• Following the weaker Ringgit, the FBM KLCI registered its fourth straight set of losses yesterday despite opening higher during the first trading hour. The sell-off was mostly seen across banking, telco and Genting-linked heavyweights. However, the Technology (+0.6%), Construction (+0.3%) and FBM Small Cap (+0.2%) outperformed the mostly negative broader market.
• Market breadth turned negative as losers outnumbered gainers on a ratio of 511-to-393 stocks. Traded volumes rose marginally to 2.17 bln shares.
• Genting Malaysia (-18.0 sen) led the heavyweight decliners on the FBM KLCI, followed by Maybank (-16.0 sen), CIMB (-15.0 sen), Maxis (-12.0 sen) and Genting (-13.0 sen). On the broader market, other key losers include F&N (- 12.0 sen), Bintulu Port (-10.0 sen), Latitude (-10.0 sen), Power Root (-7.0 sen) and Sui Wah (-9.0 sen).
• On the other side of the trade, some of the major gainers of the day were Tiong Nam Logistics (+11.0 sen), SPB (+8.0 sen), Tasek Corp (+12.0 sen), Ajiya (+25.0 sen) and PIE (+40.0 sen). Meanwhile, there were only four index-linked heavyweight gainers on the big board – Westports (+3.0 sen), Sapura Kencana Petroleum (+1.0 sen), Hong Leong Financial Group (+4.0 sen) and Axiata (+1.0 sen).
• On the regional markets, the Nikkei strengthened by 0.1% amid the stronger Yen, while the Shanghai Composite added 0.4%. The Hang Seng Index,however, declined 0.6% led by losses in financial heavyweights. ASEAN indices, meanwhile, ended mixed.
• Following the weaker-than-expected 3Q 2015 GDP readings, the U.S. stockmarkets ended lower overnight as 5 out of the 10 main sectors on the S&P 500 fell into the negative territory, while energy and health-care sectors outperformed. Pharmaceutical companies like Allergan Plc and Pfizer Inc were in focus as both companies are in talks for a possible M&A activity.
• Over in Europe, the FTSE registered its third session of losses for the week mostly attributable to the disappointing corporate earnings (Royal Dutch Shell Plc & Barclays Plc), while the DAX and CAC ended 0.3% and 0.1% lower on losses amongst financial, utility and commodity stocks. Meanwhile, Deutsche Bank AG had their worst performance in two months owing to the termination of its dividend plans and major restructuring (involving 35,000 jobs).

THE DAY AHEAD

• It appears that the selling pressure among the index-linked heavyweights were more pronounced-than-expected as FBM KLCI-listed stocks took a hefty beating yesterday, which was against our expectations and extending the ongoing consolidation phase.
• There now appear more downside risk after the Federal Reserve hinted that it could raise interest rates in December, which would result in more portfolio re-shuffling from emerging market stocks back to developed market stocks. This is likely to exacerbate the FBM KLCI’s near term weakness and we expect the downtrend to continue over the near term.
• With the 1,680 support giving way, the next support of 1,660 is coming into play, followed by the psychological 1,650 level which should provide a stronger near term support. Below the above supports, meanwhile, we think the 1,580-1,600 points level should become the major support for the remainder of the year as we expect Valuecap to come in and to shore up the key index.

COMPANY BRIEF

• Sunway Real Estate Investment Trust’s (REIT) 1QFY16 net profit rose 1.7% Y.o.Y of RM64.5 mln, underpinned by commendable growth from the retail and hotel segments, but partially offset by lower income contribution from the office segment.
• Revenue for the quarter increased 6.5% Y.o.Y to RM121.2 mln. An interim income distribution of 2.1 sen per unit for the quarter, or about 100% of the realised distributable income, was proposed. (The Star Online)
• Unisem (M) Bhd’s 3Q2015 net profit gained 48.2% Y.o.Y to RM40.2 mln, owing to the higher sales and coupled with the favorable forex gains. Revenue for the quarter climbed 20.6% Y.o.Y to RM329.6 mln.
• For 9M2015, cumulative net profit jumped 101.4% Y.o.Y to RM95.1 mln. Revenue for the period improved 20.7% Y.o.Y to RM908.5 mln. A second interim dividend of 6.0% (or 3.0 sen per share), payable on 15th December, 2015 was proposed. (The Star Online)
• Tenaga Nasional Bhd’s (TNB) 4QFY15 net profit decreased 39.4% Y.o.Y to RM820.9 mln, due to forex translation loss of RM733.5 mln and transaction loss of RM25.9 mln. Revenue for the quarter, however, gained 20.6% Y.o.Y RM329.6 mln.
• For FY15, cumulative net profit fell 5.4% Y.o.Y to RM6.12 bln. Revenue the year, however, rose 1.1% Y.o.Y to RM43.28 bln. A dividend payout of 19.0 sen a share for the quarter was declared. (The Star Online)
• Mitsubishi UFJ Financial Group, Inc. (MUFG) has emerged as a substantial shareholder in Public Bank Bhd with an indirect stake of 5.0%, or 193.2 mln shares as at 21st October, 2015.
• MUFG’s deemed interest in the shares is via its stakes in its units and also throught a 15.0% stake in Morgan Stanley Group. (The Star Online)
• D’nonce Technology Bhd’s 4QFY15 net loss stood at RM1.6 mln vs. a net profit of RM4.3 mln in the previous corresponding quarter on lower logistics and contract manufacturing revenue, coupled with higher finance cost and taxation. Revenue for the quarter fell 27.9% Y.o.Y to RM39.8 mln.
• For FY15, cumulative net profit tumbled 83.2% Y.o.Y to RM0.4 mln. Revenue for the year, however, added 25.2% Y.o.Y to RM223.8 mln. (The Edge Daily)
• Civil engineering and construction outfit Gadang Holdings Bhd’s 1QFY16 net profit surged 118.7% Y.o.Y to RM20.9 mln on the back of higher contributions from its property development segment. Revenue for the quarter improved 12.0% Y.o.Y to RM149.4 mln. (The Edge Daily)
• IHH Healthcare Bhd is going to open its RM400.0 mln Gleneagles Medini Hospital in Nusajaya, Johor. The 300-bed tertiary hospital, located on a 15-ac. Site, is IHH Healthcare's 14th hospital in Malaysia.
• Ultimately, 138 medical suites will be leased to specialists who wish to set up their own clinics and practices within the hospital premises, which has five centres of excellence — Cardiology, Orthopedics, Women and Children, Oncology and Ophthalmology. (The Edge Daily)
• Sasbadi Holdings Bhd’s 4QFY15 net profit climbed 82.8% Y.o.Y to RM2.2 mln following the acquisition of a 70.0% stake in Sanjung Unggul Sdn Bhd. Revenue for the quarter rose 14.4% Y.o.Y to RM20.1 mln.
• For FY15, cumulative net profit gained 25.2% Y.o.Y to RM15.3 mln. Revenue for the year added 9.9% Y.o.Y to RM87.4 mln. A final dividend of 2.0 sen per share, bringing its total dividend for FY15 to 5.0 sen per share, was recommended. (The Edge Daily)
• Furniture maker Homeritz Corp Bhd’s 4QFY15 net profit increased 27.9% Y.o.Y to RM6.6 mln on higher sales and the strengthening of the U.S Dollar. Revenue for the quarter rose 14.7% Y.o.Y to RM38.1 mln.
• For FY15, cumulative net profit gained 16.3% Y.o.Y to RM23.6 mln. Revenue for the year climbed 15.1% Y.o.Y to RM146.4 mln. A final dividend of 2.5 sen per share, bringing total dividend to 4.0 sen per share for FY15, was declared. (The Edge Daily)
• Cycle & Carriage Bintang Bhd’s 3Q2015 net profit soared 4.0x to RM13.5 mln, driven by higher sales of Mercedes Benz vehicles. Revenue for the quarter jumped 105.0% Y.o.Y to RM456.9 mln.
• For 9M2015, cumulative net profit sky-rocketed 5.9x to RM41.9 mln. Revenue for the period climbed 86.1% Y.o.Y to RM1.19 bln. (The Edge Daily)

Source: M+ Online Research - 30 Oct 2015