• Despite opening higher, the FBM KLCI traded mostly in the negative territory owing to losses amongst financial heavyweights. However, the lower liners managed to buck the mostly lower broader market trend, while the Properties and Construction sub-indices added 1.0% and 0.4% respectively.
• Market breadth stayed slightly positive as gainers edged losers on a ratio of 455-to-412 stocks. Traded volumes, however, increased 23.1% to 2.61 bln shares.
• BAT (-82.0 sen) led the heavyweight losers on the FBM KLCI, followed by PBB (-18.0 sen), KLK (-22.0 sen), Ambank (-6.0 sen), Sime Darby (-6.0 sen) and Telekom Malaysia (-8.0 sen). On the broader market, other major losers were Harison (-13.0 sen), United Plantation (-50.0 sen), CCB (-12.0 sen) and Khind (-13.0 sen), while MBM Resources (-10.0 sen).
• On the other side of the trade, some of the key gainers of the day were Huat Lai (+30.0 sen), MPI (+18.0 sen), Johor Tin Corporation (+14.0 sen) and Cypark Resources (+12.0 sen). Meanwhile, IHH (+12.0 sen), MISC (+6.0 sen), Genting (+6.0 sen), IOI Corporation (+5.0 sen) and Sapura Kencana Petroleum (+2.0 sen) were amongst the index-linked heavyweight advancers on the big board.
• Following the still below 50 reading in the Caixin China PMI Index (48.3 in October), Asian stockmarkets ended sharply lower as the Shanghai Composite and Hang Seng Index slipped 1.7% and 1.2% respectively, while the Nikkei fell 2.1% after the Bank of Japan withheld its additional stimulus plan last week.
• Despite the weaker manufacturing data, U.S. stockmarkets ended well in the positive territory as the Dow crossed above the green line, while the S&P 500 closed above the 2,100 level – a level last seen since 17th August this year. Separately, U.S construction spending rose modestly (+0.6%) in September.
• In Europe, most of its benchmark indices extended their gains for the third consecutive sessions, mostly attributable to stronger PMI numbers from Germany and England. Consequently, the DAX and FTSE rose 0.9% and 0.1% respectively, while the CAC ended 0.4% higher.

THE DAY AHEAD

• Although we think that the FBM KLCI could stage a rebound over the near term after successive sessions of downtrend, we think the upsides could be limited amid the lack of fresh catalysts. As it is, the overnight gains on the key global stock indices could provide some of the recovery impetus, but domestic leads are still largely absent and this will cap the upsides, in our view.
• Hence, we think any recovery will be limited to around the 1,680 level for the time being. We think that there still needs to be more significant catalysts for the 1,700 level to be cleared convincingly and the lack of leads could make the above resistance a difficult level to clear, in our opinion.
• The main support levels remain at the 1,650-1,660 points for the time being, while the 1,580-1,600 points level should be the major support for the remainder of the year as we believe that Valuecap will provide the support to the FBM KLCI.

COMPANY BRIEF

• Destini Bhd's 3Q2015 net profit rose 66.1% Y.o.Y to RM7.1 mln on the back of the increase in demand for the group’s maintenance, repair and overhaul services (MRO) as well as marine manufacturing services. Revenue for the quarter jumped 130.5% Y.o.Y to RM90.3 mln.
• For 9M2015, cumulative net profit increased 35.9% Y.o.Y to RM11.6 mln. Revenue for the period added 70.4% Y.o.Y to RM179.0 mln. (The Star Online)
• Petronas Dagangan Bhd’s (PetDag) 3Q2015 net profit rose 36.5% Y.o.Y to RM218.9 mln owing to higher margin contribution from both the retail and commercial segments, along with lower operating expense (opex) and higher other income. Revenue for the quarter, however, fell 20.6% Y.o.Y to RM6.53 bln.
• For 9M2015, cumulative net profit grew 39.3% Y.o.Y to RM697.9 mln. Revenue for the period, however, decreased 23.2% Y.o.Y to RM19.12 bln. (The Star Online)
• Prestariang Bhd's unit, Prestariang Systems Sdn Bhd has won a RM20.0 mln job from the Ministry of Higher Education (MOHE) to supply Autodesk software services to education institutions. The contract spans over the course of two years effective from 2nd November, 2015 until 1st November, 2017. (The Star Online)
• Puncak Niaga Holdings Bhd, which will receive RM1.60 bln cash from the sale of its water-related assets in Selangor, will pay out a special dividend of RM1.00 to the shareholders on 23rd December 2015, with the ex-date falling on 4th December 2015.
• Puncak Niaga’s major shareholder, Tan Sri Rozali Ismail stands to reap RM167.4 mln from the 40.3% interest he has in the stock. Other substantial shareholders are Lembaga Tabung Haji with 9.6%, the Employees Provident Fund board has 5.1%. (The Star Online)
• Bursa Malaysia is advising investors to exercise caution in the trading of the shares of XOX Bhd after the recent spike in the mobile operator’s share price. The regulator also drew investors’ attention to the company’s responses to the Unusual Market Activity (UMA) queries issued by Bursa Malaysia on 5th October 2015 and 26th October 2015, which confirmed it was not aware of any corporate development or explanation that could give rise to the unusual trading activities in its securities. (The Edge Daily)
• Meanwhile, a 20% rise in Lay Hong Bhd’s share price over the past three days has prompted Bursa Securities to issue an UMA query to the poultry egg producer. (The Edge Daily)
• Sona Petroleum Bhd plans to buy Australia’s Stag Oilfield for US$50.0 mln (RM215.2 mln) and the transaction is also intended to be the Special Purpose Acquisition Company’s (SPAC) qualifying acquisition.
• Sona Petroleum’s indirect wholly-owned subsidiary, Sona E&P (Perth) Pty Ltd (Sona Australia) will serve as the buyer while Sona Petroleum will act as guarantor for the sale and purchase agreement with Quadrant Northwest Pty Ltd and Santos Offshore Pty Ltd, whom are the sellers.
• The Stag Oilfield is a producing oilfield located in the Dampier sub-basin of the Carnarvon Basin, offshore Western Australia and in a water depth of approximately 50 m and approximately 60 km offshore. As at 30th June 2015, the Stag Oilfield was producing oil at the rate of 4,600 barrels per day from 10 active wells.
• The agreement is expected to be completed by 31st March, 2016 and will be funded entirely in cash via funds raised from the Initial Public Offering (IPO) held under a trust account amounting to approximately RM525.6 mln as at 30th October. 2015. (The Edge Daily)
• Icon Offshore Bhd has appointed Amir Hamzah Azizan as its new Managing Director effective 1st March 2016. Amir will replace Dr Jamal Yusof, whose appointment as the Chief Executive Officer (CEO) of Icon Offshore will expire on 15th November 2015.
• Amir is currently the CEO of Petronas Lubricants International and Vice President of lubricants business at Petroliam Nasional Bhd. He also sits on the board of South Africa’s Engen Petroleum and was served as the CEO of Petronas Dagangan from 2011 to 2013. (The Edge Daily)
• KNM Group Bhd has fixed the issue price for its proposed private placement of up to 193.9 mln shares at 50 sen per share. The issue price represents a discount of 6.0% to the five-day volume weighted average price of the shares up to and including 30th October 2015, being the last full trading day immediately prior to the price fixing date, of 53 sen per share.
• Based on the issue price of 50 sen, the exercise would raise RM97.0 mln. Proceeds will be utilised to repay borrowings and for working capital. (The Edge Daily)
• FSBM Holdings Bhd’s auditor has issued a qualified opinion on its audited financial statements for the financial year ended 30th June 2015 as the auditor, Messrs Ernst & Young was not able to ascertain whether RM8.7 mln in trade and other receivables of the group due from Technitium Sdn Bhd is recoverable. (The Edge Daily)
•  Kamal Abdul Aziz, one of the newly appointed Executive Directors of Wintoni Group Bhd who joined its board on 10th September 2015, has resigned from his post with the industrial automation systems provider. The 45-year-old director, who is also a full-time stock trader, cited needing more time for his own business and to pursue other personal commitments as the reasons behind his resignation.
• Kamal was appointed to the board following the en masse resignation of the former board of directors after 10 minority shareholders requisitioned for an extraordinary general meeting to remove the whole board in August 2015. (The Edge Daily)

Source: M+Online Research - 3 Nov 2015