• The FBM KLCI struggled to hold on to its gains, closing in the red again on Wednesday as investors retreated to the sidelines amid the prevailing risk-off sentiment. The lower liners also maintained its downward trajectory, led by losses in the FBM Small Cap (-1.9%), while only the Plantation sub-sector outperformed.

• Market breadth recovered slightly although losers still hold the upper hand with 620 stocks vs. 245 advancers. Traded volumes, meanwhile, was higher by 16.5% to 2.51 bln shares on the extended selling by the foreign players.

• Top Main Board decliners were Nestle (- 30.0 sen), Tenaga Nasional (-18.0 sen), Malaysia Airports (-16.0 sen), Digi (-15.0 sen) and Press Metal (-10.0 sen). Meanwhile, other underperforming counters include Fraser & Neave (-94.0sen), Ajinomoto (-68.0 sen), BLD Plantation (-56.0 sen), KESM Industries (- 54.0 sen) and MI Equipment (-34.0 sen).

• Sin stocks like Carlsberg (+58.0 sen), Heineken Malaysia (+40.0 sen) and BAT (+26.0 sen) lifted the broader market on bargain-hunting activities after their recent selldown, followed by Dutch Lady (+34.0 sen) and Bursa Malaysia (+13.0 sen). MISC (+12.0 sen), Axiata (+8.0 sen), Genting Malaysia (+6.0 sen), Sime Darby Plantation (+5.0 sen) and Genting (+2.0 sen) bucked the otherwise negative FBM KLCI performance to closed higher yesterday.

• Key regional benchmark indices closed broadly higher, albeit gains were capped by the weakness in energy stocks on expectations on rising supply. The Shanghai Composite led the outperformers after closing 0.3% higher,alongside the Nikkei (+0.4%). The Hang Seng index, meanwhile, seesawed on Wednesday and ended lower together with most ASEAN stockmarkets.

• Wall Street slumped further following a general selldown in U.S. equities, spooked by the lower-than-expected housing data and expectations of weaker corporate earnings as the earnings season rolls on. The Dow (-2.4%) closed lower, alongside the S&P 500 and the Nasdaq, which closed down by 3.1% and 4.4% respectively after investors dumped communications and semiconductorsrelated stocks.

• Meanwhile, political risks concerns, weaker-than-expected manufacturing data and depreciation in the Euro currency weighed on the European bourses as the DAX (-0.7%) and the CAC (-0.3%) narrowed. The FTSE (+0.1%), however, eked-out gains as a weaker Pound boost the earnings prospects of its exporters.

The Day Ahead

• The Malaysian stocks’ recovery was short-lived yesterday as the selling pressure continues to dominate to send most stocks into the red zone again. Its inability to stay in the positive territory is also set to extend the oversold market condition as there are few signs of a rebound as yet with global equity market sentiments remain frail.

• This follows the continuing selldown in most global equities overnight that will also sap interest on Malaysian equities as more market players will move to the sidelines, awaiting for further clarity on the market’s direction and a resolve to the current geopolitical, trade and interest rate hike concerns.
• Back home, market players are also wary of the unveiling of the upcoming Budget 2019 in early November that is likely to see few giveaways. With the key index breaching successive support levels, the next supports are now at 1,682 and 1,678 respectively, while the 1,700 points level is the near term hurdle.

• There is also little reprieve for the lower liners and broader market shares, and with the near-term market outlook staying feeble, stocks in the FBM Small Cap, Fledgling and ACE Market are set to head further south for now.

COMPANY BRIEF

• Pantech Group Holdings Bhd’s 2QFY19 net profit fell 7.5% Y.o.Y RM10.9 mln due to on suspension of carbon steel shipments to the U.S. Revenue for the quarter decreased 5.8% Y.o.Y to RM148.1 mln.

• For 1HFY19, cumulative net profit decreased 2.8% Y.o.Y to RM25.0 mln. Revenue for the period, however, rose 5.8% Y.o.Y to RM326.5 mln. (The Star Online)

• Capitaland Malaysia Mall Trust's (CMMT) 3Q2018 net profit fell 21.3% Y.o.Y to RM31.6 mln, dragged down by lower occupancy at Sungei Wang Plaza, The Mines shopping mall and 3 Damansara shopping mall, downtime from asset enhancement works at Sungei Wang Plaza and lower rental rates at The Mines. Revenue for the quarter slipped 7.0% Y.o.Y to RM86.2 mln.

• For 9M2018, cumulative net profit declined 5.9% Y.o.Y to RM101.0 mln. Revenue for the period fell 5.9% Y.o.Y tp RM263.2 mln. (Bernama)

• YKGI Holding Bhd’s 3Q2018 net loss widened to RM6.9 mln, from a net loss of RM3.53 mln in the previous corresponding quarter, dragged down by realised and unrealised foreign exchange loss of RM2.8 mln that was caused by the depreciation of the Ringgit against U.S. Dollar. Revenue for the quarter decreased 14.7% Y.o.Y to RM86.8 mln.

• For 9M2018, cumulative net loss stood at RM10.7 mln, from a net loss of RM8.1 mln net loss registered in the previous corresponding period. Revenue for the period fell 11.9% Y.o.Y to RM250.2 mln. (The Edge Daily)

• Hua Yang Bhd’s 2QFY19 net profit jumped 161.0% Y.o.Y to RM1.9 mln on higher property revenue. Revenue for the quarter added 45.6% Y.o.Y to RM64.6 mln.

• For 1HFY19, cumulative net profit rose 12.4% Y.o.Y to RM2.9 mln. Revenue for the quarter gained 43.5% Y.o.Y to RM131.1 mln. (The Edge Daily)

• Eupe Corp Bhd’s 2QFY19 net profit jumped 107.8% Y.o.Y to RM8.0 mln, lifted by improved performances across its divisions, including property development, construction and chalet and golf management. Revenue for the quarter grew 3.2% Y.o.Y to RM97.5 mln.

• For 1HFY19, cumulative net profit surged 149.0% Y.o.Y to RM12.1 mln. Revenue for the period gained 14.3% Y.o.Y to RM174.0 mln. (The Edge Daily)

• IGB Real Estate Investment Trust's (IGB REIT) 3Q2018 net property income (NPI) rose 2.4% Y.o.Y to RM96.6 mln on higher rental income. Revenue for the quarter increased 3.2% Y.o.Y to RM133.7 mln.

• For 9M2018, cumulative NPI increased 4.1% Y.o.Y to RM289.8 mln. Revenue for the period added 2.0% Y.o.Y to RM398.5 mln. (The Edge Daily)
• Key Alliance Group Bhd has subscribed 99.3 mln placement shares of XOX Bhd, representing 9.1% of its total enlarged issued and paid-up share capital for RM4.6 mln cash. The placement shares of the mobile virtual network operator were issued at RM0.0467 each and the subscription consideration was funded entirely from internally-generated funds. (The Edge Daily)  

Source: Mplus Research - 25 Oct 2018