• Tracking the sharp gains on Wall Street overnight, the FBM KLCI (+0.8%) snapped a sixth consecutive day of losing streak yesterday as the key index traded in the positive territory for the entire trading session. The lower liners also ended higher, while the Construction sector (-0.6%) was the sole decliner on the broader market.
• Market breadth remained positive as gainers outpaced losers on a ratio of 520-to-357 stocks. Traded volumes rose 7.3% to 2.80 bln shares amid the positive market sentiment.
• More than two-third the key index constituents advanced, led by BAT (+RM1.30), followed by Hong Leong Financial Group (+60.0 sen), PPB (+54.0 sen), Genting (+22.0 sen) and Petronas Chemicals (+19.0 sen). Amongst the biggest gainers on the broader market were P.I.E Industrial (+54.0 sen), Huat Lai (+40.0 sen), United Plantations (+30.0 sen) and Lysaght Galvanized (+28.0 sen). Prestariang rose 18.0 sen after bagging a RM20.0 mln job from the Ministry of Higher Education.
• Notable decliners of the day include Hibiscus (-17.5 sen), NPC (-14.0 sen), Kulim (-13.0 sen) and Tan Chong Motors (-13.0 sen). Tasek fell 20.0 sen after reporting a weak set of quarterly earnings. Meanwhile, Westports (-1.0 sen) was the sole decliner on the FBM KLCI.
• The Shanghai Composite fell 0.3%, finding some stability after the government crackdown on irregular futures trade on the previous day, while the Hang Seng Index snapped a four consecutive day of losing streak to close 1.0% higher after it is ranked second in the world Financial Secrecy Rankings. Japanese stockmarkets were closed for the Cultural Day public holiday, while ASEAN indices closed mostly higher.
• U.S. stockmarkets extended their gains as the Dow climbed 0.5% to return to the positive side for the year on the back of bargain hunting activities. On the broader market, the S&P 500 rose 0.3%, supported by the energy sector (+2.9%) after oil prices rallied.
• European benchmark indices shook off their intraday losses – the FTSE (+0.3%) and CAC (+0.4%) rose, lifted by gains from oil giants like Shell (+3.5%) and BG Group (+2.6%) as crude oil prices jumped. Meanwhile, the DAX closed marginally higher as gains were limited after Volkswagen AG was hit by new accusations of its emission scandal in its gasoline-powered vehicles.

THE DAY AHEAD

• We think that the market will continue its near-term upward trajectory as the buying momentum is also picking up pace along with other stock indices. Much of the uptrend is due to the positive performances of overseas bourses, but the spike in crude oil prices overnight will also provide some buying catalyst to oil and gas stocks over the near term. The near term positivity is likely to drive up the key index above the 1,680 points level and potentially head towards the psychological resistance of 1,700 points level.
• On the broader market, we expect the bouts of rotational play to continue, but we also think that quick profit taking will emerge as retail investors are likely to quickly lock-in their profits. Consequently, the upsides among the lower liner and broader market stocks will continue to be measured amid the short-term trading tactics.

COMPANY BRIEF

• Malaysia Marine and Heavy Engineering Holdings Bhd’s (MMHE) 3Q2015 net profit fell 56.6% Y.o.Y to RM17.0 mln due to lower contribution from the offshore segment. Revenue for the quarter declined 19.2% Y.o.Y to RM436.3 mln.
• For 9M2015, cumulative net profit decreased 37.4% Y.o.Y to RM71.0 mln. Revenue for the period contracted 20.7% Y.o.Y to RM1.74 bln. (The Star Online)
• Fraser & Neave Holdings Bhd’s (F&N Holdings) 4QFY15 net profit fell 8.8% Y.o.Y to RM56.7 mln due to lower contribution from both the soft drink and dairies segment amid the intense price competition. Revenue for the quarter, however, rose 4.5% Y.o.Y to RM1.01 bln.
• For FY15, cumulative net profit added 8.0% Y.o.Y to RM280.1 mln. Revenue for the year grew 6.3% Y.o.Y to RM4.06 bln. A final dividend of 35.5 sen per share was recommended. (The Star Online)
• Telekom Malaysia Bhd (TM) plans to provide smart building services and smart city services for Medini Iskandar Malaysia via a proposed managed services operating joint venture (JV).
• TM’s unit Intelsec Sdn Bhd had signed a JV and shareholders agreement with Medini Iskandar Malaysia Sdn Bhd’s wholly-owned subsidiary, Township Management Services Sdn Bhd (TMC) to set up the proposed JV in which Intelsec would hold 51.0%. (The Star Online)
• Astral Supreme Bhd’s unit, Astral Supreme Construction Sdn Bhd (ASC) has received a RM80.5 mln subcontract job to undertake the main building works under the People’s Housing Programme (PPR) in Kota Belud, Sabah. The electronic product maker, which has diversified into the construction industry, is expected to make a gross profit of RM5.5 mln, or a gross margin of 6.8%, from the job.
• Under the agreement, ASC will supply material, labour, and equipment to design, build and deliver 900 units of single-storey terrace house and other related works. (The Star Online)
• Petroliam Nasional Bhd (Petronas) is injecting three companies that are currently undertaking petrochemical works at its RM60.0 bln Refinery and Petrochemical Integrated Development (RAPID) project in Johor, into Petronas Chemicals Group Bhd. Following that, the chemical arm of Petronas will assume the assets and liabilities of the three companies, which amounts to approximately US$110.0 mln (RM470.5 mln).
• The three companies — PRPC Glycols Sdn Bhd, PRPC Polymers Sdn Bhd and PRPC Elastomers Sdn Bhd are currently working on petrochemical projects with a future total investment cost of about US$3.90 bln (RM16.68 bln) with a combined total capacity of approximately 2.7 mln tonnes per annum. (The Edge Daily)
• Tasek Corp Bhd's 3Q2015 net profit fell 16.2% Y.o.Y to RM18.0 mln, owing to the lower selling prices amid costlier raw materials. Revenue for the quarter, however, gained 11.4% Y.o.Y to RM165.6 mln.
• For 9M2015, cumulative net profit decreased 6.1% Y.o.Y to RM72.8 mln. Revenue for the period, however, climbed 6.4% Y.o.Y to RM514.1 mln. Despite a weaker profit, Tasek plans to pay a dividend 20.0 sen a share, with the ex-date falling on 18th November 2015. (The Edge Daily)
• Hibiscus Petroleum Bhd, which was slapped with an Unusual Market Activity query by Bursa Malaysia on 3rd November 2015, has responded that some shareholders may be subject to margin calls on shares that have been collateralised and are being asked to regularise their margin positions. (The Edge Daily)
• Felda Global Ventures Holdings Bhd (FGV) has completed the divestment of its non-core oilseeds crushing and refining plant in Quebac, Canada, to Viterra Inc for CAD172.7 mln (RM567.1 mln). Earlier on 23rd August 2015, FGV announced that it was disposing the oilseeds crushing and refining plant. (The Edge Daily)
• Malaysian Resources Corp Bhd (MRCB) has dismissed concerns that the mega projects it is undertaking soon, particularly the rejuvenation of the Bukit Jalil National Sports Complex, will strain its cash flow or spike its debt level.
• MRCB intends to undertake a de-gearing exercise in 2015, but did not disclose any further information. The RM1.60 bln construction value of the above project is pegged to the 92.5-ac. land it will receive as compensation for the job. (The Edge Daily)
• SP Setia Bhd, in a JV with Investec Australia Ltd (IAL), has been shortlisted as one of the four bidders for the A$500.0 mln (RM1.50 bln) contract to transform the old Royal Adelaide Hospital site into a more upscale area.
• The developers are to come up with schemes to transform the existing 275,000 sq. m. buildings into a project that could rival elements of Sydney's Barangaroo precinct, another site undergoing an urban transformation which is expected to be completed in 2023. (The Edge Daily)
• British American Tobacco (Malaysia) Bhd will be increasing the prices of its cigarettes by as much as RM3.20, after accounting for a 40.0% excise tax hike mandated by the government.
• Effective 4th November 2015, its Dunhill, Kent and Benson & Hedges ranges will be sold at RM17.00 per pack, Peter Stuyvesant and Pall Mall at RM15.50 per pack, Lucky Strike Plain for RM17.50 per pack and Shuang Xi for RM18.00 per pack. (The Edge Daily)

Source: M+ Online Research - 4 Nov 2015