Despite paring earlier gains, the FBM KLCI (+0.1%) closed marginally higher on the back of buying support in selected heavyweights and stronger crude oil prices that lifted sentiments on oil and gas stocks. The lower liners, however, were splashed in red, while the broader market closed mostly negative.

Market breath was tepid as decliners outweigh the gainers on a ratio of 477-to- 288 stocks. Traded volumes improved 9.0% to 1.63 bln shares amid the quick profit taking activities on some of the lower liners and broader market shares.

Significant blue chip outperformers include banking giants – Hong Leong Financial Group (+22.0 sen), Maybank (+7.0 sen) and Public Bank (+4.0 sen). Other key index advancers were Sime Darby (+20.0 sen) and IHH Healthcare (+5.0 sen). Meanwhile, broader market chart-toppers include Fraser & Neave (+36.0 sen), Malpac Holdings (+22.0 sen), Scientex (+15.0 sen), Boustead Heavy Industries Corp (+14.0 sen) and Tasek Corporation (+14.0 sen).

In contrast, Panasonic Manufacturing Malaysia (-56.0 sen) Genting Plantations (-34.0 sen), Fraser & Neave (-32.0 sen), Malpac Holdings (-22.0 sen) and Bison Consolidated (-15.0 sen) were the big losers of the day. Key index decliners were BAT (-16.0 sen), AMMB Holdings (- 11.0 sen), IOI Corporation (-10.0 sen), Genting (-8.0 sen) and Petronas Gas (-8.0 sen).

Japanese equities ended higher for the third-straight day –amid the weaker Yen due to the mounting U.S. interest rate hike expectations. The Nikkei added +0.5% to 16,819.2 points - led by Hitachi Ltd (+6.4%) after it was reportedly considering a sale of its subsidiaries worth ¥100.0 bln, while the Hang Seng Index locked-in 0.2% gains, buoyed by energy-related counters such as PetroChina Co (+3.1%) and Kunlun Energy Co (+3.0%). ASEAN stockmarkets also ended mostly in the positive realm.

Wall Street rebounded overnight and snapping two consecutive days of losses, buoyed by better-than-expected economic data as well as stronger crude oil prices following the reduction in U.S crude oil supply for the fifth straight week. The Dow gained 0.6% to close at 18,281, while the S&P500 and the Nasdaq rallied 0.4% and 0.5% respectively.

Key European indices, however, sunk into the red despite the recovery in Deutsche Bank’s shares following expectations of a reduction in monetary stimulus by the ECB. The FTSE (-0.6%) pulled back from an intra-day high to close in the red as losses in utilities and consumer-staples stocks offset gains in the energy sector. The DAX and the CAC also ended 0.3% lower each after lingering in the negative territory.

THE DAY AHEAD

Although the FBM KLCI inched higher at yesterday’s close, the general market sentiment remains muted with most market participants staying wary over the state of the market. Consequently, the key index appears to be still attempting to find its footing. Under the prevailing environment, we think the market is still devoid of a clear direction as the buying interest could still be nullified by the generally uncertain near term market direction.

As a result, we think the key index is likely to continue its sideway trend over the near term and attempt to build up a firmer base around the 1,660 level ahead of the upcoming Budget 2017 announcement later this month. Further ahead, the main resistance is at the 1,680 level, while the 1,650 is the main support.

COMPANY BRIEFS

Ho Hup Construction Co Bhd has bagged a RM32.4 mln sub-contract from Adegan Senandung Sdn Bhd to construct the Immigration quarters in Pengkalan Hulu, Perak. Ho Hup would be responsible for all piling, building, external and miscellaneous works related to the construction of the quarters. The three-year contract is scheduled to start on 20th October 2016. (The Star Online)

Tien Wah Press Holdings Bhd has been awarded a tender by the British American Tobacco (BAT) group in Indonesia entitling it to buy a BAT group member involved in printing and along with it, a six-year contract to supply packaging materials for 304.0 bln Rupiah (RM96.7 mln).

The award entitles Tien Wah to acquire the entire paid-up capital of Bentoel Group subsidiary, PT Bintang Pesona Jagat (PTBPJ) which undertakes the group’s printing business there. PTNPJ derives more than 80.0% of its revenue from printing packaging materials for the tobacco industry. (The Star Online)

Multi-Usage Holdings Bhd (MUH), which changed its financial year end twice this year, has failed to get an extension of time from the Companies Commission of Malaysia (SSM) to hold its 2016 AGM.

SSM rejected its application to convene the AGM latest by 31st December 2016. The last time MUH held its AGM was on 29th June 2015. It was a meeting that saw shareholders voting down the resolutions to re-elect or retain four retiring directors and rejecting the resolution to approve payment of directors’ fees. (The Star Online)

Kossan Rubber Industries Bhd is tying up with the Malaysian Rubber Board (MRB) to develop rubber products for civil engineering and construction for commercial evaluation. Kossan’s subsidiary, Doshin Rubber Products (M) Sdn Bhd has inked a collaboration agreement with MRB on 27th September 2016.

The tie-up will also develop formulation and mixing techniques for the civil engineering and construction of the rubber products and identify potential companies for the commercial evaluation of those products. Under the three-year agreement, the parties also agreed to enter into a separate agreement for the commercialisation of rubber products or technology from this collaboration. (The Edge Daily)

Berjaya Corp Bhd (BCorp) is disposing of a 39.1% equity interest and C$52.9 mln (RM166.5 mln) worth of Unsecured Subordinated Notes in Toronto-listed Taiga Building Products Ltd — Canada's largest independent wholesale distributor of building products to Singapore-listed UPP Holdings Ltd, which is controlled by businessman Datuk Tong Kooi Ong for a combined C$65.6 mln (RM206.4 mln) cash.

The proposed disposals represent an opportunity for it to realise its entire investment in Taiga and will result in a total net gain of about C$23.1 mln (RM72.8 mln). BCorp plans to use the proceeds for working capital. (The Edge Daily)

The Inland Revenue Board (IRB) has sent notices to Mega First Corp Bhd's unit, Idaman Harmoni Sdn Bhd for additional taxes and penalties totaling RM22.8 mln. However, Idaman Harmoni said in its defense that the assessments raised by the IRB are statute barred and erroneous in law. Idaman Harmoni had been served with the two notices from IRB in September 2016. (The Edge Daily)

Pintaras Jaya Bhd's wholly-owned subsidiary, Pintaras Geotechnics Sdn Bhd has received a contract worth RM24.5 mln from Metbuild Sdn Bhd for construction works in relation to a mixed development project at Bandar Baru Sri Petaling.

The contract is for the design, supply and construction of earth works, ancillary works, bored piling works, contiguous bored pile and capping beam works for a proposed mixed development project at Bandar Baru Sri Petaling. The said works will begin immediately and is expected to complete in 10 months. (The Edge Daily)

BLD Plantation Bhd has aborted its plan to acquire Pekan Semangat Sdn Bhd from multiple vendors for RM155.2 mln cash, which could have given it an additional 5,442 ha. of plantation land. Both parties have mutually agreed to rescind the agreement in relation to the proposed acquisition. (The Edge Daily)

Multi Sports Holdings Ltd's shareholders have approved the appointment of six independent directors to oversee and revamp the shoe manufacturer's operations.

At the company's special general meeting on 5th October 2016, the shareholders approved the appointment of Kasinathan Tulasi, Naren Anand Gill, Clarence Yeow Kong Chew, Cheh Chee Mun, Guan Swee Kee and Terence Selvarajah as directors. (The Edge Daily)

Source: M+ Online Research - 6 Oct 2016