Despite trading mostly in the positive territory yesterday, the FBM KLCI (-0.1%) succumbs to profit taking in the eleventh hour as the key index extended its losses for the fifth consecutive session. The lower liners, however, were traded mostly higher as the FBM Small Cap and FBM Fledgling indices climbed 0.2% and 0.1% respectively, while the broader market ended mixed.

Market breadth turned negative as losers outnumbered gainers on a ratio of 4-to-3 stocks. Traded volumes declined 13.6% to 1.15 bln shares as investors were cautious of the recent volatile market condition.

Half of the key index constituents fell, dragged down by Petronas Gas (-40.0 sen), followed by Hong Leong Financial Group (-34.0 sen), DIGI (-15.0 sen), Petronas Chemicals (-9.0 sen) and Telekom (-8.0 sen). Notable decliners on the broader market were Time dotCom (- 62.0 sen), Genting Plantations (-26.0 sen), Chin Teck Plantations (-15.0 sen), Press Metal (-13.0 sen) and JF Technology (- 12.5 sen).

On the flipside, amongst the biggest advancers on the broader market were Dutch Lady (+RM1.00), Aeon Credit (+68.0 sen), Heineken Malaysia (+52.0 sen) and DKSH (+41.0 sen). Magni-Tech added 15.0 sen after reporting a strong set of quarterly earnings. Anchoring the gainers on the FBM KLCI were Genting Malaysia (+24.0 sen), BAT (+22.0 sen), KLCC (+15.0 sen), Maxis (+13.0 sen) and Tenaga (+6.0 sen).

Strong new home prices data sent Chinese equities higher yesterday as the Shanghai Composite climbed 0.8%, while the Hang Seng Index added 0.9% on gains in property stocks, coupled with receding fears over the potential interest rate hike by the U.S. Federal Reserve this week. Japanese stockmarkets were closed for the Respect of the Aged Day public holiday. ASEAN stockmarkets, meanwhile, ended mostly higher.

U.S. stockmarkets ended relatively flat overnight as the Dow (-0.02%) erased earlier gains ahead of the two-day FOMC meeting. On the broader market, the S&P 500 closed unchanged after enduring a choppy trading session, while the Nasdaq (-0.2%) extended its losses.

Earlier key European benchmark indices - the FTSE (+1.5%), CAC (+1.4%) and DAX (+1.0%) all closed sharply higher, recovering from its worst week in three months. Gains were underpinned by energy shares as crude oil prices staged a recovery after the unrest in Libya could disrupt the restart of its crude exports.

THE DAY AHEAD

On the whole, conditions on Bursa Malaysia remain insipid as more investors and market players are staying on the sidelines, awaiting for a clearer direction before charting their next course of action. Although an interest rate hike is not expected in the upcoming FOMC meeting, there remains wariness as the Fed could still raise rates before the end of the year.

In the meantime, we see little movement on Bursa Malaysia as there remains few noteworthy leads and this is sending more market participants to the sidelines. Nevertheless, we think that institutional investors will continue to prop-up the key index above the 1,650 support level, but if it gives way, the FBM KLCI could retrace back to the 1,630 level.

Any recovery, for the time being, will also be meek and unlikely to lift the market above the 1,660 level, given the lack of a broad-based buying impetus.

COMPANY BRIEF

Sona Petroleum Bhd has appointed Lim San Peen and Datuk Mohd Anwar Yahya of PricewaterhouseCoopers Advisory Services Sdn Bhd (PwC) as joint liquidators and to distribute 97.0% of the of its cash trust account to eligible shareholders by November.

Meanwhile, the remaining 3.0% will be distributed within two years from the first distribution. As of 19th September 2016 the total gross amount of monies held in the cash trust account is RM543.3 mln. (The Star Online)

Iris Corp Bhd is partnering China-based property developer, Qingjian International Group Co Ltd (QIGC) to jointly undertake its 1Malaysia Civil Servants Housing (PPA1M) project in Putrajaya.

Both parties have entered into a Memorandum of Understanding (MoU) to set up a special purpose joint-venture company (SPV) on 19th September 2016. (The Star Online)

Berjaya Sports Toto Bhd's (BToto) 1QFY17 net profit decrease 18.9% Y.o.Y to RM58.7 mln, from RM72.5 mln in the previous corresponding period, mainly due to weaker results of H.R. Owen Plc although slightly offset by better results by its principal subsidiary, Sports Toto Sdn Bhd. Revenue however, was 8.2% Y.o.Y higher at RM1.44 bln, from RM1.33 bln in 1QFY16 .

The group is also proposing a first interim dividend of four sen per share, which is payable on 18th October 2016. The entitlement date has been fixed on 7th October 2016. (The Star Online)

IHH Healthcare Bhd has procured a multi-currency banking facility up to RM5.44 bln involving Singapore Dollars, Hong Kong dollars and U.S. Dollars. The unsecured multi-currency five-year revolving credit facility would be used to fund an existing RM1.87 bln facility, corporate funding, working capital, as well as for investments and project financing. (The Edge Online)

AirAsia Bhd has incorporated a wholly-owned subsidiary, AirAsia Pte Ltd in Singapore to provide airlines operation services and aviation related management services in the country. (The Edge Online)

Poh Huat Resources Holdings Bhd is acquiring a detached warehouse cum office-showroom in South Dandenong, Victoria, Australia for AUD4.3 mln (RM13.3 mln) cash, to expand its business to Australia.

Poh Huat is confident that Australia will provide good opportunities for expansion in the relatively untapped market. The group’s other overseas operational bases include Vietnam and South Africa. (The Star Online)

Digi.Com Bhd’s Norwegian parent, Telenor ASA, which holds a 49.0% equity stake, is reportedly planning to reduce its shareholding in the former amid the fierce domestic competition. However, the stake sale review is said to at an early stage and no final decision has been made.

It was also mentioned that Telenor may explore a joint-venture with Asian carriers or a sale of its stake if it does not find the right partner. (The Edge Online)

Maxis Bhd's indirect shareholder, Saudi Telecom Co was reported to be exploring options for its shareholding in Maxis. The former indirectly-owns a 16.2% interest in Maxis via its 25.0% equity stake in Binariang GSM Sdn Bhd – the controlling shareholder of Maxis.

Bloomberg had reported that Saudi Telecom may consider selling its stake in Binariang to a Malaysian pension fund or another financial investor.

Binariang is also the majority shareholder in Indian wireless carrier Aircel Ltd, which is merging with its larger rival, Reliance Communications Ltd. (The Edge Online)

Source: M+ Online Research - 20 Sep 2016