• Despite opening lower at the start of the trading bell, the FBM KLCI recouped all its intraday losses to extend its gains by 0.2% for the third straight day. Much of the key index’s gains were accounted by Tenaga after unveiling its plans to develop the solar power market. The broader market ended mixed, but the lower liners ended mostly higher – the FBM Fledging (+0.7%) and FBM Ace (+0.7%) rose, while the FBM Small Cap fell 0.2%.

• Market breadth remained positive as gainers edged losers on a ratio of 453- to-412 stocks. Traded volumes, however, fell by 18.3% to 2.18 bln, owing to the profit taking amongst selective small cap stocks.

• Tenaga (+56.0 sen) topped the key index gainers, followed by banking heavyweights like Maybank (+3.0 sen),

• Public Bank (+2.0 sen) and CIMB (+1.0 sen), while MISC rose 4.0 sen. Leading gainers on the broader market include Huat Lai (+45.0 sen), Nestle (+40.0 sen), BLD Plantations (+35.0 sen), P.I.E. Industrial (+27.0 sen) and Pestech (+23.0 sen).

• Notable decliners of the day were Bintulu Port (-24.0 sen), Apex Healthcare (-20.0 sen), Latitude (-19.0 sen), Sasbadi (-19.0 sen) and Goh Ban Huat (-12.0 sen). Amongst the biggest decliners on the big board were BAT (-RM1.20), PPB Group (-38.0 sen), RHB Capital (-12.0 sen), Sime Darby (-8.0 sen), Hong Leong Financial Group (-8.0 sen) and SapuraKencana Petroleum (-7.0 sen).

• The Nikkei extended its gains to close 1.0% higher, owing to the weaker Japanese Yen. The Shanghai Composite has technically returned to the bull market after climbing 1.8% yesterday as policy makers are taking proactive stance to ensure GDP growth of 7.0% is achievable in 2015, but the Hang Seng index ended marginally lower. ASEAN indices, meanwhile, ended mostly positive.

• U.S. stockmarkets extended its losses as the Dow closed marginally lower ahead of the employment data. On the broader market, the S&P 500 fell 0.1% with six of the ten main sectors declining, dragged lower by the energy sector (-1.2%) as oil prices tanked amid supply concerns in Brazil and Libya.

• European benchmark indices, however, closed mostly higher as the DAX and CAC rose 0.4% and 0.6% respectively – the latter after Societe Generale SA (+4.0%) reported a strong set of quarterly earnings. The FTSE bucked the positive trend to close 0.8% lower, dragged down by mining shares after the commodity prices fell.

THE DAY AHEAD

• Although the market continued to climb yesterday, the uptrend momentum appears to be weakening after most of the gains dissipated towards the end of the trading day – indicating that market participants were adopting quick profit taking activities amid the lack of fresh domestic buying catalysts.

• Under the prevailing environment, we expect the profit taking activities to persist ahead of the weekend and this could see the market trending lower and the trading environment turning increasingly mixed.

• We continue to view the 1,680 points level as the main near term intermediate support level, while the 1,650-1,660 levels will continue to be the next major supports.

COMPANY BRIEF

• Handal Resources Bhd and Nabors Drilling International Ltd are teaming up to develop new business opportunities in Malaysia's oil and gas (O&G) rig sector.

• The technical collaboration would see both parties leverage on their expertise and skills to tap into O&G businesses. Nabor is a leading international offshore platform workover and drilling rig provider. It is involved in exploratory and development of O&G well drilling, engineering and civil construction, among others. (The Star Online)

• RCE Capital Bhd has proposed a capital repayment to the company’s shareholders of up to RM98.3 mln or 7.5 sen for each ordinary 10.0 sen share. RCE expects to complete the proposal by 1Q2016.

• Separately, RCE’s 2QFY16 net profit rose 81.0% Y.o.Y to RM10.2 mln, mainly due to higher revenue, improved collections and lower allowance for impairment loss on its loans portfolio. Revenue for the quarter added 20.7% Y.o.Y to RM39.0 mln.

• For 1HFY16, cumulative net profit climbed 57.0% Y.o.Y to RM19.7 mln. Revenue for the period increased 21.9% Y.o.Y to RM76.5 mln. (The Star Online)

• Progressive Impact Corp Bhd (Picorp), which has conducted environmental monitoring and data management activities for the Department of Environment (DOE) for two decades, has failed in its proposal to develop and implement the Environmental Quality Monitoring Programme through a public-private partnership.

• Picorp’s unit, Alam Sekitar Malaysia Bhd’s (Asma) 20-year concession ended in April 2015, but the Government awarded it a one-year extension. Following the failure in the request for proposals tender process, Asma would cease to generate revenue from the interim agreement after 13th April 2016, unless the Government granted a further extension. (The Star Online)

• Hartalega Holdings Bhd’s 2QFY16 net profit rose 25.3% Y.o.Y to RM60.6 mln, owing to continuous expansion in production capacity, increase in demand and favourable forex gains. Revenue for the quarter improved 37.8% Y.o.Y to RM379.3 mln.

• For 1HFY16, cumulative net profit gained 16.9% Y.o.Y to RM123.3 mln. Revenue for the period increased 26.2% Y.o.Y to RM699.9 mln. A first interim dividend of 2.0 sen per share, payable on 30th December 2015 was declared. (The Star Online)

• MRCB-Quill Real Estate Investment Trust’s (MRCB-Quill REIT) 3Q2015 realised net income rose 76.1% Y.o.Y to RM15.7 mln, mainly due to the recognition of income contribution from Platinum Sentra, and the divestment of Quill Building 10-Section 13 in Petaling Jaya. Revenue for the quarter climbed 81.4% Y.o.Y to RM31.8 mln.

• For 9M2015, cumulative realised income increased 44.4% Y.o.Y to RM37.7 mln. Revenue for the period improved 58.6% Y.o.Y to RM82.6 mln. (The Edge Daily)

• Kulim (M) Bhd has received a takeover offer from its major shareholder Johor Corp Bhd at RM4.10 per share, a premium of 80 sen or 24.2% over the group's last closing price of RM3.30. Johor Corp, which owns a 61.9% stake in Kulim, plans to undertake the privatisation via a selective capital reduction (SCR) and repayment exercise, which will entail a total payout of RM2.22 bln.

• Johor Corp does not intend to maintain listing status of Kulim on the Main Market of Bursa Malaysia pursuant to the takeover. The offer will remain open for the board's acceptance until 5.00 pm on 20th November 2015.

• Johor Corp’s move to privatise Kulim was because the latter had, in February 2015, disposed of its 49.0% equity interest in New Britain Palm Oil Ltd for RM2.80 bln, which was the major contributor to Kulim and its subsidiaries. (The Edge Daily)

• Waste management company JAG Bhd’s 3Q2015 net loss stood at RM8.2 mln vs. a net profit of RM1.7 mln in the previous corresponding quarter, due to rising staff cost pursuant to the implementation of a share issuance scheme (SIS options). Revenue for the quarter slipped 34.8% Y.o.Y to RM20.2 mln.

• For 9M2015, cumulative net loss stood at RM6.6 mln vs. a net profit of RM5.3 mln in the previous corresponding period. Revenue for the period decreased 40.8% Y.o.Y to RM60.9 mln. (The Edge Daily)

• Tek Seng Holdings Bhd's 3Q2015 net profit soared 183.1% Y.o.Y to RM5.0 mln, on higher contributions from its solar segment. Revenue for the quarter gained 63.5% Y.o.Y to RM99.3 mln.

• For 9M2015, cumulative net profit fell 13.7% Y.o.Y to RM10.9 mln. Revenue for the period, however, increased 29.5% Y.o.Y to RM237.2 mln. (The Edge Daily)

Source: M+ Online Research - 6 Nov 2015