• The FBM KLCI rejected the 1,700 psychological level as the key index erased all its previous session gains to close 1.0% lower last Friday. Consequently, the key index trended lower for the fourth straight week, falling 0.9% W.o.W. The lower liners – the FBM Small Cap (-1.3%), FBM Fledgling (-0.4%) and FBM Ace (-0.8%) all fell, while the REIT sector (+0.1%) outperformed the negative broader market.

• Market breadth stayed negative as losers thumped winners on a ratio of 614-to-273 stocks. Trade volumes, however, jumped 42.7% to 3.09 bln shares, contributed by the month-end portfolio rebalancing by institutional funds.

• Leading the FBM KLCI lower were Hong Leong Bank (-32.0 sen), Petronas Dagangan (-32.0 sen), PPB Group (-30.0 sen), Sime Darby Plantation (-27.0 sen)and KLK (-24.0 sen). MPI sank RM1.18 on the dropping out from the Shariahcompliant list, while other notable losers on the broader market were Padini (-72.0 sen), Hong Leong Industries (-66.0 sen), Aeon Credit (-50.0 sen) and Supermax (- 29.0 sen).

• In contrast, consumer products stocks like BAT (+56.0 sen), Heineken (+30.0 sen), Carlsberg (+28.0 sen) advanced, while Petron and APM Automotive added 17.0 sen and 13.0 sen respectively. Meanwhile, Nestle (+90.0 sen), Petronas Gas (+14.0 sen), Hartalega (+4.0 sen), RHB Bank (+4.0 sen) and Maxis (+3.0 sen) topped the key-index winners’ list.

• Asia benchmark indices finished higher ahead of the G-20 summit meeting over the weekend. The Nikkei added 0.4%, while the Hang Seng Index rose 0.2%. The Shanghai Composite gained 0.8%, despite the NBS Manufacturing PMI in November 2018 stood at 50 – below economists’ consensus at 50.2. ASEAN equities, meanwhile, ended mostly higher last Friday.
• U.S. stockmarkets advanced after recovering all their intraday losses as the Dow added 0.8%, boosted by optimism over a potential trade agreement between U.S. and China at the G-20 summit meeting over the weekend. Likewise, the broader market saw both the S&P 500 and Nasdaq gaining 0.8% each.
• Earlier, European equities edged lower as the FTSE fell 0.8%. The CAC slipped 0.1%, while the DAX closed 0.4% lower. Market sentiment turned cautious on the U.K. and European Union’s relationship ahead of the weekend summit meeting among the G-20 leaders.

THE DAY AHEAD

• After a surprised steep end-of-month profit taking and selling last Friday, the Malaysian stock market is looking frail as sentiments were further dented by the intense selling. However, we think the selective selling may have largely run its course as there is no immediate change to the Malaysian stockmarket’s fundamentals.

• Meanwhile, the truce in the U.S.-China trade dispute could provide some room for the beaten down Malaysian stocks to stage a quick recovery, in tandem with the positivity in most global equity markets. This could allow the key index to retest the 1,690 level, but we think the 1,700 level is still distant for now. The supports are now at 1,670 and 1,650 respectively.

• There remains little impetus for the broader market and lower liners to stagea meaningful recovery as the buying support is still absent. As it is, many retail players are staying on the sidelines with few available catalysts to entice fresh buying interest. Therefore, we think that the insipid market environment is likely to persist for now.

COMPANY BRIEF

• Genting Malaysia Bhd has registered its largest ever 3Q2018 net loss of RM1.49 bln, largely due to a massive RM1.8 bln impairment of its investment in promissory notes issued by the Mashpee Wampanoag Tribe for the development of an integrated gaming resort in Massachusetts, U.S. Revenue for the quarter, however, was higher by 14.5% Y.o.Y to RM2.6 bln vs. RM2.27 bln last year.

• Consequently, the group slipped into the red with a cumulative 9M2018 net loss of RM739.7 mln compared to a net profit of RM711.5 mln in previous corresponding period, despite a 9.4% Y.o.Y growth in revenue to RM7.42 bln, from RM6.79 bln in 9M2017.

• Further, the group has also commenced legal proceedings in-relation to the termination of the development of the Twentieth Century Fox World theme park. (The Star Online)

• Similarly, Genting Bhd also posted a 3Q2018 net loss of RM275.8 mln, from a net profit of RM190.0 mln a year ago, dragged down by RM1.83 bln impairment loss on its 49.4%-owned unit Genting Malaysia Bhd’s investment in the promissory notes issued by the Mashpee Wampanoag Tribe. Revenue, however, improved to RM5.38 bln (+6.7% Y.o.Y), from RM5.04 bln a year ago.

• The poor quarterly earnings dragged thegroup's 9M2018 net profit down to RM710.4 mln (-45.9% Y.o.Y), from RM1.31 bln previously, while revenue gained 4.7% Y.o.Y to RM15.46 bln, from RM14.77 bln in the same period last year. (The Star Online)

• MCT Bhd’s subsidiary, One City Development Sdn Bhd has issued a statement to deny that it was involved in hiring "unruly people" to instigate riots and civil unrest in its effort to relocate the Seafield Sri Maha Mariamman Temple in Subang Jaya, Selangor.

• The group has announced that recent media reports which alleged its involvement in hiring such people "are absolutely inaccurate". It also stressed that it had taken its time in executing the consent judgment obtained for the temple's relocation in 2014 from the Shah Alam High Court, because of "our unwavering value for law, order, peace and harmony". (The Edge Daily)

• FGV Holdings Bhd has initiated a lawsuit against former, Chairman Tan Sri Mohd Isa Abdul Samad and former Group President and Chief Executive Office, Datuk Mohd Emir Mavani in the Kuala Lumpur High Court, seeking relief totalling RM7.7 mln.

• The case is in-relation to the purchase of two units at Troika, Persiaran KLCC here, at prices significantly above market value without proper due diligence and/or unauthorised use and possession of the units by the defendants, as well as the acquisition by the company of a number of cars and the misuse by Emir of the cars and petrol benefit.

• Subsequently, FGV is seeking RM2.9 mln from Mohd Isa and Emir for the acquisition of the Troika units and RM1.6 mln for the use and possession of the units. (The Edge Daily)
• UMW Holdings Bhd is planning to dispose its leasehold industrial land totalling 38.8 ac. in Shah Alam, Selangor to Strategic Sonata Sdn Bhd, a unit of Singapore's Mapletree Dextra Pte Ltd, for RM287.7 mln. The proposed disposal will enable the group to fully unlock and realise the value of its long-held assets in Shah Alam as part of its broader strategic thrust of sustainable value creation for shareholders. (The Edge Daily)

• Star Media Group Bhd’s 3Q2018 net profit plunged 99.3% Y.o.Y to RM1.6 mln, from RM230.3 mln a year ago, where the previous corresponding period included a gain on disposal of a subsidiary Cityneon, which amounted to RM206.9 mln. Revenue for the quarter also narrowed 23.5% Y.o.Y to RM91.1 mln, from RM119.1 mln previously.

• For 9M2018, Star Media’s net profit fell RM14.3 mln, compared to RM245.4 mln in the same period last year. Revenue for 9M2018, meanwhile, thinned by 15.6% Y.o.Y to RM299.6 mln, from RM354.9 mln a year earlier. (The Star Online)

• Ekovest Bhd’s 1QFY19 net profit rose 13.0% Y.o.Y to RM43.9 mln vs. RM38.8 mln a year ago, boosted by higher contribution from the property development and toll operation sectors. Revenue for the quarter also increased 33.0% Y.o.Y to RM304.9 mln, from RM229.2 mln in 1QFY18. (The Edge Daily)

• Petronas Gas Bhd’s 3Q2018 net profit grew RM499.8 mln (+19.7% Y.o.Y) vs. RM417.4 mln a year earlier, lifted by higher contribution from its regasification and utilities segments, albeit partly offset by higher finance costs due to recognition of previously capitalised interest expenses following the completion of the group's new liquefied natural gas (LNG) regasification terminal in Pengerang, Johor. Quarterly revenuewas also stronger by 20.0% Y.o.Y to RM1.4 bln, from RM1.16 bln in the previous year's corresponding quarter.

• For the cumulative 9M2018, net profit rose 14.3% Y.o.Y to RM1.49 bln, from RM1.31 bln last year, while revenue spiked 17.3% Y.o.Y to RM4.11 bln, from RM3.51 bln. (The Edge Daily)

• Carlsberg Brewery Malaysia Bhd’s 3Q2018 net profit jumped 52.0% Y.o.Y to RM65.0 mln, from RM42.9 mln in the previous year, on the back of higher sales in Malaysia and better performance of its Singapore operations. Quarterly revenue, meanwhile, climbed 16.0% Y.o.Y to RM492.8 mln, from RM423.5 mln in 3Q2017.

• Cumulative 9M2018 net profit increased 23% Y.o.Y to RM209.7 mln, from RM171.2 previously, while revenue rose 9.0% Y.o.Y to RM1.46 bln, from RM1.34 bln in the same period last year. (The Edge Daily)

Source: Mplus Research - 3 Dec 2018