• Tracking the weakness on Wall Street overnight amid the rising geopolitical tensions with North Korea, the FBM KLCI (-0.2%) succumbed to further selling pressure yesterday as the key index extended its losses for the sixth consecutive session. The selloff exacerbated towards both the lower liners and broader market with the Technology sector (-1.9%) taking the heaviest beating in the latter.

• Market breadth was negative as losers thumped gainers on a ratio of 603-to-276 stocks. Traded volume, however, jumped 50.2% to 3.70 bln shares as selloff in the equity market intensified.

• More than half of the key index components retreated, led by Petronas Gas (-34.0 sen), followed by Genting Malaysia (-11.0 sen), Hong Leong Bank (- 8.0 sen), Genting (-8.0 sen) and Sime Darby (-6.0 sen). Amognst the biggest decliners on the broader market were technology shares like KESM Industries (- 32.0 sen), MPI (-32.0 sen) and Pentamaster (-19.0 sen), while Nestle and Time dotCom shed 36.0 sen and 20.0 sen respectively.

• In contrast, Scientex (+29.0 sen), United Plantations (+24.0 sen), Heineken (+16.0 sen) and Panasonic (+14.0 sen) topped the broader market gainers list. Bison jumped 17.0 sen after reporting a strong set of quarterly earnings. Meanwhile, key winners on the big board were Petronas Dagangan (+20.0 sen), Westports (+13.0 sen), BAT (+12.0 sen), CIMB (+3.0 sen) and IHH (+3.0 sen).

• Japanese equities retreated yesterday as the Nikkei (-0.3%) reversed some of its previous session’s gains as geopolitical tension in North Korea took center stage and Prime Minister Shinzo Abe calls for a snap election on 22nd October 2017. The Shanghai Composite added 0.1%, while the Hang Seng Index (+0.1%) halted a streak of three consecutive days of decline, lifted by gains in energy shares. ASEAN stockmarkets, meanwhile, ended mostly lower.

• U.S. stockmarkets ended mixed overnight with the Dow falling 0.1% on weakerthan-expected new home sales data for August 2017. The S&P 500, however, added 0.01% as technology shares rebounded from previous session selloffs, while the Nasdaq finished 0.2% higher.

• Earlier, European benchmark indices closed mostly higher as the CAC and DAX added 0.03% and 0.1% respectively after recouping their intraday losses, lifted by gains in energy shares. The FTSE, however, slipped 0.2% on mounting geopolitical tensions between U.S. and North Korea.

The Day Ahead

• Market confidence is likely to stay thin over the near term amid the increasing probability of an interest rate hike in the U.S later in the year following hawkish view of the Federal Reserve Chairwoman. The new development could result in more foreign funds trimming their positions in Emerging Market equities and the key index remaining pressured with the 1,760 level coming into play after the FBM KLCI found a near term support at the 1,765 level yesterday.

• Whilst a rebound could be due after the market’s recent slide, we think the attempts will be feeble in view of the lack of positive leads. Hence, we see the downside pressure lingering and any rebound is likely to be mild and unlikely to sustain for now as fresh buying will still be on the low side.
   
• We also think the lower liners and broader market shares could endure further selling pressure as well, given that market sentiments are still on the dour side that would likely keep many retail players on the sidelines for longer.

COMPANY BRIEF

• Damansara Realty Bhd is revising the exercise price of its proposed three-year warrants to 58.0 sen apiece (from 82.0 sen), after considering the historical volatility of the group’s shares since the bonus issue was proposed. (The Edge Daily)

• JF Technology Bhd is planning a two-forthree bonus issue at an entitlement date to be determined later. The proposed exercise will be fully capitalised from its share premium account at 10.0 sen per bonus share. (The Edge Daily)

• The Stock Exchange of Hong Kong Ltd has approved PRG Holdings Bhd‘s application to list its manufacturing business, Furniweb Holdings Ltd on the exchange's Growth Enterprise Market.

• A formal and final approval will be granted by the exchange before the trading in Furniweb’s new shares of nominal value of 10.0 HK cents commences, while the proceeds raised from the proposed listing will go entirely to Furniweb. (The Star Online)

• Credit Suisse Group AG has emerged as a substantial shareholder in Permaju Industries Bhd, after it bought about 9.7 mln shares (or 5.2% equity stake in Permaju on the 21st September, 2017.

• The Sabah-based property developer is controlled by Datuk Chai Kin Loong, Tan Sri Chai Kin Kong and Chai Kim Chong, who collectively held some 18.0% shareholding in the company. Its automotive division is involved in the distribution of Volkswagen and Ford franchises. (The Edge Daily)

• Genting Group is planning to dispose of its Kensington, London-based casino Maxims for at least £40.0 mln (RM227.0 mln) on speculation that Maxims's location might have caused the casino to lose business. The group has hired property consultancy CBRE to handle the sale of the casino and will be prepared to review offers for Maxims. (The Edge Daily)

• Vivocom International Holdings Bhd has secured a RM75.0 mln construction contract for a mixed development in Terengganu from property developer Udaran Sdn Bhd. The 36-month project includes the construction of two blocks of 372 units of serviced apartments and nine units of shoplots for Lembaga Tabung Amanah Warisan Negeri Terengganu in Kampung Ladang Tanjung. (The Edge Daily)

• Xin Hwa Holdings Bhd has received a Letter of Award (LoA) from BD Cranetech Pte Ltd for the transportation of precast element for the construction of rail and bus depot and reception tunnels in Singapore. The four-year contract, which will commence from November, 2017, is dependent on the total tonnage of delivery and the type of transport trailer used, but Xin Hwa has estimated the total contract price to be around S$6.9 mln (RM21.5 mln). (The Star Online)

• Superlon Holdings Bhd's 1QFY18 net profit retreated 41.5% Y.o.Y to RM3.6 mln, from RM6.1 mln in the 1QFY17, mainly due to lower sales and higher material costs in its manufacturing division, although revenue rose marginally by 2.7% Y.o.Y to RM26.3 mln, from RM25.6 mln.

• MSM Malaysia Holdings Bhd has appointed Datuk Wira Azhar Abdul Hamid to replace Tan Sri Mohd Isa Abdul Samad as Chairman, following the latter’s resignation in June. (The Edge Daily)  

Source: Mplus Research - 27 Sept 2017