• The FBM KLCI rose 0.2% last Friday in tandem with the positive sentiment seen in Asian stockmarkets. The key index also snapped three consecutive weeks of losses to close 0.2% higher W.o.W. However, only the FBM Fledging (+0.4%) index ended positively among the lower liners, while the FBM Small Cap (-0.3%) and the FBM Ace (-0.4%) fell. The majority of the broader market indices, meanwhile, gained traction to close in the green.

• Nevertheless, market breadth remained negative as decliners overthrown the winners on a ratio of 402-to-347 stocks. Traded volumes, meanwhile, fell 1.7% to 1.28 bln shares ahead of the weekend and Thanksgiving holidays in the U.S.

• On the key index, BAT (+72.0 sen), Kuala Lumpur Kepong (+36.0 sen), Genting Malaysia (+10.0 sen), Hap Seng (+10.0 sen) and Maybank (+10.0 sen) rallied. On the broader market, chart-toppers were KESM Industries (+26.0 sen) and LPI Capital (+26.0 sen) as well as Plantations-related counters like Genting Plantations (+16.0 sen), Far East Holdings (+15.0 sen) and Sarawak Oil Palms (+13.0 sen).

• Significant broader market losers were consumer products giants - Dutch Lady (- 88.0 sen), Fraser & Neave (-28.0 sen), Nestle (-26.0 sen), Malaysia Smelting Corporation (-22.0 sen) and Panasonic Manufacturing (-20.0 sen). Decliners on the blue-chip gauge include Petronas linked companies like Petronas Gas (-8.0) and Petronas Chemicals (-6.0 sen), trailed by Telekom Malaysia (-7.0 sen), Public Bank (-6.0 sen) and Genting (6.0 sen).

• Key regional indices finished mostly up after the Nikkei added 0.3%, despite lower-than-expected consumer data. The Hang Seng Index (+0.5%) and the Shanghai Composite Index (+0.6%) rose as investors anticipate the launching of the stock trading link between the Hong Kong and Shenzhen exchanges on 5th December 2016 to boost the market. Meanwhile, ASEAN stockmarkets also closed mostly positive.

• Wall Street rallied on Black Friday, boosted by gains in consumer staple counters as gold and U.S. bond prices tumbled. The Dow jumped 0.4% on the back of gains in Cisco Systems (+1.3%) and Coca-Cola (+1.0%). On the broader market, the Nasdaq notched up a 0.3% gain, while the S&P 500 finished up by 0.4% at 2,213.4 points.

• Earlier, European stockmarkets eked-out marginal gains as gains in the healthcare sector offset losses in the oil and gas sector ahead of the Organisation of Petroleum-Exporting (OPEC) meeting. The FTSE was up 0.2% to 6,840.8 points after paring back losses in the final trading hour. Meanwhile, the CAC and the DAX managed to close on a positive note, rising 0.2% and 0.1% respectively, despite being in the red for majority of the trading session.

The Day Ahead

• We continue to think that market conditions are insipid despite last Friday’s gains as most investors are still adopting a cautious stance and will continue to stay mostly on the sidelines, awaiting for a decision on U.S. interest rates next month. As it is, the odds remain high for rates to be raised and this could also mean that more investors will remain wary over the market’s immediate direction.

• Therefore, we expect market breadth to stay mostly negative, albeit the index heavyweights may still nudge higher as local institutions use the calmer market conditions to provide some support. The lower liners and broader market shares, however, will continue to see limited following, in our view.

• On the upside, the 1,630 level is the main resistance, while the main support remains at the 1,620 level. MACRO NEWS

• Malaysia's inflation, as measured by the consumer price index (CPI), increased 1.4% Y.o.Y in October 2016, mainly on costlier liquor and tobacco (+19.8% Y.o.Y), besides food and non-alcoholic drinks (+2.5% Y.o.Y) which offsets the index of transport group (-5.5% Y.o.Y). For 10M2016, the CPI rose 2.1% Y.o.Y. On a monthly basis, the CPI climbed 0.3% M.o.M. (The Star Online)

Company Briefs

• Sunway Bhd’s 3Q2016 net profit increased 7.7% Y.o.Y to RM143.6 mln due to better performance in four of its five main business segments, the exception being quarrying . Revenue for the quarter added 19.6% Y.o.Y to RM1.14 bln.

• For 9M2016, cumulative net profit fell 22.7% Y.o.Y to RM400.1 mln. Revenue for the period, however, added 10.1% Y.o.Y to RM3.36 bln. (The Star Online)

• Mah Sing Group Bhd’s 3Q2016 net profit gained 8.9% Y.o.Y to RM91.9 mln on lower operational expense. Revenue for the quarter, however, fell 5.0% Y.o.Y to RM732.4 mln.

• For 9M2016, cumulative net profit rose marginally, by 0.7% Y.o.Y, to RM275.8 mln. Revenue for the period slipped 4.7% Y.o.Y to RM2.22 bln. (The Star Online)

• Sime Darby Bhd’s 1QFY17 net profit added 37.2% Y.o.Y to RM443.0 mln, underpinned by higher contribution from the motors division. Revenue for the quarter, however, declined marginally by 0.7% Y.o.Y to RM10.10 bln. (The Star Online)

• Telekom Malaysia Bhd's 3Q2016 net profit decreased 4.2% Y.o.Y to RM159.8 mln, weighed by higher operating costs and foreign exchange losses. Revenue for the quarter was flat at RM2.92 bln.

• For 9M2016, cumulative net profit gained 22.4% Y.o.Y to RM621.7 mln. Revenue for the period climbed 3.3% Y.o.Y to RM8.82 bln. (The Edge Daily)

• Ikhmas Jaya Group Bhd has bagged a piling job worth RM57.9 mln from TTDI KL Metropolis Sdn Bhd for a high-rise mixed development within the KL Metropolis project. Under the contract, Ikhmas Jaya has to complete the piling works for the serviced apartment’s foundation, pilecaps and lowest slab within eight months, with the expected completion date on 17th July 2017.

• All other works shall be completed within 15 months by 17th February 2018. (The Edge Daily)

• Titijaya Land Bhd’s 1QFY17 net profit dropped 2.8% Y.o.Y to RM20.0 mln due to higher operational cost. Revenue for the quarter, however, increased 27.2% Y.o.Y to RM107.6 mln. (The Edge Daily)

• Tune Protect Group Bhd's 3Q2016 net profit grew 11.5% Y.o.Y to RM14.3 mln, on better general insurance contribution coupled with a higher share of associate's results.

• For 9M2016, cumulative net profit added 39.4% Y.o.Y to RM63.4 mln. Revenue for the period climbed 9.1% Y.o.Y to RM381.2 mln. (The Edge Daily)

• Chin Hin Group Bhd's 3Q2016 net profit increased 76.2% Y.o.Y to RM8.1 mln, lifted by lower operating expenses, finance costs and taxation. Revenue for the quarter, however, declined 12.4% Y.o.Y to RM241.8 mln.

• For 9M2016, cumulative net profit rose 9.6% Y.o.Y to RM21.9 mln. Revenue for the period, however, slipped 12.8% Y.o.Y to RM794.8 mln. (The Edge Daily)

• Padini Holdings Bhd’s 1QFY17 net profit decreased 10.1% Y.o.Y to RM28.6 mln, amid rising costs and sales events. Revenue for the quarter, however, gained 15.0% Y.o.Y to RM310.0 mln. An interim dividend of 2.5 sen per share was announced. (The Edge Daily)

• Mega First Corp Bhd's 3Q2016 net profit rose 35.5% Y.o.Y to RM35.9 mln due to recognition of construction profit and higher earnings in its resources and property division. Revenue for the quarter improved 47.5% Y.o.Y to RM215.0.

• For 9M2016, cumulative net profit added 37.2% Y.o.Y to RM86.2 mln. Revenue for the period increased 46.8% Y.o.Y to RM630.5 mln. (The Edge Daily)

• Kerjaya Prospek Group Bhd’s 3Q2016 net profit surged 7.2x Y.o.Y to RM25.5 mln, driven by contribution from its two subsidiaries, Kerjaya Prospek (M) Sdn Bhd and Permatang Bakti Sdn Bhd, that were acquired in January 2016. Revenue for the quarter soared 8.8x Y.o.Y to RM190.5 mln.

• For 9M2016, cumulative net profit jumped 6.5x Y.o.Y to RM73.75 mln. Revenue for the period surged 9.4x Y.o.Y to RM569.9 mln. (The Edge Daily)  

Source: Mplus Research - 28 Nov 2016