In tandem with the negative sentiments on global stockmarkets and weaker crude oil amid concerns over the supply glut, the FBM KLCI shed 0.2% to close slightly above the 1670.0 psychological level. The lower liners were also pressured lower – led by losses in the FBM Ace (-0.7%). Meanwhile, on the broader market only the Technology (+0.4%) and the Plantations (+0.4%) sectors rallied.

Market breadth continued to suffer as decliners dominated the gainers on a ratio of 496-to-285 stocks. Traded volumes, however gained 8.2% to 1.54 bln shares, amid profit-taking activities in the lower liners.

BAT (-RM1.22), IHH Healthcare (-9.0 sen), Hong Leong Financial Group (-8.0 sen), Petronas Gas (-8.0 sen) and CIMB Group (-7.0 sen) were the underperformers on the Main Board. Key losers on the broader market include Dutch Lady (-60.0 sen), Panasonic Manufacturing (-40.0 sen), Hong Leong Industries (-28.0 sen), Top Glove (-15.0 sen) and LPI Capital (- 14.0 sen)

Significant gainers on the broader market were consumer products giants - Nestle (+20.0 sen) and Fraser & Neave (+18.0 sen), followed by Kobay Technology (+21.0 sen), United Plantations (+20.0 sen) and Country View (+11.0 sen). Significant key index gainers include Telekom Malaysia (+8.0 sen), Sime Darby (+5.0 sen), Hong Leong Bank (+4.0 sen), Genting (+3.0 sen) and AmBank (+3.0 sen).

Japanese equities finished in the green as the Nikkei (+0.2%) advanced for the third-straight day on the back of a weaker Yen vs. the Dollar. The Shanghai Composite Index (-0.5%) and the Hang Seng (-1.0%), however, were splashed in red amid disappointing corporate earnings from Wall Street and falling crude oil prices. ASEAN stockmarkets ended mostly in the red.

U.S. stocks finished mostly lower, contributed by the drag in Apple shares (-2.3%) after the latter reported its first revenue decline in 15 years. The Nasdaq and the S&P500 ended down 0.6% and 0.2% respectively, in tandem with the weakness in crude oil prices, despite lower-than-expected crude oil inventories. The Dow, however, rose 0.2% - led by gains in aircraft maker Boeing (+4.7%).

Meanwhile, the European equities were also splashed in red on Wednesday’s close - due to weaker commodity and real-estate counters. The FTSE fell 0.9% after lingering in the negative territory the entire session, trailed by the DAX and the CAC which lost 0.4% and 0.1% respectively.

THE DAY AHEAD

The FBM KLCI continues to find it difficult to clear the 1,670 level convincingly as the wary sentiments are keeping a lid on the upsides. At the same time, the mostly insipid global market environment is also keeping most market participants on the sidelines with few intending to make fresh bets on a sustained market uptrend.

Bursa Malaysia’s tentativeness is largely reflected in the thin market breadth of late, where most market participants are just willing to undertake short-term trading tactics instead of buy and hold strategies.

With sentiments remaining dour, we think similar market conditions will prevail for longer with the 1,670 support likely to be re-tested.

COMPANY BRIEFS

MRCB-Quill Real Estate Investment Trust’s (MQ REIT) 3Q2016 net property income fell 3.2% Y.o.Y to RM15.2 mln, mainly due higher manager's fee, trustee’s fee, valuation fee and administrative expenses. Revenue for the quarter, however, added 2.2% Y.o.Y to RM32.5 mln.

For 9M2016, cumulative net property income gained 21.8% Y.o.Y to RM45.9 mln. Revenue for the period increased 18.3% Y.o.Y to RM97.7 mln.

Separately, MQReit plans to set up a 20 year Medium Term Notes (MTN) programme by end 2016 to cater for its immediate and future opportunistic acquisitions as well as its future refinancing requirements. (The Star Online)

Sarawak Cable Bhd’s wholly-owned subsidiary, Trenergy Infrastructure Sdn Bhd, has secured a double circuit transmission line contract from Tenaga Nasional Bhd worth RM55.9 mln. The contract was for 500kV and 275kV transmission lines from Point Z to Point M (Border Pahang/Selangor). (The Star Online)

BHS Industries Bhd is in talks with potential investors to set up a tissue paper factory of 5,000 tonnes, as part of the first phase of the Pekan Green Technology Park in Kg Paloh Hinai, Pekan, Pahang.

The Pahang state government had, on 10th March 2016, approved and granted its wholly-owned subsidiary, Ultimate Ivory Sdn Bhd, a piece of land measuring 26 ac. in Kg Paloh Hinai, Pekan, Pahang for development of the first phase of Pekan Green Technology Park.

BHS is developing a total of 375 ac. of land in Pekan into a green technology park, where the main industries located in the park will be using green technology to convert empty fruit bunches into pulp and paper, box liner paper, corrugated paper and tissue paper. They will also be using bio-technology to convert frond to agro-feed, and other palm waste into organic fertilisers. The development of Pekan Green Technology Park will be divided into five phases. (The Edge Daily)

Yong Tai Bhd has sold en bloc RM461.0 mln worth of properties in Phase 1A of its RM5.4 bln Impression City mixed development in Melaka to Orient Venture Properties Bhd. Meanwhile, the group has also secured a fit out contract valued at RM412.0 mln with Orient Venture Properties, to carry out renovation works on the property. (The Edge Daily)

Sumatec Resources Bhd’s Miri-based associate, Semado Maritime Sdn Bhd has defaulted on the repayment of a RM165.2 mln loan due to Bank Pembangunan Malaysia Bhd on 18th and 19th October 2016. A delay in securing the completion of sale of two vessels has caused the default.

The sum to be guaranteed of RM165.2 mln comprises a principal amount of RM143.3 mln and interest at 5.0% up to 4th October 2016 of RM21.5 mln as well as RM0.4 mln in cost. Semado is arranging for inspection of the vessels by interested buyers. It has also requested for extension of time from Bank Pembangunan to complete the sale of the vessels. (The Edge Daily)

Melati Ehsan Holdings Bhd's 4QFY16 net profit soared 5.7x Y.o.Y to RM13.1 mln, mainly due to a gain from the disposal of a subsidiary. Revenue for the quarter jumped 119.2% Y.o.Y to RM53.7 mln.

For FY16, cumulative net profit surged 287.2% Y.o.Y to RM30.2 mln. Revenue for the period, however, fell 41.9% Y.o.Y to RM103.9 mln. A final and single dividend of 1.75 sen was proposed. (The Edge Daily)

Source: M+ Online Research - 27 Oct 2016