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Market Daily Report: Bursa Malaysia Closes Higher On BNM’s OPR Decision, Wall Street Gains

KUALA LUMPUR, Nov 5 (Bernama) -- Bursa Malaysia closed higher, buoyed by Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent, alongside positive cues from Wall Street. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 19.30 points, or 1.19 per cent, to 1,635.86 from Wednesday’s close of 1,616.56. The benchmark index opened 6.72 points higher at 1,623.28, and fluctuated between an intraday high of 1,642.44 and a low of 1,622.62 during the trading session. However, market breadth was negative, with losers outnumbering gainers 723 to 497, while 466 counters were unchanged, 1,075 untraded and 10 suspended. Turnover rose to 3.74 billion units valued at RM3.61 billion compared with yesterday’s 2.81 billion units valued at RM2.57 billion.

Sector: Banking (Neutral)

M&A Securities released a research report yesterday and they believe the banking sector is bracing for a softer 2016. Softer 2016 for the banking sector? Loan growths are expected to decelerate to 8% in 2016. In contrast, the 2015's loan growth is at 8.4%. Two themes take central stage for 2016 in the banking sector according to M&A, lethargic loan growth and tight liquidity environment. For the research team in M&A, they feel that improvement in asset quality and leaner operating cost could be the drivers to support the banking sector in 2016. Top Picks in the sector: Maybank and BIMB Holdings. A quick look at the December 2015 banking statistics shows us a few important summary: Loans growth ended at 8.4% yoy in December, similar to November. This was largely due to a fine performance in household segment, pushing the average loan growth in 2015 to hit the 9.1% mark. A red flag is raised as loan applications were even weaker in December with a -8.3% y...

Sector Review: SEMICONDUCTOR

2015 sales fell slightly In 2015, the global semiconductor sales totalled US$335.2 billion, a 0.2% drop from the previous year.  Despite the strong start to the year, sales faltered and slowdown towards the second half as the industry faced issues with softening demand and a stronger dollar. Here is a breakdown by product groups for some of the largest segments by sale: Logic (US$90.8 billion) Memory (US$77.2 billion) Micro-ICs (US$61.3 billion) Sensors and actuators, NAND flash memory and analog recorded increases of 3.7%, 2.2% and 1.9% on a y-o-y basis. The December month shown a decreased in sales by 5.2% y-o-y and 4.4% decline on a m-o-m basis. The m-o-m decline was attributed to seasonal cyclicality with December typically being a weaker quarter, according to TA Securities report. The World Semiconductor Trade Statistics (WSTS) is expecting a sales growth of 1.4% y-o-y in 2016 although TA Securities is of the view that the f...