Despite trading mostly in the positive territory, last minute profit taking sent the FBM KLCI (-0.1%) lower yesterday ahead of the Budget 2017 announcement later today. The lower liners, however, finished mostly higher as the Fledgling and FBM Ace indices added 0.3% and 0.7% respectively, while the broader market ended mostly negative.

Market breath stayed negative as decliners outpaced advancers on a ratio of 417-to-342 stocks. Traded volumes, however, climbed 7.7% to 1.50 bln shares on rotational play amongst the lower liners.

Genting (-14.0 sen) topped the FBM KLCI decliners lists, followed by Maybank (- 10.0 sen), MISC (-8.0 sen), Hong Leong Financial Group (-8.0 sen) and KLK (-4.0 sen) were amongst the biggest decliners on the FBM KLCI. In contrast, amongst the biggest decliners on the broader market were Dutch Lady (-20.0 sen), Lafarge (-18.0 sen), Ajinomoto (-10.0 sen), Khind Holdings (-10.0 sen) and Malaysia Airport Holdings (-190 sen).

Significant gainers on the broader market include Harrison Holdings (+27.0 sen) Panasonic (+20.0 sen), SHH Resources (+16.0 sen) and Pharmaniaga (+14.0 sen). Samchem added 7.0 sen to close at a fresh all-time high level. Meanwhile, BAT (+64.0 sen), Petronas Chemicals (+9.0 sen), CIMB (+6.0 sen), Hong Leong Bank (+4.0 sen) and Axiata (+3.0 sen) were amongst the biggest gainers on the key index.

Asia benchmark indices closed mostly higher as the Nikkei added 1.4% to a fresh 6-months high, taking cue from the positive developments on Wall Street. The Hang Seng Index climbed 0.3%, lifted by the gains in energy stocks, but the Shanghai Composite (-0.01%) closed marginally lower. ASEAN stockmarkets, meanwhile, ended mostly higher.

Wall Street retreated overnight as the Dow fell 0.2% with the key index traded in a volatile manner on concerns over the upcoming U.S. presidential election, coupled with uncertainties over the potential interest rate hike. On the broader market, both the S&P 500 and Nasdaq slipped 0.1% as the former was dragged down by the weakness in telecommunications sector (-2.0%).

Earlier, European key indices – the FTSE (+0.1%), CAC (+0.4%) and DAX (+0.5%) all rebounded from their intraday lows. The positive market sentiment emanated from the European Central Bank’s move to keep its interest rates unchanged and hinted further easing measures in the next policy meeting in December.

THE DAY AHEAD

The key index is still finding it difficult to breach the 1,670 resistance amid the lack of fresh leads to help it take on the level. This is continuing to leave investors wary on the sustainability of the key index’s near term direction as well as the corresponding market breadth – which continues to stay at anemic levels.

The anticipation of Budget 2017 – to be announced later today, has mostly failed to liven up the market with many market participants still staying on the sidelines, preferring to wait for the Budget to be announced before making their investment decision.

Consequently, we expect the market to remains mostly muted for the day as investors await for the announcement with the FBM KLCI likely to linger around the 1,660-1,670 levels over the near term.

COMPANY BRIEFS

Ajiya Bhd’s 3QFY16 net profit fell 11.1% Y.o.Y to RM5.4 mln, from RM6.0 mln a year earlier – due to weaker market conditions which dragged revenue contribution down slightly by 2.0% Y.o.Y to RM100.0 mln against RM102.0 mln in 3QFY15.

Cumulative 9MFY16 net profit declined 43.6% Y.o.Y to RM9.5 mln, from RM16.8 mln last corresponding year, in-tandem with the lower revenue which lost 7.5% Y.o.Y to RM294.8 mln, from RM318.5 mln previously. (The Star Online)

Public Bank Bhd registered a 3.1% Y.o.Y growth in its 3Q2016 net profit to RM1.24 bln vs RM1.20 bln a year ago, on the back of stronger net interest income and contribution from its Islamic banking segment. Quarterly revenue also rose 2.4% Y.o.Y from RM4.91 bln in 3Q2015, to RM5.03 bln.

The cumulative 9M2016 net profit stood at RM3.72 bln, which was 4.3% Y.o.Y higher than RM3.57 bln recorded in the previous year, owing to healthy growth in loans and customer deposits as well as stable asset quality. Meanwhile, revenue expanded to RM15.02 bln, from RM14.25 bln in the previous corresponding period. (The Star Online)

Bursa Malaysia has rejected Multi-Usage Holdings Bhd’s application for a one-month extension for the release of its annual report for the year ended 30th June 2016 till 30th November, 2016. (The Edge Daily)

PRG Holdings Bhd has launched its maiden luxury residential property project, Picasso Residence at Jalan Ampang, Kuala Lumpur, with a gross development value (GDV) of RM600.0 mln.

The group said that the project, which encompassed two 38-storey towers of 472 residential units, has already seen a 65.0% take-up during the group’s private preview roadshows.

The development is targeted at investors and home seekers, with units ranging between 1,013 sq ft to 2,407 sq ft, priced upwards of RM950.0 per sq ft. (The Edge Daily)

M3 Technologies (Asia) Bhd (M3Tech) has inked an exclusive distribution agreement with Hangzhou Hikvision Technology Co Ltd for the distribution of the full range of EZVIZ surveillance and security products, effective from 31st December, 2017. The contract will be automatically renewed for an additional year, upon fulfilment of certain terms and conditions of the agreement.

The group is sanguine of EZVIZ's growth potential, given the growing demand in security cameras. (The Edge Daily)

MHC Plantations Bhd's net profit jumped by 81.0% Y.o.Y to RM5.8 mln in 3Q2016, from RM3.2 mln a year ago, attributed to higher crude palm oil (CPO), palm kernel (PK) and fresh fruit bunch (FFB) prices. Revenue also strengthened by about 9.0% Y.o.Y to RM101.6 mln against RM93.1 mln in 3QFY15.

Cumulative 9M2016 net profit was up by 17.0% Y.o.Y at RM7.5 mln, from RM6.4 mln in the previous corresponding period, while revenue rose 3.0% Y.o.Y to RM233.9 mln, from RM227.1 mln in 9M2015.

Looking ahead, the group expects favourable CPO prices and the improvement in operational efficiency of its biomass power plant to boost the company's performance. (The Edge Daily)

WZ Satu Bhd's 4QFY16 net profit climbed 47.7% Y.o.Y to RM7.9 mln, from RM5.4 mln in 4QFY15 - attributed to stronger contributions from its civil engineering and construction, as well as oil and gas segments. Quarterly revenue increased 9.4% Y.o.Y to RM123.6 mln, from RM113.0 mln last year.

FY16’s net profit also improved 10.6% Y.o.Y to RM22.9 mln, compared with RM20.7 mln a year earlier, while revenue grew 33.0% Y.o.Y higher to RM465.9 mln. The stronger earnings were due to better performance by its civil engineering and construction segments.

On its bauxite mining segment, the group said that it will continue to be affected by the 11-month moratorium imposed by the Malaysia government on bauxite mining in Kuantan, effective from 15th January, 2016. However, the group remains positive that the mining segment's contributions to the group will eventually improve in the future.

Further, WZ Satu also expects to significantly reduce its exposure to investments that require a long gestation period for profitability, following the rationalisation of its manufacturing segment via the disposal of equity interests in PT WZ Steel and WZS Technologies Sdn Bhd. (The Edge Daily)

Jerasia Capital Bhd has been slapped with an Unusual Market Activity (UMA) query by Bursa Malaysia after the company's shares rose 35.2% over the past two days. (The Star Online)

Heineken Malaysia Bhd sunk into the red with a 10.0% Y.o.Y decline in its net profit to RM57.0 mln for the three-month period ended 30th September, 2016, from RM63.0 mln in the preceding quarter, contributed by the generally weak macroeconomic conditions.

Revenue for the quarter also dropped 5.0% Y.o.Y to RM384.0 mln, fromRM405.0 mln in the same period a year earlier.

For the 15 months ended 30th September, 2016, net profit stood at RM322.6 mln, on the back of RM2.23 bln in revenue. The company had changed its financial year end from 30th June to 31st December, thus there are no comparative figures for the period. (The Edge Daily)

Source:M+ Online Research - 21 Oct 2016