Despite opening higher at the start of the trading bell, quick profit taking sent the FBM KLCI (-0.3%) lower for the fourth consecutive session. The lower liners also ended mostly lower – the FBM Small Cap and FBM Ace fell 0.1% and 0.2% respectively, while the Construction (+0.3%) and Technology (+0.04%) sectors outperformed the negative broader market.

Market breath turned negative as decliners outnumbered advancers on a ratio of 440-to-322 stocks. Traded volumes fell 6.0% to 1.26 bln shares as investors risk appetite was dampened by the negative market sentiment.

Leading the decliners list on the big board was Petronas Gas (-18.0 sen), followed by Sime Darby (11.0 sen), Genting (-11.0 sen), MISC (-9.0 sen) and Hong Leong Financial Group (-8.0 sen). Notable losers on the broader market include Aeon Credit (-32.0 sen), Bintulu Port (-28.0 sen), Nestle (-28.0 sen), Heineken (-16.0 sen) and Amway (-14.0 sen).

On the other side of the trade, Panasonic (+48.0 sen), Choo Bee Metal (+18.0 sen), Apollo Food (+15.0 sen), Khind Holdings (+12.0 sen) and Titijaya (+10.0 sen) led the broader market advancers list. Amongst the biggest gainers on the big board were BAT (+50.0 sen), Hong Leong Bank (+4.0 sen), KLK (+4.0 sen), Petronas Dagangan (+4.0 sen) and Astro (+3.0 sen).

Japanese stockmakrets advanced yesterday as the Nikkei climbed 0.3% on weaker Japanese Yen against the U.S. Dollar. The Shanghai Composite (-0.7%), however, was dragged down by the sharp selloff in dollar-denominated Shanghai Bshare index that slumped 6.2%, while the Hang Seng Index slipped 0.8% on weakness in casino stocks. ASEAN stockmarkets, meanwhile, ended mixed.

Wall Street closed lower overnight as the Dow fell 0.4% after the Industrial Production data (+0.1% M.o.M) in September came below economists’ estimates of a 0.2% increase. On the broader market, the S&P 500 slipped 0.3%, dragged down by the weakness in consumer discretionary and energy sectors, while the Nasdaq declined 0.3%.

Despite the Eurozone’s inflation data rising 0.4% Y.o.Y in September – in line with economists’ estimates, key European indices – the FTSE (-0.9%), CAC (-0.5%) and DAX (-0.7%) all retreated. Oil & gas stocks like Royal Dutch Shell (-1.8%) and BP (-1.2%) were under pressure as crude oil prices slipped below the US$50 per barrel level.

THE DAY AHEAD

The positive global markets last Friday failed to rub on Malaysian stocks as the selling sustained amid the weak regional conditions. At the same time, most market players elected to remain on the wayside with the dearth of sustainable leads.

We see similar conditions lingering over the near term as the weakness on most key global indices as well as the still tepid market environment will leave most market players on the sidelines again. It also appears that anticipations on the upcoming Budget has taken a back seat amid the ongoing global market concerns and may not be a consideration over the near term.

Consequently, we think the downside bias on Bursa Malaysia could linger and the 1,650 support level is likely to come into play again, with resistance at 1,660.

COMPANY BRIEFS

Trinity View Sdn Bhd has become the substantial shareholder of Yinson Holdings Bhd, after the former acquired 119.7 mln shares (or 11.0% equity interest) of the company.

The direct business transaction was made at RM3.07 per share, which is 12.0 sen or 3.8% lower than the RM3.19 closing price of its share yesterday.

On the same note, it was reported that Kencana Capital Sdn Bhd has sold some 153.4 mln of its shares in Yinson and thus, ceased to be a substantial shareholder of group. (The Edge Daily)

Green Packet Bhd is planning to undertake a private placement of up to 10.0% of its issued share capital (or 68.6 mln shares) to raise up to RM14.5 mln for product and business development, future investments and working capital.

About RM9.0 mln will be used to fund product and business development, RM5.0 mln for future investments, up to RM0.4 mln for working capital and the remaining RM80,000 for expenses of the placement.

Following the completion of the proposed placement by 4Q2016, the group expects its gearing ratio to fall to 2.4x from 3.4x as at 31st December 2015. (The Edge Daily)

Syarikat Takaful Malaysia Bhd’s 3Q2016 net profit jumped 30.0% Y.o.Y to RM44.9 mln, from RM34.4 mln a year earlier – due to stronger revenue contribution which was 10.0% Y.o.Y higher at RM427.0 mln vs. RM389.2 mln in the previous year.

The group said its better performance for the quarter was due to higher sales generated by both the family takaful and general takaful businesses as well as higher wakalah fee income.

Cumulative 9M2016 net profit also climbed 15.0% Y.o.Y to RM137.0 mln, from RM119.6 mln, while revenue gained 10.0% Y.o.Y to RM1.52 bln against RM1.34 bln in 9M2015. (The Edge Daily)

KPJ Healthcare Bhd has proposed to develop a piece of land in Batu Pahat, Johor into a RM67.6 mln hospital named KPJ Batu Pahat Specialist Hospital.

The group has signed an agreement to lease a hospital building and the land from Johor Land Bhd and landowner Johor Corp (JCorp) for the proposed development.

The agreement is deemed a related party transaction as JCorp is a major shareholder of KPJ with a 44.3% shareholding, while Johor Land is a wholly-owned subsidiary of JCorp, who is also the registered owner of the land.

The seven-storey 90-building will have a gross floor area measuring approximately 157,500 sq. ft., and 162 car parking bays with built up area of 21,797.10 sq. ft. The hospital is slated to be completed in 24 months. (The Star Online)

Malaysia Packaging Industry Bhd's (Maypak) minority shareholders have been urged by independent adviser, Mercury Securities Sdn Bhd to reject a takeover offer from Japan-based Taisei Lamick Co Ltd.

The deal was deemed to be unfair as the offer price represents a significant discount of 63.1% over the estimated revalued net asset value (RNAV) per Maypak share of RM1.76.

Maypak had announced on 15th Septembe, 2016 that it had received a takeover offer at 65.0 sen a share from Taisei Lamick after the latter's planned acquisition of a controlling 55.0% equity interest in the former became unconditional.

Mercury, however, noted that the offer price was higher than the closing market prices of the Maypak shares over the past 10 years up to the takeover offer date, except on 15th January 2014. (The Edge Daily)

Meanwhile, the takeover offer of 61.0 sen a share for Aluminium Co of Malaysia Bhd (Alcom) by businessman Yeoh Jin Hoe is deemed as “not fair and not reasonable” by independent adviser, Mercury Securities Sdn Bhd.

Mercury has advised the shareholders to reject the offer by Yeoh, who is the Managing Director of Kian Joo Can Factory Bhd and Box-Pak (M) Bhd.

The offer price of 61.0 sen represented a 68.9% discount to the revalued net asset value per Alcom share of RM1.96 and a discount of between 23.7% and 29.9% over the five-day, one-month, three-month, six-month and one-year volume weighed average moving prices of the Alcom shares, up to the latest practicable date.

Mercury said that the offer was not reasonable as Yeoh intends to maintain the listing status of Alcom on the Main Market of Bursa Securities. (The Star Online)

CIMB Group Holdings Bhd is proposing a 50:50 joint-venture (JV) in the stockbroking business with China Galaxy Securities Co Ltd. Both parties have signed a heads of terms to explore a strategic partnership in institutional and retail brokerage, equities research and associated securities businesses and to identify further areas of cooperation in the relevant markets where they operate. (The Edge Daily)

Nexgram Holdings Bhd has clarified that its Angkasa Icon City project in Cyberjaya has not been terminated, although construction works have yet to commence due to pending negotiations for financing.

The group was responding to an article that appeared in the The Edge Weekly on 17th October, 2016, which noted that the company has gone silent on Angkasa Icon City which has a gross development value of RM1.15 bln. (The Edge Daily)

Source: M+ Online Research - 18 Oct 2016