Tracking the positive developments on Wall Street, coupled with the rally in crude oil prices overnight, the FBM KLCI gained 0.2% after trading mostly in the positive territory yesterday. The lower liners – the FBM Small Cap (+0.6%), FBM Fledgling (+0.2%) and FBM Ace (+1.0%), all ended higher, while the Technology sector (-0.04%) underperformed the positive broader market.

Market breath turned positive as advancers pipped decliners on a ratio of 440-to-324 stocks. Traded volumes gained 20.9% to 1.56 bln shares on rotational plays among the lower liners.

More than half the key index constituents advanced, led by BAT (+32.0 sen), followed by Sime Darby (+6.0 sen), CIMB (+5.0 sen), IHH (+5.0 sen) and IOI Corporation (+5.0 sen). Among the biggest gainers on the broader market were Panasonic (+48.0 sen), Ajinomoto (+34.0 sen), Aeon Credit (+32.0 sen) and DKSH (+31.0 sen). Malaysia Airport Holdings gained 3.0 sen after reporting a double digit growth in passenger traffic in September 2016.

Consumer products stocks like Lay Hong (-70.0 sen), Dutch Lady (-50.0 sen) and Fraser & Neave (-18.0 sen) remain as the biggest decliners on the broader market, while HCK Capital and Concrete Engineering fell 12.0 sen and 9.0 sen respectively. Key decliners on the big board were Petronas Dagangan (-14.0 sen), Hong Leong Financial Group (-8.0 sen), Maxis (-6.0 sen), Axiata (-5.0 sen), and Telekom (-1.0 sen).

Japanese stockmarkets advanced as the Nikkei gained 1.0% to close above the 17,000 psychological level on a weaker Japanese Yen. The Shanghai Composite (+0.6%) extended its gains for the fourth straight session, but the Hang Seng Index fell 1.3% as property stocks retreated. ASEAN stockmarkets, meanwhile, ended mixed.

U.S. stockmarkets recorded its biggest decline in a month as the Dow fell 1.1% on downbeat corporate earnings, coupled with the uncertainty over the timing of next interest rate hike. On the broader market, the S&P 500 slipped 1.2% with all ten main sectors in the red, while the Nasdaq closed 1.5% lower.

European benchmark indices erased all their intraday gains – the FTSE (-0.4%), CAC (-0.6%) and DAX (-0.4%) all retreated from their previous session gains after the rally in crude oil prices lost steam. Adding to the woes were concerns over heightened political risks from Italy’s upcoming referendum.

THE DAY AHEAD

Yesterday’s muted gains on the FBM KLCI highlights the market’s fickleness on the upside as the buying interest still appears insipid with investors staying wary over the market’s direction. Therefore, most investors remain unconvinced that any run-up is sustainable amid the lingering uncertainties over the direction of U.S. interest rates and the state of the global economy, which is still on a tepid note. The tumbling key global indices overnight are also leaving local market sentiments on the dour note and we expect stocks on Bursa Malaysia to mirror the performance of overseas stockmarkets over the near term and resume its consolidation trend within the 1,660 and 1,670 levels.

The broader market and lower liner stocks are also expected to trend lower as the weaker market sentiments are likely to prompt more retail players to lock-in their short-term profits.

COMPANY BRIEFS

The Court of Appeal has ordered a rehearing for Kamdar Group (M) Bhd’s claim against its former Chairman Bipinchandra Balvantrai, former Chief Executive Officer (CEO) Jayesh Kamdar and contractor Yap Kim Hong, over an alleged withdrawal of RM8.8 mln from the group’s accounts.

The case will be reheard before a different judge in the High Court, although no date for the rehearing was given. (The Star Online)

SMRT Holdings Bhd has announced the issue price for the first tranche of its private placement, amounting to 11.9 mln shares to be at 21.1 sen apiece. The issue price represents a discount of about 0.05% to the five-day volume weighted average market price of SMRT shares of 21.1 sen a share. (The Edge Daily)

Systech Bhd's 51.0%-owned subsidiary, SysArmy Sdn Bhd was awarded a 10-year tax exemption from the federal government, following the approval of its MSC status.

Further, SysArmy's application for the pioneer status incentive under the Promotion of Investments Act 1986 has also been approved. (The Edge Daily)

Axiata Group Bhd is planning to maintain a controlling stake in its overseas operation companies (opcos) despite the possibility of a minor stake sale in the latter to reinvest in higher potential businesses.

The announcement came following media reports last September, which suggested that Axiata intends to dispose some of its foreign opcos, including XL, Sri Lanka's Dialog Axiata Plc and closely-held Cambodian subsidiary. Smart Axiata Co in a move to pare the group’s liabilities. (The Edge Daily) Gabungan AQRS Bhd has announced the resignation of its Deputy Chairman and Executive Director Ng Chun Kooi due to health reasons with effect from 11th October, 2016.

Mr. Ng joined the board on 6th Jul, 2011, and was subsequently re-designated as the Deputy Chairman on 25th April 2016. (The Edge Daily)

Pos Malaysia Bhd is seeking a more direct role in providing logistics services to Chinese e-commerce giant, Alibaba Group Holding Ltd by bypassing the middlemen, when shipping goods sold on the latter’s platforms.

The group plans to focus on e-commerce, following the 40.0% jump in profit in the fiscal first quarter – led by higher parcel deliveries for online shopping. (The Star Online)

Nexgram Holdings Bhd‘s 70.0% indirectly owned subsidiary, Blue Hill Development Sdn Bhd has clinched a RM7.4 mln contract to build an open shed warehouse and a factory unit in Port Klang from Good View Construction Sdn Bhd.

The warehouse and factory unit will function as an extension of an existing warehouse for Mah Sing Plastic Industries Sdn Bhd, with a substation located at Taman Perindustrian Bandar Sultan Suleiman, Port Klang.

The project will commence on 17th October 2016 and is due for completion by 15th July 2017. (The Edge Daily)

Source: M+ Online Research - 12 Oct 2016