• The FBM KLCI fell for the second straight day, on the back of extended selling pressure on selected heavyweights. The majority of the lower liners retreated as well, with the exception of the FBM Small Cap (+0.1%) due to last-minute buying support, while the broader market closed mixed.

• Market breadth turned tepid as decliners overtook advancers on a ratio of 504-to- 368 stocks. Traded volumes also declined, albeit marginally by 2.7% to 3.07 bln shares, weighed down panic selling in Ekovest, following news of potential consolidation between the group and Iskandar Waterfront City.

• Notable heavyweights decliners include BAT (-96.0 sen) Telekom Malaysia (-17.0 sen), KLCC Property & REITs (-13.0 sen), Sime Darby (-11.0 sen) and RHB Bank (- 7.0 sen). Meanwhile, Nestle (-50.0 sen), Perusahaan Sadur Timah Malaysia (-38.0 sen), Ajinomoto (-28.0 sen), Ekovest ( 21.0 sen) and Globetronics (-19.0 sen) dragged the broader market lower.

• On the other side of the trade, PMB Technology (+36.0 sen), Press Metal (+29.0 sen), Panasonic Manufacturing (+16.0 sen), Suiwah (+15.0 sen) and Time Dotcom (+14.0 sen) advanced. Meanwhile, O&G giants like Petronas Dagangan (+14.0 sen), MISC (+13.0 sen) and Petronas Gas (+4.0 sen) gained on bullish crude oil prices, followed by Ambank (+5.0 sen) and Maxis (+4.0 sen).

• Japanese benchmark bourses closed higher, boosted by gains in energy stocks, in-tandem with rising crude oil prices. The Nikkei jumped 1.9%, buoyed by Sony (+11.4%) on stronger-than expected quarterly corporate earnings. The Hang Seng (+1.2%) also rallied, as gaming stocks ended higher ahead of the market close. Over at China, the Shanghai Composite index inched up by 0.1%, while the majority of the ASEAN stockmarkets closed higher.

• Wall Street closed just shy of its previous record levels, lifted by the hawkish view from the U.S. Federal Reserve and expectations of an interest rate hike in December. The Dow (+0.3%) extended its gains for the second consecutive session, albeit slightly weighed down by losses in Apple (-1.3%), while the S&P 500 gained 0.2%. On the flip side, Nasdaq (-0.2%) opposed the general positive sentiment and closed lower due to weakness in biotech and giant technology stocks.

• U.K. stockmarkets trimmed its gains, dragged down losses in retailers and a stronger Pound ahead of the Bank of England’s scheduled meeting. The FTSE closed 0.1% lower, due to losses in Next and Standard Chartered, following weaker-than-anticipated quarterly earnings report. The CAC and the DAX, however, rose 0.2% and 1.8% respectively – boosted by miners and automakers.

The Day Ahead

• The inability of the key index to climb back above the 1,750 level is leaving it in a dour mood again as market players appear to have cast aside the positives of Budget 2018. Instead, market players are focussing on the earnings growth potential for the near-and-medium term as well as the potential interest rate increases in the U.S. that could see a reversal of funds flow from Emerging Markets back to the U.S.

• With sentiments staying tepid, we see the dour trend remaining on Bursa Malaysia and the downtrend could prolong with the key index potentially dipping back to the 1,735-1,740 levels with the continuing lack of fresh buying interest. Any recovery would also be insignificant with the 1,750 level serving as the main hurdle for now.

• The bouts of bargain hunting and profit taking among the lower liners and broader market shares look to continue and will dominate trades with retail players casting aside the dour sentiments among the index heavyweights to undertake trading activities.

COMPANY BRIEF

• Berjaya Corp Bhd founder and adviser, Tan Sri Vincent Tan Chee has been re appointed as Executive Chairman, after relinquishing the position in February 2012. He will be replacing his son, Datuk Seri Robin Tan Yeong Ching, who will remain as CEO of the group.

• To recap, Tan Sri Vincent Tan relinquished the reins five years ago, citing his wish to focus on his philanthropic work but he continued to explore new business opportunities for the group as its founder and adviser. (The Star Online)

• Axis Real Estate Investment Trust (Axis REIT) is leasing a plot of land from Malaysia Airports Holdings Bhd (MAHB) which will be used to build an industrial manufacturing facility to be leased to aerospace components manufacturer, Upeca Aerotech Sdn Bhd for 20 years via a build-and-lease arrangement.

• Its trustee, RHB Trustees Bhd has signed a sub-lease agreement to lease the 7.0 ac. vacant land located in Subang — within the proposed Malaysia International Aerospace Centre (MIAC) Technology Park — from MAHB for 49 years for RM19.9 mln.

• Axis REIT is responsible for constructing the manufacturing facility-cum-office building with a gross built up area of 178,978.6 sq. ft. at a cost of RM74.2 mln. (The Edge Daily)

• Eden Inc Bhd has proposed to issue up to 155.7 mln free warrants to shareholders on the basis of one warrant-for-every two Eden’s shares held. Assuming full exercise of the warrants at the exercise price of 19.6 sen, Eden could potentially raise maximum gross proceeds of RM30.5 mln, which will be used for working capital.

• The group is also planning to issue Redeemable Convertible Medium Term notes with an aggregate principal amount of up to RM60.0 mln in four tranches, with 36 months tenure. The notes bear an interest rate of 1.0% per year, which will be used to fund the group’s turnaround plan. (The Edge Daily)

• T7 Global Bhd is planning a private placement of 10.0% of its issued share capital to third party investors to fund existing projects. The proposed exercise of up to 42.0 mln shares is expected to raise between RM14.0 mln and RM15.5 mln.

• Assuming the indicative issue price is at 37.0 sen per share, it will be trading at a discount of about 8.4% to its volume-weighted average market price of 40.4 sen for the five-day period ended 31st October 2017. (The Edge Daily)

• Unisem (M) Bhd posted a 4.7% Y.o.Y rise in 3Q2017 net profit to RM40.5 mln, from RM38.6 mln in the previous corresponding period - led by higher sales, improved average selling prices and the strengthening Greenback. Revenue also grew 18.8% Y.o.Y to RM382.3 mln, from RM322.0 mln a year earlier.

• Cumulative 9M2017 net profit, meanwhile, added 14.9% Y.o.Y to RM127.4 mln compared with RM111.0 mln last year, in-tandem with stronger revenue contribution at RM1.10 bln vs. RM960.7 mln in 9M2016. (The Edge Daily)

• Theta Edge Bhd said that it has been actively pursuing projects in its ordinary course of business, although nothing is set in stone yet at the current juncture. The statement is in response to Bursa Malaysia’s Unusual Market Activity (UMA) query recently. The ICT service provider also said that it the preliminary discussions with potential investors for a private placement exercise, but nothing has been confirmed. (The Edge Daily)

• Former Magna Prima Bhd Managing Director (MD), Datuk Lee Kian Seng has been appointed the new MD of property developer Jiankun International Bhd, effective 1st November 2017. Datuk Lee was Magna Prima’s MD from 2006 to 2009, but left afterwards to set up his own property development company Wangsa Group. (The Star Online)  

Source: Mplus Research - 2 Nov 2017