The FBM KLCI (-0.5%) extended its losing streak for the third-straight day as selling pressure amongst selected blue-chip counters persisted. The lower liners – the FBM ACE (-1.1%), the FBM Fledging (- 0.9%) and the FBM Small Cap (-0.4%) were also splashed in red alongside a similarly negative broader market.

Market breadth was negative as losers dominated gainers on a ratio of 564-to- 279 stocks. Traded volumes also tanked 9.4% to 1.81 bln shares, on the back of higher foreign selling.

More than two-thirds the key index constituents fell, dragged down by Hong Leong Financial Group (-14.0 sen), followed by Petronas Gas (-14.0 sen), Maxis (-9.0 sen), AmBank (-7.0 sen) and Axiata Group (-7.0 sen). Significant decliners on the broader market were United Plantations (-20.0 sen), SP Setia (- 18.0 sen), Seni Jaya Corporation (-17.0 sen), Genting Plantations (-16.0 sen) and Perak Corporation (-15.0 sen).

Consumer Products stocks like Dutch Lady (+RM1.64), Nestle (+RM1.16) and Fraser & Neave (+18.0 sen) topped the broader market advancers lists, followed by Advanced Packaging Technology (+41.0 sen) and Carlsberg (+30.0 sen). Meanwhile, BAT (+22.0 sen), Genting (+10.0 sen), Westports (+3.0 sen), IHH Healthcare (+2.0 sen) and YTL Corporation (+1.0 sen) were the only advancers on the FBM KLCI.

Key regional benchmark indices closed mostly on the positive side, amid the mixed economic data from regional economic powerhouses. The Nikkei rose 0.2%, as gains in defensive counters like healthcare and consumer staples offset losses in materials and industrial-related stocks, on the back of weaker-thanexpected factory spending. The Shanghai Composite, however, contracted 0.7% despite the better-than expected manufacturing data, while the Hang Seng Index climbed 0.8%. ASEAN stockmarkets, meanwhile, ended mostly in the red.

The majority of U.S. stockmarkets finished with slight gains ahead of the August employment data. Despite a choppy trading session, the Dow erased earlier losses to close in the green territory as consumer staples and technology industry stocks advanced. On the broader market, the S&P closed almost unchanged, while the Nasdaq added 0.3%.

Key European benchmark indices ended mostly down on Thursday, on the back of a sudden spike in the Pound Sterling after U.K.’s manufacturing data hit a record ten-month high. The FTSE pared back earlier gains, closing 0.5% lower on losses on Hikma Pharmaceuticals (-2.9%) and Vodafone Group (-2.8%), while the DAX lost 0.6% and the CAC (+0.03%) eked-out tiny gains.

THE DAY AHEAD

With the 1,680 level breached and the key index retreating back to the 1,670 support level, market conditions appears weaker as market sentiments are turning increasingly cloudy. As it is, the dearth of local and foreign leads is sending more investors to the sidelines and foreign investors are also locking-in their short-term profits as well.

Consequently, stocks on Bursa Malaysia could trend lower over the near term as the consolidation continues. This could also mean that the 1,670 points level may not hold and the key index could retrace back to the 1,650 major support. Meanwhile, any recovery is likely to be meek at this junction and merely to just stay above the immediate 1,670 support.

COMPANY BRIEF

Axiata Group Bhd has secured an approval from Bangladesh’s High Court to merge Robi Axiata Ltd with another operator there, Airtel Bangladesh Ltd, an indirect wholly-owned subsidiary of Indian-based Bharti Airtel Ltd, paving the way for the setting up of the second largest mobile operator in terms of subscribers in Bangladesh.

The High Court Division of the Supreme Court of Bangladesh has approved the amalgamation of the two entities with a merger fee of US$12.8 mln, along with a spectrum fee of US$65 mln. (The Edge Daily)

Malaysian Resources Corp Bhd (MRCB) has inked a Memorandum of Understanding (MoU) with Telekom Malaysia Bhd to provide integrated telecommunications — be it traditional broadband or wireless — to the property developer's existing and upcoming projects.

The MoU is to strengthen the existing telecommunication and information and communications technology infrastructure at MRCB properties. At the same time, the two groups will look into providing Internet of Things (IoT)-enabled services for smart township services and smart building services. (The Edge Daily)

Vivocom International Holdings Bhd's subsidiary, Vivocom Enterprise Sdn Bhd has been appointed as the turnkey contractor for a residential condominium project with a gross development value of RM600.0 mln in Hulu Kinta, Perak, after entering into a heads of agreement with the developer of the project, Dazamega Ventures Sdn Bhd. (The Edge Daily)

Eka Noodles Bhd fell into Practice Note 17 (PN17) effective 1st September 2016 as its shareholders’ equity, on a consolidated basis, was 25.0% or less of its issued and paid-up capital.

The shareholders’ equity is less than RM40.0 mln in EKA’s unaudited interim financial results for its 2Q2016. Eka Noodles is looking into formulating a regularisation plan to address its PN17 status and will make the necessary announcement in due course. (The Edge Daily)

Damansara Realty Bhd has inked a Memorandum of Understanding with Country Garden Real Estate Sdn Bhd to jointly undertake a development on a land, measuring 52.0-ac in Johor Bahru, Johor.

The MoU was to set out the understanding between the parties to jointly develop a portion of land held under an individual title in Johor Bahru. (The Edge Daily)

Sarawak Plantation Bhd (SPB) is acquiring two parcels of land with existent oil palm plantations in Batang Baram and Tinjar, Miri, for RM76.0 mln to expand its landbank in Sarawak.

The land is purchased from Magna Wide Sdn Bhd and Magna Wide Enterprise Sdn Bhd. The land is mostly planted with oil palm aged between one and four years old. (The Edge Daily)

Iris Corp Bhd is seeking international partners to fund the 1Malaysia Civil Servants Housing (PPA1M) programme. On 30th November 2015, Iris was awarded the construction contract by Perbadanan Putrajaya for the development of PPA1M and a mixed development on 16.2-ac. of land in Putrajaya, for an estimated gross development cost of RM622.7 mln. (The Edge Daily)

Ranhill Holdings Bhd plans to sell a 60.0% stake in its wholly-owned, Ranhill Water (Hong Kong) Ltd to Singapore-listed SIIC Environment Holdings Ltd for RMB273.9 mln (RM167.0 mln). The move will allow both companies to jointly pursue waste water projects in China. (The Edge Daily)

Tropicana Corp Bhd is disposing off an office tower, along with car parks located on a tract in Damansara Intan, Petaling Jaya, to a private entity for RM24.9 mln. The disposal is expected to net a disposal gain totalling RM18.2 mln, of which it intends to utilise as working capital and/or repayment of bank borrowings. (The Edge Daily)

Oriental Interest Bhd (OIB) has appointed its former Managing Director Low Kok Aun’s cousin, Low Kok Shen, as its Chief Executive Officer (CEO), effective 1st September 2016. (The Edge Daily)

Kossan Rubber Industries Bhd has launched its first patented "low derma" technology for synthetic gloves on 1st September 2016. Kossan is the first Malaysian glove manufacturer in the world to be granted the "low dermatitis potential" claim in gloves by the US Food & Drug Administration (FDA).

The low derma technology works to eliminate allergy-causing accelerators in the glove-making process, while still ensuring the gloves have the same or superior tensile strength, flexibility and sensitivity. The company has also been granted with patents in Japan, China, Hong Kong and Taiwan. Kossan would invest about RM100.0 mln in the next five years to expand its lines, automate its plants and also R&D. (The Star Online)

Boustead Holdings Bhd's subsidiary is seeking RM42.7 mln in damages from Petronas Carigali Sdn Bhd over the suspension of a contract to provide five helicopters for the latter's operations. Boustead’s 51.0%-owned MHS Aviation Bhd (MHS) had issued a notice of arbitration against Petronas Carigali over a contract dated 29th June 2011. (The Star Online)

SapuraKencana Petroleum Bhd's (SK Petro) unit, SapuraKencana TL Offshore Sdn Bhd has bagged five oil and gas-related contracts totalling US$65.3 mln or RM264.0 mln. The first job was to provide transportation and installation of offshore facilities for the BOC-BOD pipeline replacement tie-in project by Repsol Oil and Gas Malaysia Ltd (formerly known as Talisman Malaysia Ltd) for one-month period.

The second job was a contract from MISC Offshore Floating Terminals (L) Ltd to demobilise a floating storage and offloading (FSO) located 20km offshore of Kertih, Terengganu, Malaysia in the ABU cluster field at Block PM-318. The contract was for five months.

The third contract was awarded by PTSC Offshore Services Joint Stock Company was to provide offshore installation for the jacket, piles and appurtenances for the Su Tu Trang field in Vietnam. The contract is for three months.

The fourth was by Petronas Carigali Sdn Bhd to provide transportation and installation of pipeline, substructure and topside for the F12 gas development project. The site would be 180km offshore of north west of Bintulu and the contract is for eight months.

The fifth was a contract by ExxonMobil Exploration and Production Malaysia Inc. is to provide transportation and installation of offshore facilites for the Guntong pipelay project. The scope of work consists of transportation and installation of a new pipeline from Tapis Q to Guntong C. The contract will start around March 2017 and is expected to end in May 2017. (The Star Online)

Source: M+ Online Research - 2 Sep 2016