Nowhere To Go, Staying Around 1,800

• Tracking the sluggish mood in global stockmarkets, the FBM KLCI finished lower after lingering mostly in the negative territory. Most of the lower liners remain downward pressured as well, with the exception of the FBM Fledgling (+0.3%), while the broader market retreated with more than half of its sub-sectors in the red.

• Market breadth was dour as losers trounced the winners on a ratio of 472-to- 336 stocks, while traded volumes erased 22.4% to 2.34 bln shares as investors stayed on the sidelines amid the lack of potential trading catalysts.

• Key-index underperformers were Nestle (- 10.0 sen), Genting (-9.0 sen), MISC (-9.0 sen), Digi (-5.0 sen) and IHH Healthcare (- 4.0 sen). Meanwhile, broader market stocks which retreated include Dutch Lady (-60.0 sen), Panasonic Manufacturing (-38.0 sen), Aeon Credit (- 24.0 sen), Bintulu Port (-23.0 sen) and Heineken Malaysia (-16.0 sen).

• On the contrary, gainers were BAT (+38.0 sen), Sam Engineering (+35.0 sen), Vitrox (+25.0 sen), Apex Healthcare (+24.5 sen) and Pineapple Resources (+22.5 sen). Press Metal (+11.0 sen), Hong Leong Finacial Group (+4.0 sen), Tenaga Nasional (+3.0 sen), Dialog (+3.0 sen) and Kuala Lumpur Kepong (+2.0 sen) led the blue-chip gauge higher yesterday.

• Major automakers dragged Japanese stocks lower as the Nikkei (-0.7%) retreated, following tepid auto sales to the U.S. last month, while the Hang Seng also ended in the red, albeit slightly capped by gains in property counters. Other ASEAN indices were also mostly lower due to the extended profit-taking activities.  U.S. benchmark indices advanced on Wednesday as the Dow (+0.2%) closed higher for the fifth consecutive session, bumped up by upbeat employment report and expectations of a stronger U.S. economy. The S&P 500 and the Nasdaq also added 0.1% and 0.3% respectively.

• Earlier, majority of the European equities rebounded as the possibility of a lowerthan-expected budget deficit by Italy ease rising geopolitical concerns. The FTSE was 0.5% higher, boosted by communication services and healthcarerelated large caps, while the CAC rose 0.4%. The DAX (-0.4%), however, weakened to 12,287.6 points.

The Day Ahead

• There remains little impetus for the key index to make headway due to the dearth of leads and the stretched equity valuations. Despite that, the key index continues to linger close to the 1,800 points level amid the sustained institutional support that we see continuing over the near term.

• Under the prevailing market environment, we think that the indifferent trend will remain in play for longer. There are still few noteworthy leads to shore up market sentiments, both from domestic and overseas sources, leaving most market players to stay on the sidelines. Hence, the rangebound trend is likely to continue for longer with the key index likely to trend within the narrow range of 1,790 and 1,800 points for now.

• The lower liners are also undergoing a consolidation after their recent 5.0% gain. The pullback has been relatively benign thus far and we think the mild pullback is likely to persist for now as we view it as healthy after their recent uptrend to allow the gains to be digested.

COMPANY BRIEF

• PRG Holdings Bhd has disposed of 60.5 mln shares or 12.0% equity interest in Furniweb Holdings Ltd for HK$0.50 (RM0.26) a share or HK$30.2 mln. The disposal will enable PRG to rationalise its investment in Furniweb and the proceeds will go towards its expansion into healthcare and working capital.

• Upon completion of the share disposal, PRG's shareholding in Furniweb will be reduced from 75.0% to 63.0%. The disposal price of HK$0.50 per Sale Share is 34.0% above the net tangible assets per share of HK$0.37 of Furniweb. (The Star Online)

• Telco firms, including Axiata Group Bhd’s unit Celcom, Maxis Bhd, Telekom Malaysia Bhd and TIME dotCom Bhd, have agreed to reduce the prices of fixed broadband access in line with the government's initiative to reduce fixed broadband prices with higher speed by 2019. Some of the telcos have already rolled out the cheaper packages before 30th September 2019 which was the deadline for the telcos to submit their access agreements to the Malaysian Communications and Multimedia Commission (MCMC).

• Meanwhile, Telekom Malaysia has appointed four new directors to its board's following the resignation of David Benello as Independent Non-Executive Director. The new directors are Datuk Asri Hamidin @ Hamidon, Datuk Mohd Naim Daruwish, Hisham Zainal Mokhtar and Saheran Suhendran. The group also announced the appointment of Farid Bassir as its new Chief Human Capital Officer, in place of Suhaimi Sulong who served as Acting Chief Human Capital Officer since early 2018. (The Edge Daily)

• APFT Bhd has appointed two new NonExecutive Directors, namely SMTrack Bhd’s Executive Director, Datuk Tan Choon Hwa and former National Water Management Commission (SPAN) Chairman Tan Sri Zaini Omar. The two will fill the positions left vacant by Chow Hung Keey and Datuk Sri Ahmad Said Bin Hamdan after the two retired by not seeking for re-election in the company’s annual general meeting in July 2018. (The Edge Daily)

• Country Heights Holdings Bhd (CHHB) which planned to issue its own assetbacked cryptocurrency called 'Horse Currency', has assured shareholders it will be taking "very patient and prudent steps" in the venture. CHHB is the first Bursa Malaysia-listed firm to plan its own cryptocurrency issuance totalling 1.00 bln Horse Currencies backed by RM2.00 bln worth of the group's assets with an initial 300.0 mln units in its first initial coin offering (ICO). The company will be holding an EGM on 8th November 2018 to get shareholders’ approval for the plan as well as to appoint any technology partner and external consultants for the ICO. (The Edge Daily)  

Source: Mplus Research - 4 Oct 2018