• The FBM KLCI closed in the red after swimming in the negative territory for the entire intra-day session, affected by the bearish sentiment spilled over from Wall Street and profit-taking in selected financial-related stocks. The FBM Small Cap (-0.4%) also remained southbound, although the FBM Ace and the FBM Fledgling index closed 0.5% and 0.1% higher respectively. Most of the subsectors on the broader market were also painted red, with the exception of the Construction, Healthcare and Utilities sectors.

• Market breadth was negative as the losers outperformed the winners on a ratio of 497-to-319 stocks. Traded volumes, however, jumped 29.2% to 2.05 bln shares on the back of the increased selling.

• Among the worst blue-chip performerswere Hong Leong Financial Group (-28.0 sen), Petronas Dagangan (-26.0 sen), Malaysian Airports (-18.0 sen), Public Bank (-18.0 sen) and Genting (-15.0 sen). Other decliners were Malaysian Pacific Industries (-50.0 sen), Fraser & Neave (- 40.0 sen), Allianz Malaysia (-28.0 sen), Heineken Malaysia (-24.0 sen) and Petron Malaysia (-24.0 sen).

• On the bright side, BAT (+30.0 sen), Batu Kawan (+26.0 sen), KESM Industries (+20.0 sen), Panasonic Manufacturing (+18.0 sen) and Thong Guan Industries (+15.0 sen) bucked the general bearish sentiment and closed higher. The sole advancer on Bursa Malaysia yesterday was Telekom Malaysia (+6.0 sen).

• Stocks in Asia closed mixed on Wednesday, following an update report from Washington’s investigation into China’s intellectual property andtechnology transfer policies, alleging the latter of unfair trade practices, adding fuel to uncertainties ahead of President Xi Jinping and President Donald Trump’s high-level trade negotiations at the end of November. The Nikkei (-0.4%) lost grounds yet again, although the Hang Seng and Shanghai Composite managed to eked out gains in the eleventh hour. ASEAN stockmarkets, meanwhile, closed on a mixed tone.

• Wall Street ended with modest gains amid thin trading volumes ahead of the U.S. Thanksgiving holiday, largely due to higher crude oil prices on stronger demand expectations and bargainhunting in technology giants. The Dow rebounded strongly but selling pressure gave way late in the session following sharp losses in Apple. Tech heavy indices like the S&P 500 and the Nasdaq, meanwhile, gained 0.3% and 0.9% respectively.

• U.K. stockmarkets ended on an upbeat tone, buoyed by gains in commoditylinked companies. The FTSE snapped its three-day weakness and closed 1.5% higher. The DAX (+1.6%) and the CAC (+1.0%) also followed suit, despite lingering political uncertainties.

THE DAY AHEAD

• After a tumultuous spell that saw the key index slip below the 1,700 points level yesterday, we think local stocks will try to find some stability after some major global stock indices posted gains overnight. However, the rebound is likely to be mild with the broad market undertone still one of caution that will keep most market players wary as there remains no resolve to the ongoing market concerns such as the U.S-China trade spat, potentially higher interest rates and prognosis of slower economic growthahead.

• Amid the continuing cautiousness, we also think the near term upsides could be measured with the 1,700 points level to be the immediate target, limited by quick trades that could curtail its upsides. Beyond the 1,700 points level, the other resistance is at 1,710, while the supports are at 1,690 and 1,680 respectively.

• Elsewhere, the broader market is set to drift further amid the lack of following as positive leads that are still far and inbetween. The ongoing results reporting season has seen the continuing mixed performances and it leave few leads for retail players to follow.

COMPANY BRIEF

• Sapura Energy Bhd units have secured contracts in Mexico and Malaysia with a combined value of RM1.75 bln. It’s Mexico unit has secured a job from Hokchi Energy S.A. de C.V. to undertake engineering, procurement, construction, transportation and installation in the Hokchi field development in the Gulf of Mexico. The project was expected to be completed by end of 1Q2020.

• It also bagged a contact from ENI Mexico S. de. R.L de. C.V to undertake engineering, procurement, construction, transportation and installation in the Offshore Block Area 1 in the Gulf of Mexico. The works are expected to be completed by end of 2Q2019.

• Meanwhile, its unit Sapura Subsea Services Sdn Bhd was awarded a fiveyear contract to provide underwater services for Petroleum Arrangement Contractors (PACs), package C by four companies, namely Sarawak Shell Bhd /Sabah Shell Petroleum Company Ltd; Murphy Sarawak Oil Co., Ltd/MurphySabah Oil Co., Ltd; Repsol Oil & Gas Malaysia Ltd; and Kebabangan Petroleum Operating Company Sdn Bhd. The scope of work consists of underwater services which includes the utilisation of vessels, air and saturation diving as well as remotely operated vehicles. (The Star Online)

• Sime Darby Bhd’s 1QFY19 net profit slumped 82.9% Y.o.Y to RM225.0 mln, due to one-off adjustment on the listing of its subsidiaries in the previous corresponding period. Revenue for the quarter, however, rose 8.6% Y.o.Y to RM8.84 bln. (The Star Online)

• Malaysia Airports Holdings Bhd's 3Q2018 net profit surged 108.2% Y.o.Y to RM168.5 mln due to higher passenger traffic for Malaysia and growth momentum in Turkey. Revenue for the quarter increased 1.5% Y.o.Y to RM1.23 bln.

• For 9M2018, cumulative net profit surged 236.9% Y.o.Y to RM699.0 mln. Revenue for the period increased 5.7% Y.o.Y to RM3.60 bln. (The Star Online)

• Paramount Corp Bhd's 3Q2018 net profit sank 81.1% Y.o.Y to RM15.6 mln, due to a one-off gain of RM77.8 mln from the sale of its Sri KDU campus to Alpha REIT recorded in the previous corresponding quarter. Revenue for the quarter, however, grew 12.1% Y.o.Y to RM210.5 mln.

• For 9M2018, cumulative net profit slipped 40.8% Y.o.Y to RM64.9 mln. Revenue for the period, however, added 24.2% Y.o.Y to RM651.1 mln. (The Star Online)

• MSM Malaysia Holdings Bhd’s 3Q2018 net profit increased 52.4% Y.o.Y to RM15.9 mln on lower raw material costs and favourable foreign exchange rates. Revenue for the quarter, however, declined 15.7% Y.o.Y to RM562.1 mln.
• For 9M2018, cumulative net profit stood at RM46.0 mln vs. a net loss of RM45.7 mln recorded in the previous corresponding period. Revenue for the period, however, dropped 16.1% Y.o.Y to RM1.68 bln. (The Edge Daily)

• Pos Malaysia Bhd’s 2QFY19 net loss stood at RM16.6 mln vs. a net profit of RM18.8 mln recorded in the previous corresponding quarter due to accelerated reduction in mail volumes. Revenue for the quarter, however, was flat at RM588.7 mln.

• For 1HFY19, cumulative net loss stood at RM11.6 mln vs. a net profit of RM54.8 mln recorded in the previous corresponding period. Revenue for the period slipped 1.7% Y.o.Y to RM1.18 bln. (The Edge Daily)

• AirAsia X Bhd’s (AAX) 3Q2018 net loss widened to RM197.5 mln vs. a net loss of RM43.2 mln recorded in the previous corresponding quarter, dragged down by RM138.2 mln impairment from a joint venture, coupled with higher average fuel price in the quarter under review at US$91/bbl, against US$65/bbl recorded in 3Q2017. Revenue for the quarter slipped 3.6% Y.o.Y to RM1.08 bln.

• For 9M2018, cumulative net loss stood at RM213.4 mln vs. a net profit of RM14.5 mln recorded in the previous corresponding period. Revenue for the period, however, added 1.8% Y.o.Y to RM3.40 bln. (The Edge Daily)

• Sunway Bhd’s 3Q2018 profit grew by a marginal 0.2% Y.o.Y to RM145.3 mln, due to higher contributions from the property development and construction segments. Revenue for the quarter rose 12.6% Y.o.Y to RM1.44 bln.

• For 9M2018, cumulative net profit gained 4.2% Y.o.Y to RM466.7 mln. Revenue for the period added 11.8% Y.o.Y to RM4.04bln. (The Edge Daily)

• Sumatec Resources Bhd has lodged a police report against a former director for acting without board approval on several occasions and a possible breach of trust. Sumatec accused the director of signing a "parental company guarantee agreement" on 2nd May 2016 to the Continental Industrial Supply and Services Limited Liability Company Partnership (CISS).

• The agreement required Sumatec to pay approximately US$6.0 mln in arbitration proceedings related to a payment to the CaspiOil Gas LLP contract. The director had also witnessed the placement of the company’s seal on an agreement without the board’s resolution, resulting in Sumatec acknowledging it would undertake a settlement of around RM80.0 mln of a collateralised loan obligation debt (CLO debt), although the liability had been waived.

• Additionally, Sumatec believes the director was negligent in handling the financing of vessels under SISB and another subsidiary, Semado Shipping Sdn Bhd. (The Edge Daily)

Source: Mplus Research - 22 Nov 2018