• The FBM KLCI fell 0.2% to 1,754 points yesterday – due to selling-pressure on banking blue-chips. All the lower liners - the FBM ACE (+2.0%), the FBM Small Cap (+0.2%) and Fledgling (+0.7%), meanwhile, extended their rally on Thursday. The broader market, however, ended mostly in the red, weighed down by mild profit-taking activities.

• Market breadth was positive as winners beat losers on a ratio of 454-to-438 stocks. Meanwhile, traded volumes also jumped 36.2% to 4.33 bln shares, driven by buying-interest in ACE-market counters.

• Main Board underperformers were BAT (- 22.0 sen), Hong Leong Financial Group (- 16.0 sen), IHH Healthcare (-14.0 sen), Tenaga (-8.0 sen) and Westports (-8.0 sen). Broader market losers include Allianz Malaysia (-26.0 sen), Ajinomoto (- 18.0 sen), Sam Engineering (-12.0 sen), Malaysian Pacific Industries (-10.0 sen) and Denko Industrial (-8.0 sen).

• On the flipside, rubber-glove makers like Hartalega (+54.0 sen) and Top Glove (+28.0 sen) advanced, followed by Dutch Lady (+72.0 sen), Nestle (+24.0 sen) and Batu Kawan (+20.0 sen). Telco heavyweights like Telekom (+5.0 sen), Axiata (+4.0 sen) and Maxis (+3.0 sen), meanwhile, recovered some of its previous session’s losses on buyingsupport in the eleventh hour. Other keyindex advancers include Kuala Lumpur Kepong (+6.0 sen) and RHB Bank (+4.0 sen).

• Key regional benchmark indices ended mostly positive – due to the bullish sentiment spilled over from the U.S. stockmarkets overnight. The Nikkei extended its gains for the second consecutive day as selling-pressure on Kobe Steel eased after the major selldown in the last two sessions. The Hang Seng index also gained 0.2%, although the Shanghai Composite index (-0.1%) trimmed its previous gains, weighed down by mild profit-taking activities. ASEAN stockmarkets, meanwhile, finished mostly higher.

• Wall Street fizzled out as investors booked in profits at the beginning of the quarterly earnings season. The Dow (- 0.1%) tapered, weighed down by profittaking in major banking stocks, while the Nasdaq and the S&P 500 ended lower by 0.2% each.

• European equities gained momentum and closed mostly higher as investors digested the latest impasse from U.K.’s Brexit negotiations with the European Union. The FTSE expanded by 0.3%, spurred by gains in miners and the weakness in Pound, while the DAX hit fresh record high, closing above the 13,000 psychological mark. The CAC was flattish on Thursday’s close.

The Day Ahead

• The downside bias on FBM KLCI continues to dominate the market environment and does not appear to be lifting soon as the rotational selling is still largely in play. Consequently, we see the downtrend likely to sustaining to the end of the trading week with few signs of a reversal as yet.

• The continuing weakness among the index linked stocks could also see the key index retesting the 1,750 support level, which we think should provide some measure of support for now. By then, we also see a rebound in store as the market would be oversold. Still, any rebound is likely to be mild for now amid the generally tepid market environment, leaving the rebound to be merely an adjustment from oversold and the upsides limited to the 1,758 and 1,760 levels.

• Despite the insipid market environment among the index heavyweights, there remains substantive trading interest among the lower liners and broader market shares that will continue to draw in retail players. However, we also see quick profit taking activities prevailing among the above stocks and their upsides will be limited.

Company Brief

• Express bus operator GETS Global Bhd plans to acquire nearly 80% stake in Pengangkutan Awam Putrajaya Travel & Tours Sdn Bhd (PAPTT). GETS Global, via its unit Konsortium Bas Ekspres Semenanjung (M) Sdn Bhd, has inked a MoU with Putrajaya Leisure & Services Group Sdn Bhd (PULSE) for the puchase and will hold the other 20.1% stake in PAPTT. PAPTT has 170 buses and offers Putrajaya city bus services for both internal and external routes, as well as bus rentals and leasing. Its total share capital is RM300,000. (The Star Online)

• SMRT Holdings Bhd had told Bursa Malayia it was unaware of the reasons for the unusual market activity (UMA) of its shares after which its trading was suspended late yesterday. Trading will resume on 13th October 2017. (The Star Online)

• Petronas Dagangan Bhd (PetDag) has entered into a tripartite partnership with Malaysian Green Technology Corporation (GreenTech Malaysia) and TNB Energy Services Sdn Bhd (TNBES), a whollyowned subsidiary of Tenaga Nasional Bhd (TNB), to install 100 electric vehicle (EV) charging stations, ChargEV, by 2018. ? The tripartite partnership is to collectively increase respective commitments towards achieving Malaysia's overall emission reduction target while catalysing Green Economy initiative. PetDag will also explore strategic partnership to increase the number of ChargEV gradually, in tandem with market demand.

• The partnership is an extension from the Memorandum of Understanding (MoU) signed in 2016 between PetDag and GreenTech Malaysia to install 66 ChargEV stations. To date, 55 stations have been installed at Petronas stations nationwide. (The Edge Daily)

• Johan Holdings Bhd Chief Executive Tan Sri Tan Kay Hock and his wife Puan Sri Tan Swee Bee have increased the offer price for Johan shares that they do not own to 26 sen per share, from 25 sen previously. The couple via their vehicle, Mustika Manis Sdn Bhd had acquired a further 15.0 mln Johan shares, representing a 2.4% stake at 26 sen per share today, for a total of RM3.9 mln in cash. (The Edge Daily)

• Wintoni Group Bhd's executive director Cheah Kwong Lee has applied to set aside the winding-up order issued by the High Court on the company on 17th August 2017. Cheah claimed that the Penang-based company was not given any notice of the winding-up process. (The Edge Daily)

• Sunway Real Estate Investment Trust’s (SunREIT) trustee, RHB Trustees Bhd has subscribed to its substantial unitholder Sunway Bhd's one-month commercial paper that carries a nominal value of RM60.0 mln. The subscription, at a discount rate of 3.8% p.a., followed the maturity of an earlier one on 12th September 2017. (The Edge Daily) 
• Atlan Holdings Bhd’s 2QFY18 net profit grew marginally by 0.6% Y.o.Y to RM9.6 mln as improved other operating income mitigated the higher operating expenses. Revenue for the quarter, however, eased 0.1% Y.o.Y to RM199.4 mln.

• For 1HFY18, cumulative net profit slipped 16.6% Y.o.Y to RM21.1 mln. Revenue for the period declined 3.4% Y.o.Y to RM431.4 mln. A second interim dividend of five sen, payable on 15th November 2017, was declared. (The Edge Daily)

• Kumpulan Jetson Bhd’s 51.0%-owned unit has bagged a subcontract worth RM76.4 mln to build two blocks of serviced apartments in Bukit Jalil. Jetson ARDC Sdn Bhd was awarded the job by China State Construction Engineering (M) Sdn Bhd. It involves the development of 709 apartment units with carparks and office units. (The Edge Daily)

• Chin Hin Group Bhd plans to spend RM3.0 mln to buy equipment to set up a high and ultra-high performance concrete manufacturing plant. It also intends to engage in the business of research and development of products using high and ultra-high performance concrete. (The Edge Daily)

• Cam Resources Bhd, which would be selling renewable energy to Tenaga Nasional Bhd in 2019, plans to build its 2.0 MW biogas plant at a cost of RM19.8 mln. The project is expected to be completed in May 2019, which is the scheduled feed-in tariff (FiT) commencement date. Future Atlas is expected to sell energy under the feedin-tariff (FiT) system for 16 years. (The Edge Daily)  

Source: Mplus Research - 13 Oct 2017