• Tracking the positive developments in Wall Street overnight, mild bargain hunting activities emerged on the FBM KLCI (+0.2%) as the key index recovered all its intraday losses yesterday. The lower liners, however, ended mostly lower as the FBM Fledgling and FBM ACE shed 0.2% and 0.7% respectively, while the broader market closed mixed.

• Market breadth stayed negative as losers overcame gainers on a ratio of 467-to- 362 stocks. Traded volumes fell 0.9% to 2.46 bln shares amid the generally negative market sentiment.

• KLK (+20.0 sen) topped the big board gainers list, followed by Genting Malaysia (+13.0 sen), RHB Bank (+12.0 sen) and Astro (+5.0 sen). Maxis added 2.0 sen after reporting a strong set of quarterly earnings. Edaran (+30.0 sen) hit limit up after bagging a RM150.0 mln contract from the Royal Malaysian Customs Department while other key winners on the broader market were Gamuda (+20.0 sen), Petron Refining & Marketing (+20.0 sen), Carlsberg (+16.0 sen) and Lii Hen (+15.0 sen).

• Consumer products stocks like Ajinomoto (-18.0 sen), Fraser & Neave (-14.0 sen) and Kawan Food (-9.0 sen) led the, broader market decliners list, while Chin Teck Plantations and Vitrox fell 12.0 sen each. Meanwhile, BAT (-80.0 sen), Petronas Dagangan (-10.0 sen), Hong Leong Financial Group (-8.0 sen), Petronas Gas (-4.0 sen) and IOI Corporation (-4.0 sen) were the key index biggest decliners.

• Japanese equities retreated as the Nikkei (-0.5%) snapped a 16-day winning streak as investors begun to lock-in recent gains. The Shanghai Composite (+0.3%) extended its gains after announcing the new Chinese leadership line-up, while the Hang Seng Index (+0.5%) rebounded. ASEAN stockmarkets, meanwhile, ended mostly higher.

• U.S. stockmarkets retreated overnight as the Dow fell 0.5%, dragged down by a string of disappointing quarterly earnings that offsets the strong economic data from durable goods orders and new home sales in September 2017. On the broader market, both the S&P 500 and Nasdaq declined 0.5% each with the former having all 11 main sectors in the red.

• Earlier, European benchmark indices – the FTSE (-1.1%), CAC (-0.4%) and DAX (- 0.5%) all fell ahead of the European Central Bank monetary policy meeting that is widely anticipated to reduce its €60.0 bln monthly bond buying program. Meanwhile, Germany’s Ifo Business Climate Index rose to a record high at 116.7 in October 2017.

The Day Ahead

• The key index is attempting to find support at around the 1,740 levels following its 50-point drop over the past month, but the attempts are still relatively feeble as there appears to be still pockets of selling, whilst fresh buying interest is still tepid with market players awaiting for the Budget announcement tomorrow.

• We think the market could continue to stay mixed as the bouts of selling could be punctuated by bargain hunting spells that could also leave the key index tracking within a tight range of around the 1,740 levels as it looks to build up a firmer base. Near-term support should be available around the 1,733 level, while the 1,745 level is the immediate resistance. ? Bouts of profit taking are also emerging among the lower liners and broader market shares and this will continue to the case over the near term as more retail players will opt to lock-in their gains from their recent winning positions.

Company Briefs

• Maxis Bhd’s 3Q2017 net profit rose 10.1% Y.o.Y to RM554.0 mln, from RM503.0 mln in the same period a year ago, boosted by stronger growth in the postpaid segment, while revenue inched 2.8% Y.o.Y higher to RM2.22 bln, from RM2.16 bln last year.

• Meanwhile, cumulative 9M2017 earnings grew 8.2% Y.o.Y to RM1.63 bln, from RM1.51 bln in 9M2016, mainly due to higher revenue contribution that grew 2.3% Y.o.Y to RM6.55 bln, from RM6.4 bln a year earlier. The group also declared an interim dividend of five sen per share, payable on 28th December 2017. (The Star Online)

• Bursa Malaysia Bhd registered a 17.0% Y.o.Y gain in 3Q2017 net profit at RM51.6 mln, from RM44.0 mln a year earlier, mainly due to increased share trade as well as listing and issuer services income. Quarterly revenue was also 9.5% Y.o.Y higher at RM130.3 mln vs RM119.4 mln in the same quarter last year.

• Cumulative 9M2017 net profit expanded 17.0% Y.o.Y to RM167.8 mln compared to RM143.5 mln a year ago, in-tandem with 8.5% Y.o.Y spike in revenue to RM415.6 mln, from RM383.1 mln in 9M2016. (The Star Online)

• Petronas Carigali Sdn Bhd (PCSB) has awarded a contract extension for the provision of two anchor handling tug supply vessels by Marine & General Bhd for another year. The contract that was first awarded in January 2013 will be extended from January to December 2018. The contract extension is estimated to be valued at RM33.0 mln. (The Edge Daily)

• Gadang Holdings Bhd's 1QFY18 net profit climbed 9.8% Y.o.Y to RM18.3 mln, from RM16.7 mln last year, driven mainly by its construction division, while revenue for the quarter rose 12.4% Y.o.Y to RM116.7 mln, from RM103.9 mln previously. (The Edge Daily)

• Hua Yang Bhd has launched its latest development in Johor Bahru that comprises 64 units of cluster homes and two units of link bungalows, with an estimated gross development value of RM41.7 mln (GDV).

• The development sits on a 4.0 ac. plot of freehold land and is part of Oval, which makes up Phase One of Elemence, located in Taman Denai Alam, Johor Bahru. (The Edge Daily)

• Priceworth International Bhd has secured the approval for the third forest management plan for a forest management unit in Trus Madi, Sabah. The approval granted by the Sabah Forest Department was accepted by Anika Desiran Sdn Bhd (ADSB), which owns the rights to manage, replant and harvest the Forest Management Unit No 5 (FMU5).

• Subsequently, Priceworth is planning to acquire ADSB and FMU5 from Transkripsi Pintar Sdn Bhd for RM260.0 mln, via its Singapore subsidiary GSR Pte Ltd. (The Edge Daily)

• Pantech Group Holdings Bhd is acquiring the remaining 43.5% equity stake held by its partner Euromech Machinery Sdn Bhd in Pantech Galvanising Sdn Bhd (PGSB) for RM7.0 mln cash as part of its expansion initiative in the galvanising industry. Consequently, the group will have full control of the affairs and business direction of PGSB moving forward. (The Edge Daily)

• Willowglen MSC Bhd has secured a RM5.2 mln contract from Samsung C&T Corp for the lump sum subcontract for BIMS & Marshalling panel design. The contract is scheduled for completion by 31st March next year. (The Edge Daily)  

Source: Mplus Research - 26 Oct 2017