• The FBM KLCI traded higher, boosted by buying support n selected heavyweights and a stronger Ringgit. The lower liners maintained its upward momentum as the FBM Small Cap (+0.2%), the FBM Fledgling (+0.1%) and the FBM Ace (+0.5%) logged gains, while the broader market finished mostly higher.

• Market breadth turned positive as advancers surpassed decliners on a ratio of 431-to-428 stocks. Traded volumes, meanwhile, jumped 18.9% to 3.09 bln shares, attributed to buying-support from local funds.

• Main Board charttoppers were BAT (+RM1.50), Petronas Gas (+64.0 sen), Genting (+31.0 sen), Kuala Lumpur Kepong (+10.0 sen) and Hong Leong Financial Group (+8.0 sen). Other gainers were refiners like Hengyuan Refining (+59.0 sen) and Petron Malaysia Refining (+54.0 sen), followed by Ajinomoto (+26.0 sen), United Plantations (+26.0 sen) and KESM (+24.0 sen).

• Broader market underperformers, meanwhile, include Malaysian Pacific Industries (-40.0 sen), Heineken Malaysia (-32.0 sen), Southern Acids (-25.0 sen), Malaysia Airports (-15.0 sen) and DKSH Holdings (-14.0 sen). Blue-chip gainers were Petronas Dagangan (-30.0 sen), PPB Group (-8.0 sen), IHH Healthcare (-5.0 sen) and IJM (-4.0 sen). Petronas Chemicals fell 7.0 sen after the EPF reportedly disposed of 25.0 mln of its shares – the largest block of shares sold by the provident fund in the recent months.

• Major regional benchmark indices ended broadly in the positive territory amid higher-than-expected Chinese inflation data. The Nikkei erased earlier gains, however, on the back of profit-taking activities after surpassing the 23,000 psychological mark for the first time since 1992. The Hang Seng and the Shanghai Composite index, on the other hand, gained 0.8% and 0.4% respectively, boosted by bullish sentiments as investors cheered the upbeat October inflation data from China. ASEAN bourses, meanwhile, closed mostly higher.

• Wall Street retreated, as investors booked-in profits after the recent rally amid concerns over delays in U.S. tax reforms. The Dow snapped its streak of seven straight sessions of gains and closed 0.4% lower, while the S&P 500 (- 0.4%) follow suit. The Nasdaq also fell 0.6% to sit marginally above the 6,750.0 psychological mark.

• U.K. equities retreated, dragged down by the weakness in homebuilders due to soft industry figures. The FTSE shaved lost 0.6%, weighed down by Burberry (-10.0%), after the luxury goods maker reported disappointing quarterly earnings. The DAX was also down by 1.5% - led by losses in Adidas (-4.8%), on weaker-thananticipated revenue growth, while the CAC finished 1.2% lower on Thursday’s closing bell.

The Day Ahead

• The key index continues to trend nowhere with the lack of a definitive direction on the local bourse. As it is, positive leads are far and in-between with market players awaiting for the flurry of corporate results over the next few weeks to determine the strength of corporate earnings recovery and their prospects for the next few quarters.

• In the meantime, it appears that the mixed-to-lower market condition will persist for the foreseeable future and the key index could linger within the 1,740 and 1,750 levels as it also attempts to find a base after its recent consolidation from the 1,790 points level.

• The lower liners and broader market shares will also experience similar trading pattern as retail players will be quick to lock-in their profits that would keep the above stocks in check.

Company Brief

• Malaysia Smelting Corp Bhd’s 3Q2017 net profit declined 55.8% Y.o.Y to RM7.7 mln, due to foreign exchange differences, higher production cost and operating expenses. Revenue for the quarter, however, increased 24.8% Y.o.Y to RM403.2 mln.

• For 9M2017, cumulative net profit fell 8.3% Y.o.Y to RM29.3 mln. Revenue for the period dropped marginally by 0.9% Y.o.Y to RM1.12 bln. (The Star Online)

• Massachusetts Mutual Life Insurance Company (MassMutual) has ceased to be Genting Bhd’s substantial shareholder after more than three years. Funds managed by MassMutual subsidiaries, OFI Global Institutional Inc and OppenheimerFunds Inc have pared down their combined stake in Genting by 26.5 mln shares since 31st July 2017.

• The disposal reduced MassMutual’s deemed interest to 4.9% or 190.1 mln shares from 5.7% or 216.7 mln shares in July. (The Star Online)

• My EG Services Bhd (MyEG) has proposed to diversify its existing principal activities and its units to include the foreign workers accommodation programme (FWAP). The programme entails the setting up and management of centralised and integrated living quarters or hostels for foreign workers. The proposed diversification would complement the group’s existing foreign workers permit renewal business. (Bernama)

• Zecon Bhd plans to undertake a mixed property development project in Kota Petra, Kuching, Sarawak, with a total gross development value (GDV) of RM11.0 bln. The Kota Petra project would be the group’s largest property development, comprising of multiple clusters, including proposed state and federal new administrative centres, tourism enclave, education city, resort destination, integrated affordable homes and a medical city.

• The state planning authority has approved the 1,203 ha. Kota Petra project. Out of it, 49.4 ha. 1Malaysia People’s Housing (PR1MA) project with a contract sum of RM286.9 mln comprises of 1,065 units of residential houses was awarded to the group. Meanwhile, the proposed 105.6 ha. 1Malaysia Civil Servants Housing (PPA1M) project with a contract sum of RM839.6 mln would have 2,332 units. As at 30th June 2017, Zecon Group’s outstanding order book stood at RM3.60 bln. (Bernama)

• Petronas Chemicals Bhd’s (PetChem) 3Q2017 net profit grew 2.5% Y.o.Y to RM913.0 mln, lifted by higher production and sales volume achieved with the commissioning of the Sabah Ammonia Urea (SAMUR) plant in May 2017. Revenue for the quarter rose 12.6% Y.o.Y to RM4.01 bln

• For 9M2017, cumulative net profit gained 63.1% Y.o.Y to RM3.17 bln. Revenue for the quarter improved 27.8% Y.o.Y to RM12.67 bln. (The Edge Daily)

• Tien Wah Press Holdings Bhd’s 3Q2017 sank into the red with a net loss of RM7.1 mln vs. a net profit of RM4.2 mln in the previous corresponding quarter — following the cessation of its printing operations in the country that was announced on 20th July 2017. Revenue for the quarter, however, grew 26.0% Y.o.Y to RM104.5 mln.

• For 9M2017, cumulative net profit loss stood at RM17.4 mln as oppose to a net profit of RM15.9 mln recorded in the previous corresponding period. Revenue for the period, however, improved 31.2% Y.o.Y to RM323.4 mln. (The Edge Daily)

• Malayan Flour Mills Bhd’s (MFM) 3Q2017 net profit jumped 70.0% Y.o.Y to RM23.5 mln, due to higher profit in its flour and grains trading segment, coupled with a higher share of profit from its joint venture company, PT Bungasari Flour Mills Indonesia. Revenue for the quarter increased 2.7% Y.o.Y to RM631.0 mln.

• For 9M2017, cumulative net profit added 4.0% Y.o.Y to RM64.6 mln. Revenue for the period, however, slipped 4.1% Y.o.Y to RM1.81 bln. (The Edge Daily)

• Hong Leong Industries Bhd’s (HLI) 1QFY18 net profit gained 26.3% Y.o.Y to RM81.9 mln, mainly attributable to higher revenue from the consumer products segment. Revenue for the quarter improved 11.2% Y.o.Y to RM629.4 mln. (The Edge Daily)

• S P Setia Bhd’s 3Q2017 net profit surged 88.9% Y.o.Y to RM253.2 mln, riding on the completion of phase 1 of its Battersea Power Station project in the United Kingdom. Revenue for the quarter, however, shrank 33.3% Y.o.Y to RM842.5 mln.

• For 9M2017, cumulative net profit increased 29.1% Y.o.Y to RM494.7 mln. Revenue for the period, however, slipped 19.1% Y.o.Y to RM2.58 bln. (The Edge Daily)

• Gas Malaysia Bhd's 3Q2017 net profit added 2.9% Y.o.Y to RM44.5 mln, in line with the increase in volume of gas sold. Revenue for the quarter improved 31.4% Y.o.Y to RM1.40 bln.

• For 9M2017, cumulative net profit gained 3.6% Y.o.Y to RM117.7 mln. Revenue for the period grew 29.1% Y.o.Y to RM3.88 bln. (The Edge Daily)

• Asia Bioenergy Technologies Bhd's subsidiary Asiabio Petroleum Sdn Bhd has entered a tripartite Memorandum of Understanding (MoU) with Peri Formwork Malaysia Sdn Bhd and AT Engineering Solution Sdn Bhd — a subsidiary of AT Systematization Bhd — to research the scaffolding and formwork market in Malaysia.

• The purpose of the tri-party MoU is to research and determine the market potential cost and profit benefits over the next five years in Malaysia of the scaffolding and formwork market, which is estimated to be worth RM400.0 mln in the next two years for the oil and gas industry. (The Edge Daily)  

Source: Mplus Research - 10 Nov 2017