Indifferent Trend Still Dominates

• The FBM KLCI closed with meagre losses after trading within a tight range on Monday, supported by buying-support in selected O&G heavyweights. All the lower liners – the FBM Small Cap (+0.8%), the FBM Fledgling (+0.3%) and the FBM Ace (+0.5%) rallied, while the broader market ended mostly in the red.

• Market breadth, however, was negative as losers tipped the advancers on a ratio of 455-to-427 stocks. Traded volumes meanwhile jumped by 13.9% to 2.39 bln shares, lifted by buying-interest in energy stocks amid higher crude oil prices.

• Among the significant decliners were KLCC (-7.0 sen), Sime Darby Plantation (- 6.0 sen), Malaysia Airports (-5.0 sen), Genting Malaysia (-5.0 sen) and Press Metal (-5.0 sen). Meanwhile, underperforming stocks on the broader market were Carlsberg (-40.0 sen), Ajinomoto (-18.0 sen), Muhibbah Engineering (-13.0 sen), Sungei Bagan Rubber (-12.0 sen) and Tasek (-12.0 sen).

• On the other hand, notable broader market gainers were Apex Healthcare (+34.0 sen), BAT (+32.0 sen), Yinson (+29.0 sen), Hong Leong Industries (+28.0 sen) and Heineken Malaysia (+20.0 sen). Key-index charttoppers, meanwhile, include Petronas Dagangan (+14.0 sen), Axiata (+9.0 sen), Petronas Gas (+8.0 sen), Hong Leong Financial Group (+6.0 sen), and Tenaga Nasional (+6.0 sen).

• Asian equities finished mixed following a trade agreement that was reached between the U.S., Canada and Mexico on Sunday. The Nikkei added 0.5%, boosted by stronger energy prices. The Shanghai Composite and the Hang Seng Index were closed for national holidays, while ASEAN stockmarkets closed mixed.

• U.S. benchmark indices, namely the Dow (+0.7%) and the S&P 500 (+0.4%) rallied on extended optimisms from the new North American Free Trade Agreement (NAFTA) ahead of key employment data releases on Friday. The Nasdaq, however, reversed earlier gains and closed 0.1% lower at Monday’s close.

• Earlier, the FTSE fell 0.2%, dragged down by the appreciation of the Pound and ongoing geopolitical tensions. Other major European - the DAX (+0.8%) and the CAC (+0.2%), however, closed in the positive territory.

The Day Ahead

• Bursa Malaysia’s indifferent trend continues to be the order of the day with few fresh leads available to provide the trading impetuses. With the directionless trading environment persisting, it would appear that the current sideway trend is also likely to continue over the near term.

• At the same time, the still toppish market environment, coupled with a still challenging outlook for the Malaysian economy and corporate earnings, is likely to leave most market players on the cautious side for longer and further dampen investor sentiments.

• The upcoming Budget is also likely to see few goodies with the government on an austerity drive that could significantly see reduced expenditures. Under the prevailing environment with most market players still on a wait-and-see approach, we think the key index could continue to trend with the 1,780 and 1,800 points level.

• Nevertheless, we think the lower liners and broader market shares are likely to remain on a purple patch as many of the stocks in the FBM Small Cap, Fledgling and ACE market continue to make headway on bargain hunting activities that appears to be picking up pace, thus potentially prolonging their recovery trend.

COMPANY BRIEF

• Dataprep Holdings Bhd has secured a contract worth RM14.2 mln from RHB Banking Group to provide desktop support and information technology helpdesk management services. The contract for duration of three years from 1st October 2018 until 30th September 2021.(The Star Online)

• Prestaring Bhd has received an extension of a contract to supply Microsoft software licence to public institutions of higher learning from the Ministry of Education (MoE) valued RM11.6 mln. The one-year extension is for the supply to universities, polytechnics and community colleges under the MoE. (Bernama)

• AppAsia Bhd is undertaking a share capital reduction of RM24.0 mln with the aim of eliminating its accumulated losses, which amounted to RM24.0 mln as at 30th June 2018. The exercise would reduce the company’s share capital to a minimum of RM26.6 mln, or RM47.5 mln should all AppAsia warrants and options be exercised beforehand. (The Edge Daily)

• Bioalpha Holdings Bhd has proposed to raise up to RM23.8 mln via a proposed private placement to third party investors at an issue price to be fixed later, which will be partly used for the launch of new products such as health supplements and functional foods in the principal markets of the group or other potential new markets.  Part of the proceeds will also be used for acquisition of potential new businesses and for working capital.

• Bioalpha also plans to acquire the business of North West Enterprise Sdn Bhd (NWESB), which is in the manufacture, trading and supply of hotel amenities, personal care products and instant beverage in sachets for hotel and other establishments in the hospitality industry. The proposed acquisition of NWESB will be funded via proceeds from the proposed private placement. (The Edge Daily)

• E.A. Technique (M) Bhd is seeking US$21.7 mln in claims from Malaysia Marine Heavy Engineering Sdn Bhd over a dispute relating to a contract to convert a vessel into a floating storage and offloading facility. The contract was entered into between the two companies on 9th June 2015. (The Edge Daily)

• IHH Healthcare Bhd has bought the entire stake in Amanjaya Specialist Centre Sdn Bhd for RM101.7 mln. Amanjaya Specialist Centre Sdn Bhd owns and operates a 98-bed capacity multidiscipline specialist hospital known as Amanjaya Specialist Centre, which is located in Sungai Petani, Kedah. (The Edge Daily)

• Malaysia Airports Holdings Bhd (MAHB) plans to upgrade all three runways at the Kuala Lumpur International Airport (KLIA) in Sepang within the next five years to boost safety and service levels. Due announcements will be made after a joint decision has been reached by all relevant airport stakeholders. (The Edge Daily)

• Mexter Technology Bhd is collaborating with Universiti Malaya to provide premium-brand fertility-linked medical services to high-end clients. The two organisations have inked a five-year service and collaboration agreement to establish LYC Fertility Centre which will be the vehicle to develop and market the said services, with a five-year extension option pending certain requirements. (The Edge Daily)

• Sealink International Bhd is selling a 1.9- ha. piece of land in Miri, Sarawak to Cahya Mata Sarawak Bhd for RM26.5 mln in cash. Proceeds will be used to for loan settlement relating to the property, as well as working capital. The group expects a gain of RM19.0 mln from the sale (The Edge Daily)

• Astro Malaysia Holdings Bhd has teamed up with beIN Sports to offer live coverage of the UEFA Champion League and UEFA Europa League from the 2018/19 season to 2020/21. Both competitions will be offered on beIN SPORTS and beIN’s dedicated UEFA channel — beIN SPORTS MAX. (The Edge Daily)

• Telekom Malaysia Bhd is seeking to raise RM4.00 bln for capital expenditure and business operating requirements through the establishment of a series of sukuk wakalah programmes.

• A proposal was lodged with the Securities Commission on 28th September 2018 for the programme, which would comprise Islamic commercial papers (ICPs) and Islamic medium term notes (IMTN) programmes. (The Edge Daily)  

Source: Mplus Research - 2 Oct 2018