The FBM KLCI (+0.01%) pared its earlier losses, on the back of late buying support of selected heavyweights, to close almost unchanged on Wednesday. The lower liners - the FBM Small Cap (+0.1%), the FBM Fledging (+0.3%) and the FBM Ace (- 1.3%) closed mixed. The broader market meanwhile, finished mostly higher, led by gains in the Technology counters (+0.6%).

Market breath, however, remained negative as losers edged gainers on a ratio of 397-to-370 stocks. Traded volume recovered by 6.4% to 1.58 bln shares due to profit-taking activities in the FBM Ace index.

Banking heavyweights that dominated the Main Board on Wednesday includes RHB Bank (+11.0 sen), Hong Leong Bank (+8.0 sen) and AmBank (+7.0 sen). Other key index movers were Genting Malaysia (+23.0 sen) and KLCC Property & REITs (+7.0 sen). Dutch Lady (+RM1.1), Panasonic Manufacturing (+72.0 sen), Bursa Malaysia (+25.0 sen) and Scientex (+23.0 sen) topped the broader market advancers list. Teck Guan Perdana, meanwhile, extended its gains for the second straight day by adding 41.0 sen.

In contrast, Far East Holdings (-27.0 sen), Apex Healthcare (-22.0 sen), Shangri-La Hotels (-17.0 sen), Lafarge Malaysia (12.0 sen) and Choo Bee Metal Industries (- 11.0 sen) declined. Blue chip underperformers were BAT (-RM1.00) Petronas Chemicals Group (-10.0 sen), Axiata Group (-8.0 sen), Maybank (-7.0 sen) and MISC Bhd (-4.0 sen).

Japanese stockmarkets sunk into the red as the stronger Yen against the Dollar dragged exporters lower. The Nikkei lost 1.3% as losses in financial and energy stocks also dragged the market lower. The Shanghai Composite Index was also down 0.3%, although the Hang Seng Index gained 0.2% to close at 23,619.7 points. ASEAN stockmarkets were mostly lower.

U.S. equities finished higher on the back of strengthening crude oil prices after the Organisation of Petroleum Exporting Countries (OPEC) agreed to limits crude output. The Dow grew 0.6%, buoyed by energy and industrials-related stocks. The S&P 500 (+0.5%) rallied, as seven of its eleven sectors close in the green, while the Nasdaq rose 0.2%.

Commodity stocks pushed the European equities higher with the FTSE (+0.6%) closing in the positive territory for the first time in three days – on expectation of more support from the Bank of England. The DAX was up 0.7%, buoyed by the rally in Deutsche Bank (+3.2%) and the CAC ended 0.8% higher to just above the 4,400 psychological level.

THE DAY AHEAD

OPEC’s decision to limit production, coupled with the corresponding jump in oil prices will buoyed oil and gas stocks on Bursa Malaysia. Index heavyweights like the Petronas group of companies and SapuraKencana are expected to lead the market higher. The positivity will also extend to the broader market oil and gas related companies, including support services and contractors.

On the upside, we think the 1,670 level could be breached easily and the FBM KLCI could target the next resistance at the 1,680 level over the near term.

We also expect the broader market and lower liners to also stage a commendable performance as retail players could take advantage of the positive market environment for trading activities.

COMPANY BRIEFS

DRB-Hicom Bhd will continue to hold a substantial stake in Proton Holdings Bhd even after it has identified a strategic partner for the struggling national carmaker. It was reported that Proton had shortlisted Volkswagen AG’s Skoda unit and Suzuki Motor Corp. to sell a stake and raise money to turn around. Earlier this week, Proton had also chosen proposals from companies including Renault SA and Peugeot parent, PSA Group.

Following the launch of the new Proton Saga yesterday, Proton is targeting so sell 5,000 units per month and is targeting to sell 100,000 cars in 2016, compared with 102,175 units in 2015. (The Star Online)

The Securities Commission (SC) has reprimanded and imposed penalties on two executive directors of Dufu Technology Corp Bhd for causing wrongful loss to the company.

Yong Poh Yow, a former Executive Director and Chief Executive was found to have made remittances totaling US$1.0 mln to foreign parties in the United States between January 2013 and October 2014 without authorisation from Dufu’s Board. The funds were then used to purchase several assets which were registered under his name. He was reprimanded and fined RM200,000.

Lee Hui Ta, the former Executive Director and Chief Financial Officer of Dufu, was reprimanded and fined RM150,000 for abetting Yong by approving payment vouchers for the said unauthorised remittances. Lee is currently the Executive Chairman of Dufu.

SC had imposed administrative sanctions on both Lee and Yong after taking into consideration that Yong had fully repaid the amount of US$1.0 mln to Dufu. (The Star Online)

SapuraKencana Petroleum Bhd’s 2QFY17 net profit grew 8.0% Y.o.Y to RM112.3 mln, in the absence of provisions for impairment on oil and gas assets, which totaled RM539.9 mln in the previous corresponding quarter. Revenue for the quarter, however, fell 40.2% Y.o.Y to RM1.67 bln.

For 1HFY17, however, cumulative net profit slipped 39.0% Y.o.Y to RM222.6 mln. Revenue for the period declined 28.5% Y.o.Y to RM3.62 bln. (The Star Online)

Four listed companies, namely Utusan Melayu (M) Bhd, Ancom Bhd, Media Prima Bhd and Seni Jaya Corp Bhd, have been awarded 10-year advertising concession packages on the Mass Rapid Transit (MRT) Sungai Buloh-Kajang Line (SBK Line), also known as MRT 1.

The 10-year concessions for both Package A for station advertising and Package C for train advertising had been awarded to Titanium Compass Sdn Bhd, while the concession for Package B for exterior advertising had been awarded to Big Tree-Seni Jaya Consortium.

Titanium Compass is a joint-venture (JV) comprising four companies: Ancom's indirect wholly-owned Puncak Berlian Sdn Bhd, Thai-listed VGI Global Media Public Co Ltd, Ikatan Asli Sdn Bhd and Utusan Melayu's wholly-owned Utusan Airtime Sdn Bhd.

Meanwhile, Big Tree-Seni Jaya Consortium comprises Media Prima's wholly-owned Big Tree Outdoor Sdn Bhd (BTO) and Seni Jaya Corp's wholly-owned Seni Jaya Sdn Bhd. (The Edge Daily)

VS Industry Bhd's 4QFY16 net profit tumbled 79.2% Y.o.Y to RM10.9 mln, owing to the impairment loss on other investments amounting to RM7.6 mln coupled with provision for deposits of RM21.8 mln paid for the proposed acquisition of a 20.0% stake in a solar power plant in the Inner Mongolia Autonomous Region. Revenue for the quarter, however, rose 9.3% Y.o.Y to RM554.2 mln.

For FY16, cumulative net profit decreased 11.2% Y.o.Y to RM117.9 mln. Revenue for the year, however, added 12.4% Y.o.Y to RM2.18 bln. A final dividend of 0.8 sen was proposed. (The Edge Daily)

Yinson Holdings Bhd's 2QFY17 net profit fell 23.1% Y.o.Y to RM60.3 mln due to lower other operating income and higher administrative expenses. Revenue for the quarter, however, gained 16.3% Y.o.Y to RM114.4 mln.

For 1HFY17, cumulative net profit dropped 6.8% Y.o.Y to RM82.7 mln. Revenue for the period, however, climbed 16.4% Y.o.Y to RM229.8 mln. (The Edge Daily)

Gamuda Bhd's 4QFY16 net profit fell marginally lower by 1.0% Y.o.Y to RM152.1 mln, due to the tapering off of underground and elevated works of the MRT 1. Revenue for the quarter declined 1.4% Y.o.Y to RM614.4 mln.

For FY16, cumulative net profit decreased 8.2% Y.o.Y to RM626.1 mln. Revenue for the year slipped 11.6% Y.o.Y to RM2.12 bln. (The Edge Daily)

Source: M+ Online Research - 29 Sep 2016