• The FBM KLCI extended its weekly losses for the second straight time after submitting to three consecutive sessions of losses last week amid the weak global market sentiments and tumbling crude oil prices. Meanwhile, the lower liners also ended lower on the back of a mostly negative market trend, with the exception of the Technology and Plantation sub-indices.
• Market breadth was expectedly negative as losers outstripped gainers on a ratio of 580-to-325 stocks. Traded volumes rose by 42.4% to 1.88 bln shares.
• Sime Darby Bhd (-18.0 sen) was the biggest heavyweight decliner on the FBM KLCI, followed by Genting Bhd (+17.0 sen), Petronas Dagangan (-10.0 sen) and Sapura Kencana Petroleum (- 6.0 sen). Meanwhile, some of the major losers on the broader market were MYEG (-6.0 sen), CCB (-13.0 sen), Tiong Nam Logistics (-4.0 sen) and Fiamma (- 9.0 sen).
• On the other side of the trade, among the key gainers of the day include Bintulu Port (+18.0 sen), Amway Malaysia (+15.0 sen), UMS (+12.0 sen), MBM (+6.0 sen) and OWG (+11.0 sen). Concurrently, IHH (+3.0 sen), Astro (+5.0 sen), Telekom (+1.0 sen) and Genting Malaysia (+2.0 sen) were the main gainers among FBM KLCI listed stocks.
• Following the sharp losses on Friday, the Shanghai Composite entered into a technical bear market after sliding 20.0% off its recent high on the 22nd December 2015. Likewise, the Hang Seng and Nikkei also fell by 1.5% and 0.5% respectively. ASEAN indices were also affected by the negative sentiment and ended the week mostly lower.
• U.S. stockmarkets also extended their losses to mark its worst 10-day start to a calendar year amid the slump in crude oil prices. Ten of the main sectors on the S&P 500 ended in the negative territory.
• European equities also fell into the red as the FTSE closed 1.8% lower for the week, while the DAX and CAC fell by 3.1% and 2.9% respectively. Separately, sales of new cars in European Union rose 16.6% in December, the strongest monthly rate in 2015, which could potentially be a sign of stronger economic recovery in the region.

THE DAY AHEAD

• There remains little respite and we expect the weak market trend to sustain over the near term following the weak global stockmarket performance since the start of the year. Market conditions are staying feeble amid the lack of positive catalyst and this is likely to prolong the selling and profit taking activities. As it is, investors prefer to stay on the sidelines, awaiting for calmness to return before re-entering the market.
• Although most stocks are expected to see near term weakness, we expect oil and gas related stocks to bear the brunt of the selling on the back of the lower crude oil prices. Banking stocks could also see sustained weakness as they are seen as the main barometer of the economic environment that continues to see tepid growth prospects.
• With the 1,630 level giving way, the next support is pegged at the 1,620 level, before the major support at the 1,600 level comes into play.

COMPANY BRIEFS

• Emas Kiara Industries Bhd has received a notice of unconditional takeover offer from its second largest shareholder, Kim Feng Capital Sdn Bhd (KF Capital), who has a 15.0% stake in the company, for the acquisition of all the remaining ordinary shares it does not own at an offer price of 80.0 sen per share in cash.
• KF Capital had entered into a conditional sale of shares agreements with founder and Deputy Executive Chairman Wong Kong Foo, Intan Kuala Lumpur Sdn Bhd, Goh Siew Bee and Tan Sri Kamaruzzaman Shariff to acquire 29.4 mln shares, which is equivalent to 32.0% of EKIB’s share base, for RM23.5 mln or 80 sen per share.
• With the above acquisition, KF Capital’s holdings in Emas Kiara will rise to 47.0%, triggering the Mandatory General Offer (MGO) for the remaining shares it does not own. (The Edge Daily)
• The Securities Commission Malaysia (SC) has raised a red flag over the conduct of Nexgram Holdings Bhd in disposing of three of its subsidiaries – Nexgram Resources Sdn Bhd, Godynamic Investments Ltd and PT Semesta Tirta Antara Raya (Indonesia).
• Nexgram, is also making a voluntary takeover offer for the securities of Ire-Tex Corp Bhd via a share-swap arrangement.
• Bursa Malaysia is seeking verification from Nexgram on the existence of certain assets belonging to the subsidiaries. They are also being investigated by the SC in relation to the accuracy of information disclosed in the offer document despatched to Ire-Tex shareholders. (The Edge Daily)
• Scan Associates Bhd has reported in an annual general meeting that it is focusing on cost cutting and streamlining its ICT security solutions provider's operations to rejuvenate the company's financials.
• The Practice Note 17/Guidance Note 3 (PN17/GN3) entity was working closely with its adviser, Mercury Securities Sdn Bhd to come up with a regularisation plan. (The Edge Daily)
• Scomi Energy Services Bhd (SESB) has bagged a US$41.6 mln contract from PT Total E&P Indonesie (TEPI), Indonesia's biggest gas producer, to provide drilling fluids and completions services for one year. The contract is an extension from a previous three-year award, which was signed with TEPI in 2012. With the inclusion of the aforementioned contract, Scomi Energy’s orderbook stands at US$1.78 bln (The Edge Daily)
• Brahim’s Holdings Bhd (BHB) is eyeing further expansion overseas through its partnership with SATS Investments Pte Ltd, following the disposal of a 49.0% equity stake in Brahim’s Airline Catering Holdings Sdn Bhd (BACH) to the latter. SATS has 43 airline catering kitchens around the globe and also has non-airline catering businesses; and with SATS as a partner, it expects to do much better business overseas. (The Edge Daily)
• AirAsia Bhd is revising its baggage pricing effective 28th January 2016, allowing passengers to save more money, if they purchase checked baggage when making their flight reservations. Passengers who buy their checked baggage after booking their flights, such as through the Manage My Booking page, will have to pay a higher price. (The Edge Daily)
• Fajarbaru Builder Group Bhd plans to place out up to 10.0% of its issued share base to raise gross proceeds of approximately RM23.8 mln under the maximum scenario to finance its construction and property businesses. The company might place out up to 47.7 mln new shares to third-party investors at an indicative price of 50 sen each. (The Edge Daily)
• Axiata Group Bhd has announced three key appointments to strengthen the mobile telecommunication network provider's management team and human capital development. Dr Hans Wijayasuriya, currently CEO of Axiata's Sri Lanka unit, Dialog Group, will take on the additional role of regional CEO for Axiata, while Dominic P Arena has been appointed as Axiata's Group Chief Strategy Officer. Mohd Asri Hassan is also named as the group’s Head of Business Operations. (The Edge Daily)
• IHH Healthcare Bhd has signed an agreement with Perennial Real Estate Holdings Ltd to lease space for IHH's planned ParkwayHealth Chengdu Hospital in China. The group would lease at least 48,000 sq. m. at the Perennial International Health and Medical Hub for the 350-bed ParkwayHealth Chengdu Hospital. (The Edge Daily)
• Petron Malaysia Refining and Marketing Bhd is looking at offering the company’s new Blaze 100 high-grade petrol at more of its stations nationwide. At the moment, Blaze is offered in eight service stations in Klang Valley and Johor and the group will offer the new fuel in 30-40 more stations if there is demand.
• The new petrol has a Research Octane Number of 100 (RON 100), which is the highest number available locally, delivers better performance in cars and motorcycles compared with RON 95 or RON 97 fuels. The fuel, contains Tri-Activ formulation that also improves engine protection and increases mileage. Blaze 100 costs RM2.80 per litre and is produced at Petron Malaysia’s refinery in Port Dickson. (The Star Online)

Source: M+ Online Research - 18 Jan 2016