• The FBM KLCI closed narrowly in the negative territory, after rebounding from earlier sharp losses – led by buying support on selected heavyweights by local funds. The lower liners, however, continued to close on an upward bias, while the majority of the broader market stocks finished in the red.

• Market breadth was still positive as winners edged losers on a ratio of 458-to- 449 stocks. Traded volumes rose 9.5% to 3.15 bln shares, mainly due to extended buying interest on the lower liners, coupled with potential portfolio rebalancing by foreign funds.

• Petronas-linked companies like Petronas Dagangan (-14.0 sen) and Petronas Chemicals (-13.0 sen) pushed the key index lower, followed by BAT (-RM1.30), Hong Leong Financial Group (-22.0 sen) and Genting (-11.0 sen). Other underperformers include Malaysia Airport (-17.0 sen), DKSH (-17.0 sen), Batu Kawan (-14.0 sen) and BLD Plantation (- 12.0 sen). Perusahaan Sadur Timah (- 67.0 sen) retreated after reporting a 73.5% Y.o.Y drop in its 2QFY18 net profit.

• Meanwhile, broader market constituents that topped the gainers’ chart include Nestle (+74.0 sen), Tasek (+30.0 sen), Petron Malaysia (+20.0 sen), Sarawak Oil Palms (+17.0 sen) and Airasia (+16.0 sen). Winners on the blue chip gauge on Tuesday were KLCC Property & REITs (+24.0 sen), Telekom (+24.0 sen), Tenaga Nasional (+20.0 sen), Axiata (+5.0 sen) and CIMB (+4.0 sen).

• Asian stockmarkets were mixed as investors digested lower-than-expected economic data as well as concerns of increasing corporate defaults in China. The Nikkei recovered its earlier losses to close flattish, following the BOJ’s decision to keep interest rates unchanged and continuing to inject money into the market. The Hang Seng declined 0.3%, weighed down by the lackluster close on Wall Street overnight,
  while the Shanghai Composite index (+0.1%) finished with minute gains.ASEAN bourses also closed mixed at Tuesday’s close.
• U.S. benchmark stock indices wrapped up October on an upbeat tone as Wall Street logged its seventh straight monthly gains, on the back of solid corporate quarterly earnings. The Dow rose 0.1%, as investors monitored the upcoming Federal Reserve meeting and President Donald Trump’s choice for the next Head of the central bank to succeed Chairwoman Janet Yellen. Meanwhile, technology stocks pushed the S&P 500 (+0.1%) and the Nasdaq (+0.4%) higher.
• European equities finished in the positive territory as the corporate earnings season ensues in full swing amid a weaker Greenback. Gains in Croda International (+4.2%) buoyed the FTSE (+0.1%), after it posted a growth in third quarter sales, while the CAC (+0.2%) closed at 5,503.3 points. German stockmarkets were closed for the Reformation Day holiday.

The Day Ahead

• There are still doses of hesitation as the key index finds the 1,750 level a formidable barrier to breach. Fresh buying on index-linked stocks remains elusive despite the mildly positive Budget announcement last week as market players await for a clearer earnings growth outlook in view of the already fair market valuations.

• Under the prevailing environment, we think the FBM KLCI will continue to take a sideway trend, veering within a tight trading band around the 1,750 level until there is a convincing breach of the above level that could set a new uptrend.There will be bouts of rotational interest among the lower liners and broader market shares. IWC and Ekovest could see speculative interest on after a corporate exercise was announced.

COMPANY BRIEF

• Benalec Holdings Bhd expects to realise a net gain of RM24.7 mln from the sale of 216,427 sq.m. of land in Pekan Klebang, Melaka to Titanium Hallmark Sdn Bhd for RM110.0 mln. The land is leasehold and expires in 2115 and would be for commercial buildings only.

• Proceeds arising from the disposal are intended to be used to finance the company’s on-going reclamation projects and to meet the company’s working capital requirements. Proceeds from the sale would be utilised within 12 months. (The Star Online)

• Malaysia Marine and Heavy Engineering Holdings Bhd’s (MMHE) 3Q2017 net profit stood at RM16.4 mln vs. a net loss of RM4.5 mln in the previous corresponding quarter, as the heavy engineering segment's losses narrowed, coupled with recognition of change orders and finalisation of completed projects. Revenue for the quarter, however, declined 35.4% Y.o.Y to RM215.4 mln.

• For 9M2017, cumulative net losses narrowed to RM13.9 mln vs. a net loss of RM14.6 mln in the previous corresponding period. Revenue for the period, however, fell 20.1% Y.o.Y to RM708.5 mln. (The Star Online)

• Iskandar Waterfront Holdings Sdn Bhd (IWH) has axed plans to merge with its 38.4% owned associate, Iskandar Waterfront City Bhd (IWCity) and assume the latter's listing status.

• Ekovest Bhd is instead proposing to buy the rest of the 61.6% shares it does not own in IWCity through either a cash consideration of RM1.50 per share, valuing the company at RM1.25 bln, or a one-for-one share swap deal. (The Edge Daily)

• Wong Engineering Corporation Bhd has bagged an RM87.5 mln contract to build two blocks of affordable housing apartments, together with related facilities at the Kuchai Lama Entrepreneurs Park.

• The apartment blocks will comprise 556 units, 31-unit hawker centre and an eight-storey car park podium. The contract will start on 16th November 2017 and be completed by 15th May 2020. (The Edge Daily)

• LBS Bina Group Bhd has proposed to split its shares on a one-to-two (1-to-2) basis, followed by a bonus issuance on the basis of 1 bonus share-for-every 10 split shares held (1-for-10). The first will result in the subdivision of every one existing share into two ordinary shares, on an entitlement date to be fixed.

• Subsequently the group will undertake the bonus issue, which will involve the issuance of up to 163.0 mln new shares on the 1-for-10 basis. (The Edge Daily)

• Sunway Real Estate Investment Trust’s (Sunway REIT) 1QFY18 net property income (NPI) rose 15.5% Y.o.Y to RM112.0 mln, on the back of higher revenue and lower property operating expenses. Revenue for the quarter increased 9.5% Y.o.Y to RM141.2 mln. An income distribution per unit of 2.7 sen, payable on 29th November 2017, was proposed. (The Edge Daily)

• Ivory Properties Group Bhd is planning to buy a plot of commercial land measuring some 259,100 sq.m. in Sitiawan, Perak for RM133.9 mln, for property development purposes.

• The purchase consideration for the land was arrived at based on the indicative market value of not less than RM48 per square feet, which is equivalent to not less than RM133.9 mln. (The Edge Daily)

• Sasbadi Holdings Bhd’s 4QFY17 net loss stood at RM4.2 mln vs. a net profit of RM4.2 mln in the previous corresponding quarter, dragged down by lower topline contribution from its academic publishing subsidiaries. Revenue for the quarter fell 15.6% Y.o.Y to RM13.0 mln.

• For FY17, cumulative net profit slipped 51.9% Y.o.Y to RM8.0 mln. Revenue for the year, however, inched up 0.4% Y.o.Y to RM93.1 mln. (The Edge Daily)

• DKSH Holdings (M) Bhd’s 3Q2017 net profit climbed 84.5% Y.o.Y to RM10.0 mln, on the back of higher revenue that grew 6.2% Y.o.Y to RM1.37 bln.

• For 9M2017, cumulative month net profit dipped 1.9% Y.o.Y to RM36.4 mln. Revenue for the period, however, rose 4.8% Y.o.Y to RM4.13 bln. (The Edge Daily)

• Globetronics Technology Bhd's 3Q2017 net profit jumped 57.2% Y.o.Y to RM14.4 mln, due to higher volume loadings and production of new products for certain customers. Revenue for the quarter grew 65.9% Y.o.Y to RM87.0 mln.

• For 9M2017, cumulative net profit gained 34.9% Y.o.Y to RM26.1 mln. Revenue for the period increased 18.5% Y.o.Y to RM199.8 mln. (The Edge Daily)

• Theta Edge Bhd has been slapped with an Unusual Market Activity query from Bursa Malaysia on the sharp rise in its stock price recently.

• Theta Edge shares rose as much as 46.7% to hit its intra-day high of 67.5 sen yesterday, before closing 11 sen or 23.9% higher at 57 sen — its highest closing since 21st May 2017 with 14.7 mln shares exchanged hands. (The Edge Daily)  

Source: Mplus Research - 1 Nov 2017