The FBM KLCI endured a volatile trading session yesterday, before snapping its four-day losing streak to close 0.3% higher. Gains on the big board were underpinned by buying interest in selective oil & gas and banking heavyweights. The lower liners ended mostly higher as the FBM Small Cap and FBM Ace climbed 0.04% and 0.1% respectively, while the broader market ended mixed.

Market breadth stayed negative as losers outpaced gainers on a ratio of 418-to-344 stocks. Traded volumes, however, added 21.6% to 1.39 bln shares on rotational play amongst the lower liners.

Topping the gainers list on the key index was BAT (+86.0 sen), followed by Hong Leong Financial Group (+34.0 sen), Axiata (+12.0 sen), Petronas Chemicals (+10.0 sen) and Petronas Dagangan (+10.0 sen). Notable advancers on the broader market include Dutch Lady (+30.0 sen), Apex Healthcare (+16.0 sen), Malaysia Airport Holdings (+14.0 sen), Lafarge (+11.0 sen) and George Kent (+10.0 sen).

In contrast, consumer bellwethers like Nestle (-30.0 sen), Panasonic (-30.0 sen), Carlsberg (-24.0 sen) and Heineken Malaysia (-18.0 sen) topped the broader market decliners list. Choo Bee (-9.0 sen) halted a streak of six consecutive winning days. Meanwhile, Telekom (-12.0 sen), PPB Group (-10.0 sen), Genting Malaysia (-10.0 sen), MISC (-4.0 sen) and RHB Bank (-3.0 sen) were amongst the biggest decliners on the big board.

Asia benchmark indices ended lower as the Nikkei fell 0.2% ahead of the two-day Bank of Japan monetary policy meeting coupled with a stronger Japanese Yen. Both the Shanghai Composite and Hang Seng Indices declined 0.1% each as investors were cautious on the U.S. Federal Reserve’s stance on the upcoming monetary policy meeting. ASEAN stockmarkets, meanwhile, ended mixed.

U.S. stockmarkets inched marginally higher as the Dow rose 0.1% overnight, but gains were limited by the weak housing start data in August. The S&P 500 climbed 0.03%, lifted by the healthcare and consumer staples sector which offsets the fall in the energy sector, while the Nasdaq crept 0.1% higher.

European benchmark indices also closed mostly higher as the FTSE and DAX gained 0.3% and 0.2% respectively. The CAC, however, reversed all its intraday gains to close 0.1% lower as financial stocks like BHP Paribas and Societe Generale slipped 0.2% and 0.1% respectively. Meanwhile, significant advancers of the day were mining stocks such as Glencore (+0.2%), Fresnillo (+0.9%) and BHP Billiton (+1.1%).

THE DAY AHEAD

It appears that the 1,650 level is becoming a major support level for the key index after institutional investors were seen nibbling on selected index heavyweights to help shore up the market.

We think this nibbling trend is likely to continue over the near term as market participants await for further signals from the Bank of Japan and the Federal Reserve on the direction of interest rates and other stimulus measures to be announced over the next two days.

The above developments could well determine the global market’s direction over the intermediate term, but for the day, we think the FBM KLCI could make a fresh attempt at the 1,660 level amid the sustained market support and mild bargain hunting activities.

COMPANY BRIEF

Press Metal Bhd has inked a 20:80 joint-venture (JV) agreement with China-based Sunstone Development Co Ltd. The JV company, Shandong Sunstone & PMB Carbon Ltd will be incorporated in China and shall principally be engaged in the manufacturing of pre-baked carbon anodes, which will be supplied to Press Metal. (The Edge Online)

Dagang NeXchange Bhd (DNeX) has secured a two-year contract extension to serve as the exclusive operator of the National Single Window (NSW) for Trade Facilitation from the Malaysian government. The contract involves facilitating Customs-related electronic transactions and duty payments.

The contract extension will commence on 25th September 2016 and the service charge to be rendered by DNeX will remain unchanged at 75.0 sen per kilobyte for government agencies, 80.0 sen per kilobyte for the private sector and RM5.00 per approved permit and certificate of origin application. (The Star Online)

KESM Industries Bhd registered a fall in its 4QFY16 net profit by 23.0% Y.o.Y to RM8.1 mln, from RM10.5 mln last year - due to higher staff costs and other expenses. This is despite the stronger revenue contribution, which was up 8.1% Y.o.Y to RM74.5 mln, from RM68.9 mln in the previous corresponding period. A dividend of three sen per share (RM1.3 mln) was also proposed. (The Star Online)

CLIQ Energy Bhd's major shareholder, Best Oracle Sdn Bhd, has agreed to cease its court appeal against CLIQ's liquidation application. Moving forward, the former will wind up on 26th September 2016 in accordance to the High Court’s order.

Best Oracle had, in April, filed a judicial review to prevent the special purpose acquisition company from being liquidated. It named the Securities Commission Malaysia and CLIQ as respondents. (The Edge Online)

Ekovest Bhd’s shares trading will be suspended on 22 September 2016 pending a material announcement. (The Edge Online)

Source: M+ Online Research- 21 Sep 2016