• The FBM KLCI experienced some mild profit taking activities yesterday as the key index fell 0.3%, dragged lower by telco heavyweights. The lower liners also ended mostly lower with the FBM Ace (-1.0%) taking the heaviest beating while the broader market ended mixed.
• Market breadth was fairly mixed as losers edged gainers on a ratio of 426- to-423 stocks. Traded volumes, however, fell by 16.6% with 1.96 bln shares amid the lack of fresh local catalysts.
• Maxis (-21.0 sen) was the biggest loser on the big board, followed by KLK (-14.0 sen), Petronas Dagangan (-10.0 sen), Hong Leong Financial Group (-10.0 sen) and IOI Corporation (-9.0 sen). Among the other biggest decliners of the day were Lafarge Malaysia (-29.0 sen), Lebtech (-21.0 sen), Hap Seng (-18.0 sen) and Latitude Tree (-15.0 sen). XoX, meanwhile, fell 7.0 sen yesterday, marking its ninth straight day losing streak.
• In contrast, the significant gainers on the broader market include consumer products stocks like Nestle (+RM1.08), Carlsberg (+30.0 sen) and Dutch Lady (+30.0 sen), while glove manufacturers like Hartalega and Top Glove climbed 34.0 sen and 30.0 sen respectively. Key advancers on the FBM KLCI were RHB Capital (+22.0 sen), UMW (+12.0 sen), Tenaga (+8.0 sen), Petronas Gas (+4.0 sen) and Westports (+3.0 sen).
• Japanese stockmarkets retreated as the Nikkei fell 0.4% to close marginally below the 20,000 psychological mark. The Hang Seng Index, however, added 0.4% while the Shanghai Composite surged 2.3%, logging its biggest daily gain in a month as the government plans to launch tax incentives to encourage home purchases. ASEAN indices, meanwhile, closed mixed.
• Over on Wall Street, stockmarkets retreated as the Dow fell 0.9% on strong private jobs numbers, coupled with the hawkish remarks from Federal Reserve officials that led to higher expectations of interest rate hike in the upcoming FOMC meeting. On the broader market, the S&P 500 gave up all of its previous session’s gains to close 1.1% lower as the energy sector plunged 3.3% after crude oil prices tanked.
• European benchmark equities also slipped as the DAX and CAC slipped 1.1% and 0.9% respectively as investors perceived that further stimulus from the European Central Bank would not be able to meet the over optimistic market expectations. The FTSE, however, extended its gains by 0.4%, lifted by gains in pharmaceutical stocks.

THE DAY AHEAD

• The quick profit taking activities that nullified some of the previous day’s gains was not surprising given the lack of positive domestic catalysts to lift the market significantly higher. At the same time, investors’ cautiousness has also crept back into the market as participants await for a new market direction and the interest rate decision.
• Given the lacklustre market conditions and the overnight weakness on overseas markets, we think the FBM KLCI could consolidate further and may retreat back to the 1,670 level over the near term amid the lack of fresh buying impetus. The insipid market conditions are also likely to permeate to the lower liners and broader market and this will leave the market to drift lower, in our view.

COMPANY BRIEFS

• AirAsia Bhd has acquired a 73.0% equity stake in Tune Box Sdn Bhd - a designer, developer and seller of inflight entertainment and connectivity (IFEC) solutions, from UK-based Caterham Technology and Innovation Ltd and vendor Clarence Lim Kee Kiat, for RM876,000.
• The said acquisition would allow the company to diversify into the design, sale, supply and provision of IFEC infrastructure solutions (wireless IFEC solution) businesses. The diversification is also expected to contribute additional revenue garnered from sales to other airlines. (The Edge Daily)
• Hibiscus Petroleum Bhd has secured London Stock Exchange's AIM-listed Polo Resources Ltd as a new substantial shareholder, with an 8.4% equity stake after the company had entered into a share placement agreement with the latter. Under the deal, Hibiscus issued 90.0 mln new shares at 23.5 sen each to Polo.
• Polo Resources Ltd invests in oil and gas, coal, gold, iron ore, copper and phosphate projects. (The Edge Daily)
• Eversendai Corp Bhd intends to acquire a 70.0% equity stake in Thailand-based S-Con Engineering Co Ltd from Anuchart Suphannarat and S-Con for approximately RM3.6 mln. This move will help Eversendai to expand its business into the neighbouring country's power sector.
• Anuchart is the founder and owner of S-Con, which specialises in steel fabrication and installation. The aforementioned purchase is financed with its internal funds. (The Edge Daily)
• Glomac Bhd saw its 2QFY16 net profit rise 33.1% Y.o.Y to RM17.5 mln on higher revenue that grew 69.3% Y.o.Y to RM146.0 mln. The increase in its revenue was driven by progress billings on its key ongoing projects, such as Lakeside Residences, Saujana Rawang, Glomac Centro and Reflection Residences.
• For 1HFY16, cumulative net profit rose 13.5% Y.o.Y to RM38.6 mln. Revenue for the period increased 39.5% Y.o.Y to RM269.1 mln. (The Edge Daily)
• Wintoni Group Bhd’s share trading will be suspended from 8th December, 2015 as the company has failed to submit its quarterly report for the period ended 30th September, 2015 within the stipulated timeframe accorded by Bursa Malaysia. (The Edge Daily)
• Scientex Bhd had lodged with the Securities Commission Malaysia (SC), the relevant documents to issue a 15-year Sukuk Murabahah programme, with a nominal value of up to RM500.0 mln
• The issuance of the Islamic debt paper would be used to finance the acquisition of land, property and investments. It could also be used to fund working capital requirements or refinance Scientex’s existing borrowings. (The Edge Daily)
• Malakoff Corporation Bhd's Chief Executive Oofficer (CEO), Datuk Sri Syed Faisal Albar has resigned to pursue other career opportunities, just six months after the company was listed.
• Syed Faisal was appointed as Malakoff's CEO on 1th July, 2014 and helmed the company until its much-touted listing on 14th May 2015. Prior to joining Malakoff, Syed Faisal served as CEO of Gas Malaysia Bhd from January 2014.
• He also served as Pos Malaysia Bhd's group managing director from 2008 to 2011. (The Edge Daily)
• See Hup Consolidated Bhd has entered into a joint venture (JV) agreement with Tokyo Stock Exchange-listed Maruzen Showa Unyu Co Ltd to set up a logistics and forwarding JV company, which it foresees will provide it competitive edge over its competitors.
• Maruzen Showa, established in 1931, is engaged in the provision of logistics, yard operations and machine stevedoring.
• The initial share capital of the JV would be RM1.5 mln, with a ratio of 40:60 between See Hup and Maruzen Showa, respectively. (The Edge Daily)
• Petrol One Resources Bhd has appointed Moore Stephens Associates PLT to undertake a special audit on its audited financial statements for the financial year ended 30th June, 2015 (FY15), following a disclaimer of opinion expressed by its external auditors, Messrs KPMG on 30th October 2015.
• The special audit would be on matters in relation to matters that formed part of the basis for the 2015 disclaimer of opinion.
• According to the company's filing, KPMG was not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion, after noting that the group's current liabilities exceeded its current assets by RM101.9 mln, among other things. (The Edge Daily)
• Maxis Bhd and its subsidiaries' proposal to implement an internal reorganisation is expected to consolidate and integrate the businesses and undertakings of its wholly-owned subsidiaries under Maxis Broadband Sdn Bhd (MBSB).
• Meanwhile, MBSB has entered into separate sale and purchase agreements with Maxis Collections Sdn Bhd, Maxis International Sdn Bhd, Maxis Mobile Sdn Bhd and Maxis Mobile Services Sdn Bhd to purchase their businesses and undertakings, including relevant assets and liabilities.
• The group expects to complete the reorganisation in the 1H2016. (The Edge Daily)

Source: M+ Online Research - 3 Dec 2015