• The FBM KLCI (-0.2%) finished on a weak footing after the Federal Reserve Chair Janet Yellen hinted that higher borrowing costs is imminent in view of the positive U.S. economic data. The key index also closed marginally lower by 0.6% W.o.W at 1623.8 points. The lower liners were splashed in red, with the exception of the FBM ACE (+0.4%), while the Consumer Products (+0.06%), Trading and Services (+0.2%) and Properties (+0.4%) sectors outperformed the negative broader market.

• Market breadth was negative as losers beat winners on a ratio of 402-to-356 stocks. Traded volumes flatlined at 1.39 bln shares as investors fled emerging markets in search of higher yields ahead of the potential interest rate hike in December.

• Petronas-linked counters like Petronas Gas (-36.0 sen) and Petronas Chemicals (-12.0 sen) fell in-tandem with the weaker crude oil prices, while other key index losers include Kuala Lumpur Kepong (- 10.0 sen), PPB Group (-8.0 sen) and Maybank (-7.0 sen). Consumer-product counters like Dutch Lady (-RM1.2), Nestle (-50.0 sen), Ajinomoto (-28.0 sen) led the broader market decliners, followed by United Plantations (-RM1.40) and BLD Plantation (-18.0 sen).

• Broader market winners were Carlsberg (+30.0 sen), IQ Group (+20.0 sen), AirAsia (+19.0 sen), Top Glove (+18.0 sen) and Can-One (+14.0 sen). Blue-chip advancers include BAT (+62.0 sen), Petronas Dagangan (+34.0 sen) and Genting (+9.0 sen), as well as banking giants like RHB Bank (+8.0 sen) and Hong Leong Bank (+6.0 sen).

• Key regional benchmark indices ended mostly higher as Japanese stocks entered the bull market territory last Friday, on the back of the weaker Yen. The Nikkei (+0.6%) advanced – led by gains in the consumer discretionary and technology sectors. The Hang Seng Index was 0.4% higher, although the Shanghai Composite Index ended down by 0.5%, dragged down by selling pressure in the eleventh hour. ASEAN stockmarkets, meanwhile, ended mixed.

• U.S. stockmarkets slipped into the red territory last Friday, mainly due to mild profit-taking activities as the Dollar surged to a 13-year high. The Dow lost 0.2%, while the S&P 500 (-0.2%) ended lower despite clawing back earlier losses. The Nasdaq also finished 0.2% down – to near the 5,320 psychological level.

• Major European indices retreated as the stronger Greenback pushed commodityrelated stocks lower. The FTSE shed 0.3% as losses in the materials and utilities sectors offset gains from the technology and consumer discretionary counters. Meanwhile, the CAC and DAX fell 0.5% and 0.2% respectively.

The Day Ahead

• The general market sentiments on Bursa Malaysia remain insipid due to the prospects of a rate hike next month that is seeing foreign funds exiting the local market for higher yields in key global stockmarkets. At the same time, the weakening currency is also seeing foreign players switching out of Ringgit denominated assets.

• Although the selling spree appears to have dwindled towards the end of last week, we see fresh buying support still lacking as most market players are likely to remain on the sidelines until there are further clarity on the market’s direction.

• Therefore, we see further near term downside risk as market players will continue to trim the positions, while local institutions could provide some mild support to the index heavyweights to help the key index to hold above the 1,620 level over the near term.

Company Briefs

• Prestariang Bhd has bagged a job to implement the Sistem Kawalan & Imigresen Nasional (SKIN) programme, a government-led border transformation programme potentially worth RM3.50 bln from the Home Affairs Ministry. The concession shall be for a period of 15 years and will consist of a three-year period to build and deploy the programme and 12 years for maintenance and technical operations.

• The payment to Prestariang is inclusive of all costs incurred during the build and deployment phase, maintenance and technical operation phase. The payment shall only commence upon full commissioning of the system, after three years, with an average annual payment of RM294.7 mln from year four to year 15 during the maintenance and technical operation phase.

• SKIN is a Government-led border transformation programme that will give confidence, facilitate and encourage the movement of genuine people in and out of the country. The commencement date shall be subjected to the finalisation of the terms and conditions of the agreement to be mutually agreed between the parties. (The Star Online)

• IOI Corp Bhd’s 1QFY17 net profit stood at RM104.8 mln, from a net loss of RM744.4 mln recorded in the previous corresponding quarter, due to lower net foreign currency translation loss on foreign currency denominated borrowings, which fell by 80.0% to RM172 mln, coupled with higher contribution from all segments. Revenue for the quarter increased 6.6% Y.o.Y to RM3.30 bln. (The Star Online)

• Pintaras Jaya Bhd’s 1QFY17 net profit jumped 96.4% Y.o.Y to RM13.2 mln on increased construction activities and higher progress profits recognised from ongoing projects, which have advanced beyond the initial stages of implementation. Revenue for the quarter grew 67.0% Y.o.Y to RM59.7 mln. (The Edge Daily)

• Guan Chong Bhd's 3Q2016 net profit contracted 28.6% Y.o.Y to RM15.5 mln, dragged down by lower net gain on foreign exchange arising from the weakening of the Ringgit against the U.S. Dollar and British Pound. Revenue for the quarter decreased 15.7% Y.o.Y to RM597.5 mln.

• The group announced a first interim single-tier dividend of 1.5 sen per share, payable on 4th January 2017. (The Edge Daily)

• BP Plastics Holding Bhd’s 3Q0216 net profit decline 48.9% Y.o.Y to RM3.1 mln, due to higher costs of sales as well as increased selling and marketing expenses. Revenue for the quarter, however, added 16.1% Y.o.Y to RM79.4 mln.

• For 9M2016, cumulative net profit climbed 1.7% Y.o.Y to RM14.0 mln. Revenue for the period increased 20.3% Y.o.Y to RM243.6 mln. A single-tier third interim dividend of two sen per share, payable on 22nd December 2016, was declared. (The Edge Daily)

• Ibraco Bhd’s 3Q2016 net profit slipped 61.1% Y.o.Y to RM4.4 mln on lower topline growth due to a change in product mix. Revenue for the quarter declined 46.6% Y.o.Y to RM60.8 mln. (The Edge Daily)  

Source: Mplus Research - 21 Nov 2016