• The FBM KLCI narrowed for the second consecutive day, weighed down by selling pressure on telco heavyweights. The lower liners, however, continued to rally with the FBM Fledgling (+0.4%) at the forefront, while the broader market close broadly higher.

• Market breadth was slanted towards the positive side as advancers edging decliners on a ratio of 430-to-401 stocks. Traded volumes, however, jumped 14.3% to 3.18 bln shares, boosted by renewed buying-interest in technology counters.

• Genting-affiliated companies like Genting (-13.0 sen) and Genting Malaysia (-9.0 sen) pressured the key-index, followed by Digi (-10.0 sen), Kuala Lumpur Kepong (- 8.0 sen) and Petronas Gas (-8.0 sen). Other decliners were Sam Engineering (- 13.0 sen), United Plantations (-10.0 sen), Lii Hen Industries (-9.0 sen), Genetec Technology (-8.0 sen) and Kerjaya Prospek (-8.0 sen)

• On the contrary, Malaysian Pacific Industries (+34.0 sen), Ajinomoto (+18.0 sen), MESB (+14.5 sen), Aeon Credit (+14.0 sen) and Serba Dinamik (+14.0 sen) outperformed its broader markets peers. Blue-chip advancers, meanwhile, include BAT (+24.0 sen), IHH Healthcare (+20.0 sen), Hong Leong Financial Group (+8.0 sen), Westports (+4.0 sen) and RHB Bank (+3.0 sen).

• Most Asian stocks finished with minute gains, spurred by a softer Greenback ahead of the release of minutes from the Federal Open Market Committee. The Nikkei pared earlier losses to close up by 0.3%, underpinned by gains in consumer staples (+1.0%) - related counters. The Shanghai Composite index (+0.2%) came off intra-day high, albeit still closing in the green, alongside a stronger Yuan although the Hang Seng (-0.5%) closed in the red yesterday. ASEAN stockmarkets finished mixed on Wednesday’s closing bell.

• U.S. stockmarkets gained strength from the Federal Reserve’s bullish outlook and closed higher, despite ongoing concerns of low inflation levels. The Dow advanced for the second-straight day, boosted by gains in Johnson & Johnson (+2.1%). Meanwhile, on the broader market, the Nasdaq and the S&P 500 follow suit, finishing 0.3% and 0.2% respectively.

• Major European bourses closed mixed, amid unabated uncertainties in the region’s political landscape. The FTSE slipped 0.1% lower, weighed down by Mondi (-7.8%), after the packaging and paper group warned that its earnings will most likely underperformed the markets’ expectations. The CAC flatlined, while the DAX added 0.2% to 12,970.7 points.

The Day Ahead

• The downbeat sentiments on the key index stocks continue to weigh on its performance with the selling becoming rotational as institutional players lock-in profits on some of their winning positions. The selling does not appear to have abated and the downside pressure remains for now, which could send the key index back to the 1,750 support level.

• Although there are few signs of a rebound as yet, it is becoming due after the recent bout of weakness. However, we think any rebound will be meek at this juncture, given that the market wariness is still prevailing that could limit the upsides to the 1,765 level.

• Among the lower liners and broader market shares, however, the rotational interest is still prevalent and this could prolong the trading activities on those stocks.

Company brief

• George Kent (Malaysia) Bhd is partnering Siemens Aktiengesellschaft, Germany and Siemens Pte Ltd, Singapore for the Kuala Lumpur to Singapore High Speed Rail (HSR) tender. George Kent has entered into a pre-consortium agreement with Siemens on 6th October 2017.

• George Kent and Siemens will form an engineering, procurement and construction (EPC) pre-consortium to prepare a joint offer via a special purpose company that will bid for the development, financing, construction and technical operation and maintenance of the Kuala Lumpur-Singapore HSR. (The Edge Daily)

• Johan Holdings Bhd' Chairman and Chief Executive, Tan Sri Tan Kay Hock and his wife, who collectively own about 48.2% of the group's shares, are making a conditional mandatory takeover offer for the remaining shares they do not own. Tan, who is also the Chairman of George Kent (M) Bhd and Puan Sri Tan Swee Bee are offering to buy the remaining shares at 25 sen each.

• Mustika Manis Sdn Bhd, a company wholly owned by the couple, has just acquired 15.0 mln shares or 2.4% of the voting shares in the group for RM3.8 mln, or at 25 sen a share. Prior to this, Tan and his wife already owned a 45.8% stake in Johan through their vehicles Kin Fai International Ltd, Kwok Heng Holdings Ltd, Star Wealth Investment Ltd and Suncrown Holdings Ltd. (The Edge Daily)

• Zhulian Corporation Bhd’s 3QFY17 net profit surged 138.6% Y.o.Y to RM14.6 mln, from RM6.1 mln a year ago, boosted by a rise in its share of profit of equity accounted investee amounting to RM4.2 mln. Revenue for the quarter improved 13.1% Y.o.Y to RM49.8 mln.

• For 9MFY17, cumulative net profit jumped 95.6% Y.o.Y to RM41.3 mln. Revenue for the period climbed 5.2% Y.o.Y to RM139.4 mln. A third interim dividend of 1.5 sen per share, payable on 30th November 2017 was declared. (The Edge Daily)

• A consortium comprising Ancom Bhd and three other firms has bagged the advertising service concession for phase one of the Mass Rapid Transit (MRT) in Jakarta. The consortium submitted a tender for the project on June 20, through PT Avabanindo Perkasa. Avabanindo Perkasa and Ancom’s indirect wholly-owned subsidiary, Puncak Berlian Sdn Bhd (held through Redberry Sdn Bhd) are its members, along with PT Alternatif Media Group and Thailand-listed VGI Global Media PCL. (The Edge Daily)

• Key Asic Bhd, whose shares hit a sevenyear high yesterday and was the most active counter on the local stock exchange, revealed that it is in the midst of undertaking a corporate exercise. The details of the exercise, however, have not been finalised yet at this juncture. (The Edge Daily)

• A printing and publishing firm bought over Dataprep Holdings Bhd’s controlling shareholder’s entire stake in the loss-making IT solutions provider, and announced an unconditional mandatory takeover offer for the remaining shares. Wardah Communication Sdn Bhd acquired the 270.5 mln shares or 64.2% stake in Dataprep from VXL Holdings Sdn Bhd at 16.0 sen a share.

• Its offer for the remaining shares is being made at the same price of 16.0 sen, representing a 23.0 sen or 59.0% discount to the group’s last closing price of 39 sen. Wardah is controlled by Tan Sri Muhammad Ikmal Opat Abdullah and his wife Puan Sri Jamilah Mahamad Isa via the Widad Business Group Sdn Bhd. (The Edge Daily)  

Source: Mplus Research - 12 Oct 2017