• Despite opening higher at the start of the trading bell, quick profit taking sent the FBM KLCI (-0.2%) lower yesterday after the Ringgit trended lower against the U.S. Dollar. Amid the mixed broader market, the lower liners also closed mostly lower as the FBM Fledgling and FBM ACE fell 0.01% and 0.1% respectively.

• Market breadth turned negative as losers outnumbered losers on a ratio of 449-to- 349 stocks. Traded volumes, however, added 36.7% to 1.84 bln shares.

• Leading the key index decliners’ list was BAT (-80.0 sen), followed by Maybank (- 12.0 sen), Petronas Dagangan (-10.0 sen), Sime Darby (-7.0 sen) and Genting Malaysia (-7.0 sen). Consumer products stocks like Frasers & Neave (-48.0 sen), Heineken (-30.0 sen), Carlsberg (-38.0 sen) and Nestle (-22.0 sen) were among the biggest decliners on the broader market. Reach Energy slipped 4.5 sen despite receiving the approval of the majority of its shareholders on the Kazakhstan oil field acquisition.

• In contrast, notable advancers on the broader market include Box-Pak (+37.0 sen), Mercury (+20.0 sen), Ajinomoto (+18.0 sen) and BLD Plantations (+18.0 sen) and UMW (+17.0 sen). Meanwhile, Hong Leong Financial Group (+26.0 sen), KLK (+22.0 sen), PPB Group (+16.0 sen), Genting (+6.0 sen) and Tenaga (+4.0 sen) were amongst the biggest gainers on the big board.

• Japanese equities advanced as the Nikkei jumped 1.1% after the Japanese Yen weakened to five-month low against the Greenback. The Shanghai Composite (- 0.1%) extended its losses, while the Hang Seng Index (-0.2%) erased all its intraday gains to close in the red in the final trading hour on weakness in properties and banking shares. ASEAN stockmarkets, meanwhile, ended mixed.

• U.S. stockmarkets closed mostly lower overnight as the Dow (-0.3%) snapped its streak of seven consecutive winning days as well as retreating from the all-time high level. On the broader market, the S&P 500 fell 0.2% with eight out-of-the ten main sectors in the red, but the Nasdaq added 0.4%. • European benchmark indices - the FTSE (- 0.6%), CAC (-0.8%) and DAX (-0.7%), all retreated after the rally in financial stocks losses steam. Concerns over the Italy’s constitutional reform plan in the upcoming referendum on 4th December 2016 also dampened market sentiment.

The Day Ahead

• Although we expected the key index to sustain its near term recovery yesterday, quick profit taking activities became more pronounced instead, whilst the renewed buying remained relatively muted. It also appears that the most market players are unwilling to take up fresh positions on Bursa Malaysia amid the continuing uncertainties over the direction of U.S. interest rates and the policies of President-elect Trump.

• The above issues will continue to cloud prospects on Bursa Malaysia and it is likely that the FBM KLCI will continue on its cautious trend over the near term. We think the key index could revert to a sideway trend, ranging between the 1,620 and 1,630 as the market attempts to find a firmer footing.

• The lower liners and broader market stocks could also sustain their mixed-tolower trend as most retail players are expected to remain on the wayside due to the unsettled market environment.

Company Briefs

• Boustead Plantations Bhd’s 3Q2016 net profit surged 58.1% Y.o.Y to RM37.4 mln, from RM23.6 mln a year ago – led by higher palm product prices and lower operating expenditure (opex) which offset the shortfalls in fresh fruit bunch (FFB) production. Revenue also expanded 19.7% Y.o.Y to RM199.3 mln against RM166.6 mln in the previous corresponding period.

• For 9M2016, earnings jumped 123.0% Y.o.Y to RM177.5 mln, from RM79.59 mln last year, attributed to a gain on disposal of plantation land worth RM117.8 mln, better palm product prices and lower opex, while revenue grew 13.1% Y.o.Y to RM511.2 mln vs. RM451.8 mln. Boustead has also proposed a third interim dividend of five sen per share, which will be paid on 14th December, 2016.

• Moving forward, the group anticipates favorable CPO prices amid low crop production due to the lingering effects of the El Nino weather condition. However, demand could be adversely impacted by further release of rapeseed oil reserves in China and weaker Renmimbi against the Greenback. (The Star Online)

• Taliworks Corp Bhd posted a 80.6% Y.o.Y jump to its 3Q2016 net profit to RM19.5 mln, from RM10.8 mln last year - boosted by higher metered sales from its water business, stronger income derived from management fee and unrealised foreign exchange gain on disposal of its China waste management business.

• The improved bottomline was also contributed by the improved earnings from the toll compensation for the Cheras-Kajang Highway from the government due to a delay in a toll hike. Revenue for the quarter rose 13.6% Y.o.Y to RM83.8 mln, from RM73.7 mln in 3Q2015 ? The group has declared a third dividend of 2.0 sen per share, payable on 23th December 2016. To date, the total dividend declared for the year is RM72.6 mln.

• Meanwhile, cumulative 9M2016 net profit surged 170.3% Y.o.Y to RM95.5 mln, from RM35.3 mln in 9M2015, while revenue rose 8.2% Y.o.Y to RM235.8 mln, from RM217.9 mln a year ago. (The Star Online)

• CIMB Group Holdings Bhd's 3Q2016 net profit rose 28.0% Y.o.Y to RM1.02 bln, from RM803.9 mln previously as a result of higher net interest and non-interest income. The group also attributed the stronger earnings to higher Islamic banking income and a RM149.8 mln gain from the sale of CIMB's stake in PT CIMB Sun Life. Revenue gained 7.3% Y.o.Y to RM4.12 bln, from RM3.84 bln in 3Q2015.

• Meanwhile, cumulative 9M2016 net profit jumped 34.2% Y.o.Y to RM2.71 bln against RM2.02 bln, while quarterly revenue stood at RM11.75 bln, in comparison to RM11.35 bln.

• Moving forward, the group will advance its “Asean franchise” plan after securing a full banking license in Vietnam, where it will begin operations in December. (The Star Online)

• Amway (M) Holdings Bhd registered a 61.0% Y.o.Y rise in its 3Q2016 net profit to RM18.9 mln, from RM11.8 mln in 3Q2015, in-tandem with an 8.0% Y.o.Y increase in revenue from RM241.7 mln last year to RM261.7 mln. The group also declared a third interim single-tier dividend of five sen per share which is payable on 15th December, 2016.

• The group’s aggregate 9M2016 net profit, however, plunged 26.7% Y.o.Y to RM43.2 mln compared to RM58.9 mln in 9M2015, despite stronger revenue contribution which was 11.3% Y.o.Y higher at RM836.5 mln against RM751.6 mln a year earlier.

• The weaker bottomline was attributed to the increased distribution, as well as selling and administrative expenses. Amway expects revenue to normalise in the coming quarter, on the back of various sales and marketing programmes with a low- to mid-single digit growth for 2016.

• Separately, Amway has also announced the re-designation of its NonIndependent Director Liu Ming-Hsiung @ Martin Liou as its new Managing Director and the appointment of Michael Jonathan Duong, the current Deputy General Manager of Amway Malaysia as its Executive Director effective 1st January, 2017. (The Edge Daily)

• Kuala Lumpur Kepong Bhd's (KLK) 4QFY16 net profit grew 101.3% Y.o.Y to RM375.1 mln from RM186.3 mln or 17.5 sen per share a year ago, driven by its plantation and property business sectors, while quarterly revenue increased 15.5% Y.o.Y to RM4.54 bln, from RM3.93 bln in the previous corresponding period.

• Full year net profit almost doubled to RM1.59 bln, from RM869.9 mln last year – mainly due to higher sales, improved other operating income and lower tax charge. Revenue stood at RM16.51 bln vs. RM13.65 bln in 2015.

• KLK is also planning a final dividend of 35.0 sen per share, payable on 14th March 2017. The group paid a total dividend of 50.0 sen per share in FY16, compared to 45.0 sen per share in FY15.

• Going forward, KLK said the prevailing firm CPO price will be supported by low palm oil stocks and a weak Ringgit. It also expects improvement in FFB production and inventories of palm oil. (The Edge Daily) ? Ta Ann Holdings Bhd's net profit in 3Q2016 declined 22.8% Y.o.Y to RM52.1 mln, from RM67.4 mln a year earlier – dragged down by lower average selling price (ASP) of plywood products, although revenue was higher by 17.1% Y.o.Y to RM349.9 mln. The group declared a dividend of five sen, payable on 23th December, 2016.

• Going forward, Ta Ann expects its palm oil segment to remain the main contributor of its income due to lower– than-expected CPO production which will lead to improvement in prices. The group is also anticipating plywood prices to recover in view of the infrastructure construction works for the coming Japan Olympics.

• Further, the group has appointed Wong Siik Onn as its Executive Director with immediate effect. Siik Onn is the son of its Group Managing Diretor and major shareholder Datuk Wong Kuo Hea. (The Edge Daily)

• Wing Tai Malaysia Bhd's 1QFY17 net profit dipped 67.0% Y.o.Y to RM825,000, in comparison to RM2.6 mln a year ago, alongside revenue which declined 12.0% Y.o.Y to RM65.6 mln, from RM74.3 mln.

• The lower net profit resulted fromlower sales contribution and higher finance costs, which offset the higher share of gains from its joint-venture.

• Its property development division generated revenue of RM22.5 mln in the quarter compared with RM19.0 mln in the preceding quarter, while revenue from its retail division was marginally lower at RM36.4 mln in 1QFY17 vs. RM36.6mln last year. Wing Tai also proposed a first and final dividend of three sen per share, payable on 15th December, 2016. (The Edge Daily)  

Source: Mplus Research - 17 Nov 2016