The FBM KLCI extended its losses for the third straight session as the key index erased all its earlier weekly gains to close 0.4% W.o.W lower. Although the broader market ended mixed, the lower liners, however, ended mostly higher as the FBM Small Cap and FBM Fledgling added 0.1% and 0.2% respectively.

Market breath turned positive as advancers edged decliners on a ratio of 375-to-351 stocks. Traded volumes fell 23.7% to 1.34 bln shares on renewed concerns over global market uncertainty.

Two-thirds of the key index constituents retreated, dragged down by PPB Group (- 22.0 sen), followed by Genting Malaysia (12.0 sen), KLK (-10.0 sen), Westports (- 7.0 sen) and CIMB (-7.0 sen). Meanwhile, Nestle (-62.0 sen), Heineken (-22.0 sen), Scientex (-20.0 sen), Sui Wah (-10.0 sen) and Kawan Foods (-7.0 sen) were amongst the biggest decliners on the broader market.

In contrast, notable gainers on the broader market include Apex Healthcare (+27.0 sen), Khind Holdings (+25.0 sen), Panasonic (+24.0 sen), POS Malaysia (+21.0 sen) and Genting Plantations (+20.0 sen). Leading the key index gainers were Hong Leong Financial Group (+8.0 sen), Petronas Dagangan (+8.0 sen), Hap Seng (+5.0 sen), BAT (+2.0 sen) and Sime Darby (+1.0 sen).

Asia benchmark indices rebounded last Friday as the Nikkei gained 0.5% on gains in mining, energy and telecommunication shares. The Shanghai Composite (+0.1%) was lifted into the positive territory on stronger-than-expected inflation data that rose 1.9% Y.o.Y in September vs. consensus estimates of 1.6% rise, while the Hang Seng Index (+0.9%) halted a streak of four consecutive sessions of losses. ASEAN stockmarkets, meanwhile, ended mostly higher.

U.S. stockmarkets ended higher as the Dow added 0.2% after a string of quarterly earnings from financial institutions topped estimates. On the broader market, both the S&P 500 and Nasdaq rose, owing to gains in financials and technology companies.

Earlier, European benchmark indices advanced – the FTSE (+0.5%), CAC (+1.5%) and DAX (+1.6%) all finished higher as the former rose above the 7,000 psychological level. Gains were underpinned by strong China economic data coupled with gains in banking and energy stocks.

THE DAY AHEAD

After three straight sessions of losses that cumulated in the FBM KLCI slipping below the 1,660 support level last Friday, we think the key index could stage a near term recovery in tandem with the positive overseas stockmarket performances at the end of last week.

With Budget 2017 to be announced at the end of the week, we expect the Malaysian stockmarket to hold steady as investors anticipate on the potential goodies in the upcoming Budget. However, we think that there could be few giveaways due to the government’s tight fiscal position and many of the stimulus measures have already been announced earlier.

Still we think the mild recovery could send the key index back above the 1,660 level and linger within the above level to the 1,670 level over the near term with institutional investors providing support to keep the market afloat .

COMPANY BRIEFS

Malaysian Resources Corp Bhd (MRCB) has received enquiries from PLUS Malaysia Bhd and a client of ZJ Advisory Sdn Bhd in relation to the acquisition of MRCB Lingkaran Selatan Sdn Bhd – the concession holder of Eastern Dispersal Link (EDL) Expressway in Johor.

The group said that the necessary announcement will be made upon the finalisation of the proposed disposal. (The Star Online)

Damansara Realty Bhd (DRealty) is planning to jointly develop a 53.1-ac. freehold land in Johor Bahru into an integrated township known as Central Park with Country Garden Holdings Co Ltd.

DRealty will hold 30.0% equity stake in the joint-venture (JV) company, DAC Properties Sdn Bhd while the remaining 70.0% shareholding will be held by Country Garden.

The development of Central Park will span over a six-to-eight year period, starting from 4Q2016 and will include residential units, commercial shop spaces as well as various amenities. The first phase of the project is slated to be launched in 1Q2017 and will target young homebuyers in Malaysia. (The Star Online)

NWP Holdings Bhd is diversifying into the private charter air transport services business via the acquisition of a 30.0% equity interest in U.S.-incorporated Aviation AI Inc (AAI).

The timber products manufacturer has entered into an agreement with Datuk Ismail Hassan to acquire his 30.0% stake in AAI for US$1.5 mln (RM6.3 mln).

Moving forward, AAI plans to provide private charter air transport services to public and private corporate customers such as government agencies and commercial entities. (The Edge Daily)

SMTrack Bhd has appointed Chang Chee Ching as its Executive Director (ED) effective from 14th October, 2016.

Previously, Mr. Chang was the Group Managing Director (MD) of Bright Packaging Industry Bhd from 1998 to 2004. He has also served as the ED of NWP Holdings from December 2014 to March 2016. (The Edge Daily)

Hai-O Enterprise Bhd has appointed Prof. Datuk Dr Choo Yeang Keat (or Datuk Jimmy Choo) as a Non-Independent and Non-Executive Director (NED) effective from 15th October, 2016.

Datuk Choo is a renowned fashion designer and international fashion icon. (The Edge Daily)

Metronic Global Bhd, the largest shareholder of MNC Wireless Bhd is planning to take the latter’s Board of Directors (BoD) to court.

Metronic, which holds a 18.8% equity stake in MNC said it has commenced legal action against MNC chairman Wong Kok Seong, Chief Executive Officer (CEO) Christopher Tan Chor How, ED Pang Siaw Sian, Non-Independent Non-Executive Director Kua Khai Shyuan and independent non-Executive Director Thu Soon Shien

It also named MNC’s shareholder Datuk Seri Dr Pang Chow Huat in the suit. Chow Huat is also the founder and MD of Sanichi Technology Bhd.

Metronic had filed an ex-parte injunction application on 7th October, 2016 against the directors, for an injunction to restrain them from taking any steps to implement a proposed rights issue, establishment of an employee share option scheme and increase in the authorised share capital of MNC Wireless.

The injunction was also to restrain the company from amending MNC Wireless’ Memorandum of Association (MoA) and to restrain Chow Huat and his nominees or associates from subscribing to the rights issue and employee share option scheme. (The Edge Daily)

The Kuala Lumpur Regional Centre for Arbitration (KLRCA) has dismissed a counterclaim amounting to RM171.8 mln made against MMC Corp Bhd by Pioneer Smith (M) Sdn Bhd.

The tribunal also rejected MMC Corp's claim for a declaration that the sublease agreement of 28th June 2005 had been determined, as well as for vacant possession of the land subleased to Pioneer Smith.

The court, however, allowed MMC's claim for outstanding rentals of RM2.6 mln, being the agreed rental of the land which had not been paid from 2010 to 2015 and outstanding charges up to RM35,836.50. (The Edge Daily)

Source: M+ Online Research - 17 Oct 2016