AmResearch maintains Buy on WCT

Sunday, July 31, 2011

KUALA LUMPUR: AmResearch has maintained its Buy call on WCT BHD with an unchanged fair value of RM3.85 after the company’s wholly-owned subsidiary WCT CONSTRUCTION Sdn Bhd secured an earthwork contract with Vale Malaysia Manufacturing Sdn Bhd.

In a note Friday, July 29, AmResearch said that this was the first major contract that WCT has secured this year.

The award is for Phase 1A (Stage 1) of Vale’s iron ore distribution centre and pelletisation plant project in Teluk Rubiah, Perak.

The total contract value is estimated at RM115mil – and is to be completed in April 2013. Scope of works includes earthwork, drainage, roads & pavement, slope protection works as well as temporary sedimentation ponds at Vale’s.

“We have maintained our earnings forecast for FY11F – as this new job forms part of our new orderbook assumptions of RM2 billion.

“Most importantly, we believe WCT’s early success would provide the impetus for the group to be in a competitive position to secure more jobs for Vale’s massive project,” it said.

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Stocks to watch Jotech, AIC, AutoV, Chin Teck

KUALA LUMPUR: The local stock market is expected to remain on tenterhooks in the week beginning Monday, Aug 1 on emerging worries of a potential double-dip global recession.

With just days before the US runs out of cash to pay all of its bills, a deadlock in reaching a consensus on the world’s largest economy’s debt ceiling has just about rattled most global markets.

Furthermore, rating agency Moody's put Spain on review for a possible downgrade on Friday, adding to concerns that a Greek rescue package has done little to halt the spread of Europe's debt crisis.

Given the slew of negative newsflow, trading at the local stock market could remain sluggish and the FBM KLCI could well extend its losses after dropping more than 30 points in July.

Meanhile, stocks that could be in focus on Monday are JOTECH HOLDINGS BHD, AIC CORPORATION BHD and AutoV Corporation Bhd, Chin Teck PLANTATIONs and TASEK CORPORATION BHD.

Jotech, AIC Corp and AutoV resume trade following Temasek Formation Sdn Bhd (TFSB), a special purpose company, proposing to acquire their entire interests including assets and liabilities for a total of RM696 million.

TFSB, which is owned by Jotech executive chairman Datuk Goh Tian Chuan, will then merge the companies to create a larger entity.

Under the exercise, the company is offering 18 sen for each Jotech share, RM1.80 for each AIC share and RM2.38 per AutoV share.

Based on the above, the proposed swap ratios are three new TFSB shares for every two existing Jotech shares; 15 new TFSB shares for every 1 existing AIC share and 119 new TFSB shares for every six AutoV shares.

Goh last Friday said the merger would create a larger manufacturing group with diverse customer portfolios in a wide range of industries comprising medical and life sciences, automotive industry, the electrical and electronics industry (including the semiconductor industry).

Chin Teck declared a second gross interim dividend 30 sen per share in respect of the financial year ending Aug 31, to be paid on Aug 26.

Its net profit for the third quarter ended May 31, 2011 surged to RM24.18 million from RM10.89 million a year ago. Revenue for the quarter increased to RM45.04 million from RM29.62 million in 2010.

Tasek could see continued interest after it declared a gross interim dividend of 20 sen per share for FY ending Dec 31, 2011 after its net profit for the second quarter ended June 30, 2011 rose to RM24.21 million from RM23.11 million a year earlier.

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Stocks to watch: Prestariang, Axiata, Uzma, Alam

Wednesday, July 27, 2011

KUALA LUMPUR: Stocks which could see trading interest on Wednesday, July 27 include ICT service provider Prestariang Bhd which will make its debut on the Main Market.

Other stocks to watch include Axiata Group Bhd, UZMA BHD, ALAM MARITIM RESOURCES BHD and Berjaya Food Bhd.

On the eve of its listing, Prestariang announced it had secured an RM80 million contract with the Ministry of Higher Education for an industry based certification scheme.

The programme would be undertaken by its unit Prestariang Systems Sdn Bhd under a contract over four years at RM20 million a year.

The offer price of the shares is 90 sen. Hwang DBS Vickers Research has a fair value of RM1.09 based on sum-of-parts.

According to the research house, Prestariang intends to gradually reduce its dependency on government contracts going forward.

The company plans to expand its product offerings to include more in-house certification programmes, set up sales offices and training centres in three new locations within Malaysia in 2H11, widen clientele base from the Middle East region via partnership arrangements, and develop its own proprietary test and assessment centres with in-house proprietary procedures and systems in 2012.

Meanwhile, Axiata should see trading interest as share overhang has been finally cleared.

TELEKOM MALAYSIA BHD’s unit has placed out 92.36 million Axiata Group Bhd at RM5.07 a share. The exercise raised gross proceeds of RM468.3 million for TM.

Uzma Bhd has secured a RM170 million contract from Petronas Carigali Sdn Bhd to provide integrated equipment and services for idle well reactivation project.

its subsidiary Uzma Engineering Sdn Bhd (UESB) had received the three year contact which would be effective from July 25, 2011 to July 24, 2014.

On project delays, Uzma said the execution of the contract was depending on work orders to be issued by Petronas from time to time.

Alam Maritim’s unit has received a letter of award from Petronas Carigali Sdn Bhd to provide one anchor handling tug supply vessel for RM10.6 million.

The contract started on July 13 and the duration is for a primary period of 150 days with two extension options of 45 days each.

Berjaya Food Bhd is expanding its Kenny Rogers Roasters (KRR) brand into Indonesia after it inked a joint venture (JV) agreement with three Indonesian companies to develop and operate the franchise.

It had entered into a conditional JV agreement with PT Mitra Samaya (MS), PT Harapan Swasti Sentosa (HSS) and PT Boga Lestari Sentosa (PT Boga) to operate the franchise in Java island and Bali, Indonesia under PT Boga.

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RHBInvest Research

Tuesday, July 26, 2011

Top Story: MRCB – A little patience for RRI land Trading Buy

Visit Note

¨ MRCB expects Kwasa Land Sdn Bhd to make some decisions with regards to the RRI land re-development project by the end of the year, with physical works only expected to commence in 2012.

¨ The flow of new construction jobs should improve in 2H2011 and into 2012, underpinned by potential jobs from the LRT line extension project, Penang Sentral and the River of Life project.



Corporate Highlights



TH Plantation: Planting for posterity Outperform

Briefing Note

¨ An interesting point to note from the briefing is that THP achieved an admirable FFB yield at its newly-matured Sarawak estates. Where most other oil palm plantations only achieve an FFB yield of 8-9t/ha in its first full year of maturity, THP managed an FFB yield of 7.6t/ha in just half a year in one of its Sarawak estates. Annualised, this estate could yield about 16t/ha, double that of other oil palm estates in its first year of maturity. This is in line with management’s own targets of achieving an FFB yield of at least 15t/ha for its plantations in the first year of maturity.



Sime Darby: RM43.4m writeback for marine project Outperform

News Update

¨ Sime Darby’s subsidiary has, on 20 Jul, entered into a yard settlement agreement and release agreement with its JV partners for the refund of a cash amount of US$21.63m (RM63.6m) in return for the release of its claims, rights and interests over the Marine Project (involving the construction of two tug boats and a derrick lay barge for the Maersk Oil Qatar (MOQ) project). Of this amount, US$16.63m (RM48.9m) has been received, with the balance US$5m (RM14.7m) payable on 17 Nov, if there are no further claims made. Based on Sime’s announcement, of the refund total of US$21.6m, it will receive up to US$14.75m (RM43.4m), based on its stake.



SP Setia: Full equity interest in KL EcoCity Market Perform

News Update

¨ SP Setia announced that its proposed acquisition of the remaining 40% equity interest in KL Eco City S/B (KLEC) from Yayasan Gerakbakti Kebangsaan (YGK) for a total consideration of RM75m is to be satisfied through the issue of 19.38m new SP Setia shares at RM3.87 per share. KLEC was previously the JV company for the RM6bn KL EcoCity project.



KNM: HOA with GAP for petrochemical facility in Teluk Ramunia Underperform

News Update

¨ KNM announced yesterday that it, together with Zecon has entered into a Heads Of Agreement (HOA) with Gulf Asian Petroleum to undertake EPCC contracts for projects worth around USD5.7bn (RM17bn) in Teluk Ramunia, Johor. The two projects involve a petroleum refinery, a polypropylene unit and petroleum product storage terminal facility with capacity of 2.3m cubic meters).

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Maybank IB Views

Public Bank RM13.36: Hold
Competitive pressures remain

Little excitement. 1H11 results were broadly within expectations, with net profit of RM1.71b (+20% YoY) accounting for 51% of our full-year forecast and 50% of consensus. Our forecasts are maintained with higher NIM contraction estimates offset by lower provisions. Consumer loan demand continues to show resilience at the group but we do expect this to taper off from 2H11 onwards. Pricing is fair at this stage ( (prospective 2012 P/BV of 2.7x, ROE: 23.5%). Hold call and TP of RM14.10 maintained, pegged to a 2012 P/BV of 2.8x.

Axis REIT RM2.62: Buy
Results in line; more acquisitions soon Shariah-compliant

Maintain Buy. AXRB’s RM31.8m 1H11 core net profit (+33% YoY) came in as expected. Its 4.5 sen 2Q11 DPU was also in line. Share price has performed well thanks to a switch in preference to defensive stocks. No change in our earnings forecasts but we raise our TP to RM2.75 (+15 sen) as we roll over our base year to 2012. A lower beta assumption has also contributed to the upgrade in TP. With a 12% total return, AXRB remains as our top pick for the M-REITs sector.

COMPANY UPDATE
S P Setia RM3.92: Buy
Reaping full benefit of KL Eco City Shariah-compliant

An attractive booster to earnings and RNAV. We are excited on SP Setia's purchase of the remaining 40% stake in KL Eco City (KLEC). This non-cash acquisition will immediately boost SPSB's earnings by 0.6-1% and RNAV/sh by 8 sen. All it would cost SP Setia is 19.4m new shares, which is a mere 1.1% increase of its existing share base. We upgrade our forecasts by 0.3-1.9%. Reiterate Buy with a higher RM5.00 target price (+24 sen; 10% premium to RM4.53 RNAV).

RESULTS PREVIEW
Malaysia Airports Holdings RM6.50: Buy
2Q11: Expect good result

Strong momentum continues. MAHB will release its 2Q11 results on 28 July. 2Q is seasonally the weakest quarter for the year. Based on the operating statistics published, we expect a core net profit (less forex translation and all other non-cash items) of RM110.5m (+24.5% YoY, -1.4% QoQ). Maintain Buy, with a higher DCF-based target price of RM7.55, after imputing for a higher passenger growth of 10% in 2011 (previously 8%). Our new TP offers undemanding 15.2x 2012 earnings.

Technicals
The FBM KLCI fell 5.46 points to close at 1,559.60 yesterday. Its resistance areas of 1,559 and 1,574 will cap market gains, whilst the obvious support areas are located at 1,543 and 1,552.

Trading idea today is YTL

Other Local News
KNM: Secure RM17b project with Zecon. KNM Group Bhd and Zecon Bhd have entered into two heads of agreement with Gulf Asian Petroluem Sdn Bhd (GAP) to construct a petroleum refinery and a petroleum product storage terminal facility for a combined contract of RM17b in Teluk Ramunia. (Source: The Edge Financial Daily)

Tan Chong: Sets 20% sales target for Sabah, Sarawak. Edaran Tan Chong Motor Sdn Bhd (ETCM) is eyeing to raise the sales contribution from Sabah and Sarawak to 20% of that nationwide in three years time. Sales in the two states at the moment represented 10 percent of the national total for Nissan vehicles. (Source: The Star)

KPJ: To triple education revenue. KPJ Healthcare Bhd's education arm has been granted university college status by the Higher Education Ministry. KPJ plans to invest RM120m in the physical expansion of its education facilities and hopes to triple revenue from its education unit to RM100m annually from RM30m in 2010. (Source: The Edge Financial Daily)

Ivory: Wins Penang land rights. Ivory Properties Group Berhad (IVORY) won the rights to develop 102.56 acres of land located at Bayan Mutiara, North East District, Penang of which approximately 67.56 acres are existing land and 35 acres are to be reclaimed for a proposed mixed development. (Source: Bursa Malaysia)

Perwaja: Makes cash call to Kinsteel. Debt-laden Perwaja Holdings Bhd is making cash call to its major shareholder Kinsteel Bhd to raise RM280m under a planned restricted issue of redeemable convertible unsecured loan stocks (RCULs). Perwaja is also proposing an issue of free warrants on the basis of one free warrant for every two existing shares held. The gross proceeds will be used to finance the working capital needs of Perwaja. (Source: The Edge Financial Daily)

O&G: Qatar to sell liquefied natural gas to Malaysia. Qatar's state-run Qatargas says it has agreed to sell 1.5m tons of liquefied natural gas annually to Malaysia, locking in its first major customer in Southeast Asia. The company says it signed a preliminary agreement with Malaysia's Petronas LNG on Sunday in the Qatari capital, Doha. The supply deal is expected to start in 2013 and last for two decades. (Source: The Star)

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Bursa down reflecting regional market movements

KUALA LUMPUR: The FBM KLCI continued to dip, with 5.46 points or 0.35% down to 1559.60 today following weaker investor sentiment that also affected the regional market performance.

Leading gainers and losers showed conservative trading. Top gainers were COASTAL-WA, which rose 30 sen to RM0.305, KLK gained 20 sen to RM21.70 while BRDB-WA gaining 19.5 sen to RM0.98.

Top losers were DRBHCOM which slid 33 sen to RM1.95, GENTING which lost 22sen to RM10.50 and SINDORA which dipped 21 sen to RM2.39.

On the local bourse, decliners outpaced advancers by 505 to 203 while 291 other counters were traded unchanged. There were 857.4 million shares done with a total turnover of RM1361.27 million.

Regional bourses closed weaker as well. Tokyo's Nikkei 225 fell 0.81% to 10050.01 and Hong Kong's Hang Seng Index was down 0.68% to 22293.29.

Shanghai's A index was down 2.96% to 2688.75, Taiwan's Taeix Index fell 0.93% to 8683.51 while Seoul's Kospi Index dropped 0.96% to 2150.48. Singapore's Straits Times Index slid 0.40% to 3170.09.

Nymex crude oil lost 64 cents to US$99.23 per barrel. Spot gold gained US$17.58 to US$1,618.91 per ounce while silver rose US$0.79 to US$40.87. The ringgit was quoted at 2.9729 to the US dollar and 4.2719 to the euro.

source: thestar

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RHBInvest Research

Corporate Highlights


KFC: India on track Market Perform

Visit Note

¨ KFCH currently has nine outlets in India , with 3-4 more outlets currently in the advanced stages of construction. It targets to have 17 outlets by the end of the year, which is broadly in line with our assumptions of 16 stores by end-FY11.

¨ KFCH College currently has two campuses, with the first campus in Puchong, while a new campus in Bandar Dato’ Onn, Johor, was launched in April. The Johor campus is only at its first phase, which has a total capacity of 2,000 students and currently has ~400 students enrolled. There will be two more phases of construction for its Johor campus, which are expected to be completed by 2015, which will bring total intake capacity to 12,000 students p.a..





Hiap Teck: Placement shares to Shougang fixed at RM1.00 Underperform

News Update

¨ Hiap Teck has proposed to place out 32.2m shares to Shougang International ( Singapore ) Pte Ltd at an issue price of RM1.00.

¨ Hiap Teck also announced that Shougang International will acquire a 40%-stake in Eastern Steel Sdn Bhd currently held by Dato’ Law Tien Seng, with an option to increase by another 30% to 70% once the blast furnace project reaches an annual capacity of 1.5m tonnes of slab and 0.7m tonnes of coke.



Quill Capita Trust: DPU on track to meet forecast Market Perform

2QFY11 Results

¨ Quill Capita’s (QC) 2Q11 realised net income of RM9.2m came in within our expectation but was 7.1% below consensus estimates. Sequential gross revenue growth was rather flattish at only +0.6%, but bottom-line improved significantly largely due to lower operating expenses incurred during the quarter. An interim DPU of 4 sen was declared, as compared to 3.85 sen last year. This is on track to meet our FY11 DPU forecast of 8.4 sen.

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Maybank IB Views

Monday, July 25, 2011

Rubber Gloves: Neutral
YTY: Still single and available

Glove-makers to reconsider YTY? YTY has rejected Latexx Partner's (Latexx) offer to merge their businesses. Given its strong nitrile capacity, YTY continues to appeal to the bigger glove producers (i.e. Top Glove, Hartalega) and private equity funds. With the Latexx-YTY deal off, we believe the bigger glove-makers will take a relook at YTY for the overnight capacity/earnings enhancement and longer-term value creation potential. While pricing can be the deterrent, it is still earnings accretive. We believe M&A play in the sector is not over yet.

RESULTS REVIEW
Quill Capita Trust RM1.09: Hold
First half on track

Maintain Hold. QCT's RM16.9m 1H11 net profit (+6.8% YoY) came in as expected. 4 sen DPU was also in line. Despite the over-supply outlook in the office segment, we maintain our Hold rating given: 1) its decent 7.9% yield (8% sector), 2) prudent and active asset management, and 3) 61% of its office NLA being located in Cyberjaya, which has no oversupply vs. KL city centre. No change in our forecasts.

Technicals
The FBM KLCI lost 12.19-points and closed at 1,565.06 last Friday. The weaker support areas for the FBM KLCI are located in the 1,525 to 1,552-zone. The next resistance levels of 1,566 and 1,597 will see heavy selling and liquidation activities.

Trading Idea is Yinson

Other Local News
Proton: To spend RM100m on R&D yearly. Proton Holdings Bhd is allocating between RM90m and RM100m to the research and development activities (R&D) yearly to ensure it remains competitive in the automotive industry. (Source: The Star)

Sime Darby: Expects crop production to increase by 6%. Sime Darby Plantation Bhd expects its crop production to increase by 6% in the financial year ended June 30, 2011 as compared to the previous financial year as the cyclical down trend of the oil palm has ended. (Source: The Star)

CIH: To distribute up to 90% of Permanis sale proceeds. CI Holdings Bhd (CIH) is looking at distributing no less than half of the RM820m proceeds from the sale of its bottling unit Permanis Sdn Bhd to Asahi Group Holdings Ltd. (Source: The Edge Financial Daily)

Eng Teknologi: Receives RM307m privatisation offer. Eng Teknologi Holdings Bhd's major shareholders has made an offer via investment vehicle TYK Capital Sdn Bhd to take the company private at an indicative offer price of RM2.50 per share or RM307.2m. (Source: Bursa Malaysia)

Property: RM150m in deals sealed at Penang property fair. About RM150m worth of property has been sold or booked at the Star Property Fair 2011, reflecting optimism in the property market here. The number of registrations and buyers had also exceeded expectations. (Source: The Star)

Read more...

New ContiComfortContact CC5 - RM200 per tyre

Sunday, July 24, 2011



I already changed 4 tires for my toyota car which total cost me at RM800.00. The replacement of new tires already included balancing and alignment work.

I changed it at Jalan Kapar Klang.

Now the problem is the alignment. Already went to 2 workshop to do alignment work but until now still not good. Not sure what is the root cause. But not because of the new tires.

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RHBInvest Research

Friday, July 22, 2011

Top Story: TNB – Badly burned by massive oil and distillate fuel costs Market Perform (down from OP)

3QFY11 Results / Briefing Note

¨ Excluding forex gains of RM102m, TNB’s 9MFY11 results were below expectations with core net profit of RM801m (-62.4% yoy) accounting for 36% and 33% of our and consensus FY11 net profit estimates respectively. TNB recorded a RM460m loss in 3QFY11, due to significantly higher oil and distillate fuel costs arising from gas supply disruption.



Corporate Highlights



CI Holdings: Selling Permanis to Asahi for RM820m Trading Buy

News Update

¨ CIH announced that it has entered into a conditional share sale agreement for the disposal of its entire equity interest in Permanis to Asahi for RM820m in cash

¨ Post-disposal of Permanis, CIH would be left with only its tap-ware and sanitary ware business (under Doe Industries). As management has stated its intention to maintain CIH’s listing status, CIH would need to acquire a new core business and/or distribute some of the cash proceeds to shareholders to avoid becoming a PN16 (cash) company, given Doe’s small asset base and profit contribution



SEGi: INVITE-ing more foreign students Outperform

News Update

¨ SEGi has been appointed by the Government as Project Leader for a new initiative – SkillsMalaysia International Technical Education & Vocational Training Programme, which is expected to begin in 2012.

¨ The objective of SkillsMalaysia INVITE is to create and provide a new dimension of learning skills to non-academically inclined foreign school leavers and adult learners to pursue their training in Malaysia. Upon completion of the programme, the trainees will be awarded an internationally recognised qualification from UK or Australia, as well as certification from the Malaysian Government.



AirAsia: To set up a low-cost carrier in Japan Market Perform

News Update

¨ AirAsia is setting up a low-cost carrier in Japan via a 49:51 JV called AirAsia Japan Co Ltd with All Nippon Airways Co Ltd (ANA).

¨ The new airline is expected to take to the skies in Aug 2012, with a fleet of 3-4 A320 aircraft by the end of its first year of operations.



Hiap Teck: China Shougang roped in as contractor for blast furnace and shareholder Underperform

News Update

¨ Eastern Steel Sdn Bhd, a 55%-owned subsidiary of Hiap Teck, has entered into an EPC contract worth approximately RM650m with China Shougang International Trade and Engineering Corporation.

¨ A supplement agreement was also entered into where Hiap Teck will issue 32.2m new shares (9.8% of current share base) to China Shougang at an agreed price. China Shougang has the right to terminate the EPC contract if the shares are not issued by 30 November 2011.



VS Industry: Fully focus on EMS Overweight

Company Update

¨ VSI had announced on 19 Jul the disposal of its 53%-owned subsidiary, PT. GY Plantation Indonesia (PGP) for US$4.1m to PT Karya Manunggal Sawitindo. In addition, PGP will also sell a 6,450 ha piece of land (undeveloped) to PT Bumitama Gunajaya Agro for US$2.2m, which will flow to PGP’s existing shareholders (VSI’s portion amounts to US$1.2m). In total, VSI will receive US$5.3m (RM16.1m) from the abovementioned transactions, which management has earmarked for working capital.

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Tenaga, Petronas-linked stocks weigh on FBM KLCI

KUALA LUMPUR: The FBM KLCI remained in negative territory at the mid-day break on Friday, July 22 as TENAGA NASIONAL BHD and Petronas-linked counters weighed on the index.

Regional markets, however, displayed better investor sentiment on the back of European leaders agreeing on a package to rescue debt-stricken Greece, and on hopes that US policymakers also manage to cobble together a last minute deal.

The FBM KLCI shed 2.65 points to 1,563.16, with losses at Tenaga alone shaving off 3.89 points off the benchmark index.

Given the overall regional sentiment, gainers led losers by 321 to 244, while 304 counters traded unchanged. Volume was 652.04 million shares valued at RM894.67 million.

The ringgit strengthened 0.46% to 2.9825 versus the US dollar; crude palm oil futures for the third month delivery rose RM7 per tonne to RM3,137, crude oil added 32 cents per barrel to US$99.45 while gold fell US$1.65 an ounce to US$1,589.05.

At the regional markets, Hong Kong’s Hang Seng Index jumped 1.69% to 22,358.05, Japan’s Nikkei 225 added 1.13% to 10,123.46, Singapore’s Straits Times Index rose 0.94% to 3,168.08, South Korea’s Kospi up 0.93% to 2,164.94, Taiwan’s Taiex gained 0.66% to 8,774.45 and the Shanghai Composite Index edged up 0.45% to 2,778.40.

Tenaga, which was hit by higher operating expenses, posted a net loss of RM440.2 million in its third quarter ended May 31, 2011 from net profit RM1.11 billion a year earlier, fell 31 sen to RM6.21.

Among the Petronas-linked counters, Petronas Dagangan lost 26 sen to RM17.82, while Petronas Chemicals and Petronas Gas fell two sen each to RM7.07 and RM13.48.

Other decliners included United PLANTATION []s that fell 40 sen to RM20, Sindora and UMS 15 sen each to RM2.59 and RM1.63, Far East 10 sen to RM7.10, while LPI Capital, Selangor Dredging and F&N fell eight sen each to RM13.70, 76 sen and RM19.52 respectively.

Among the gainers, CI Holdings rose 49 sen to RM4.57 after the company said it was set to record gains of RM677.10 million from the sale of its bottling unit, Permanis Sdn Bhd to Asahi Group Holdings Ltd for RM820 million.

Other gainers included BAT and Tasek up 22 sen each to RM46.42 and RM8.10, Cypark 20 sen to RM2.28, QSR 19 sen to RM6.21, S P Setia and Bursa 16 sen each to RM3.91 and RM8.02, KLK 14 sen to RM21.48 and AFG 13 sen to RM3.78.

Meanwhile, the actives included Ingenuity Solutions, Bumi Armada, Jotech, Key West and newly-listed Catcha Media.

Read more...

Maybank IB Views

Tenaga Nasional RM6.52: Hold
Still not out of the woods yet Shariah-compliant

Worst quarter ever. RM786m 9MFY11 core net profit (-68% YoY) was 53% of our full-year forecast and 38% of consensus. 3QFY11 was exceptionally weak due to shutdowns of natural gas facilities for repairs, high coal price and extra cost incurred by burning oil and distillates. We have lowered our FY11-13 earnings forecasts to take into account this quarter's results and changes to revenue and cost assumptions. Maintain Hold, with a lower TP of RM6.60 (from RM7.05) based on unchanged 13x FY12 PER.

British American Tobacco RM46.20: Sell
Gloom-soaked cigarette

Cautious mode persists. 1H11 net profit accounted for 48% and 50% of our and consensus full-year forecasts respectively. We maintain our Sell call on BAT (RM42.50 DCF-based target price) due to declining sales volume and exacerbated by weaker margins. Valuation, at 17.5x 2011 PER, appears pricey relative to its lackluster earnings growth (2.5% 3-year forward net profit CAGR).

TH Plantations RM2.10: Buy
Strong production recovery in 2Q Shariah-compliant

No earnings surprises. 1H11 net profit accounted for 49% of our full-year estimate, and are within consensus expectations. THP’s current valuation at 9.3x 2011 PER offers a good buying opportunity as it trades at a 41% discount to industry peers’ average of 15.8x. This is further supported by attractive net dividend yields of 5.5%. We reiterate our Buy call with an unchanged TP of RM2.50 (11x 2012 PER).

Technicals
The FBM KLCI rose 3.22 points to close at 1,565.81 yesterday. Its resistance areas of 1,569 and 1,580 will cap market gains, whilst the obvious support areas are located at 1,552 and 1,565.

Trading idea is TENAGA

Other Local News
MAS: Sees no need to raise cash. Malaysian Airline Systems Bhd (MAS) sees no need to raise capital against a backdrop of weakening travel demand. Poor quarterly results have raised concern over cash depletion at the national carrier, which is expecting at least four more aircraft to be delivered this year. (Source: The Edge Financial Daily)

AirAsia: Expands in Japan. AirAsia Bhd has tied up with All Nippon Airways Group (ANA) to form AirAsia Japan Co Ltd. AirAsia will hold 49% stake in AirAsia Japan, which will be the first low-cost carrier (LCC) to be based at the Narita International Airport. (Source: The Edge Financial Daily)

TM: The latest MVNO? Telekom Malaysia Bhd may be the latest player in the MVNO (mobile virtual network operator) space. It has signed a MoU with Celcom Axiata Bhd to cooperate strategically in providing complete fixed and mobile solutions. (Source: The Edge Financial Daily)

CI Holdings: Asahi buys Permanis for RM820m. CI Holdings Bhd (CIH) is selling its entire 70m shares in Permanis Sdn Bhd to Japan's Asahi Group Holdings Ltd for RM820m in cash. CIH is making a net gain of RM677.1m from the disposal based on its audited financial statements for the financial year ended June 30 2010. Permanis is PepsiCo Inc's bottler in the country. (Source: Business Times)

Hiap Teck: Unit in steel mill deal. Hiap Teck Ventures Bhd’s 55% owned subsidiary Eastern Steel Sdn Bhd has entered into an engineering and procurement contract and a construction contract with China Shougang International Trade and Engineering Corp for the design, procurement and construction of the first phase of an integrated steel mill in Teluk Kalung, Kemaman, Terengganu. The contract value for the engineering and procurement contract is RM417.83m, while the construction contract is RM232m. (Source: The Star)

Kurnia Asia: Gets nod to start acquisitions talk. Kurnia Asia Bhd (KAB) has received the green light from Bank Negara to commence preliminary negotiations with relevant interested parties for the acquisition of an equity stake in its wholly owned subsidiary, Kurnia Insurans (M) Bhd (KIMB). (Source: The Star)

Read more...

RHBInvest Research

Digi: Benefits from rebound in voice Trading Buy

2QFY11 Results / Briefing Note

¨ 1HFY11 net profit of RM567.7m (+2% yoy) was in line with expectations, accounting for 50-52% of our and consensus full-year estimates.

¨ QoQ, revenue grew 2.6% due to stronger data (+6.1%), as well as a rebound in prepaid (+2.9%) and postpaid (+2.2%) voice. EBITDA margin was stable at 45.8% (1QFY11: 45.9%). Net profit, however, dropped 28.7% qoq mainly due to the RM145.5m accelerated depreciation booked in 2Q (if stripped out, net profit grew 15.2% qoq).

¨ DiGi declared its 2nd interim single-tier DPS of 30 sen, i.e. payout ratio of 99% (in line with net payout ratio assumption of 100% in FY11, as guided by management).

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Maybank IB Views

Wednesday, July 20, 2011

Star Publications (Malaysia) RM3.41: Hold
Seeking inspiration in Life Inspired Shariah-compliant

Another lukewarm investment. Star will invest RM35m for 51% of Li TV Holdings Limited. Li TV owns and operates Li, Life Inspired, a pan-Asian lifestyle TV channel. It is loss making but is not expected to materially impact Star's earnings. While we are encouraged that Star is continuing to diversify its media assets, it remains to be seen if Li TV can contribute meaningfully going forward. Maintain Hold.

Technicals
The FBM KLCI fell 6.94 points to close at 1,555.64 yesterday. Its resistance areas of 1,555 and 1,574 will cap market gains, whilst the much weaker support areas are located at 1,540 and 1,552. The FBM KLCI stalled at its previous all-time high of 1,576.95 on 6 Jan 2011.

Trading idea today is Dialog

Other Local News
Maybank: Islamic signs MoU with Bank Syariah Mandiri. Maybank Islamic has signed a MoU with Bank Syariah Mandiri (BSM), Indonesia, to establish cross-border collaboration in all Islamic treasury and trade finance matters. The collaboration would enhance cross-border liquidity flows and increase and diversify the application of Islamic financial solutions. (Source: The Edge Financial Daily)

Inari: Gains 6.5 sen on debut. Inari Bhd made its debut on the ACE Market of Bursa Malaysia yesterday, closing 6.5 sen higher than its issue price of 38 sen. Inari expects its fourth new plant, costing RM25m in the Free Industrial Zone in Bayan Lepas, Penang, to increase its revenue by 25% to 30% when the plant is operational by March next year. (Source: The Star)

Iskandar: Another British varsity. Britain's University of Reading Business School is setting up a branch campus in EduCity in Iskandar Malaysia, Johor, for between RM150m and RM200m. To be known as University of Reading Iskandar, construction is due to start next year. (Source: Business Times)

Property: Sagajuta eyes year-end listing. Sagajuta (Sabah) Sdn Bhd hopes to complete its backdoor listing by year-end, to turn the company into a bigger real estate firm. Sagajuta is behind the RM1.2b 1Borneo project in Kota Kinabalu. Sagajuta is planning to buy more land in Sabah, Klang Valley, Penang and Johor to enable it to undertake development projects worth more than RM3b at any one time. (Source: Business Times)

Property: Sapura Resources in KLCC development. Sapura Resources Bhd has proposed a joint venture with KLCC (Holdings) Sdn Bhd (KLCCH), a wholly owned subsidiary of Petronas, to establish a commercial development on a piece of land in KL. The land measuring 7,605sqm will comprise an office tower, convention centre and retail podium. (Source: The Edge Financial Daily)

Read more...

Eng Tek resumes upward trend on privatisation hopes

KUALA LUMPUR: Shares of ENG TEKNOLOGI HOLDINGS BHD [] resumed their upward trend again on Wednesday, July 20 as buyers pinned their hopes on a possible privatisation of the hard-disk drive manufacturer.

At 4.09pm, it was up 17 sen to RM2.16 with 2.14 million shares done.

The FBM KLCI rose 7.48 points to 1,563.12. Turnover was 640.62 million shares valued at RM959.35 million. There were 403 gainers, 295 losers and 309 stocks unchanged.

To recap, on Monday HwangBDS Investment Bank announced on behalf of Eng Teknologi that certain major shareholders of the company were in privatisation discussions.

However, the company had not received any definitive proposal.

The Edge FinancialDaily reported on Tuesday that the privatisation ncould send a signal that the hard disk drive (HDD) sector may finally be poised for a turnaround.

The increasing merger and acquisition interest suggests that there is value to be found among the country’s HDD component manufacturers, many of which are trading at low valuations after a major sell-off.

Read more...

RHBInvest Research

Top Story: Perwaja – Cost savings from its concentration and pelletisation plant Underperform

Visit Note

¨ Business condition for Perwaja remains weak and it will likely to record losses again in 2Q11 due to high feedstock costs amid stagnating steel prices.



Kinsteel: Dragged down by Perwaja Underperform

Visit Note

¨ Margins for Kinsteel have not been materially affected by the recent hike in electricity and natural gas tariffs as electricity only constitutes 3% of its cost of production, while natural gas used in the reheating process of steel billets is very minimal.



Corporate Highlights



UMW: Introduction to the CEO Market Perform

Briefing Note

¨ UMW hosted a “Meet the President and CEO” session recently. It was Group CEO Datuk Syed Hisham’s first engagement with the investor community since his appointment nine months ago.

¨ Management confirmed that component supply constraints arising from the Japan earthquake have begun to abate. Local assembly has normalised at both UMW-Toyota and Perodua with production to be ramped higher in 2H11.



Star Publications: Gains exposure to TV media Market Perform

News Update

¨ Star yesterday announced it will invest RM35m to acquire a 51% equity stake in Hong Kong-based LI TV Holdings, while Juita Viden International will hold the remaining 49% interest.

¨ LI TV owns and operates Li (Life Inspired), a High Definition (HD) pan-regional lifestyle TV channel.

Read more...

Stocks to watch: Mitrajaya, CIMB, Ajiya, Unico

KUALA LUMPUR: After two days of foreign selling on the local stock market, which saw the FBM KLCI declining a cumulative 21.6 points as of Tuesday, July 19, investors could generally stay on the sidelines on Wednesday.

As of Tuesday, there was a dearth of strong corporate news to excite investors and to underpin market sentiment.

Attempts to prop up the FBM KLCI failed on Tuesday, with the 30-stock index falling 6.94 points to 1,555.64 towards the close. The selling was not very heavy in terms of volume but what was evident was the stocks affected were those held by foreign funds like KLK, DiGi and CIMB.

Perhaps stocks to watch include MITRAJAYA HOLDINGS BHD [], CIMB Group Bhd, AJIYA BHD [], Unico Desa PLANTATION []s Bhd and SCOMI GROUP BHD [].

Mitrajaya secured a RM13.51 million contract to build a freshwater laboratory complex at Tasik Chini in Pekan, Pahang.

Its unit Pembinaan Mitrajaya Sdn Bhd accepted the letter of acceptance of contract from the East Coast Economic Region Development Council to build phase one of the laboratory.

CIMB Thai Bank Public Company Ltd posted net profit of 536.4 million baht (RM54 million) in the first half ended June 30, 2011.

Total operating income was 3.2 billion baht, underpinned by net interest income and fee and service income.

CIMB Thai Bank president and chief executive officer Subhak Siwaraksa said the group operating results for 1H showed a 24.9% decline in net profit to 536.4 million baht, from 714.0 million a year ago.

However, he explained in 2010, there was special revenue recognised including gains from disposal of Sathorn building in 1Q2010 and CIMB-Principal Asset Management in 2Q10.

“Should we exclude these items, profit should increase 160%,” he said.

The US State Department has lifted the sanctions which were imposed on Scomi Group Bhd group chief executive officer Shah Hakim Zain, with effect from July 18, Monday.

Ajiya’s net profit for the second quarter ended May 31, 2011 rose 13.68% to RM7.23 million from RM6.36 million a year earlier on the back of a higher turnover for the period.

Its revenue rose 15.5% to RM100.95 million from RM87.39 million in 2010, due mainly to better market sentiment. Earnings per share were 10.41 sen, while net assets per share were RM2.95.

For the six months ended May 31, however, Ajiya’s net profit fell to RM10.55 million from RM12.01 million despite posting revenue RM181.72 million compared to RM164.04 million a year earlier.

UNICO-DESA PLANTATIONS BHD [] has proposed to distribute shares in its unit ELK-Desa Resources to all shareholders on a one-for-10 basis under a corporate exercise which would involve in the listing of ELK-Desa.

Unico-Desa said on Tuesday, July 19 it had also proposed a restricted offer for sale of the remaining shares in ELK-Desa after the proposed distribution.

It also proposed to list ELK-Desa on the Main Market of Bursa Securities.

“The proposed distribution would involve a distribution of approximately 86.506 million ELK-Desa Resources shares representing approximately 86.51% equity interest in ELK-Desa Resources to Unico-Desa shareholders,” it said.

SALCON BHD [] has decided not to go ahead with its proposed water supply scheme in West Java, Indonesia.

Its unit Salcon Engineering Bhd decided not to proceed with the project after the detailed studies and discussions for the scheme for Kecamatan Cikarang Barat and Citibung in Kabupaten Bekasi.

Read more...

Stocks to watch: IOI Corp, UOA REIT, MAHB, SP Setia

Sunday, July 17, 2011

KUALA LUMPUR: Stocks on Bursa Malaysia may see more downside pressure in the week ahead, starting July 18 due to external headwinds, mainly from the US.

On Wall Street, US stocks ended the week lower. For the week, the S&P 500 ended down 2.1%, while the Dow lost 1.4% and the Nasdaq fell 2.5%.

Mounting uncertainty about the government's ability to reach a debt-reduction deal may keep investors at bay in the coming week, Reuters reported.

Next week's U.S. data including the Philadelphia Fed survey would provide a crucial update on the state of the world's biggest economy after a disappointing set of data in recent weeks, especially last week's monthly jobs report, it said.

At Bursa Malaysia, the FBM KLCI fell 17.49 points to 1,577.25 from the week before while the marker capitalisation was reduced by RM14.07 billion to RM1.342 trillion.

Year-to-date, the KLCI is up 3.84%, making it the fifth best performing market in the key regional markets. At 1,577, the KLCI is trading at a trailing price-to-earnings of 16.82 times.

Two companies which are due to be listed in the week ahead are Inarai Bhd and Catcha Media Bhd.

Inari Bhd posted net profit RM2.6 million for the third quarter ended March 31, 2011 on the back of revenue RM35.8 million. For the nine months ended March 31, the company’s net profit was RM14.7 million on the back of revenue RM77 million.

Catcha Media reported that in the first quarter ended March 31, 2011, it recorded revenue and pre-tax profit of about RM5.728 million and about RM12,000 respectively.

It said the pre-tax profit was mainly due to the lower revenue achieved in the current quarter as a result of the seasonality associated with media business, significant increase in headcounts and associated payroll expenses in both publishing and online media business in anticipation of the growth of revenue in the future as well as the listing expenses incurred in the current quarter under review.

Stocks to watch on Monday include IOI Corp Bhd. UOA Real Estate Investment Trust (UOA REIT), Malaysia Airports Holdings Bhd (MAHB) and SP SETIA BHD [].

The Edge weekly reports executive chairman Tan Sri Lee Shin Cheng as saying that going by its present growth rate, the company's property business could grow to three times its present size and become a distinct and substantial core business for the group.

UOA REIT’s net profit rose 62% to RM10.68 million in the second quarter ended June 30, 2011, from RM6.59 million a year ago.

Its revenue increased by 88% to RM20.28 million from RM10.78 million. Earnings per share were 2.53 sen compared with 2.68 sen.

MAHB’s decision not to install aerobridges at the new Low Cost Carrier Terminal, or KLIA 2, will save the company up to RM104 million.

Its chairman Tan Sri Aris Othman said the amount was for 80 aerobridges, costing RM1.3 million each. Although aerobridges could provide convenience, it would be a waste if airlines would not use it.

SP Setia share price closed 12 sen lower to RM3.89 on Friday after hitting an intra-day low of RM3.84 the lowest since early March as analysts downgraded it to underperform.

CLSA Asia-Pacific Research had downgraded SP Setia to Underperform from Outperform with a revised target price of RM4.30, based on a 10% discount to RNAV of RM4.80. It said this was in line with the discount applied to other property names under its coverage.

“Given that SP Setia is a pure property developer play, we believe that the 10% discount is justified from zero discount previously. We do not see any compelling reason for SP Setia to be valued at a premium compared to the rest of the property companies given that the visibility of the physical property market has been reduced by the mixed signals,” it said.

However, CLSA said it did not change its earnings estimates for FY11 and FY12 as these will continue to be supported by the strong unbilled sales recorded at RM1.8billion as at FY10, which had subsequently increased to RM3billion as at H111.

“For FY13 earnings estimates, we see potential downside risk if the mixed signals above tilted towards more negative outlook. Another potential headwind could be the change in government policy in tightening the lending requirement, which at this stage, still unclear as it remains at the proposal stage,” it said.

Read more...

Maybank IB Views

Friday, July 15, 2011

Malaysia: MIER Quarterly Indices
"Circumspect" is the word...

MIER releases 2Q2011 Consumer Sentiment Index (CSI) and Business Conditions Index (BCI). CSI recorded another quarter of decline (-0.3pt QoQ to 107.9), BCI posted another quarter of rise (+0.7pt QoQ to 114.0) as inflation dampen consumers amid external risks and domestic opportunities facing businesses. In addition, the expectations sub-index for both CSI and BCI were down 0.5pt and 16.1pts respectively. Overall, the indices point to further moderation in 2Q 2011 real GDP growth, with continued caution ahead.

SECTOR UPDATE
Oil & Gas: Overweight
Tide is turning

Domestic OSV market entering calmer waters. We upgrade the Offshore Service Vessels (OSV) segment to Neutral following a 8-37% correction in share price YTD. Operationally, we opine the worst is over for the sector and prospects are set to improve, albeit at a gradual pace over the next 24 months. Stocks wise, we have upgraded Alam, TOFF and Perdana Petroleum to a Hold (from Sell previously).

Technicals
The FBM KLCI inched lower by 0.83 points to close at 1,579.84 yesterday. Its resistance areas of 1,579 and 1,597 will cap market gains, whilst the weaker support areas are located at 1,560 and 1,574.

Trading Idea is a Take Profit call on Muhibah

Other Local News
Dialog: Buys 51% stake in Indian Company. Dialog Group’s unit is paying RM7.88m for a 51% stake in India-based outsourcing company Anewa Engineering Pte Ltd to further boost its engineering capabilities and talent pool. The investment provides access to new customers, including those in the Middle East and India. (Source: The Edge Financial Daily)

AirAsia: Tie-up with ANA likely. AirAsia is likely to have a joint venture with Japan's largest carrier - All Nippon Airways (ANA) - to set up a low cost airline likely to be called AirAsia Japan. The LCC will serve the domestic market and eventually regional markets. (Source: The Star)

DiGi: Set to seal two MVNO deals. DiGi.Com Bhd is expected to announce two mobile virtual network operator (MVNO) deals in the second half of the year. (Source: Business Times)

Tradewinds Plantation: Gets nod to buy Mardec for RM140m. Tradewinds Plantation Bhd has received the green light from its shareholders to acquire rubber processor Mardec Bhd for RM140m cash. The acquisition was part of Tradewinds Plantations' strategy to expand its rubber business into downstream activities, complementing its existing rubber plantation operations. (Source: The Star)

Oriental Pearl Harbour: Close to RM4.5b UAE port deal. Oriental Pearl Harbour Sdn Bhd (OPH), which is bidding for the privatisation of the Penang Port, is on the verge of concluding a contract to manage and operate a port in the Middle East in a deal estimated to be worth more than USD1.5b (about RM4.5b). (Source: The Malaysian Reserve)

Read more...

RHBInvest Research

Sector Call



Telecom: Assessing upside on the 6% service tax issue Overweight (up from N)

Axiata: Fair value raised to RM6.00 (from RM5.75) Outperform

Digi: Fair value raised to RM34.00 (from RM30.00) Trading Buy (up from MP)

Read more...

Maybank IB Views

Tuesday, July 12, 2011

Plantation: Neutral
June's inventory surpassed 2m tonnes

Inventory at 18 month high. Malaysia's palm oil inventory rose 41.1% YoY to 2.05m tonnes (6.8% MoM) on yet another record June's production (1.75m tonnes; +0.7% MoM, +23.5% YoY). However, the higher production was offset by growth in exports at 1.58m tonnes (+12.4% MoM, +9.5% YoY). June’s inventory level is within market's expectation. Maintain Neutral on the sector. KL Kepong (Buy) and TSH Resources (Buy) are currently our top picks among the large caps and mid caps in the sector.

ECONOMICS
Industrial Production Index (IPI), May '11
Temporary Decline...

Industrial production (IP) growth in May '11 fell deeper into the red as it contracted by -5.1% YoY (revised Apr '11: -1.7% YoY; Maybank IB: -3.3% YoY; Consensus: -2.7% YoY). MoM, overall production dipped by -1.3% following a revised -7.2% drop in the preceding month. YTD, production was up marginally at +0.2% YoY (2010: +7.3% YoY). Mining output was the main culprit. For the second month in a row, mining output was the biggest drag on IP.

Technicals
The FBM KLCI fell 6.16 points to close at 1,588.58 yesterday. Its resistance areas of 1,588 and 1,597 will cap market gains, whilst the weaker support areas are located at 1,576 and 1,584. Due to the US markets’ weaker tone last night; we will see some profit taking and liquidation activities in the local bourse today.

Trading idea is a Short-Term Buy on MUDA.

Other Local News
SapuraCrest, Kencana: Proposal to merge. Integral Key Sdn Bhd (IKSB), a special purpose vehicle, has made an RM11.85b offer to acquire SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd. Received on Monday, July 11 offer letters from IKSB to acquire all their assets and liabilities in a share swap. IKSB offered to acquire SapuraCrest for RM5.87b equivalent to RM4.60 per share and Kencana was offered RM5.98b or RM3 per share. The offer shall remain open for acceptance until 5pm on Aug 15. (Source: Bursa Malaysia)

Tenaga: To implement new tariff in Sabah from July 15. The new tariff structure is also to promote efficient utilisation of electricity by the consumers. In this restructuring also, the tariff for Federal Territory of Labuan will be realigned to mainland Sabah since Federal Territory of Labuan is supplied from the Sabah network system, and more appropriate to be subjected to Sabah's cost of supply structure rather than that of Peninsular Malaysia. (Source: Bursa Malaysia)

KPJ: Inks JV to set up specialist hospital in Perlis. KPJ Healthcare Bhd has inked a joint venture agreement with Yayasan Islam Perlis (YIP) to set up and operate a new hospital to be known as KPJ Perlis Specialist Hospital. It said the JV would operate under the name Perlis Specialist Hospital Sdn Bhd, of which KPJSB would hold 60% equity interest while YIP would hold the remaining 40%. (Source: Bursa Malaysia)

E&O: Sells building, land on Penang island for RM134m. Eastern and Oriental Bhd (E&O) is expected record about RM66m in profit from the sale of a building and freehold land in Tanjong Tokong on Penang island for RM134m cash, if based on the building and land costs totalling RM67.7m. its unit had entered into a sale and purchase agreement Soaring Profit Sdn Bhd to sell the 27,743.7 sq m of land and building with 269,418 sq ft of gross floor area and 1,042 car park bays. (Source: Bursa Malaysia)

Silk Holdings: secured four long term contracts worth RM39.75m from Petronas Carigali Sdn Bhd for the provision four units of anchor handling tug supply vessel (AHTS). The contracts for the four units of AHTSV were for the primary period of one year, with various effective commencement dates in July 2011 respectively, with options to extend for a further period of one year each. (Source: Bursa Malaysia)

Read more...

RHBInvest Research

Top Story: Plantation – CPO stocks cross the 2m tonne mark Neutral

Sector Update

¨ Malaysia’s CPO production was relatively flat on a mom basis in June, rising just 0.7% mom, while exports rose by a larger 12.4% mom. On a yoy basis however, the recovery was very much stronger, as production rose by 23.5% yoy, while exports rose by 9.5% yoy. Despite the smaller mom increase in production vis-à-vis exports, closing CPO stock levels rose 6.8% mom to 2.05m tonnes in Jun (from 1.92m tonnes in May)s



Sector Call



Oil & Gas: A merger of two giants Overweight

Sector Update

¨ Sapuracrest and Kencana announced yesterday that Integral Key Sdn Bhd (IKSB), a special purpose company, has made an offer to merge the two companies via an acquisition of their entire businesses and undertakings for RM5.9bn and RM6.0bn respectively. The proposal involves: 1) share swap of Sapuracrest and Kencana shares into new IKSB shares; and 2) cash payments. The offer is open until 15 Aug.



Utilities: No immediate catalysts Neutral

Sector Update

¨ Despite a volatile political landscape, the Government has pressed ahead with two out of three industry reforms: 1) reduction of subsidies for natural gas; and 2) a formal fuel cost pass-through (FCPT) formula.

¨ With these factors already largely priced into TNB’s stock price, we believe the market is watching closely the trend of coal prices and the implementation of the FCPT formula.



Corporate Highlights



KFC Holdings: Buying land in Bandar Dato’ Onn for RM9.1m Market Perform

News Update

¨ KFCH announced that it has entered into a SPA with JLand for the purchase of a piece of freehold vacant commercial land measuring 135k sf located within Bandar Dato’ Onn, Johor, for RM9.17m which translates to RM68 psf.

Read more...

Tenaga to implement new tariff in Sabah from July 15

KUALA LUMPUR: TENAGA NASIONAL BHD’s unit Sabah Electicity Sdn Bhd will impose the new electricity tariff structure in Sabah and the Federal Territory of Labuan with effect from July 15, 2011.

In a filing Monday, July 11, Tenaga said the new tariff structure was to promote efficient utilisation of electricity by the consumers, adding that it had minimal impact on lower income households and small businesses.

“In this restructuring also, the tariff for Federal Territory of Labuan will be realigned to mainland Sabah since Federal Territory of Labuan is supplied from the Sabah network system, and more appropriate to be subjected to Sabah’s cost of supply structure rather than that of Peninsular Malaysia,” it said.

Tenaga said 75% of domestic consumers or 275,276 households in Sabah and the Federal Territory of Labuan with consumption of 350 kiloWatt-hour (kWh) and below would not experience any increase in their monthly bills.

Meanwhile, the electricity rebate by the government for domestic consumers with monthly bill of not more than RM20 will be maintained until Dec 31, 2011, it said.

Tenaga said about 70,000 domestic consumers in Sabah and the Federal Territory of Labuan were benefitting from this rebate.

As for commercial consumers, Tenaga said low voltage commercial consumers within 1-200 kWh band (33% of Commercial consumers) will see a maximum of 3% addition or RM2 in their monthly bills.

Low voltage industrial consumers within 1-2,000 kWh band (61% of Industrial consumers) will see no impact to their electricity bills, it said.

On lighting up Sabah, Tenaga said there would be a 47% reduction in rates for public lighting maintained by local authorities from 30 sen/kWh to 16 sen/kWh to increase safety levels while allowing local governments to use more allocations for beautification, cleanliness campaigns and other services to the public.

The utility company is also introducing new peak/off-peak tariff classes for existing and new medium voltage commercial and Industrial consumers which would give potential savings to those who can shift their usage to off peak periods.

It said there would be a reduction of up 50% on consumer connection charges for new supply connections which would reduce the upfront capital cost in starting businesses, thus spurring economic growth in the state.

Tenaga said the revised charges would be implemented effective Jan 1, 2012.

It also said a 10% discount would be given to approved non-profitable welfare organisations, places of worship and government education institutions (fully or partly funded), while higher consumption will be charged higher rates to curb energy wastage, thus helping to conserve depleting resources and address climate change.

Meanwhile, Tenaga said meter rental was waived for all consumers.

Tenaga said the tariff restructuring would rationalise and rebalance the subsidy distribution in the power sector so that the targeted poor (the low income households and small businesses) will continue to be protected while subsidy to the well-off segment will be reduced.

“The gradual subsidy rationalization will also mean that more allocation can be channelled to other deserving sectors and for the development of needed infrastructure.

“The new tariff structure gives the appropriate pricing signal and is in line with the country’s objective to promote efficient and sustainable use of energy and, thus conserve depleting energy resources and address climate change,” it said.



Read more...

Stocks to watch: SapuraCrest, Kencana, E&O, SILK, KPJ, AFG

KUALA LUMPUR: All eyes would be on SAPURACREST PETROLEUM BHD and KENCANA PETROLEUM BHD when they resume trading on Tuesday, July 12 following a proposed merger which would position them stronger to bid for upstream jobs.

Other stocks to watch are Eastern and Oriental Bhd (E&O),SILK Holdings Bhd, KPJ HEALTHCARE BHD and ALLIANCE FINANCIAL GROUP BHD (AFG).

SapuraCrest and Kenanca announced Integral Key Sdn Bhd (IKSB), a special purpose vehicle, had made a RM11.85-billion offer to acquire all their assets and liabilities in a share swap.

The merged entity would become one of the world’s largest oil and gas service providers in terms of market capitalisation and assets.

Meanwhile, E&O is expected record about RM66 million in profit from the sale of a building and freehold land in Tanjong Tokong on Penang island for RM134 million cash.

The E&O group’s original cost of investment in the land made in May 2004 was RM13.57 million while the CONSTRUCTION [] cost of the building incurred from March 2009 to May 2011 was RM54.17 million.

SILK secured four long term contracts worth a total of RM39.75 million from Petronas Carigali Sdn Bhd for the provision four units of anchor handling tug supply vessel (AHTSV).

Its subsidiary Jasa Merin (Malaysia) Sdn Bhd had been the awarded the four contracts. It said the long term contracts for the four units of AHTSV were for the primary period of one year, with various effective commencement dates in July 2011 respectively, with options to extend for a further period of one year each.

KPJ is teaming up with Yayasan Islam Perlis (YIP) to set up and operate a new hospital to be known as KPJ Perlis Specialist Hospital. KPJ’s unit Kumpulan Perubatan (Johor) Sdn Bhd (KPJSB) had signed the agreement with YIP on Monday, July 11.

It said the JV would operate under the name Perlis Specialist Hospital Sdn Bhd, of which KPJSB would hold 60% equity interest while YIP would hold the remaining 40%.

Meanwhile in AFG, the Employees Provident Fund (EPF) Board had disposed of 5.2798 million shares from July 5 and 6, reducing its shareholding to 12.53% or 193.96 million shares.

The shares had run up early last week on market talk that Temasek Holdings Pte Ltd and Langkah Bahagia Sdn Bhd might dispose of their combined 30% stake in AFG.

Market talk was that Temasek might want to dispose of its stake in AFG after selling its stakes in two of China’s biggest banks.

Read more...

Maybank IB Views

Monday, July 11, 2011

Construction & Property: Overweight
First MY Rapid Line (MRT) launched

Overweight Construction. Prime Minister Najib's launch of the Sg Buloh-Kajang (SBK) mass rapid transit (MRT) line last Friday cement scepticisms on the execution of the country's largest infrastructure project, which forms a critical component of the Greater KL/KV National Key Economic Area (NKEA) under the Economic Transformation Programme (ETP). We expect full construction works to start next year. We remain Overweight on the sector with Gamuda as our top pick.

COMPANY UPDATE

Malaysia Airports Holdings RM6.50: Buy
Airports still flying high

Thriving under adversity. MAHB's May 2011 traffic statistics reveal a strong 14.6% YoY passenger growth (5M 2011: +13.3% YoY). This is way ahead than regional and global growth rates which underpins our positive stance for MAHB. Cargo volumes shrunk by 7.1% YoY (5M 2011: -2.6% YoY) due to the severe downturn of the electrical & electronics industry in Malaysia. Maintain Buy; no change to our earnings forecasts and RM7.12/share DCF-based target price.

Technicals
The FBM KLCI gained 11.80-points and closed at 1,594.74 last Friday. The local market remained quite firm on a firm global market tone. Despite BNM’s MPC meeting SRR interest rate rise from 3% to 4% last Thursday, the market rose further. The firm support areas for the FBM KLCI are located in the 1,576 to 1,594-zone. The next resistance level of 1,595 may see token selling activities.

Trading Idea is a Short-Term Buy on AFG

Other Local News
Latexx: Due diligence on YTY almost over. Latexx Partners Bhd is poised to complete a due diligence on YTY Industry Holdings Sdn Bhd by as early as next month. Latexx is proposing to take over YTY for RM1.25b by paying 30% in cash, with the balance of the assets being swapped for Latexx shares. (Source: Business Times)

Ivory: Surges on hope of land award. Ivory Properties Group Bhd's share price has surged on anticipation that the Penang state government will decide this week if it is to award the company the rights to help develop 40ha of land in Bayan Mutiara. (Source: Business Times)

Dijaya: TAEL One buys more shares. TAEL One Partners Lts, a Cayman Islands-incorporated private equity firm, has raised its stake in Dijaya Corp Bhd to 7.25% after acquiring another 10.3m shares last Friday. (Source: The Sun)

Media: Catcha Media sees a big catch in online advertising. Catcha Media Bhd, one of the country's largest new media companies, is planning to launch websites for all its magazines as part of its plan to grow online advertising business. The company operates all of Microsoft's online properties in Malaysia, including the MSN portal, and has exclusive sales rights for leading Malaysian website Lowyat.net. It also publishes 14 magazines such as Clive, HomePride, Juice, Mint, Stuff and Prestige, among others. (Source: Business Times)

O&G: OM to build RM210m plant in Q4. OM Holdings Ltd (OMH) expects to start construction of its proposed USD70m (RM210m) manganese smelting and sintering plant in Tanjung Langsat Industrial Complex, Johor Baru in the fourth quarter this year. The Australian public-listed company said land clearing works for the project site is now carried out by Johor Corp. (Source: The Star)

Read more...

RHBInvest Research

Parkson – A Regional Brand Market Perform

Visit Note

¨ PHB’s group structure has changed after its acquisition of Centro in Indonesia , as all the Malaysian, Vietnam and Indonesian operations are now housed under one entity, i.e Parkson Retail Asia (PRA). PHB owns 90.1% of PRA, while the other 9.9% is owned by Centro’s previous owner, i.e. Mitra Samaya (MS).

¨ Given the different target market for Centro and Parkson, we understand that moving forward, PHB’s growth strategy in Indonesia would be to open 4-5 stores p.a., of which 1-2 stores would be under the Parkson brand while the rest would be opened under the Centro brand.

¨ For CY11, Parkson China has only opened one new store, in Zi Gong which was opened in 11 Jan. However, we expect it to meet our store opening target of 8 for CY11, as store openings are typically done at the end of the year.



MISC - Bumi Armada IPO Lifts Valuations Of MISC’s Offshore Assets Outperform

Company Update

¨ We are upgrading our fair value for MISC by 17% from RM7.26 to RM8.47, having raised our valuations for MISC’s offshore assets comprising ten FPSO/FSO and two MOPUs from 1.2x book value to 2x book value.

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Tenaga Weekly Chart & Daily Chart

Tenaga Daily Chart


Tenaga Weekly Chart

Do I get a correct data from chart nexus? I am not sure but feel doubt on the chart...

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Stocks to watch: Ramunia, BCorp, Bintai Kinden, AFG

Sunday, July 10, 2011

KUALA LUMPUR: Stocks on Bursa Malaysia may see some mild selling pressure on Monday, July 11 following the cautious close Wall Street after a weak jobs report dashed hopes the US economy was emerging from a soft patch.

Hence, investors may have to hold back their hopes that the FBM KLCI can cross the psychological important 1,600 level this week.

Late fund buying on selected stocks pushed the index to a fresh historic close of 1,594.74. But the broader market displayed some caution due to the Bersih 2.0 rally on Saturday.

However, OSK Research director Chris Eng said the Malaysian market will easily recover in half of week despite initial concerns about the Bersih rally.

“The remainder of July should be positive,” he said, adding sentiment would be underpinned by the economic reforms and the strategic reform initiatives,” he said.

On Wall Street, the sell-off was broad and halted an eight-day streak for the Nasdaq, though stocks ended off their lows. U.S. employers added only 18,000 workers in June, short of even the lowest forecast, jolting buyers who had rushed into the market after some encouraging labour-market figures earlier in the week.

The S&P 500 components are expected to show earnings growth of an average of 7.3 percent in the second quarter, but estimates have been lowered in the last 30 days.

The Dow Jones industrial average slipped 62.29 points, or 0.49%, to 12,657.20 at the close. The Standard & Poor's 500 Index shed 9.42 points, or 0.70%, to 1,343.80. The Nasdaq Composite Index dropped 12.85 points, or 0.45%, to 2,859.81.

At Bursa Malaysia, stocks to watch include RAMUNIA HOLDINGS BHD [], BERJAYA CORPORATION BHD [], Bintai Kinden Corp Bhd and ALLIANCE FINANCIAL GROUP BHD [].

Ramunia is buying a floating, storage and offloading (FSO) vessel for US$82.5 million (RM248.37 million) cash. The acquisition would be financed by bank borrowings of RM201.3 million and the remainder via internally generated funds

Berjaya Corporation aborted the proposals including a special dividend after it decided to go ahead and privatise its Hong Kong-listed Cosway Corp Ltd (CCL), after listing it about two years ago.

The corporate exercise then had included the issuance restricted non-renounceable offer for sale by CCL of HK$491.56 million loan stocks to BCorp shareholders.

Bintai Kinden and Biz Investment Pte. Ltd have proposed a takeover of Lereno Bio-Chem Ltd, which is listed on the Singapore Exchange’s Catalist Board in a deal valued at RM214.84 million.

Bintai Kinden and Biz Investment would sell their 100% stake in Bintai Kindenko Pte Ltd (BKPL), representing 8.5 million shares, for RM214.84 million to be satisfied by the allotment and issuance of new securities in Lereno.

Bintai Kinden would dispose of its 69.82% stake for RM150,000 and Biz Investment of its 30.18% for RM64.84 million.

AFG shares fell last Friday as investors were disappointed that no deal had yet firmed up about Temasek Holdings Pte Ltd and Langkah Bahagia Sdn Bhd disposing of their combined 30% stake in AFG.

Market talk was that Temasek might want to dispose of its stake in AFG after selling its stakes in two of China’s biggest banks.

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Ramunia buying vessel for RM248m

Saturday, July 9, 2011

KUALA LUMPUR: RAMUNIA HOLDINGS BHD [] is buying a floating, storage and offloading (FSO) vessel for US$82.5 million (RM248.37 million) cash.

It said on Friday, July 8 it would RAHB proposes to finance up to RM201.3 million or 81% of the purchase price via bank borrowings and the remainder via internally generated funds

It had on Thursday, signed a memorandum of agreement with DP Producer AS to buy the vessel from Drydocks World, which is equally owned by Dubai LLC and NTM Refectio II AS.

DP Produce, which was incorporated in Norway on May 16, 2006, is under bankruptcy or liquidation proceedings.

“The proposed acquisition provides an excellent opportunity for Ramunia to tap into and participate in the development of marginal oilfields and deepwater fields in Malaysia and the region,” it said.

It added the exploration, production, storage and offloading activities for the upstream O&G sector involved the fabrication of offshore structures, provision of offshore terminals, marine support services, transportation and installation, operations and maintenance and drilling.

“The proposed acquisition also presents an immediate opportunity for Ramunia to participate in any direct negotiations, invitation to bids and requests for new proposals for the proposed deployment of FPSOs, to be undertaken by Malaysian and regional oil companies, where the demand is increasing within the backdrop of higher oil prices,” it said.

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LPI Capital 2Q net profit up 18.8% to RM31.42m

Thursday, July 7, 2011

LPI Capital net profit for the second quarter ended June 30, 2011 rose 18.83% to RM31.42 million from RM26.44 million a year earlier, due mainly to higher gross premium underwritten and higher underwriting profit.

It said on Thursday, July 7 that revenue for the period rose 23% to RM213.88 million from RM173.87 million. Earnings per share was 14.26 sen while net assets per share was RM5.21.

LPI Capital declared a first single tier interim dividend of 25 sen per share to be paid on July 28.

For the six months ended June 30, LPI Capital’s net profir rose to RM70.04 million from RM64.77 million, on the back of revenue RM427.3 million.

On its outlook for the year, LPI Capital said barring unforeseen circumstances, its prospects for the year should be satisfactory.

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Supermax, Top Glove up in early trade

KUALA LUMPUR: Shares of Supermax and Top Glove rose in early trade on Thursday, July 7 after CIMB Research rated both the stocks as technical Buys.

At 9.35am, Supermax rose seven sen to RM3.87 while Top Glove added four sen to RM5.48.

CIMB Research has a technical Buy on Supermax Corp at RM3.80 at which it is trading at a FY12P/E of 8.3 times and price-to-book value of 1.8 times.

The research house said on Thursday, July 7 that since its previous call on Supermax on June 2, prices have rebounded to a high of RM4.00 before succumbing to profit taking.

However, Wednesday’s long white candle on rising volume may be a sign that the bulls are ready to kick start another rally.

“With both the indicators reconfirming their buy signals, we think that there is a good chance of a decent rally in the near term,” it said.

It said traders may opt to buy now with a stop placed below the recent low of RM3.70. They could also place their stop below the RM3.60 mark. A push past the recent RM4.00 high is likely to send prices shooting towards its 200-day SMA at RM4.20 next. It also has potential to reach as high as RM4.52 in the longer term.

Meanwhile, CIMB Research has a technical Buy on Top Glove Corporation at RM5.44 at which it is trading at a FY12P/E of 17.0 times and price-to-book value of 3.1 times.

It said Top Glove broke out of its consolidation triangle on Wednesday. Although prices pulled back a tad at the close, prices remained above the triangle resistance turned support level of RM5.38.

“Both indicators are rising, supporting a positive outlook for the stock in the near term. The RSI has yet to reach the overbought region, suggesting that there is still room on the upside.

“Traders should jump in and buy now to try to ride on this breakout run. We expect prices to nudge higher towards RM5.87-RM6 once the RM5.58 minor resistance gives way. Only a fall below the RM5.24 support would trigger our stop loss,” it said.

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RHBInvest Research

Corporate Highlights

SapuraCrest: Tying up with Clough in Australia? Outperform

News Update (published 6 July 2011)

¨ The company announced yesterday that it is in discussions with Clough Ltd for a business acquisition or cooperation for its marine construction business. Clough is an Australian integrated oil and gas company with a market cap of AU$561m.

¨ Clough’s “Marine Construction” business provides solutions to the subsea construction and platforms and pipelines market in the Australasia region. We note from its latest investor presentations that the division suffered significant earnings slowdown in 2HFY10 and a loss in 1HFY11 mainly due to sluggish contract wins which were compounded by start-up costs for its JV with Peritus International (a subsea and floating systems engineering and project management services company) in Jan-10.

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Maybank IB Views

RESULTS PREVIEW
WCT RM3.12: Buy
Awaiting the roll-outs Shariah-compliant

Maintain Buy. 2011 job win target remains at RM2b riding on a sizeable RM10b tender book; this will provide the lift to its RM3.4b outstanding order book. We retain our forecast for a 31% growth in 2011 net profit supported by strong property sales, completion of the 1Medini earthworks and good progress at the Qatar government building works. Our target price pegs the stock to sum-of-parts (15x 2012 PER plus 20sen value enhancement for KLIA2 retail concession).

Technicals
The FBM KLCI gained 9.49 points to close at 1,591.34 yesterday. Its resistance area of 1,591 may cap market gains, whilst the firm support areas are located at 1,577 and 1,590.

Trading idea is Short-term Buy on TCHONG

Other Local News
AirAsia: Order for A320neos to hit 300? Less than a month after AirAsia Bhd made a record-breaking order of 200 A320neo jets at the Paris Air Show, it has now reportedly increased this order by 100 jets. However, founder Tan Sri Tony Fernandes has declined to comment on the report. (Source: Business Times)

SapuraCrest: May buy Aussie business. SapuraCrest Petroleum Bhd may be acquiring Australia-listed Clough Ltd's marine construction business. The deal would allow it to grow its regional presence, expand its activities in the subsea and deepwater segments. (Source: Bursa Malaysia)

Dialog: Ink pact to develop terminal. Dialog Group Bhd's 51% owned subsidiary Pengerang Terminals Sdn Bhd (PTSB) has inked a shareholders' agreement with State Secretary, Johor to undertake the first phase portion of designing and developing of an independent deepwater petroleum terminal in Pengerang, Johor. (Source: Bursa Malaysia)

Tan Chong: To assemble Subaru vehicles here. Tan Chong Group has signed a MoU with Fuji Heavy Industries Ltd (FHI) for a consignment production contract for the assembly of Subaru vehicles in Malaysia. The contract for local assembly will begin in Oct 2012 with production capacity of 5,000 units per year. (Source: The Edge Financial Daily)

Boustead: Unlocks value of its unit. Boustead Holdings Bhd has proposed to distribute part of its stake in Pharmaniaga Bhd to its minority shareholders to help meet the required 25% free-float to stay listed and cut borrowings at the same time. To boost trading liquidity of its own share, Boustead also proposed a one-for-10 bonus issue after paring down its holding in Pharmaniaga. (Source: Bursa Malaysia)

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OSK Research: Technical outlook for Maybulk bearish

Wednesday, July 6, 2011

Maybulk Weekly Chart

KUALA LUMPUR: OSK Research said MALAYSIAN BULK CARRIERS BHD []’s (Maybulk) share price has been dropping rather quickly of late after having experienced two major technical breakdowns in the last three months.

It said on Wednesday, July 6 both the stock’s near-term and mid-term technical outlooks are firmly bearish at the moment.

“We have identified three strong support levels which may be preventing its share price from falling further. These are the RM2.09, RM1.93 and RM1.78 levels,” it said.

OSK Research said however, the stock has yet to exhibit any signs of bottoming out. To the upside, there is immediate resistance at the RM2.29 level, followed by the RM2.36 level.

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PetDag extends gains on dividend plan

KUALA LUMPUR: PETRONAS DAGANGAN BHD extended its gains in early trade on Wednesday, July 6 after it proposed a special gross dividend of 25 sen and final gross dividend of 35 sen per share for the financial year ended March 31, 2011.

At 9.45am, Petronas Dagangan added 14 sen to RM16.46 with 1,400 shares traded.

The company said on July 4 the special and final dividends would be paid on Aug 28, subject to shareholders’ approval at its AGM to be held on July 28.

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Maybank IB Views

MARKET STRATEGY
GLC divestments
Market friendly "strategic reforms"

Long-term positive. Prime Minister Najib yesterday unveiled six Strategic Reform Initiatives (SRI), being the core enablers to 12 existing National Key Economic Areas (NKEA) under the Economic Transformation Programme (ETP). Of particular interest to the equity market is the divestment and listing plan relating to government-linked companies (GLC) which, in our view, is positive in raising liquidity, the quality of listed companies and attractiveness of the Malaysian bourse.

ECONOMICS
Malaysia: Strategic Reform Initiatives
Another key ingredient the "change" recipe...

SRIs - a commitment to reforms… Prime Minister unveiled the Strategic Reform Initiatives (SRIs) on 5th July 2011 which serves as the enablers to boost the country's competitiveness, on top of complementing the twin transformation programmes i.e. Government Transformation Programme (GTP) and Economic Transformation Programme (ETP). Essentially, SRIs are the other half of ETP i.e. in addition to the 12 National Key Economic Areas (NKEAs).

External Trade, May 2011
Lower than expected export growth

Exports growth in May '11 came in below expectations as it moderated to +5.4% YoY (Apr '11: +11.1% YoY; Maybank IB: +9.0% YoY; Consensus: +11.0% YoY) while imports growth eased to +5.6% YoY (Apr '11: +9.4% YoY; Maybank IB: +5.3% YoY; Consensus: +8.6% YoY) bringing in a trade surplus of RM 8.5b. MoM, both exports and imported contracted by -4.7% and -0.4% respectively. Our forecast for 2011 is for exports to grow by +8.4% YoY (YTD May'11: +6.2%; 2010: +15.6%) and imports to gain by +10.8% YoY (YTD May'11: +10.3%; 2010: +21.7%) with a trade surplus of RM106.9b (YTDMay'11: +RM51.3b; 2010: +RM110.2b).

Technicals
The FBM KLCI closed lower by 0.50 points at 1,581.85 yesterday. Its resistance areas of 1,581 and 1,589 may cap market gains, whilst the firm support areas are located at 1,566 and 1,579.

Trading idea is a Short-Term Buy on LBS

Other Local News
MBM Resources: On expansion drive. MBM Resources Bhd plans to build several showrooms and service centres in Johor Baru, Perak and Penang by 2015 to expand its automotive business. The Johor Baru project will be completed in the next 12 months and will be similar to the company's showroom in Glenmarie, Shah Alam. (Source: Business Times)

MRCB: Unit gets KL land for 3 projects in Brickfields. Country Annexe Sdn Bhd (CASB), a 70% subsidiary of Malaysian Resources Corp Bhd (MRCB), will be given land in Kuala Lumpur with a potential RM1b gross development value, in consideration for undertaking three projects in the city's Brickfields area. The projects consist of Little India, Pines Bazaar and Ang Seng Development. (Source: The Star)

Guan Chong: To double capacity by 2Q12. Guan Chong Bhd plans to double the capacity at its Batam plant by 2Q12, which will boost its annual cocoa grinding capacity to 200,000t. It has fully sold for the entire 2011 due to rising demand for its cocoa ingredients of butter and powder. (Source: The Edge Financial Daily)

Yinson: Eyes RM800m worth of jobs. Yinson Holdings Bhd is set to bid for more contracts worth RM800m. It is currently bidding for FSO, PSV and AHTS jobs locally and abroad particularly in Vietnam. Yinson's current orderbook stands at RM1.2b. (Source: The Edge Financial Daily)

Plantation: Sarawak palm oil industry earmarked for major expansion.. Sarawak's plans to double the land earmarked for oil palm plantations to two million hectares will act as a key driver for the state's economic development. (Source: The Edge Financial Daily)

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RHBInvest Research

Tuesday, July 5, 2011

Top Story: Motor – The worst of the supply crunch is over Neutral

Sector Update

MBM Resources: Fair value raised to RM3.80 Outperform

Tan Chong: Fair value maintained at RM6.15 Outperform

Proton: Fair value raised RM3.55 Underperform

  • Recent reports indicate that vehicle and component production in Japan has begun to normalise sooner than expected.
  • We expect supply issues to continue affecting vehicle deliveries for another one to two months and believe the worst of the supply crunch is over.
  • We expect supply issues to continue affecting vehicle deliveries for another one to two months and believe the worst of the supply crunch is over.
  • Macro indicators remain supportive of domestic consumption and this bodes well for consumer discretionary spending going into 2012.

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Maybank IB Views

Technicals
The FBM KLCI closed lower by 0.60 points at 1,582.35 yesterday. Its resistance areas of 1,584 and 1,589 may cap market gains, whilst the firm support areas are located at 1,569 and 1,582. The market could rise marginally, with some afternoon profit taking activities.

Trading idea is a Short-Term Buy on Ivory

Other Local News
Genting: To buy Pan Malaysian Pools for RM2.5b? The market is again abuzz with speculation that Genting Bhd is finalising the deal to acquire Tanjong plc's gaming unit Pan Malaysian Pools Sdn Bhd (PMP) for an estimated RM2.5b. (Source: The Star)

Star Publications: To buy 5% stake in Catcha Media. Star Publications (M) Bhd plans to buy a 5% stake in Catcha Media Bhd for RM4.98m or RM0.75 per share. Catha Media is slated for listing on the ACE Market of Bursa Securities on July 22. The proposed acquisition is part of Catcha Media’s private placement exercise under the IPO. (Source: The Sun)

Proton: To offer CVT tech in future cars. Proton Holdings Bhd will introduce the continuous variable transmission (CVT) technology in its upcoming range of cars. Proton tests show that CVT can reduce fuel consumption by 4-10%. (Source: The Sun)

CI Holdings: Asahi to buy Permanis? CI Holdings Bhd is in talks with Asahi Group Holdings Ltd to buy subsidiary Permanis Sdn Bhd for USD200m (RM600m). However, Permanis’s MD Datuk Johari Abdul Ghani was tightlipped on the talk when contacted. It was reported that the Tokyo-based Asahi had agreed yesterday to buy the mineral-water and juice businesses of closely-held P&N Beverages Australia Pty Ltd for USD309 m (RM927m). Asahi is also in the midst of competing with Suntory Holdings Ltd to buy New Zealand’s Independent Liquor under a deal worth some USD1.12 b (RM3.36b). (Source: Business Times)

Dijaya: Foreign fund acquires 5% stake in Dijaya. TAEL One Partners Ltd , a Cayman Islands registered company bought 22.75m shares or a 4.99% stake in Dijaya Corp Bhd for RM37.5m. (Source: The Edge Financial Daily)

Grand-Flo: To distribute Apple iPad. Grand-Flo Solution Bhd’s unit E-Tech IT Sdn Bhd has been appointed as a value-added reseller by Apple to distribute the Apple iPad in Malaysia. E-Tech is now a value-added reseller for the Apple iMac and Macbook. (Source: The Sun)

Property: 825 acres of land for PR1MA. As many as 20 sites on 825 acres of land across the Klang Valley, Rawang and Seremban have been identified for the development of an estimated 42,078 homes under the 1Malaysia Housing Programme or Program Perumahan 1Malaysia (PR1MA). Under PR1MA, homes priced between RM150,000 and RM300,000 will be built in urban and suburban areas across the country. (Source: The Edge Financial Daily)

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