The local bourse extended its losses yesterday as the FBM KLCI fell another 0.1%, owing to the mild profit taking activities in selective index heavyweights. The lower liners - the FBM Small Cap (-0.1%), FBM Fledgling (-0.1%) and FBM ACE (-1.0%), all ended in the red, while the Consumer Products (+0.1%), Technology (+0.8%) and Properties (+0.2%) sector outperformed the mostly negative broader market.

Market breadth remained negative as decliners outpaced advancers on a ratio of 285-to-303 stocks. Traded volumes rose to 1.76 bln shares as profit taking activities amongst the lower liners intensified.

More than half of the key index constituents fell, dragged down by BAT (- 92.0 sen), followed by Petronas Dagangan (-18.0 sen), Petronas Gas (- 12.0 sen), MISC (-7.0 sen) and Axiata (- 6.0 sen). Significant decliners on the broader market include consumer products stocks like Heineken Malaysia (- 12.0 sen), Ajinomoto (-10.0 sen) and Carlsberg (-10.0 sen), while Oriental and Press Metal shed 9.0 sen each.

In contrast, notable advancers on the broader market were Fraser & Neave (+52.0 sen), KESM Industries (+35.0 sen), Latitude Tree (+34.0 sen) and Panasonic (+22.0 sen). Top Glove added 1.0 sen despite reporting a weaker set of quarterly earnings. Among the biggest gainers on the big board were Hong Leong Financial Group (+12.0 sen), PPB Group (+12.0 sen), Tenaga (+10.0 sen), KLCC (+8.0 sen) and AmBank (+6.0 sen).

Asia benchmark indices closed mostly lower as the Nikkei fell 0.4% on the back of stronger Japanese Yen, while the Hang Seng Index tumbled 1.6% to a six-week low as export and energy shares fell. Despite reporting weaker exports data that fell 10.0% Y.o.Y in September, the Shanghai Composite added 0.1%. Asia stockmarkets, meanwhile, closed mostly lower.

Wall Street closed lower overnight but major indices managed to pare their intraday losses. The Dow fell 0.3% on concerns over the sluggish Chinese data. On the broader market, the S&P 500 declined 0.3%, dragged down by selling pressure in financial sector (-1.1%), while the Nasdaq ended 0.5% lower.

Key European indices - the FTSE (-0.7%), CAC (-1.1%) and DAX (-1.0%) all extended their losses to close at two-month lows on weaker-than-expected Chinese data which could prompt the People Bank of China to further devalue its currency. Notable decliners include commodity-based shares like BHP Billiton PLC (-2.7%), Boliden AB (-2.2%) and ArcelorMittal (- 3.0%)

THE DAY AHEAD

There remains no change to our immediate market view and we expect the Malaysian stockmarket to end the week on a dour note on fresh economic slowdown concerns that is permeating the global markets. The overnight weakness in many global indices will further dampen the near term market sentiments on Bursa Malaysia, in our view.

Although we expect the consolidation to sustain over the near term, we think the downside will still be cushioned by institutional support on selective heavyweights. Therefore, we expect the 1,660 support level to hold over the near term, while the 1,670 level is still the immediate resistance.

On a similar vein, we think that retail interest will stay mixed amid the uncertain market direction and that most retail players will remain cautious, preferring to stay on the sidelines until there is further market clarity.

COMPANY BRIEFS

Texchem Resources Bhd is planning to sell its 30.0% equity interest in Fumakilla Asia Sdn Bhd (FASB) and 26.4% equity interest in PT Fumakilla Nomos (PTFN) to Japan's Fumakilla Ltd (FJ) for a cumulative amount of RM80.5 mln.

The FASB and the PTFN stake are worth RM61.5 mln and RM19.0 mln respectively. The group had earlier disposed of its 70.0% shareholding in FASB and PTFN to FJ for US$42.4 mln (about RM178.6 mln) in March 2012. (The Edge Daily)

Stone Master Corp Bhd's Deputy Managing Director (MD), Datin Chan Chui Mei is being sued by the Securities Commission Malaysia (SC) for allegedly causing wrongful loss to the group.

Stone Master had entered into several agency agreements with 23 foreign companies for the exclusive rights to market and promote in Malaysia and Singapore, products belonging to foreign companies and subsequently paid RM11.6 mln to the latter in the form of a non-refundable deposit.

The SC alleged that of the RM11.6 mln, a sum of RM11.5 mln was then paid by the local representatives to Chan’s personal account. (The Edge Daily)

Nexgram Holdings Bhd's 70.0% indirectlyowned subsidiary, Blue Hill Development Sdn Bhd has established a joint-venture (JV) with Suara Hati Sdn Bhd for the development of PR1MA homes in Gombak.

The project encompasses 1,138 units of homes comprising of double-storey houses, apartment units as well as 20 retail units and will sit on 49.4 ac.of leasehold Malay reserve land.

Separately, the group has also received a letter of intent to be the main subcontractor for the proposed construction of 462 apartment units in Bukit Katil, Melaka.

Meanwhile, the project coordination and project management roles will be taken up by Good View Construction Sdn Bhd. The proposed contract work falls under the 1Malaysia Civil Servants Housing (PPA1M) scheme. (The Star Online)

Press Metal Bhd foresees revenue contribution from its value-added products, such as alloy wheels, to increase to 60.0% in the next one to two years, from 30.0% to 40.0% currently. (The Edge Daily)

The group mainly exports to large wheel manufacturers in Europe which supplies to automobile makers such as BMW and Volkswagen. Press Metal also expects the remaining 40.0% of revenue to come from the ingot segment. (The Edge Daily)

Boustead Heavy Industries Corp Bhd (BHIC) has secured a 33-month contract worth up to RM62.6 mln to provide maintenance and logistics support services for three units of Dauphin AS365N3 helicopters, belonging to the Malaysian Maritime Enforcement Agency. The contract is slated to commence on 1st October 2016. (The Edge Daily)

The Employees Provident Fund (EPF) has awarded the development rights for a 24.1 ac. plot of land, known as R3-1 at Kwasa Damansara township in Sungai Buloh, Selangor to Gadang Holdings Bhd.

The group has successfully beaten more than 10 other bidders for the project, which is the biggest so far for residential developments to be developed by Tier-2 developers.

The project will give Gadang a total financial return of RM165.0 mln for both the land cost and profit sharing. (The Star Online)

Source: M+ Online Research - 14 Oct 2016