Tracking the overnight weakness in regional and global stockmarkets, the FBM KLCI plunged 1.0% due to profittaking on weaker crude oil prices as well as the weakening Ringgit and selling on telco and banking heavyweights. The lower liners descended into the negative zone, while nine-out-of-ten sectors on Bursa Malaysia declined, with the exception of the Mining sector (+0.9%).

Market breath was negative as decliners overpowered the winners on a ratio of 586-to-230 stocks. Traded volume also declined 4.9% to 1.75 bln shares, amid profit taking activities ahead of a public holiday on Monday.

Significant heavyweight laggards were banks which included Hong Leong Financial Group (-36.0 sen), RHB Bank (- 20.0 sen) and Maybank (-12.0 sen). BAT shed RM1.40, while Sime Darby lost 12.0 sen despite higher crude palm oil prices. Lafarge Malaysia (-34.0 sen), Aeon Credit Service (-18.0 sen), Alliance Financial Group (-18.0 sen) and LPI Capital (-18.0 sen) weighed on the broader market. Bursa Malaysia (-21.0 sen) ended down to RM 8.80, following a bomb hoax at midday.

On the other side of the trade, gainers include Lay Hong (+30.0 sen), Apex Healthcare (+28.0 sen), Calsberg (+16.0 sen) and Manulife Holdings. Meanwhile, Teck Guan Perdana rose 16.0 sen after it was slapped with an Unusual Market Activity (UMA) query by Bursa Malaysia. Petronas Dagangan (+4.0 sen) and Hong Leong Bank (+2.0 sen) were the only two outperformers on the FBM KLCI last Friday.

Japanese equities rose on Monday, on the back of weaker Yen vs. the Greenback as well as easing worries on the financial health of banking giant, Deutsche Bank. The Nikkei advanced 0.9%, as gains in consumer staples companies offset the losses in energy-related stocks. Meanwhile, the Hang Seng Index jumped 1.2%, led by Galaxy Entertainment Group (+2.9%) but the Shanghai Composite Index is closed for a week long holiday. The majority of the ASEAN stockmarkets finished on a positive note on Monday.

U.S. equities sunk into the red despite stronger crude oil prices – due to the persisting concerns over Deutsche Bank’s problems and uncertainties surrounding U.K.’s plans for exiting the EU. The Dow shed 0.3%, while on the broader market, the S&P 500 fell 0.3%, dragged by declining utilities and property-related counters. The Nasdaq was also down by 0.2% to just above the 5,300.0 psychological level.

Key European benchmark indices advanced on Monday, as the FTSE jumped 1.2% after British Prime Minister, Theresa May promised to begin the process of exiting the European Union (EU) in the 1Q2017. The CAC (+0.1%) also eked-out slight gains after paring earlier losses, while Germany’s stockmarkets closed for a public holiday.

THE DAY AHEAD

After the steep fall last Friday, we think the FBM KLCI could stage a quick rebound as the Malaysian stockmarket attempts to adjust from a mild bout of oversold. The positive performance of regional and key global indices would also provide some recovery impetus for Bursa Malaysia stocks over the near term.

For now, however, we think the recovery could be modest as many market participants are still wary over the sustainability of the market’s direction after Friday’s steep fall and the recovery could just lift the key index to around the 1,660. Meanwhile, we think the 1,650 level will continue to serve as the major support level.

COMPANY BRIEFS

SapuraKencana Petroleum Bhd (SapKen), has won three contracts with a combined value of RM889.0 mln. The first contract consists of engineering, procurement, construction, installation and commissioning of 11 pipeline systems and associated topside modifications in B127 and surrounding Mumbai High fields located off the west coast of India. The 20 months contract was awarded by Oil and Natural Gas Corporation Ltd.

The second contract was given to SapuraKencana Drilling Asia Ltd by Brunei Shell Petroleum Sdn Bhd for the provision of its Tender Assist Drilling Rig, SKD Pelaut. The contract is for a firm period of two years with options to extend for an additional two years.

The third contract was awarded to SapuraKencana Subsea Services Sdn Bhd by Petronas Carigali Sdn Bhd (PCSB) for the provision of underwater maintenance services for Sepat MOPU. The contract is for a period of about two months. (The Star Online)

Iskandar Waterfront City Bhd (IWC) is proposing to acquire two vacant freehold plots in Johor for a collective sum of RM90.0 mln.

IWC’s wholly-owned subsidiary, Success Straits Sdn Bhd (SSSB) had entered into a conditional sale and purchase agreement with Malgold Construction Sdn Bhd for a 1.7 ha. plot of land for RM39.0 mln. SSSB had also entered into a conditional sale and purchase agreement with Eight Danga Sdn Bhd to buy 2.2-ha. Plot of land for RM51.0 mln.

The two adjoining properties are about 10km north-west of Johor Baru city centre. IWC is proposing a mixed development project on the properties comprising residential and commercial units. (The Star Online)

Genting Malaysia Bhd’s indirect wholly-owned subsidiary, Resorts World Ltd has finalised its proposed disposal of its stakes in Genting Hong Kong Ltd to Golden Hope Ltd (GHL) for US$415.0 mln (about RM1.70 bln) in cash.

The disposal involves the sale of Resorts World's entire 1.40 bln shares, which represents almost 16.9% of Genting Hong Kong’s total issued and paid-up share capital, for a price of US$0.29 (about RM1.20) per share. (The Edge Daily)

Titijaya Land Bhd is proposing to acquire property development company, NPO Builders Sdn Bhd (NPOB) from its vendors Titi Kaya Sdn Bhd, Lee Eng Wah and Lim Wen Yeh for RM115.6 mln by issuing new shares.

NPOB is principally engaged in property development and is the registered owner of a 33.2 ac. residential land and a 13.0-ac. commercial land located at Mukim of Bukit Raja, District of Petaling, Selangor.

The proposed development on the land will be shops, serviced apartments and affordable homes with a total estimated gross development value of RM2.40 bln. The project is expected to commence development in 2H2017 with a targeted completion in the 2H2027.(The Edge Daily)

Gumusut-Kakap Semi-Floating Production System (L) Ltd, a wholly-owned subsidiary of MISC Bhd, has commenced arbitration proceedings against Sabah Shell Petroleum Company Ltd to seek resolution on contractual disputes totaling approximately US$245.0 mln (RM1.01 bln).

MISC said it wishes to seek resolution on contractual disputes covering claims for outstanding additional lease rates, payment for completed variation works and other associated costs under the lease agreement dated 9th November 2012, which was entered into between Gumusut-Kakap and Sabah Shell. The agreement between the parties was for the construction and lease of the Gumusut-Kakap Semi-Floating Production System (Semi –FPS) for the purposes of the production of crude oil. (The Edge Daily)

Berjaya Corp Bhd’s 1QFY17 net loss stood at RM62.7 mln vs. a net profit of RM56.1 mln in the previous corresponding period, partly due to exceptional items, including loss on disposal of associated company, and non-cash impairments. Revenue for the quarter, however, increased 3.7% Y.o.Y to RM2.22 bln. (The Edge Daily)

Salutica Bhd is seeking a transfer from the ACE market to the main market of Bursa Malaysia. The Bluetooth electronic components maker has met the requirements for the transfer of its listing to the main market as set out by the Securities Commission and Bursa Securities. (The Edge Daily)

Astino Bhd’s 4QFY16 net profit soared 17.7x Y.o.Y to RM8.4 mln due to an increase in revenue and profit margin. Revenue for the quarter grew 13.4% Y.o.Y to RM111.9 mln.

For FY16, cumulative net profit rose 53.3% Y.o.Y to RM30.3 mln. Revenue for the year, however, fell 2.7% Y.o.Y to RM472.7 mln. (The Edge Daily)

Source: M+ Online Research - 4 Oct 2016