The FBM KLCI (0.3%) fell for the thirdstraight day, on the back of a weaker Ringgit vs. the Dollar and uncertainties over the Organisation of the Petroleum Exporting Countries’ (OPEC) output cut. The lower liner recovered as the FBM Ace and FBM Fledging notched up 0.2% each, although FBM Small Cap fell 0.1%. The broader market, however, continued to see selling pressure with only two out-ofthe ten sectors in the green.

Market breadth was subdued as losers edged the gainers on a ratio of 396-to- 339 stocks. Traded volumes shed 3.4% to 1.49 bln shares, as investors remained on the sidelines ahead of the upcoming U.S. Presidential election.

Significant key index decliners were mainly banking giants such as Maybank (-13. sen), Public Bank (-4.0 sen) and AmBank (-2.0 sen), followed by KLCC (- 5.0 sen) and Genting Bhd (-9.0 sen). Meanwhile, laggards on the broader market include Fraser & Neave (-28.0 sen), KESM Industries (-22.0 sen), Ajinomoto (-12.0 sen), United U-Li Corporation (-12.0 sen) and Dutch Lady (- 10.0 sen).

On the other hand, Hong Leong Industries (+43.0 sen) Melati Ehsan Holdings (+29.5 sen), Triplc (+14.0 sen), Sasbadi (+12.0 sen) and and Top Glove (+12.0 sen) pushed the broader market higher. Bluechip chart-toppers include BAT (+18.0 sen), Hong Leong Financial Group (+8.0 sen), IHH Healthcare (+6.0 sen), Hong Leong Bank (+4.0 sen) and Petronas Dagangan (+4.0 sen).

Key regional benchmark indices lost ground on Thursday, following the dour sentiment from the U.S. and European stockmarkets overnight, as well as disappointing Chinese economic data. The Shanghai Composite Index retraced 0.1% after China registered a slower growth in its industrial profits to 7.7%, from a 19.5% growth last month. The Hang Seng Index was off 0.8% to 23.132.4 points, alongside the Nikkei which closed 0.3% down – led by losses in the technology and healthcare sectors. Meanwhile, most ASEAN stockmarkets ended on a soft footing yesterday.

Wall Street retreated after a spike in U.S. treasury yields triggered a selldown in defensive counters amid a string of mixed corporate earnings. The Dow (-0.2%) slipped in the final hour, dragged down by Boeing (-1.5%) and Caterpillar Inc (-1.3%). Similarly, the S&P500 and the Nasdaq shed 0.3% and 0.7% respectively.

U.K. equities closed in the positive zone yesterday as investors cheered its higher-than-expected gross domestic production data (GDP). The FTSE rose 0.4% after a volatile intraday session, buoyed by gains in communications-related sector, while the DAX advanced 0.1%. The CAC (-0.02%) ended flattish after recovering earlier losses.

THE DAY AHEAD

With equity markets on a holding pattern, sentiments are also taking a dip ahead of the FOMC meeting next week to decide on the direction of interest rates, in addition to the U.S. Presidential election a week later. Both events will be keenly watched as it could set the market’s direction over the intermediate term. As market players await for the outcome of the above events, we think the sideway trend is likely to persist in the interim.

Stocks on Bursa Malaysia, however, could still head lower with the lack of domestic leads that is also affecting market breadth, which is continuing to thin. The lack of new leads is also seeing some foreign participants starting to take profit on some of the positions acquired recently, resulting in the key index slipping back below the 1,670 level yesterday.

For now, we think the FBM KLCI will continue to trend within the 1,660 and 1,670 levels over the near term with local institutions providing the supports as we expect foreign funds to continue taking profit on their short-term positions. The lower liners and broader market shares are also poised to see the mixed-to-lower conditions sustaining.

COMPANY BRIEFS

UMW Oil & Gas Corp Bhd (UMW-OG) will provide a high pressure high temperature jack-up drilling rig and services to Hess Exploration and Production Malaysia BV for its North Malay basin operation. UMW-OG’s indirect unit, UMW Offshore Drilling Sdn Bhd would assign UMW Naga 8 for the contract, which has a duration of 18 months with option to extend for 12 more months. UMW-OG, however, did not reveal the value of the contract. (The Star Online)

Sasbadi Holdings Bhd will supply Lego Education robotics sets to primary and secondary schools in Malaysia for the expansion of the robotics programme. The RM3.8 mln contract from the Education Ministry runs for the period from 26th October 2016 to 31st December 2016. (The Star Online)

Sunway REIT’s 1QFY17 net property income (NPI) rose 6.8% Y.o.Y to RM96.1 mln, lifted by the resilient performance from its retail segment. Revenue for the period gained 6.3% Y.o.Y to RM128.9 mln. An income distribution of 2.3 sen per unit was declared. (The Edge Daily)

Pavilion REIT’s 3Q2016 net property income (NPI) added 11.0% Y.o.Y to RM80.7 mln, owing to the additional rental income from two new properties, Damen Mall and Intermark Mall. Revenue for the quarter climbed 14.7% Y.o.Y to RM117.5 mln.

For 9M2016, cumulative NPI rose 9.3% Y.o.Y to RM237.8 mln. Revenue for the period improved 10.2% Y.o.Y to RM342.2 mln. (The Edge Daily)

Perisai Petroleum Teknologi Bhd's 51%-subsidiary, SJR Marine (L) Ltd has defaulted on its financing facility of US$20.5 mln (RM86.0 mln) from OCBC Al-Amin Bank Bhd. SJR Marine is seeking legal advice on the matter.

To recap, Perisai, which is now a Practice Note 17 (PN17) company, has defaulted on the principal and interest on a S$125.0 mln (RM376.6 mln) bond early this month. Perisai has sought preliminary legal advice and intends to challenge and oppose the petition. (The Edge Daily)

TH Heavy Engineering Bhd (THHE) and Destini Bhd have entered into a joint venture to pursue a shipbuilding contract entailing the supply of three offshore patrol vessels for the Malaysian Maritime Enforcement Agency (MMEA).

The jobs comprise supply, delivery, testing and commissioning of the three vessels for MMEA, including the performance of an industrial collaboration programme as required by the government. The vessels, measuring 80 metres each, will be the three largest vessels in MMEA’s fleet. Construction of the vessels is expected to take three-and-a half years. (The Edge Daily)

Yinson Holdings Bhd has announced that Datuk Yeow Kheng Chew has ceased to be a substantial shareholder after disposing of 101.8 mln shares, representing some 9.3% stake in the company. It is learnt that Datuk Yeow had disposed of the shares mainly to local institutions at RM3.00 per share. (The Edge Daily)

Gadang Holdings Bhd’s 1QFY17 net profit fell 20.3% Y.o.Y to RM16.6 mln, due to lower revenue inflow from its construction division, coupled with the completion of some projects. Revenue for the quarter slipped 30.0% Y.o.Y to RM104.6 mln. (The Edge Daily)

Source: M+ Online Research - 28 Oct 2016