The FBMKLCI (-0.3%) extended its losses for a third consecutive day– mainly due to funds selling of selected heavyweights. The FBM Ace (+0.5%) was the only advancer among the lower liners. Meanwhile, the broader market was also splashed in red, with the exception of the Industrial Products sector (+0.2%) and the Mining sector, which closed unchanged.

Market breath turned negative as losers outpaced the gainers on a ratio of 426-to- 338 stocks. Traded volume lost 9.3% to 1.49 bln shares amid uncertainties over an early general election as investors look forward to Malaysia’s Budget 2017.

Genting (-12.0 sen) topped the FBM KLCI decliners list, followed by Sime Darby (- 11.0 sen), Hong Leong Financial Group (- 10.0 sen) and Maybank (-10.0 sen). IHH Healthcare fell 12.0 sen, following the disposal of a 2.0% equity stake in the group by its second largest shareholder, Mitsui & Co. The biggest losers on the broader market included UMW Holdings (- 20.0 sen), Malaysian Pacific Industries (- 19.0 sen), Fraser & Neave (-18.0 sen) and Alliance Financial Group (-14.0 sen). Tek Seng Holdings shed 19.0 sen after reported rumuors of its plans to retrench some 200 employees.

On the broader market, glove-makers, Kossan Rubber Industries (+21.0 sen) and Top Glove (+18.0 sen) rallied, followed by Scientex (+22.0 sen), Teck Guan Perdana (+31.0 sen) and DKSH Holdings (+28.0 sen). Key index outperformers were BAT (+54.0 sen) and CIMB Group Holdings (+5.0 sen), while Axiata Group, MISC and Petronas Dagangan rose 8.0 each.

Key regional benchmark indices finished higher, following the conclusion of the first U.S. presidential debate which favored Hilary Clinton as the winner. The Nikkei ended 0.8% higher, led by gains in Mitsui Chemicals (+7.3%) and Toshiba Corp (+5.8%). The Shanghai Composite Index (+0.6%) pared earlier losses to close in the green, while the Hang Seng Index jumped 1.1% on the back of gains by the consumer discretionary-related companies. Similarly, ASEAN stockmarkets finished mostly in the positive region.

Wall Street ended higher for the first time in three days, attributed to gains in technology stocks and better-than-expected consumer confidence data, which rose to a record high since August 2007. The Dow gained 0.7% as investors cheered Hilary Clinton’s apparent win over Donald Trump in the first Presidential debate, while the S&P 500 (+0.6%) and the Nasdaq (+0.9%) advanced.

European key benchmark indices closed lower last Tuesday, despite recovering some of its earlier losses. The FTSE slid 0.2% for the third-straight day, pressured by banking and materials-related stocks. Meanwhile, the DAX and the CAC fell 0.3% and 0.2% respectively after a choppy trading session.

THE DAY AHEAD

We think there could be a reprieve for stocks on Bursa Malaysia after the successive days of weakness as the key index takes cue from the positive overnight performance on Wall Street and regional markets to stage a near term rebound.

For now, however, we think the rebound could be mild as the general market environment is still tentative and the buying interest could still be measured. Therefore, we think the upsides could be limited to the 1,670 points level as market players are likely to adopt quick profit taking activities that could limit the market’s upsides.

Retail interest on the broader market and lower liners could also pick up slightly amid the calmer market conditions, but we also expect their gains to be tempered by quick profit taking activities.

COMPANY BRIEFS

Mitsui & Co Ltd has disposed about a 2.0% stake in IHH Healthcare Bhd for RM1.02 bln, or RM6.20 per share on 27th September 2016. The disposal of 164.6 mln shares through its subsidiary, MBK Healthcare Partners Ltd was done in a direct business transaction.

This was the first time since IHH’s listing in July 2012 that the Japanese company had pared down its stake. In contrast, IHH’s largest shareholder Khazanah Nasional Bhd and third largest shareholder the Employees Provident Fund Board have been actively buying and selling IHH shares.

Mitsui had acquired 30.0% equity interest in the hospital group - then called Integrated Healthcare Holdings Sdn Bhd from the Malaysian government investment arm in April 2011 for RM3.30 bln, or RM2.00 per share. (The Star Online)

Sime Darby Bhd, who owns a 22.2% stake in property developer Eastern & Oriental Bhd (E&O), has agreed to sell a 10.0% stake at a lower price to E&O Group Managing Director Datuk Seri Terry Tham than the price they agreed on in early June 2016.

The conglomerate had agreed to revise the sale price of the stake to RM323.3 mln, or RM2.45 per share compared to the RM2.60 per share in E&O. Tham would re-emerge as E&O’s largest shareholder following the latest acquisition as his stake will rise to 21.0%, while Sime Darby will hold 12.2%. (The Star Online)

Eco World Development Group Bhd's (EcoWorld) 3QFY16 net profit surged 4.7x Y.o.Y to RM44.6 mln, attributable to higher sales from projects launched during the quarter. Revenue for the quarter rose 60.1% Y.o.Y to RM727.3 mln.

For 9MFY16, cumulative net profit jumped 4.1x Y.o.Y to RM99.9 mln. Revenue or the period climbed 75.7% Y.o.Y to RM1.81 bln. (The Edge Daily)

Ranhill Holdings Bhd has proposed to sell a 60.0% stake in Ranhill Water (Hong Kong) Ltd (RWHK) for RMB273.9 mln (RM169.1 mln) to Singapore-listed SIIC Environment Holdings Ltd.

As part of the sales agreement, RWHK will undertake an internal restructuring prior to the completion of the divestment by transferring its 51.0% interest in Ranhill International Trade (Hong Kong) Investment Ltd and its 100.0% interest in Ranhill Venture (Hong Kong) Ltd to Ranhill Water Technologies (Cayman) Ltd (RWT Cayman) - a wholly owned subsidiary of Ranhill Holdings Bhd. (The Edge Daily)

Greenpeace activists have blocked operations of IOI Corporation Bhd at Rotterdam port, accusing it of forest destruction and child labour. Ten activists are blocking IOI from accessing its refinery and the Greenpeace ship Esperanza is preventing oil from being unloaded from incoming tankers.

In April 2016, the Roundtable for Sustainable Palm Oil (RSPO) withdrew IOI's Sustainability Certification after allegations the company had illegally cut down rainforests in Indonesia and planted palm crops on peatland. However, the RSPO announced in August 2016 that IOI had satisfied conditions for the suspension to be lifted, a move that has sparked sharp criticism from environmental groups. (The Edge Daily)

Superlon Holdings Bhd's 1QFY17 net profit gained 56.7% Y.o.Y to RM6.1 mln due to favourable exchange rate movements, growth in margin from its higher sales volume and lower material costs. Revenue for the quarter added 15.9% Y.o.Y to RM25.6 mln. (The Edge Daily)

Source: M+ Online Research - 28 Sep 2016