• The FBM KLCI (-0.5%) fell below the 1,570 level again amid weaker crude oil prices and the lack of progress on the U.S-China trade front. The lower liners tracked the Main Board, with the exception of the FBM Fledgling (+0.1%), while majority of the broader market constituents closed in the red. The only two outperforming sectors were the Property and the Transportations and Logistics sectors.

• Market breadth was negative as decliners almost doubled the advancers, although traded volumes rose 14.7% to 2.34 bln shares amid the flight into safehaven assets; resulting in the jump in bullion prices on Tuesday.

• Banking-related giants like Hong Leong Financial Group (-24.0 sen), Hong Leong Bank (-18.0 sen) and Public Bank (-10.0 sen) extended its losing streak, followed by Nestle (-70.0 sen) and Kuala Lumpur Kepong (-24.0 sen). Meanwhile, other losers include Fraser & Neave (-48.0 sen), SHL Consolidated (-40.0 sen), BAT (-30.0 sen), Dutch Lady (-30.0 sen) and Heineken Malaysia (-20.0 sen).

• On the positive side of the trade, broader market advancers were Carlsberg (+46.0 sen), VSTECS (+22.0 sen), Thong Guan Industries (+19.0 sen), Greatech Technology (+17.0 sen) and Keck Seng (+16.0 sen). The only bluechip stock to survive Tuesday’s beating was Malaysia Airports after clawing back its earlier losses in the final hour.

• Key regional benchmark indices were mostly in the negative territory, taking cue from the negative sentiment spilled over from Wall Street overnight. The Hang Seng Index lost 0.2% after Hong Kong’s retail sales volume hit its record low in October amid unabated public protests. The Nikkei was also down by 0.6%, weighed down by losses in the consumer staples and utilities sectors, but the Shanghai Composite eked-out gains in the eleventh hour. ASEAN shares, however, closed broadly lower.

• Despite rebounding from intra-day lows, major U.S. indices were splashed in red following dimming prospects of a U.S.- China trade deal, which could include tariffs rollback on Chinese goods. The Dow, S&P 500 and the Nasdaq ended lower by 1.0%, 0.7% and 0.6% respectively.

• European stocks finished mostly weaker at Tuesday’s close, weighed down by Washington’s threats of increased tariffs on luxury goods from France. The FTSE (- 1.8%) extended its losing streak ahead of its U.K.’s general election next week, while the CAC also fell 1.0%. The DAX (+0.2%), however, bucked the general downtrend and closed with meagre gains.
  
  THE DAY AHEAD

• The broad market outlook remains frail after yesterday’s reversal that is placing a fresh strain on the near term outlook. We had earlier hoped for a follow through buying yesterday, but renewed selling pressure again placed a dampener on sentiments to sustain the dour trend.

• Under the prevailing environment, we see further near term weakness among Malaysian equities as the selling is still prevalent, particularly as global equities are also enduring a choppy ride on concerns that a U.S-China trade agreement may not materialise anytime soon.

• Back home, the recently concluded results reporting season still indicates mixed earnings performances that is also providing few noteworthy leads for the market to follow. In the interim, the support has now moved to the 1,560 level, followed by the 1,550 level. The resistances, meanwhile, are at 1,570 and 1,575 points respectively.

• The lower liners are also wavering amid the choppy market conditions and the selling that is picking up pace. Therefore, we also think that these shares will continue to endure volatile conditions as we also see selling dominating market activities over the near term.
  
  COMPANY BRIEF

• Setegap Ventures Petroleum Sdn Bhd, an associate company of Uzma Bhd, has secured a RM98.4 mln financing deal with Bank Islam Malaysia Bhd for its capital expenditure and working capital requirements. The financing agreement is for Setegap Ventures to acquire equipment required for its well intervention contracts from Petronas Carigali Sdn Bhd.

• The financing facility allows Setegap Ventures to enjoy a very competitive rate and would significantly reduce its cost of funds and would contribute in improving its bottom line. (The Star Online)

• IGB Bhd, together with its partner Tower Ray Ltd, plans to sell their 50-50-owned UK-based Black Pearl Ltd, which owns a plot of freehold London land, for £235.0 mln or RM1.27 bln. IGB’s 50% stake in Black Pearl is held under IGB's whollyowned Verokey Sdn Bhd and together with Tower Ray, they have inked a nonbinding heads of terms agreement with Hero Inc Ltd, Staycity Ltd and BSW Land and Property Ltd, who want to buy their entire stakes in Black Pearl. (The Edge Daily)

• Destini Bhd has secured a one-year extension for its contract with the Defence Ministry for the provision of maintenance, repair and overhaul services, as well as the supply of safety and survival equipment to the Royal Malaysian Air Force. The contract ceiling is RM50.2 mln. (The Edge Daily)

• Sino Hua-An International Bhd is buying the entire stake in technology company TouchPoint Group for RM72.0 mln in cash. It inked an agreement to effect the acquisition on 3rd December 2019, after changing its mind about taking up a 51.0% stake in the company eight months ago. With the completion of its new business acquisitions, Sino Hua-An will have three core businesses, namely food and beverage (F&B), digital solutions platform, and manufacturing of metallurgical coke. (The Edge Daily)

• Bursa Malaysia Securities has rejected Scomi Group Bhd's Practice Note 17 (PN17) waiver application, due to concerns on the sustainability and growth potential of its existing/remaining business and its ability to generate sufficient revenue and thus, profitability. Hence, the group is now regarded as a PN17 company.

• Separately, Scomi’s proposed share capital reduction and share consolidation have been approved by Bursa Malaysia Securities. (The Edge Daily)

• PRG Holdings Bhd has proposed a private placement of up to 40.3 mln placement shares, representing not more than 10.0% of its existing share base, to raise proceeds to partly fund its acquisition of two parcels of land in Kelantan that are planted with teak trees. Based on an indicative issue price of 57 sen per share, the company expects to raise total proceeds of up to RM23.0 mln, of which RM10.6 mln will be used to partly pay for the acquisition of the two parcels of land.

(The Edge Daily)

• Parkson Holdings Bhd’s 68.0%-owned Singapore listed subsidiary, Parkson Retail Asia Ltd (PRA) has been placed on the Singapore Exchange (SGX)’s watchlist after PRA issued a notice in October 2019 that it had been lossmaking for three consecutive years. The watchlist inclusion takes effect on 4th December 2019. (The Edge Daily)

Source: Mplus Research - 4 Dec 2019