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• The FBM KLCI extended its losses for the second consecutive session owing to the decline in selective financial and O&G heavyweights. Meanwhile, there were only two sub-indices that outperformed the broader market – the Industrial and Construction indices that gained 0.2% each.
• Market breadth turned negative as losers outnumbered losers on a ratio of 525-to-306 stocks. Traded volumes, however, increased by 4.1% to 2.04 bln shares as profit taking activities took precedent.
• Hong Leong Bank (-34.0 sen) led the heavyweight losers on the FBM KLCI, followed by KLCC (-7.0 sen), PPB (-8.0 sen), Astro (-4.0 sen) and Westports (- 4.0 sen). On the broader market, some of the other major decliners include Hartalega (-22.0 sen), SAM (-13.0 sen), Caring (-10.0 sen) and Unisem (-9.0 sen).
• On the other side of the trade, the notable key advancers of the day include OIB (+24.0 sen), Top Glove (+12.0 sen), MPI (+12.0 sen), Petron Malaysia (+9.0 sen) and SMIS Corporation (+8.5 sen). Meanwhile, Petronas Gas (+22.0 sen), Petronas Dagangan (+10.0 sen), BAT (+14.0 sen), Hong Leong Financial Group (+4.0 sen) and CIMB (+2.0 sen) were among the main index-linked heavyweights gainers on the key index.
• Despite the slower growth pace in China’s services sector, the Shanghai Composite rose 1.4% on the back of gains in resource companies. The Nikkei, however, were mostly unchanged, while the Hang Seng slipped 0.3%. ASEAN indices, meanwhile, ended mostly negative.
• U.S. stockmarkets endured one of its largest losses in more than two months as the European Central Bank (ECB) unveiled a lesser-than-expected expansion of its monetary stimulus program. Despite the increase in crude oil prices, some of the beaten down stocks were Southwestern Energy Co. and PVH Corp, while healthcare stocks were the worst performers yesterday.
• As the ECB’s additional stimulus fell short of market expectations, European stocks registered one of the worst sessions in three months as the CAC and DAX dropped 3.6% each, while the FTSE slipped 2.3%. Consequently, the Euro rose more than 3.0% against the U.S. Dollar

THE DAY AHEAD

• As it is, market sentiments will remain on the dour side after the past few days’ insipid market performance that is leaving investors on a cautionary mode. This means that the market’s weakness is also likely to extend over the near term with the fewer positive catalysts.
• Consequently, we expect more investors and traders alike to retreat to the sidelines amid the rising uncertainties and the overnight weakness on most key global stockmarkets.
• While we think there could be continued weakness on Bursa Malaysia stocks, we think that the downside risk will be limited as domestic funds will provide ample support to keep the key index above the 1,660-1,670 support levels.
• The lower liner and broader market stocks, however, could continue to see more short-term profit taking ahead of the weekend and this will leave market breadth on the mixed-to-lower side.

COMPANY BRIEFS

• Malaysian Resources Corp Bhd (MRCB) will inject the 33-storey Menara Shell into MRCB-Quill Real Estate Investment Trust (MQREIT) to unlock RM640.0 mln worth of investment value in the property. The property comes together with a five storey podium and a four storey basement car park.
• The RM640.0 mln price tag for the proposed disposal is based on the valuation of Menara Shell by independent valuer - CH Williams Talhar & Wong Sdn Bhd, via a certificate of valuation dated 25th November, 2015. (The Edge Daily)
• UEM Sunrise Bhd intends to dispose its serviced apartments component of the group’s maiden Australian project, the mixed development Aurora Melbourne Central at La Trobe Street, Melbourne Australia, to Ascendas Hospitality Trust for approximately RM380.0 mln.
• The said disposal, which is expected to be completed by 30th September, 2019, will contribute around RM83.3 mln to UEM Sunrise Group’s earnings for 2019.
• The agreement was signed with The Trust Company (Re Services) Ltd, trustee for the Ascendas Australia Hotel Trust, for the sale of the apartments (252 units in all), which is located on level 10 to 32 of Aurora Melbourne Central. (The Edge Daily)
• A subsidiary of Halex Holding Bhd, Halex International Sdn Bhd has terminated its Memorandum of Understanding (MoU) with Goh Teik Keng, the major shareholder of VW Win Holdings Plc, in relation to its proposed acquisition of at least a 51.0% equity stake in VW.
• The termination was affected as Halex was not provided with the complete documentation to enable it to carry out the requisite due diligence exercise as stipulated in the MoU and as such, has decided to terminate the MoU.
• The conditions stipulated in the MoU include Halex International receiving a written approval from the relevant authorities in Cambodia with regards to the proposed sale and purchase of the shares, completing a legal and financial due diligence on the business of VW Win and obtaining shareholders’, Bursa Malaysia’s and Securities Commission Malaysia’s approval in relation to the proposed acquisition. (The Edge Daily)

Source: M+ Online Research - 4 Dec 2015