The FBM KLCI (-0.7%) traded in the red from the opening bell to ended lower for a third straight day, following the dampened sentiment on most Asean stockmarkets and weaker crude palm oil. The FBM Small Cap (-0.2%) and the FBM Fledging (-0.4%) also declined, while the FBM Ace (-0.04%) flatlined. The broader market finished mostly on a softer note.

Market breadth remained negative as underperformers beat gainers on a ratio of 500-to-277 stocks. Traded volumes also thinned by 13.9% to 1.45 bln shares as uncertainties caused by the U.S. election continued to weigh on global equity sentiments.

Downtrodden key index equities included BAT (-7.0 sen), Hong Leong Bank (-14.0 sen), RHB Bank (-14.0 sen) and CIMB Bank (-12.0 sen). MISC Bhd lost 27.0 sen after its 3Q2016 net profit dropped 72.3% Y.o.Y to RM134.1 mln. Meanwhile, the main broader market losers were Dutch Lady (-6.0 sen), SP Setia (-16.0 sen), LPI Capital (-14.0 sen), Tasek Corporation (- 12.0 sen) and Axiata Group (-11.0 sen).

On the other hand, Lafarge Malaysia (+17.0 sen), Southern Acids (+14.0 sen), Enra Group (+12.0 sen), Felda Global Ventures (+12.0 sen) and Apex Equity Holdings (+11.0 sen) were among the main gainers. Blue-chips that advanced on Thursday include plantations-related counters like Kuala Lumpur Kepong (+20.0 sen) and Sime Darby (+5.0 sen), followed by Astro Malaysia (+4.0 sen), KLCC (+4.0 sen) and Digi (+2.0 sen).

The malaise from the upcoming U.S. Presidential Election kept key regional equities on the downside as the Nikkei shed another 1.8% - led by losses in NTN Corp (-14.1%) and Sumitomo Electric Industries (-11.6%), while the Hang Seng Index (-0.6%) retreated to the 22,683.5 level. The Shanghai Composite, however, resisted the general tepid sentiment and closed 0.8% higher, in-conjunction with an array of upbeat Chinese economic data. Meanwhile, ASEAN equities were mostly down.

U.S. equities were splashed in the red due to the possible interest rate hike by as soon as December and concerns over the tighter race to the White House. The S&P500 (-0.4%) sunk for the eight-straight day following Donald Trump’s turnaround in the opinion polls, which saw the margin of victory for Hilary Clinton narrowing. The Dow ended 0.2% down, with more than half of its members in the negative territory, while the Nasdaq (-0.9%) also extended its losing streak for the eight consecutive day, dragged down by Facebook (-0.2%).

Trading activities in the European shares were also dampened amid lower-than-expected corporate earnings as well a surprise ruling from the U.K. High Court which prevented the British government from triggering a formal divorce from the European Union without the support from the Parliament. The FTSE lost 0.8% as the losses in the materials sectors offsets the gains in the financials-related sector. The DAX finished 0.4% lower after a series of disappointing corporate earnings from its industrial giants and the CAC closed marginally down by 0.1%.

THE DAY AHEAD

The dour environment engulfing Bursa Malaysia shows little signs of abating as yet, given the escalating odds for an interest rate hike next month. At the same time, the tighter race to the White House is causing jitters as the prospects of a Trump presidency could fuel nationalistic and protectionist ambitions that could see global trades dwindling. Therefore, the flight to safety is already prevalent, particularly on emerging market stocks.

With the 1,650 level giving way yesterday, the downside risk has heighten and we think the FBM KLCI could head towards the 1,635-1,640 support as there are few signs of the selling abating for now as we expect foreign funds to continue trimming their shareholding of Malaysian stocks.

The lower liners and broader market shares are also experiencing further selling pressure as more retail players retreat to the sidelines.

COMPANY BRIEFS

Tien Wah Press Holdings Bhd’s (TWPH) 51-0% owned subsidiary, Max Ease International Ltd (MEIL) has signed an agreement to acquire PT Bintang Pesona Jagat (BPJ) that would make the Tien Wah group the exclusive provider of print supplies to the British American Tobacco (BAT) group in Indonesia for six years starting 1st January 2017.

The proposed acquisition is conditional on receiving a written consent from the Investment Coordinating Board in the form of in-principle license or investment license by 7th December 2016. The proposed purchase is expected to be completed on 15th December 2016 or a later date as may be agreed by the parties, but no later than 31st December 2016. TWPH portion of the purchase price will be settled via cash, which will be financed by the proceeds raised from the rights issue exercise completed by the company on 9th August 2016. (The Star Online)

Tenaga Nasional Bhd (TNB) has signed three power purchase agreements (PPAs) with the special-purpose company set up by the consortium of ItraMAS Technology Sdn Bhd, Maltech Pro Sdn Bhd and Cam-Lite Sdn Bhd. The Energy, Green Technology and Water Ministry had awarded the consortium a contract to develop 3x50 megawatts (MW) solar project proposed to be located at Jasin (Malacca), Gurun (Kedah) and Merchang (Terengganu).

Each of the companies will construct, own, operate and maintain a solar photovoltaic energy generating facility with a capacity of 50 MW alternate current at its specified location. Each PPA, which has an expected commercial operation date of 31st December 2017, governed the obligations of the parties to sell and purchase the energy generated by the facility for a period of 21 years from the commercial operation date in accordance with the agreed terms and conditions. (Bernama)

Acoustech Bhd has tied up with three private firms to jointly build a five-block foreign worker hostel in Permas Jaya, Johor. The project will involve the construction of 120 residential hostel units on a 7.4 ac piece of freehold land there. The undisclosed project cost will be funded with external borrowings.

On completion, the hostel will be tenanted to HMR, which specialises in the recruitment of foreign workers, which will secure and manage the tenancy of the hostel units upon completion. The JV company, HED, which is currently dormant, will have a capital outlay of RM2.0 mln: RM1.1 mln from Harum Megah Resources Sdn Bhd (HMR), which will have a 55.0% stake, RM0.6 mln from Acoustech (30.0%), and RM0.3 mln from Jaya Dormitory Sdn Bhd (JDSB) (15.0%). (The Edge Daily)

MMC Corp Bhd’s subsidiary, Projek Lebuhraya Timur Sdn Bhd (Pelita) has been ordered by the High Court to pay RM86.2 mln in damages to Daya Group over a claim in relation to the East Coast Expressway project. A sum of RM17.3 mln of the damages must be paid to Jurutera Perunding Daya Sdn Bhd and the remaining RM68.9 mln to Pengurusan Projek Daya Sdn Bhd.

Daya Group had sued Pelita for RM50.0 mln in 2005 over a claim in relation to a concession agreement entered into between the government and Pelita in 1998, in respect of the privatisation of the East Coast Expressway. MMC was also sued on the matter but the High Court had, in 2011, ruled that that the utilities and infrastructure group was not liable as it was not a party to any of the agreements between Daya and Pelita. (The Edge Daily)

Fraser & Neave Holdings Bhd's (F&N) 4QFY16 net profit declined 12.6% Y.o.Y to RM49.6 mln, mainly on weaker Malaysian operations. Revenue for the quarter dropped 4.3% Y.o.Y to RM976.5 mln.

For FY16, cumulative net profit grew 37.6% Y.o.Y to RM385.4 mln. Revenue for the year increased 1.5% Y.o.Y to RM4.17 bln. A dividend of 30.5 sen per share was proposed. (The Edge Daily)

Unisem (M) Bhd's 3Q2016 net profit dipped 3.9% Y.o.Y to RM38.6 mln on the back of weaker sales, where revenue for the quarter fell 2.3% Y.o.Y to RM322.0 mln.

For 9M2016, cumulative net profit gained 16.6% Y.o.Y to RM111.0 mln. Revenue for the period added 5.7% Y.o.Y to RM960.7 mln. An interim dividend of 7.0% or 3.5 sen per share, payable on 6th January 2017 was declared. (The Edge Daily)

KLCCP Stapled Group’s 3Q2016 net profit rose 19.0% Y.o.Y to RM178.2 mln due to lower operational expenses. Revenue for the quarter, however, fell 2.3% Y.o.Y to RM329.5 mln.

For 9M2016, cumulative net profit expanded 6.0% Y.o.Y to RM538.8 mln. Revenue for the period rose marginally by 0.6% Y.o.Y to RM998.9 mln. The group announced an income distribution of 8.6 sen per unit which is made up of an interim dividend of 2.94 sen per unit by KLCC Property Holdings Bhd (KLCCP), and an income distribution of 5.66 sen per unit totalling RM102.18 mln by KLCC Real Estate Investment Trust KLCC REIT, both payable on 14th December 2016. (The Edge Daily)

Source: M+ Online Research - 4 Nov 2016