Downside Risk Still Present​​​​​​

• Tracking the renewed volatility in Wall Street overnight, the FBM KLCI (-0.4%) extended its losses yesterday after lingering the negative territory for the entire trading session. Similarly, the lower liners – the FBM Small Cap (-1.2%), FBM Fledgling (-0.4%) and FBM Ace (- 1.3%) all extended their losses, while the broader market finished mostly lower.

• Market breadth stayed negative as decliners overcame advancers on a ratio of 2-to-1 stocks. Traded volumes declined 28.2% to 1.75 bln shares as investors opt to remain at the sidelines amid the negative market sentiment.

• Topping the decliners list on the FBM KLCI were Nestle (-30.0 sen), Tenaga (- 22.0 sen), Maxis (-12.0 sen), Genting (- 11.0 sen) and Press Metal (-6.0 sen). Notable decliners on the broader market were United Plantations (-40.0 sen), Heineken (-30.0 sen), MPI (-30.0 sen), Hong Leong Industries (-26.0 sen) and Fraser & Neave (-26.0 sen).
• On the other side of the trade, significant gainers on the broader market include BAT (+70.0 sen), Bintulu Port (+29.0 sen), Shangri-La (+28.0 sen) and Bursa (+16.0 sen). Techbond jumped 20.0 sen on its debut in Bursa Malaysia. On the local bourse, Sime Darby Plantations (+8.0 sen), Petronas Chemicals (+6.0 sen), Hong Leong Financial Group (+4.0 sen), Hong Leong Bank (+4.0 sen) and Astro (+2.0 sen) were the biggest advancers.
• Asia benchmark indices extended their losses as investors view the recent G20 summit meeting as not yielding any positive results on the trade dispute that sent the Nikkei falling 0.5%. The Shanghai Composite slipped 0.6%, while the Hang Seng (-1.6%) slipped below the27,000 psychological level. ASEAN equities, meanwhile, were splashed in red on Wednesday.

• European equities – the FTSE (-1.4%), CAC (-1.4%) and DAX (-1.2%), all extended their losses as concerns over global economic growth returned to the forefront. On a brighter note, Eurozone’s retail sales in October 2018 rose 1.7% Y.o.Y, augmenting the 0.3% Y.o.Y expansion recorded in September 2018.

• Meanwhile, U.S. stockmarkets were closed to honor the death of former President George H.W. Bush.

THE DAY AHEAD

• Even after two sessions of negative performance, we think stocks on Bursa Malaysia is still looking indifferent as there are still few positive developments in the global capital markets to change the course of the Malaysian equity market over the near term. On the other hand, there is also few negative news overnight to set the market back as well.

• Consequently, we think that the FBM KLCI could trend within a tight range between the 1,680 and 1,690 levels over the near term with market interest to continue staying thin amid the lack of new leads. Apart from the above support and resistance levels, the others are at 1,670 and 1,700 points respectively.

• With the market still in a dour mode, the anticipated year-end window dressing activities are looking less likely at the current juncture. As it is, most market players are still wary of the stockmarket outlook for the next year that is clouded by the ongoing trade disputes and potentially slower economic growth ahead. Any window dressing activities are likely to be mild and short-lived, in ourview.

• The lower liners and broader market shares are also seeing little following and this is set to prolong amid the cautious market environment. Therefore, we see the FBM Small Cap, Fledgling and ACE Market indices continuing to drift for now.

COMPANY BRIEF

• Kerjaya Prospek Group Bhd has clinched a contract worth RM211.6 mln from PBB Group Bhd, for construction works at a mixed development project at Taman Megah, Petaling Jaya. The new job brings its outstanding orderbook to about RM3.08 bln. (The Edge Daily)

• Berjaya Food Bhd’s 2QFY19 net profit rose 21.0% Y.o.Y to RM7.0 mln, from RM5.8 mln in 2QFY19, boosted by stronger contribution from its Starbucks cafes, especially with the opening of new outlets. The company has also declared a second interim dividend of 1.0 sen per share, payable on 25th January 2019. (The Edge Daily)

• BIMB Holdings Bhd has appointed Mohd Muazzam Mohamed as its new Chief Executive Officer (CEO) effective 5th December 2018. He is currently acting CEO of the firm’s subsidiary, Bank Islam Malaysia and is to be both BIMB and Bank Islam’s CEO. (The Star Online)

• Straits Inter Logistics Bhd is proposing to diversify into land transportation and logistics to meet the rising demand from its existing customers for such services. The group expects the contribution from the inland transportation business segment to contribute more than 25% of its total net profit in the future. (The Edge Daily)
• A technology unit of Serba Dinamik Holdings Bhd is planning to acquire a 30.0% equity stake (or 251,152 shares) in IT solutions provider, eNoah iSolution India Pvt Ltd for a sum of RM14.9 mln as part of the group’s expansion into the tech sector. It has also earmarked RM30.0 mln for existing and upcoming projects next year.

• eNoah iSolution was established in India, but has an international presence in countries like Malaysia and Singapore where it's mainly engaged in the provision of information technology (IT) solutions, business management and support services and software and IT products platforms for clients. (The Edge Daily)

• Willowglen MSC Bhd’s Singapore unit secured a one-year RM14.4 mln contract to provide supervisory control and data acquisition (SCADA) and radio frequency identification (RFID) solutions. (The Edge Daily)

• Astro Malaysia Holdings Bhd’s 3Q2018 net profit rose slightly by 4.5% Y.o.Y to RM153.2 mln, from RM146.7 mln in the previous corresponding quarter, mainly due to lower content costs and royalty fees.

• Quarterly revenue, however, was almost flat at RM1.38 bln vs. RM1.39 bln a year ago and the group declared a third interim single-tier dividend of 2.5 sen per share, payable by 4th January 2019. (The Edge Daily)

• Gamuda Bhd has announced that the hearing of a suit filed by Tenaga Nasional Bhd (TNB) against its subsidiary for nonpayment of bills has been adjourned to 8th January 2019, pending settlement negotiations between the parties.

• In the suit filed in March 2017, TNB claimed Gamuda’s 80.0%-ownedsubsidiary, Gamuda Water Sdn Bhd failed to settle four electricity bills totalling RM39.5 mln. (The Edge Daily)

• Sunway Construction Group Bhd has secured a project worth RM100.0 mln for main building works, including basement architectural as well as mechanical and electrical works, pedestrian bridges and associated external works for the proposed development of a 22-floor building.

• The contract was awarded by SA Architects Sdn Bhd, on behalf of Sunway Integrated Properties Sdn Bhd (SIPSB) - an indirect subsidiary of Sunway Bhd. The 29-month project is expected to be completed by 30th April 2021. (The Star Online)

Source: Mplus Research - 6 Dec 2018