• The FBM KLCI started the week by extending its losses for the second consecutive session amid the fall in crude oil prices and the sharp correction in regional markets. Despite the mostly negative broader market and lower liners performances, the FBM Fledging (+0.3%) and Construction (+0.3%) sub-indices managed to bucked the weaker market trend.
• Market breadth remained negative as losers outpaced gainers on a ratio of 520-to-352 stocks. Traded volumes, however, rose by 5.1% to 1.83 bln shares on bargain hunting activities amongst selected stocks.
• KLK (-58.0 sen) led the heavyweight losers on the FBM KLCI, followed by Hong Leong Bank (-28.0 sen), Petronas Gas (-28.0 sen), Sime Darby (-9.0 sen) and CIMB (-11.0 sen). On the broader market, other key losers include Tasek (- 20.0 sen), Hartalega (-15.0 sen), Gopeng (-11.0 sen), Bursa Malaysia (-10.0 sen) and Warisan (-16.0 sen).
• On the other side of the trade, other major gainers of the day were Kawan Food (+18.0 sen), MPI (+42.0 sen), JayCorp (+9.0 sen) and GeShen Corporation (+14.0 sen), while Emico (+14.5 sen) surged more than 50.0%. Meanwhile, KLCC and Genting were the only two index-linked heavyweight gainers on the big board as they both added 11.0 sen and 4.0 sen respectively.
• Due to the strong gains in property and brokerage stocks, the Shanghai Composite rose 1.8% yesterday, while the Hang Seng Index rose 0.2%. The Nikkei, however, underperformed as the recently announced tweaks to its current bond buying program has failed to mount any support as it was viewed as an adjustment rather than an extension. ASEAN indices, meanwhile, closed mixed.
• U.S. stockmarkets rebounded overnight amid the falling crude oil futures prices – the energy sector, however, managed to end marginally higher. Gains on the broader market were led by telecoms and technology stocks. Some of the stocks in focus were Fitbit Inc. and Chipotle Mexican Grill Inc.
• After staging its first weekly win since late November, the FTSE, however, fell yesterday, hammered down by losses in O&G firms. Also, the CAC recorded its biggest daily drop in four months after its Sunday’s election, which gave no results as no party emerged as a clear winner. The DAX meanwhile declined by 1.0%.

THE DAY AHEAD

• Despite having a relief rally on the overnight performance of the Dow, we think that the FBM KLCI may continue its weak performance as general market’s momentum is still weak after the key index has violated below the 1,630 level on the back lower crude oil prices.
• Investors may stay cautious for the remaining of the year amid bereft trading ideas and catalyst in the market. However, export-related stocks within the gloves and furniture/timber companies are mostly likely to be focused as Ringgit continues to stay on the weaker side.

COMPANY BRIEFS

• Handal Resources Bhd’s wholly-owned subsidiary, Handal Offshore Services Sdn Bhd has secured a RM22.0 mln contract for the provision of offshore crane maintenance and repair services from Talisman Malaysia Ltd. The contract, effective 10th December 2015, is for an initial duration of two years with an extension option of one year. (The Edge Daily)
• Berjaya Land Bhd’s (BLand) 2QFY16 net profit soared 23.2x to RM208.3 mln, mainly due to a gain on disposal of its stake in Berjaya Kyoto Development (S) Pte Ltd, coupled with higher contribution from H.R Owen Plc and its property development and investment businesses. Revenue for the quarter rose 14.9% Y.o.Y to RM1.62 bln.
• For 1HFY16, cumulative net profit jumped 4.7x to RM218.2 mln. Revenue for the period added 11.1% Y.o.Y to RM3.13 bln. (The Edge Daily)
• Utusan Melayu (Malaysia) Bhd (Utusan) has disposed its entire 20.0% stake in Maqamad Sdn Bhd to MHA59 Sdn Bhd for RM48.0 mln to improve its operating cash flow and strengthen its financial position. Utusan’s original cost of investment in Maqamad was RM100,000 incurred in April 2015.
• Maqamad is principally involved in property development and general trading and is actively seeking to increase its landbank for future business expansion. The proceeds are expected to be utilised for Utusan group's day-to-day operation to support the existing business operations, which include payment of trade and other payables within 12 months. (The Edge Daily)
• Fidelity Management and Research (FMR LLC), the second-largest mutual fund and financial services group in the world, has emerged as a substantial shareholder in Ajinomoto (Malaysia) Bhd with a 5.0% stake.
• FMR LLC emerged as the company's
• shareholder after acquiring 3.0 mln shares or 5.0% stake on 7th December 2015. FMR LLC acquired an additional 15,400 shares or 0.04% stake in the company via three separate transactions between 10th December 2015 and 11th December 2015.
• Earlier on 17th December 2015, Ajinomoto was slapped with an unusual market activity query by Bursa on the sudden rally in its share price to an all-time high of RM9.30. (The Edge Daily)
• DRB-Hicom Bhd will dispose of its 90.0% stake in property investment firm Corwin Holding Pte Ltd for S$317.0 mln (RM964.6 mln) with an estimated gain of RM427.5 mln. The proposed disposal, expected to be finalised by 1Q2016, allows the group to unlock the value of its investment in Corwin based on the current market value of the property. The gain is also expected to reduce DRB-Hicom's gearing ratio to 0.8x, from 0.9x as at 3rd March 2015.
• The purchase price was arrived at on a willing buyer-willing seller basis after taking into consideration the audited net assets of Corwin as at 31st March 2015 of approximately S$55.4 mln and the audited net profit of Corwin for the financial year ended 31st March 2015 of approximately S$30,470. (The Edge Daily)
• Axiata Group Bhd is expanding into the Nepal market by buying an 80.0% stake in the number one mobile operator, Ncell Pte Ltd for US$1.37 bln (RM5.91 bln). Axiata had signed a conditional sale and purchase agreement with TeliaSonera UTA Holdings B.V. and SEA Telecom Investments B.V. for the 100% acquisition of Reynolds Holdings Ltd
• Ncell is the number one player in the market with 13.0 mln subscribers, representing 48.8% of the subscriber market share. After the acquisition of
• Ncell, Axiata would have contiguous presence and reach in five key countries across South Asia. (The Star Online)
• Lion Diversified Holdings Bhd’s (Lion Div) investment holding unit, Excel step Investments Ltd has fended off creditors with its bondholders waiving the event of default and extending the payment due date of its 10th scheduled partial redemption amount to 31st January 2016.
• The extension will allow the holders of its exchangeable bonds due in November 2017 to reach an agreement Excel and the guarantor on any further restructuring of the bonds as may be required by the bondholders. The outstanding principal amount of the bonds totals US$39.7 mln (RM170.6 mln), of which the 10th scheduled payment consists of US$4.0 mln (RM17.2 mln).
• Under the bond restructuring plan being mulled, the outstanding principal amount of US$39.7 mln would be paid through two new issues of bonds – (i) US$12.2 mln (RM52.3 mln) zero coupon guaranteed secured exchangeable bonds due 2020 and US$27.0 mln (RM116.0 mln) 8% guaranteed unsecured bonds due 2019. (The Star Online)
• KKB Engineering Bhd has received two contracts worth a total of RM31.8 mln from Auxicorp Construction & Engineering Sdn Bhd and Petron Malaysia Refining & Marketing Bhd.
• The contract from Auxicorp was to supply steel pipes and specials for the main pipeline from Batu Kitang water treatment plant to Bukit Entingan tank in Kuching, Sarawak. The job is expected to be completed by 3Q2016. As for the purchase order from Petron, KKB will fabricate and supply cylinders to the oil company by the 4Q2016. (The Star Online)

Source: M+ Online Research - 22 Dec 2015