The FBM KLCI (-0.6%) extended its losses yesterday, dragged down by selling pressure amongst selective telco and banking heavyweights. Both the lower liners and the broader market stocks were also painted in red with the Technology sector (-1.7%) taking the heaviest beating in the latter.

Market breadth stayed negative as losers thumped gainers on a ratio of 637-to-206 stocks. Traded volumes, however, gained 1.0% to 1.36 bln shares as investors continue to lock in recent gains amid the volatile market sentiment.

BAT (-56.0 sen) topped the FBM KLCI decliners list, followed by PPB Group (- 16.0 sen), CIMB (-16.0 sen), Axiata (-16.0 sen) and Hap Seng (-11.0 sen). Among the biggest losers on the broader market were consumer products stocks like Ajinomoto (-32.0 sen), Carlsberg (-24.0 sen), Heineken Malaysia (-18.0 sen) and Panasonic Malaysia (+16.0 sen). KESM Industries fell 10.0 sen to close lower for the third consecutive session.

Steel-related companies like Melewar (+14.0 sen), Mycron Steel (+12.0 sen) and CSC Steel (+10.0 sen) rallied, while Dutch Lady rose 52.0 sen. Paos Holdings jumped 10.0 sen after announcing a series of corporate exercise involving a bonus issue and free warrants. On the big board, Hong Leong Financial Group (+22.0 sen), KLK (+10.0 sen), Petronas Dagangan (+10.0 sen), Tenaga (+10.0 sen) and DIGI (+2.0 sen) were among the biggest advancers.

Asia benchmark indices ended mostly higher as the Nikkei gained 0.3%, taking cue from the recovery on Wall Street overnight. The Shanghai Composite (+0.1%) staged a mild rebound from its previous session’s selloff, owing to the stronger-than-expected retail sales and industrial production data in August, but the Hang Seng Index (-0.3%) extended its losses after reversing all its intraday gains. ASEAN stockmarkets, meanwhile, ended mostly lower.

US stockmarkets erased most of their previous session gains as the Dow fell 1.4% after the International Energy Agency (IEA) forecast a lower demand for crude oil in both 2016 and 2017. On the broader market, the S&P500 declined 1.5%, dragged down by the energy sector (-2.9%) while the Nasdaq ended 1.1% lower.

Key European benchmark indices like the FTSE (-0.5%), CAC (-1.2%) and DAX (- 0.3%) all ended lower after reversing their intraday gains, weighed by the weakness in crude oil prices. Consequently, Anglo American PLC and Tullow Oil PLC fell 4.4% and 4.1% respectively.

THE DAY AHEAD

Sentiments continue to look dour after the successive days of weakness and the near term outlook is still looking frail amid the sustained uncertainties among the key global stock indices as well as the unremitting weakness in crude oil prices that will continue to affect oil and gas stocks on Bursa Malaysia.

This could mean that the FBM KLCI is likely to falter once again and the key index could head towards the 1,670 level over the near term as the selling and profit taking activity intensifies amid the lower investor confidence level. The market uncertainties is also expected to see many more investors, both retail and institutional, retreating to the sidelines.

If the 1,670 level fails to hold, the next supports are at the 1,650-1,660 levels. On the upside, there is resistance at the 1,680 level, followed by the key 1,700 points level.

COMPANY BRIEF

AWC Bhd‘s 51.0%-owned environment division has secured three subcontracts totaled RM27.5 mln. The first contract is for the supply, installation, testing and commissioning of a waste handling system for a new in-flight catering facility at Taoyuan International Airport, Taiwan worth RM7.8 mln. The project, which was awarded by Evergreen Sky Catering Corp of Taiwan, is expected to be completed by March 2018.

The second subcontract is for the design and supply of an Automated Vacuum Waste Collection System in India worth RM9.5 mln. The job was awarded by Shapoorji Pallonji and Co Pte Ltd and will be completed by October 2018.

The third contract is for the implementation of a solid waste handling system for the KL118 Tower Project worth RM10.2 mln, which was awarded by Samsung C&T Corporation - UEM Construction JV Sdn Bhd. It is set to commence in March 2017 and is expected to be completed by October 2019. (The Edge Daily)

Leweko Resources Bhd was awarded a subcontract from Iswarabena Sdn Bhd, valued at RM14.5 mln, for the supply, delivery and launching of Ultra High Performance Concrete Post Tensioned Segmental U Beam for the building of the Kuala Terengganu Bypass. The project is expected to be completed within a year, commencing from 15th September 2016. (The Edge Daily)

LBS Bina Group Bhd is planning to undertake a township project in Ijok, Selangor with an estimated gross development value of RM3.43 bln. (The Star Online)

PPB Group Bhd has announced that there is no decision made on the sale of its cinema operator company, Golden Screen Cinemas Sdn Bhd (GSC), as reported by Bloomberg earlier.

Bloomberg reported that PPB Group was seeking a buyer for GSC which has 345 digital screens in Malaysia and Vietnam. The sale could reap the company an estimated US$500.0 mln in proceeds (about RM2.05 bln).

Malaysia Airports Holdings Bhd (MAHB) registered an overall 2.0% Y.o.Y growth in passenger movement to 10.5 mln passengers in its Malaysian airports and Istanbul's Sabiha Gokcen International Airport (SGIA) in August 2016, from 10.3 mln passengers a year ago.

The growth was driven by its Malaysian operations, which was 5.0% Y.o.Y higher, offsetting the declining growth in SGIA after unforeseen events in Turkey.

Meanwhile, YTD passenger traffic growth, including SGIA, was recorded as 4.2% Y.o.Y to 77.4 mln compared to 74.3 mln last year. (The Edge Daily)

Asdion Bhd has announced the resignation of its Chief Operating Officer (COO) Low Jyh Sing, due to his deteriorating health condition. Low, who joined the group on 1st March 2016, was previously the director of a local logistics company with the principal activities of dealing in dry bulk and cargo handling in East Coast of Malaysia.

His resignation follows the retirement of Asdion's Executive Director, Jason Minos Peter, who retired and did not seek reelection at the conclusion of the company's fourteenth annual general meeting held on 9th September 2016.

Three-A Resources Bhd is planning a bonus issue on the basis of one bonus share-for-every four existing shares held and an employee share option scheme of up to 10.0% of its paid up share capital. The corporate exercises are expected to be completed by 1Q2017. (The Edge Daily)

Hibiscus Petroleum Bhd has fixed the issue price for the first tranche of its private placement shares at 19.5 sen a share – representing a discount of about 1.1% from the five-day volume weighted average market price up to 9th September 2016.

The private placement, which involved up to 82.3 mln shares (or 6.1% of its existing share base), was approved by Bursa Malaysia on 6th September, 2016.

Melewar Industrial Group Bhd was slapped with an Unusual Market Activity (UMA) query by Bursa, following a 35.0% hike in its share price recently. (The Edge Daily)

Source: M+ Online Research - 14 Sep 2016