The FBM KLCI extended its losses for the third consecutive session – due to the negative sentiment spilled over from regional stockmarkets ahead of the FOMC meeting results and the U.S. Presidential Election. The lower liners were also splashed in red alongside the broader market, with the exception of the Industrial (+0.2%) and the Construction (+0.03%) sectors.

Market breadth was sluggish as decliners overshadowed the winners by more than three-fold. Traded volumes, however, jumped 28.9% to 1.68 bln shares amid a selldown in riskier assets by investors, in exchange for safe haven assets like the Yen.

More than half the FBM KLCI constituents tanked – led by banking giants like Public Bank (-14.0 sen), Hong Leong Bank (-12.0 sen), and Hong Leong Financial Group (- 12.0 sen). Other key index losers were Axiata (-13.0 sen) and KLCC (-12.0 sen). Decliners on the broader market included Hong Leong Industries (-19.0 sen), Kossan Rubber Industries (-18.0 sen), KESM Industries (-16.0 sen) and DKSH Holdings (-15.0 sen). Cycle and Carriage Bintang fell 22.0 sen after reporting a 38.4% Y.o.Y fall in its 3Q2016 net profit to RM8.3 mln vs. RM13.5 mln a year ago.

Significant broader market gainers included Dutch Lady (+20.0 sen), PPB Group (+12.0 sen), Malaysian Airports Holdings (+10.0 sen), Mercury Industries (+10.0 sen) and WCT Holdings (+8.0 sen). The five Main Board advancers were PPB Group (+12.0 sen), Petronas Gas (+6.0 sen), Sime Darby (+5.0 sen), Telekom Malaysia (+3.0 sen) and Petronas Chemicals (+2.0 sen).

Japanese equities led the selldown in key regional stockmarkets following concerns on an increasingly tight U.S. election race between Republican Donald Trump and Democrat Hilary Clinton. The Nikkei tanked 1.8%, dragged down by financials and export-related counters as the Yen strengthened. The Hang Seng Index plummeted 1.5% with only one advancer out of fifty constituents, while the Shanghai Composite (-0.6%) traded lower. Negative sentiment also painted most ASEAN stockmarkets red on yesterday’s close.

Wall Street finished down on Tuesday’s close, following the Federal Reserve’s decision to keep interest rates unchanged and higher gold prices. The S&P500 (-0.7%) capped its longest losing streak in five years after retreating for the seventh consecutive time, dragged down by real estate shares. The Dow also finished 0.4% lower – led by defensive heavyweights like Verizon Communications (-1.5%) and Pfizer (-1.4%), while the Nasdaq slipped 0.9%.

U.K stockmarkets continued to see selling pressure amid a tighter race in the U.S. Presidential election and a potential interest rate hike in December. The FTSE deteriorated by 1.0% after coming down from its intraday high, on the back of losses in the energy and utilities sectors, while the DAX fell 1.5%. The CAC slipped 1.2% to close slightly below the 4,420.0 level.

THE DAY AHEAD

The expected sideway trend has given way to renewed selling amid mounting speculation of a rate hike in December, while the tight race to the White House has further dampened sentiments, which is likely to linger over the near term.

With the heightened uncertainties, we also expect the weakness to sustain on Bursa Malaysia as market players will switch to a risk-off approach and the sustain selling could potentially send the key index back to the 1,650 level after the 1,670 and 1,660 levels failed to hold yesterday. As it is, foreign funds could hasten their profit taking as the odds of higher rates in December could prompt them to switch out their investments from risker emerging market assets.

Similarly insipid conditions will permeate among the lower liners and broader market shares as we see market interest thinning with more retail players retreat to the sidelines.

COMPANY BRIEFS

MISC Bhd’s 3Q2016 net profit plummeted 72.3% Y.o.Y to RM134.1 mln, dragged down by lower profit recorded in its liquefied natural gas (LNG) segment, loss in it is petroleum segment and higher depreciation of vessels. Revenue for the quarter fell 8.5% Y.o.Y to RM2.29 bln.

For 9M2016, cumulative net profit gained 19.6% Y.o.Y to RM2.05 bln. Revenue for the period, however, decreased 6.8% Y.o.Y to RM7.08 bln. (The Star Online)

Petronas Chemicals Group Bhd’s (PCG) 3Q2016 net profit dipped 2.7% Y.o.Y to RM891.0 mln, owing to the lower product prices. Revenue for the quarter fell 2.1% Y.o.Y to RM3.56 bln.

For 9M2016, cumulative net profit declined 6.4% Y.o.Y to RM1.95 bln. Revenue for the period fell marginally, by 1.7% Y.o.Y, to RM9.91 bln. (The Star Online)

Petronas Gas Bhd's 3Q2016 net profit climbed 38.6% Y.o.Y to RM422.7 mln after the previous corresponding period’s results were impacted by an unrealised foreign exchange (forex) loss from its U.S. Dollar lease liabilities totaling RM167.5 mln. Revenue for the quarter gained 2.1% Y.o.Y to RM1.16 bln.

For 9M2016, cumulative net profit fell 19.0% Y.o.Y to RM1.27 bln Revenue for the period, however, added 2.7% Y.o.Y to RM3.41 bln. A third interim dividend of 15.0 sen, payable on 2nd December 2016 was declared. (The Edge Daily)

Pesona Metro Holdings Bhd has bagged the construction job to build Central Plaza @ I-City in Shah Alam, Selangor valued at RM488.0 mln. The project is for 20 months, commencing 3rd November 2016. The construction outfit intends to fund the project via internally generated funds and bank borrowings. (The Edge Daily)

Trive Property Group Bhd has cancelled an Extraordinary General Meeting (EGM) scheduled for 16th November 2016 in relation to the purchase of a RM19.6 mln piece of land in Terengganu. The meeting was called off pending clarification on a development that may have a material outcome on the proposed acquisition.

Earlier on 9th September 2016, Trive Property announced that it was acquiring the entire equity stake of Pakadiri Sdn Bhd, which owns a 20.9 ha. piece of land in Kemaman, Terengganu, for RM19.6 mln cash. (The Edge Daily)

Seacera Group Bhd has aborted a plan to acquire Duta Nilai Holdings Sdn Bhd for RM220.0 mln. Duta Nilai owns a 250 ac. piece of land in Semenyih, Selangor. Two of the vendors, namely Ismail Othman and Zainab Mansor, have agreed to mutually terminate the deal after due consideration, without providing details. (The Edge Daily)

Source:M+ Online Research - 3 Nov 2016