• The FBM KLCI extended its gains for the second consecutive session on the back of strong buying interest in Genting-linked heavyweights, oil & gas and financials blue-chips - taking cue from the improved performances of global stock indices. Concurrently, the lower liner sub-indices and sectors in the broader market also ended in the positive territory with the exception of Mining sub-index which fell by 2.3%.
• Market breadth stayed positive as gainers outnumbered losers on a ratio of 558-to-333 stocks. Traded volumes, however, fell by 4.6% to 2.67 bln shares.
• KLK (+RM1.30) led the heavyweight gainers on the FBM KLCI, followed by Genting-linked heavyweights like Genting and Genting Malaysia, which gained 14.0 sen and 13.0 sen, respectively, while Sime Darby and Sapura Kencana Petroleum added 11.0 sen and 10.0 sen respectively. On the broader market, other key advancers were Huat Lai (+20.0 sen), Globetronic (+18.0 sen), Uli Corporation (+13.0 sen), Ajinomoto (+10.0 sen) and Magna Prima (+11.5 sen).
• In contrast, other major losers of the day include Bintulu Port (-10.0 sen), Success (-9.0 sen), Analabs (-7.0 sen) and GAB (- 12.0 sen). Meanwhile, there were five index-linked heavyweight decliners on the key index – Digi (-7.0 sen), BAT (- RM1.48), Tenaga (-2.0 sen), MISC (-1.0 sen) and Telekom Malaysia (-1.0 sen).
• Following the possibility of a trading link between the Shenzen and Hong Kong stock exchanges, the Hang Seng Index and Shanghai Composite rose 2.2% and 4.3% respectively, while the Nikkei close 1.3% higher after Japan Post Holdings Co surged more than 15.0% in their trading debut. ASEAN indices, meanwhile, ended mostly positive.
• Over in the U.S., its stockmarkets snapped their two straight days of gains as the S&P 500 fell 0.4%, dragged lower by losses in energy and consumer discretionary stocks. Meanwhile, the Dow and Nasdaq fell by 0.3% and 0.1% respectively as Janet Yellen reiterated the possibility of a rate hike in December.
• Over in Europe, however, the FTSE closed at its highest level in a week, mostly attributable to the gains in resources and supermarkets companies, while the CAC rose 0.3%. The DAX, meanwhile, was the largest underperformer in Europe as Volkswagen slumped by more than 9.5% amid its ongoing crisis.

THE DAY AHEAD

• After two days of gains, we think the FBM KLCI could turn lower over the near term following comments from Janet Yellen on the probability of an interest rate hike in December. This is likely to see investors turning cautious and prompt quick profit taking activities on stocks that had made gains recently.
• At the same time, the volatile oil and gas prices will also see similarly choppy conditions on the sector’s related stocks, while the rotational play could start to ebb amid the more cautious trading environment.
• For now, the 1,680 level will serve as the intermediate support level, while the 1,650-1,660 levels will be the next major supports.

COMPANY BRIEF

• MISC Bhd’s 3Q2015 net profit only rose 2.7% Y.o.Y to RM483.6 mln, limited by a provision for net impairments of RM232.3 mln. Revenue for the quarter increased 14.9% Y.o.Y to RM2.51 bln.
• For 9M2015, cumulative net profit improved 37.7% Y.o.Y to RM1.71 bln. Revenue for the period gained 8.3% Y.o.Y to RM7.59 bln. (The Star Online)
• Ahmad Zaki Resources Bhd (AZRB) has received a Letter of Award (LoA) from Kwasa Land Sdn Bhd to jointly develop 188 high-rise residential units in Kwasa Damansara township in Sungai Buloh with an estimated gross development value of RM257.0 mln. The LoA will be subject to the execution of a development rights agreement with Kwasa Land within 60 days. (The Star Online)
• SapuraKencana Petroleum Bhd’s unit, SapuraKencana Energy Inc (SKE) has secured field development plan (FDP) approval from Petroliam Nasional Bhd (Petronas) for a gas field development project offshore of Sarawak. SKE would start the development phase for the SK310 B15 development project, with the first gas delivery targeted by 4Q2017.
• The B15 field, discovered in December 2010, is located within the SK310 production sharing contract (PSC) area, offshore East Malaysia. The FDP approval from Petronas marks SKE’s first development in the upstream gas project in Malaysia. (The Star Online)
• Tropicana Corp Bhd’s Group Managing Director, Datuk Edmund Kong Woon Jun has resigned to pursue another career opportunity. The resignation would be effective 5th December 2015. Kong was appointed as an Executive Director of Tropicana on 1st March 2011 and was promoted to Deputy Group Managing Director on 1st March 2013. On 14th March 2014, he was promoted to the position of Group Managing Director. (The Star Online)
• KWAP has ceased to be a substantial shareholder in Dialog Group Bhd after disposing 11.0 mln shares in the open market between 26th October 2015 and 29th October 2015, reducing the fund’s direct stake to 4.5%. The disposals by KWAP occurred despite the oil and gas services provider being one of the better sector performers in a challenging year for the sector. (The Star Online)
• Parkson Holdings Bhd has tied up with private firm Superb Apparel Supply Sdn Bhd to establish new concept stores under the brand name 'LOL' that will sell affordable fashion apparels. Parkson Corp Sdn Bhd, the wholly-owned unit of its 67.6%-owned Singapore-listed subsidiary, Parkson Retail Asia Ltd (PRA), has inked a shareholders' agreement with Superb Apparel for the 70:30 joint venture JV called Super Gem Resources Sdn Bhd. (The Edge Daily)
• Amcorp Properties Bhd’s (AmProp) 2QFY16 net profit jumped 130.6% Y.o.Y to RM16.5 mln, mainly due to contributions from its overseas properties division. Revenue for the quarter, however, fell 7.4% Y.o.Y to RM41.1 mln.
• For 1HFY16, cumulative net profit surged 197.2% Y.o.Y to RM73.4 mln. Revenue for the period, however, declined 11.3% Y.o.Y to RM75.5 mln. (The Edge Daily)
• EG Industries Bhd’s renounceable rights issue with warrants at an issue price of 50 sen were oversubscribed by 12.9% over the total of 115.2 mln rights shares available that would raise RM57.8 mln in proceeds for its business expansion. The rights issue with warrants will eventually increase the group's total outstanding shares to 250.6 mln of 50 sen each, with an enlarged share capital of RM125.3 mln.
• Of the proceeds raised, RM20.0 mln has been earmarked for the building of a new factory adjacent to the group's current premises in Sungai Petani, Kedah. Meanwhile RM21.0 mln will be allocated to purchase and upgrade machinery and for purchase of inventory. (The Edge Daily)

Source: M+ Online Research - 5 Nov 2015