• The FBM KLCI extended its losses for the second straight time on the back of the negative regional market sentiment and declining crude oil prices. The slide was also severe with the FBM KLCI closing at its lowest level since September last year. Concurrently, all of the sub-indices on Bursa Malaysia also ended in the negative territory, weight down by losses in the FBM Ace (+1.8%) and Technology (+1.6%) indices.
• Market breadth was negative as losers overwhelmed gainers on a ratio of 846- to-165 stocks. Traded volumes rose slightly by 14.5% to 2.52 bln shares.
• Hong Leong Financial Group (-56.0 sen) led the heavyweight losers on the FBM KLCI, followed by Public Bank (-28.0 sen), Tenaga (-26.0 sen), Westports (- 13.0 sen) and Maybank (-10.0 sen). On the broader market, some of the other major decliners were MPI (-29.0 sen), PIE Industrials (-24.0 sen), Ajiya (-19.0 sen), Canone (-28.0 sen) and LPI (-20.0 sen).
• On the other side of the trade, the top advancers include Huat Lai (+21.0 sen), Carlsberg (+12.0 sen), Cepco (+11.0 sen) and EUPE (+5.0 sen). Meanwhile, there were only three index-linked heavyweight gainers – IOI Corporation (+3.0 sen), Astro (+2.0 sen) and PPB (+4.0 sen).
• Following the continual decline in Hang Seng (-1.6%) and the Shanghai Composite Index (-3.2%), the Nikkei also tumbled by another 2.4% amid the weaker Yen – the latter was also dragged lower by losses in Casio and Mazda Motor Corp. ASEAN indices, meanwhile, ended mostly negative.
• U.S stockmarkets, however, rebounded overnight amid gains in crude oil prices. The energy, telecommunications and consumer-discretionary sectors led the gainers on the broader market. Separately, the initial jobless claims rose by a seasonally adjusted 10,000 to 293,000 over 10th – 16th January period, while the Philadelphia Fed’s manufacturing index was in the negative territory in January.
• In Europe, the FTSE 100 also closed in the positive territory, supported by gains in mining and oil & gas stocks. Meanwhile, the DAX and CAC booked positive gains as the European Central Bank Mario Draghi President signalled more efforts to bolster the Eurozone economy.

THE DAY AHEAD

• We think that the FBM KLCI may have found near-term support at the 1,600 points level after yesterday’s big slide that has left the market oversold. Hence, we expect a rebound to materialise as the market adjust from oversold, which will be supported by the recovery in most Western stock indices overnight. The recovering crude oil prices will also help in the market’s recovery and to potentially end the week on a positive note.
• On the upside, the resistances are at the 1,620-1,630 points level, while the 1,650 level will serve as the major resistance for now. However, further upsides may be difficult to come by for now amid the still cautious market environment and the general market outlook is still challenging.
• On the broader market, meanwhile, we think that there could be some renewed buying, but we think it will be selective due to the cautious market environment.

COMPANY BRIEFS

• Malayan Banking Bhd (Maybank) has established a US$3.0 bln structured note programme to widen its product offerings. The programme will enable it to issue the structured notes in various countries outside of the United States and Malaysia, in accordance with applicable selling restrictions. (The Edge Daily)
• EcoFirst Consolidated Bhd’s 2QFY16 net profit surged 78.3x Y.o.Y to RM11.7 mln, mainly due to reversal of over provision of tax penalties and interests. Revenue for the quarter jumped 341.7% Y.o.Y to RM23.6 mln.
• For 1HFY16, cumulative net profit soared 16.3x Y.o.Y to RM14.1 mln. Revenue for the period jumped 348.1% Y.o.Y to RM47.0 mln. (The Edge Daily)
• Beverage manufacturer Fraser & Neave Holdings Bhd (F&N) has budgeted at least RM300.0 mln for capital expenditure (capex) over the next two years to expand its production capacity. Two planned investments would come on stream within the next six months.
• In Thailand, F&N's capex would finance its packaging line for evaporated milk at a cost of 300.0 mln baht (RM36.2 mln). (The Edge Daily)
• SCGM Bhd, the country's largest manufacturer of thermo-vacuum form plastic packaging, has appointed Sabah-based Kim Teck Cheong Consolidated Bhd (KTC) as sole distributor of its Benxon brand food packaging and plastic cups to food and beverage retailers and manufacturers in Sabah, Sarawak and Brunei. Under the agreement, KTC will distribute SCGM's Benxon brand products through its 6,419 distribution points, across 18 distribution centre. (The Edge Daily)
• Hap Seng Land Sdn Bhd, the property arm of Hap Seng Consolidated Bhd will be launching projects worth RM1.90 bln in gross development value (GDV) in 2016, despite the weaker property market. The launches slated for the year comprise Aria (RM1.10 bln GDV), a high-rise residential project in Jalan Tun Razak which will be launched in 1H2016, and another mixed development in Balakong (RM800.0 mln GDV) to be launched in 2H2016. Aria will comprise 598 units of serviced apartments, while the Balakong project will be 60% residential and 40% commercial. (The Edge Daily)
• Printed circuit board maker, GUH Holdings Bhd has called off its proposed investment in a water treatment plant in Jiangsu Province, China with the Development General Company of Jiangsu Gaochun Economic Development Zone,after the investment failed to materialise.
• Under the proposed venture plan in January 2011, GUH was to undertake the construction of a 100.0 mln litres per day water treatment plant on a build-operate-transfer basis, to be implemented in two phases. (The Edge Daily)
• Seacera Group Bhd's 60%-owned subsidiary, SPAZ Sdn Bhd has accepted a letter of award from Turnpike Synergy Sdn Bhd for the construction of a Ampang Jaya traffic police quarters block and relevant supporting buildings in Pandan Indah, Kuala Lumpur, for RM14.9 mln. The contract's completion period is 18 months from the date of site possession. (The Edge Daily)
• Poultry farming company, LTKM Bhd plans to buy a parcel of freehold land, measuring about 1.9-ac. in Kuala Lumpur for RM27.4 mln in cash. LTKM intends to fund the land buy via internal funds and bank borrowings. (The Edge Daily)
• EUPE Corporation Bhd's 3QFY16 net profit slumped 98.6% Y.o.Y to RM0.1 mln or 0.04 sen a share, partly due to the cancellation of some property sales Revenue for the quarter fell 13.3% Y.o.Y to RM35.5 mln.
• For 9MFY16, cumulative net profit sank 75.5% Y.o.Y to RM1.9 mln. Revenue for the period dropped 30.0% Y.o.Y to RM93.9 mln. (The Edge Daily)
• Civil engineering firm, Gadang Holdings Bhd's 2QFY16 net profit jumped 108.2% Y.o.Y to RM17.7 mln, mainly due to improved profit margins from construction activities and higher contribution from its property division. Revenue for the quarter, however, dropped 11.0% Y.o.Y to RM102.0 mln.
• For 1HFY16, cumulative net profit improved 113.7% Y.o.Y to RM38.6 mln. Revenue for the period added 1.4% Y.o.Y to RM251.4 mln. (The Edge Daily)
• GD Express Carrier Bhd (GDex) has offered up to 10.0% or 124.9 mln shares amounting to RM217.3 mln of its issued and paid-up share capital to Yamato Asia Pte Ltd, a wholly owned subsidiary of Yamato Holdings Co Ltd, paving the way for the company to become the leading delivery company in Malaysia.
• Yamato Asia also aims to increase its stake to 23.0% in the future by acquiring additional shares from existing shareholders. (The Edge Daily)
• Nexgram Holdings Bhd has made an application to the Securities Commission (SC) to withdraw its takeover offer to acquire the remaining securities in packaging solutions company Ire-Tex Corp Bhd.
• Nexgram’s board viewed that this withdrawal would be in the best interest of all parties, including the company and its shareholders as well as the holders of the offer securities, in view of recent developments and events that have transpired and after taking into consideration the timeline of the offer permitted under the Takeover Code. (The Star Online)
• Kian Joo Can Factory Bhd (KJCF) and two of its units have been ordered by the Kuala Lumpur High Court to pay RM9.3 mln in relief to its former Executive Director See Teow Koon. The sum included RM8.8 mln in retirement gratuity, contractual bonus and salary arrears claimed by See until he reaches 70 years old, as well as RM519,075 in litigation costs.
• The defendants - KJCF, Kian Joo Packaging Sdn Bhd and KJ Can (Selangor) Sdn Bhd were also told to pay an interest of 5.0% per annum to See, who was ousted at KJCF’s AGM in April 2014, until full payment.
• However, the judge did not grant See’s other claims such as for reinstatement as KJCF’s Executive Director, annual special incentive, year-end allowance, statutory contributions to his EPF account in respect of the arrears of salary, annual special incentive and loss of contractual benefits (The Star Online)

Source: M+ Online Research - 22 Jan 2016