Tracking the positive sentiments from the U.S. stockmarkets overnight, the FBM KLCI gained 0.2% to close at 1666,73 points yesterday, ahead of Bank Negara’s policy meeting on Friday. The lower liners, however, continues to be beaten down as the FBM Ace (-0.4%) led the lower liners lower. Meanwhile, on the broader market, only three out-of-ten sector indices advancing.

Market breath remained negative as losers overpowered the outperformers on a ratio of 402-to-355 stocks. Traded volumes rose 10.7% to 1.8 bln shares as profit-taking activities continued to be seen among the lower liners and broader market stocks.

Petronas Dagangan (+24.0 sen), Genting Malaysia (+22.0 sen) AmBank (+8.0 sen), BAT (+8.0 sen) and IHH Healthcare (+5.0 sen) advanced on the Main Board. Other lower-liner winners include United Plantations (+50.0 sen), Dutch Lady (+42.0 sen), JCBNEXT Bhd (+16.0 sen) and Pos Malaysia (+16.0 sen).

Broader market losers were Eng Kah Corporation (-25.0 sen) Lebtech Bhd (- 20.0 sen), Nestle (-20.0 sen), Top Glove (- 16.0 sen) and Lay Hong (-14.0 sen). Underperformers on the FBM KLCI included plantations-related companies like IOI Corporation (-7.0 sen) and PPB Group (-4.0 sen), followed by Hong Leong Bank (-4.0 sen), RHB Bank (-3.0 sen) and Astro Malaysia Holdings (-2.0 sen).

Key Asian benchmark indices traded largely in the positive territory on Thursday. The Nikkei (+0.5%) finished higher after the Yen notched its longest losing streak since March amid increasing expectations of an interest rate hike in December. The Hang Seng Index (+0.7%), meanwhile, extended its gains for the fourth consecutive day to close slightly above the 23,950.0 level. ASEAN stockmarkets also ended mostly higher.

Wall Street finished almost unchanged, as gains in the technology sector offset the declines among drugmakers, while investors looked forward to the upcoming employment data for assurances of firm growth in the U.S economy, which will affirm higher interest rates in the coming months. The Dow was down by 0.1%, while the Nasdaq shed 0.2% to close at 5,306.9 points. Meanwhile, the S&P500 beat the generally weaker sentiment to close slightly up by 0.1%.

U.K stocks extended it losses for the second-straight day, after the Pound fell to a 31-year low on the back of fresh concerns over British's exit from the European Union. The FTSE tanked 0.5%, led by Easyjet (-6.9%) after the latter warned that its full-year earnings could fall by as much as 29% due to weaker sales. Meanwhile, both the DAX and the CAC rebounded from earlier losses, albeit closing down marginally by 0.2%.

THE DAY AHEAD

We expect the key index to maintain building up a base at around the 1,660-1,670 levels ahead of the upcoming Budget announcement as institutional investors continue to undertake selective buying of index-linked stocks. The calmer market conditions will also aid the institutional investors’ resolve in taking up some position among the index-linked stocks.

The broader market shares and lower liners, however, may see continuing scant following as retail players retreat to the sidelines amid the lack of positive catalyst and this could sustain the quick profit taking activities ahead of the weekend.

COMPANY BRIEFS

LPI Capital Bhd’s 3QFY16 net profit grew 2.5% Y.o.Y to RM77.7 mln on higher contribution from the general insurance segment under Lonpac Insurance Bhd. Revenue for the quarter added 4.0% Y.o.Y to RM363.5 mln.

For 9MFY16, cumulative net profit gained 62.6% Y.o.Y to RM355.8 mln. Revenue for the period increased 7.7% Y.o.Y to RM1.02 bln. (The Star Online)

Mesiniaga Bhd has secured a RM10.4 mln contract from Malaysian Investment Development Authority (Mida) for ICT hardware and software maintenance services. The contract was for a period of three years commencing from 1st October 2016. (The Star Online)

Bertam Alliance Bhd's unit, Bertam Development Sdn Bhd (BDSB) is in a dispute with a contractor over an alleged claim of RM5.8 mln in connection with works done on a project in Langkawi, Kedah. BDSB had, on 4th October 2016, received a notice of adjudication from R & C Cergas Teguh Sdn Bhd to refer the payment dispute to adjudication. R & C Cergas Teguh claimed the sum includes the total certified sum and the balance sum of works that remained uncertified but duly completed. (The Edge Daily)

RHB Bank Bhd has successfully completed its second issuance of senior unsecured notes (senior notes) worth US$500.0 mln under its US$5.00 bln Euro Medium Term Note Programme. The programme was established on 23rd September 2014.

The senior notes, with tenure of five years, were priced at five-year US Treasury +137.5 bps or a yield of 2.5% and will pay a coupon of 2.5% per annum. The notes are also expected to be listed on the Singapore Exchange and the Labuan International Financial Exchange. (The Edge Daily)

Dufu Technology Corp Bhd plans to consolidate two shares of 50 sen each into one share of RM1.00 to improve its capital structure by 4Q2016. It also plans to establish an Executives' Share Option Scheme (ESOS) of up to 15.0% of its issued and paid-up share capital and to increase its share capital to RM200.0 mln comprising 200.0 mln consolidated shares from RM100.0 mln of 200.0 mln shares presently. (The Edge Daily)

Work on Westports Holdings Bhd's RM1.05 bln Container Terminal 8 (CT8) is on track, with construction of Phase 1 of the terminal completed. Work on Phase 2 has also started on the piling for the second 300-metre wharf. Westports had earlier reported that first phase of the works, which started in early 2015 would be completed by 2016, while the second phase should be done by mid-2017. (The Edge Daily)

Sime Darby Bhd's indirect unit, Glengowrie Rubber Company Sdn Bhd (GRC) plans to sell a total of 325. ha. of freehold land in Glengowrie Estate in Hulu Langat, Selangor to Petaling Garden Sdn Bhd (PGSB) for RM428.8 mln. The parcels of land, which features oil palm plantation, comprise 163 ha. and 162.7 ha. of land that is sold for RM209.4 mln and RM219.4 mln respectively.

The proceeds from the land sale will be used to fund strategic development projects by Sime Darby Property Bhd within the next 12-24 months and pay for expenses relating to the proposed disposals. Sime Darby expects to record total gains of RM295.7 mln from the sale of the two parcels of land. (The Edge Daily)

 has reported that the indicative offer of financing with respect to the S$125.0 mln (RM377.0 mlPerisai Petroleum Teknologi Bhdn) notes pursuant to its S$700.0 medium term notes will be issued soon. However, there is no confirmed time frame for the indicative offer of financing from the financial institution at this point of time. (The Edge Daily)

Boustead Heavy Industries Corp Bhd’s (BHIC) unit has accepted a RM11.2 mln contract from the Defence Ministry to supply and deliver spares and provide maintenance and training for the Malaysian Navy's Bofors 40mm/L70 gun. The contract was secured by its 51.0% owned BHIC Bofors Asia Sdn Bhd (BBA) is for a three-year period, starting from 30th September 2016. (The Edge Daily)

Source: M+ Online Research - 7 Oct 2016