RHBInvest Research

Friday, September 30, 2011

Top Story: 4Q2011 Market Outlook & Strategy – Perilous crossroads; Challenging times ahead

Strategy Update

¨ The US economic recovery has slowed to a crawl, while Europe is not just lurching from one crisis to another, it is lurching into a new one before the previous one is solved. There is a growing risk that sustained weak confidence could exert downward pressure on demand and business activity worldwide. At this stage, both the US and Europe cannot withstand another shock and any further escalation of the crises could potentially tilt the global economy into a “double-dip” recession. Nevertheless, in our view, this can still be avoided if political leaders get their acts together fast enough to contain the debt crises and avert a contagion given that global trade has not fallen off the cliff.

Corporate Highlights

DRB Hicom: Cautious outlook Market Perform

Company Update

¨ We recently downgraded our call on the auto and banking sectors to Underweight (from Neutral) on the back of our increasingly bearish view on the outlook for the global economy.

Gamuda: FY07/11 net profit grows 32% yoy Outperform

4QFY11 Results / Briefing Note

¨ FY07/11 net profit came in within our forecast and the market consensus.

Jaya Tiasa: 1QFY12 net profit more than doubled yoy on higher CPO contribution Outperform

1QFY12 Results

¨ QFY04/12 net profit of RM55.9m came within expectations

Hiap Teck: FY07/11 net profit declines by 46% yoy Underperform

4QFY11 Results

¨ FY07/11 net profit came in above our and consensus expectations. The variance against our forecast came largely from a deferred tax adjustment in 4QFY07/11 of RM6.8m.

VS Industry: No surprises but earnings risks rising Market Perform (down from OP)

4QFY11 Results

¨ FY07/11 core net profit of RM39.1m was in line with expectations, at 102.6% of our full-year estimate.


RHBInvest Research

Thursday, September 29, 2011

Top Story: TNB – Still no clarity on gas issue Underperform (down from MP)

Company Update

¨ Given the downside risk to GDP growth ahead, we lower our electricity demand growth assumptions for TNB to 1.8% p.a. for FY12-13 (previously 3.2%), based on lower GDP multiplier effect assumption of 0.5x (previously 0.7x) as we expect demand from industrial users to weaken further.

Property: Wind or smoke? Underweight

Sector Update

¨ Looking at the recent development (Sime/E&O, SP Setia, and Bandaraya selling assets) in the property sector, although it could provide some trading interest in certain property stocks on speculation of a privatisation exercise, we believe the slew of events is one-off. M&A wave will be short-lived and not widespread. Taking the past events as a clue, mega M&A interests died down for 9 months after the lapse of MRCB-IJMLD offer beginning of this year. Hence, the M&A angle is not a strong re-rating catalyst for the sector. Valuations of property stocks should continue to price in fundamentals at least six months ahead.

Education: Waning optimism Neutral (down from OW)

Sector Update

¨ We are turning cautious on the prospects for the education sector in the coming quarter given: 1) rising macroeconomic headwinds; 2) illiquidity of the stocks in the sector; 3) the relatively small market cap of the education stocks (less than RM1bn); and 4) high foreign shareholdings for HELP (12.5%) and Masterskill (49%), increasing their susceptibility to volatile portfolio flows.

Corporate Highlights

SP Setia: Giving you a second chance Market Perform (up from UP)

News Update

¨ SP Setia announced that it has received a takeover offer from PNB to acquire the remaining shares not already owned at an offer price of RM3.90 and warrants at RM0.91. However, SP Setia’s Board (excluding 2 members from PNB) has decided to seek a competing offer from other interested parties.

Axis REIT: New acquisition in Penang Market Perform

News Update

¨ Axis REIT proposed to acquire two land parcels in Seberang Perai with a GFA of approximately 408,250sq ft and is located within the Bukit Tengah Industrial Park. The land includes a single-storey warehouse with office and ancillary buildings. Total purchase consideration for the property is RM59m. With the inclusion of the property, total assets of Axis REIT will increase to around RM1.4bn.

HELP: Below expectations again Underperform (down from OP)

3QFY11 Results

¨ 9MFY10/11 net profit of RM9.4m (-25% yoy) missed our and consensus expectations by 33%. HELP’s 9MFY11 revenue of RM79.6m (+2.3% yoy) also missed our and consensus estimates by 12% and 10% respectively. No dividend was declared during the period.

Adventa: Below expectations Market Perform

3QFY11 Results

¨ 3QFY10/11 net profit (-51.0% yoy; -12.1% qoq), was below our and consensus expectations with 9MFY11 net profit (flat yoy) accounting for 65% and 64% of our and consensus full-year estimates respectively.


Stocks to watch:Formis, Kencana, Glomac,

Thursday, September 22, 2011

KUALA LUMPUR: Sentiment on Bursa Malaysia should pick up on Thursday, Sept 22, based on the positive corporate newsflow but again this would hinge on external events including comments from the Federal Reserve.


Formis’s unit has secured a RM53.75 million contract from Fibrecomm Network (M) Sdn Bhd for the next generation dense wavelength division multiplexing systems.

Its unit, Formis Network Services Sdn Bhd would supply engineering services, operation and maintenance of the NGDWDM systems, spares and accessories for the third route from Padang Besar to Menara Ansar in Johor Baru.

Kencana’s earnings rose 53% to RM63.72 million in the fourth quarter ended July 31 from RM41.47 million a year ago due to higher progress achieved for contracts. The 4Q revenue increased at a stronger pace of 77.5% to RM493.72 million from RM278.18 million.

For the financial year ended July 31, its net profit rose 63.8% to RM223.11 million from RM136.16 million. Its revenue increased by 43.2% to RM1.56 billion from RM1.09 billion.

SapuraCrest’s earnings rose 46.9% to RM78.23 million in the second quarter ended July 31 from RM53.24 million a year. Revenue, however, fell 22.1% to RM699.39 million from RM898.11 million.

For the first half, net profit rose 44.8% to RM150.57 million from RM103.93 million but revenue declined 20.2% to RM1.25 billion from RM1.568 billion.

Glomac Bhd posted net profit of RM17.87 million in the first quarter ended July 31, 2011, which a 14.9% increase from the RM15.55 million a year ago, putting the property company on a firm footing for its current financial year.

Its revenue increased a marginal 1.2% to RM127.83 million from RM126.31 million from a year ago due to its a mix of recent and on-going project launches. Earnings per share were 6.10 sen compared with 5.32 sen.

Revenue was a marginal 1.2% increase to RM845.81 million from RM835.39 million. Earnings per sharea were 6.89 sen compared with 4.78 sen. It declared an interim dividend of 8.0 sen.

AZRB has secured a 25-year concession to build and manage the International Islamic University Malaysia (IIUM) teaching hospital in Kuantan, Pahang via a private finance initiative. The total CONSTRUCTION [] cost for teaching hospital was RM412.62 million

TA Enterprise’s earnings soared 151.3% to RM26.24 million in the second quarter ended July 31, 2011 from RM10.43 million a year ago, boosted by higher contribution from its property arm, TA Global Group. Its revenue rose 8.6% to RM156.00 million from RM143.56 million. Earnings per share were 1.53 sen compared with 0.61 sen.


RHBInvest Research

Top Story: Petronas Gas – Dividend payout assured despite cash outflow Market Perform

Visit Note

¨ Management echoed market expectations that gas supply should return to normal once the bypass from the damaged Bekok-C platform is completed by end-Sep.

Sector Call

Motor: On the rebound Neutral

Sector Update

MBM Resources: Fair value maintained at RM3.25 Market Perform

Tan Chong: Fair value maintained at RM5.50 Outperform

DRB-HICOM: Fair value maintained at RM2.95 Outperform

UMW: Fair value maintained at RM7.35 Market Perform

APM: Fair value maintained at RM5.10 Market Perform

Proton: Fair value maintained at RM2.50 Underperform

Corporate Highlights

Evergreen Fibreboard: Diversifying into solid timber Underperform

News Update

¨ Evergreen has entered into a share subscription agreement with Craft Master Timber Products S/B (CMTP), Lau Yng Yng and Lim Sock Ling to subscribe for 7,012,500 new ordinary shares in CMTP (equivalent to 51% stake) for RM7m cash. CMTP is a newly-incorporated company to carry out the business in manufacturing of solid wooden furniture parts and finger jointing.


Maybank IB Views

Tuesday, September 20, 2011

US FOMC Preview
Expecting something...

The latest round FOMC meeting was originally scheduled for a day (20 Sep) but was extended to two days (20-21 Sep) to allow a fuller discussion on the economic development and outlook, as well as the Fed's policy responses. No QE3 is expected amid the lack of consensus at Fed on such policy. Instead, we are looking at the formal announcement of the "Operation Twist" where Fed will lengthen the average maturity of its securities holdings to extend the commitment to very low interest rate on the short end of the interest rate spectrum to the long end. Recall that Fed pledged to keep the fed fund rate at 0%-0.25% until at least mid-2013 at the previous FOMC meeting (9 Aug).

Power: Neutral
Projek Lekas, what it means to us

Get ready for higher tariff. This report aims to quantify the impact of importing liquefied natural gas (LNG) when PETRONAS' re-gasification plant (LEKAS) is ready (expected July 2012). The imported LNG will be costlier than Tenaga's current gas supply - which is subsidized - hence, power tariff must rise to reflect this. On the flip side, Tenaga will have greater certainty of supply and avoid further incidence of having to burn costly oil and distillates, like the episode experienced in 3QFY11.

The FBM KLCI tumbled 17.81-points to close at 1,413.12 yesterday. Its resistance areas of 1,413 and 1,440 will cap market gains, whilst the weaker support areas are located at 1,382 and 1,400. Due to the US markets’ weaker tone last night; we may see a volatile tone for the index today. Some persistent foreign liquidation activities may depress the markets’ today.

Trading Idea is a Take Profit call for SIME, PCHEM and IJM.

Other Local News
Sime Darby: In talks to buy Bucyrus’ distribution assets. Sime Darby Industrial Sdn Bhd (SDI) is in talks to buy the distribution assets of Bucyrus International Inc. Sime Darby might announce the deal by end of the year, adding that the acquisition would enable Sime to extend the range of its products to cover both surface and underground mining equipment. SDI expects to remain busy for the next three years with an order book of RM3b. (Source: The Edge Financial Daily)

AirAsia: Thai AirAsia puts off IPO to 1Q11. The Thai unit of Malaysia's AirAsia Bhd has delayed the initial public offering (IPO) of its shares to the 1Q12 from 4Q11. The delay is because it needs more time to restructure its organisation and conduct due diligence. (Source: Business Times)

Hartalega: MD to buy Budi Tenggara. Hartalega Holdings Bhd’s MD Kuan Kam Hon plans to buy 100% of Budi Tenggara Sdn Bhd, which has a direct 4.99% stake in Hartalega and a 13.9% stake in Hartalega Industries Sdn Bhd, which in turn has a 50.6% in Hartalega. If the deal goes through, Kuan will control 51.5% of Hartalega and Securities Commission has granted a waiver from making a mandatory general offer. (Source: Business Times)

BRDB: To sell four assets for RM914m. Bandar Raya Development Bhd (BRDB) has decided to part with four investment properties including Bangsar Shopping Centre , Menara BRDB, CapSquare Retail Centre and Permas Jusco Mall for a cash consideration of RM430m with net liabilities of RM484m to be assumed by the buyer, valuing the entire transaction at RM914m. Following the disposal, BRDB will distribute part of the proceeds to its shareholders via a net cash dividend of 80 sen per share. (Source: Bursa Malaysia)

Plantation: Another vote against Aussie palm oil Bill. The Food Standards Amendment (Truth in Labelling - Palm Oil) Bill 2010 was rejected by Australia's House of Representatives Economics Committee in Canberra yesterday, the second committee to do so since it was tabled in Parliament. Malaysia is awaiting the final vote from the Parliament. (Source: Business Times)


RHBInvest Research

Top Story: Gamuda – FY07/11 results to meet expectations Outperform

Results Preview

¨ We expect Gamuda’s 4QFY07/11 results to come in within expectations at RM105-110m at the core net level, marginally weaker vis-à-vis RM116.6m recorded in 3QFY07/11 on slightly reduced construction margins sequentially as a result of the cycle of writebacks of cost over-provisions having already peaked 1-2 quarters ago.

Sector Call

Media: Aug adex rose 9.7% yoy Underweight

Sector Update

¨ According to Nielsen Media Research, Aug’s gross adex for TV and print media combined rose 9.7% yoy (+2.9% mom), led by the print media (+14.1% yoy).

¨ Aug’s adex growth was quite strong mainly due to: 1) Hari Raya and Merdeka adex; 2) ad rate hike; and 3) resilient consumer spending.


Stocks to watch Proton, Tenaga, Catcha, Cypark, tobacco

Saturday, September 17, 2011

KUALA LUMPUR: The FBM KLCI could stage a corrective rebound in the week beginning Monday, Sept 19, on the back of the announcements made by Prime Minister Datuk Seri Najib Razak as well as corporate news flow.

Najib on Sept 15 announced the proposed repeal of the Internal Security Act (ISA) and laws related to banishments, but gave little detail of the two proposed enactments to be in place after the ISA is repealed.

There is also heavy anticipation of a people-friendly Budget 2012 to be tabled on Oct 7, seen as the final one before the general elections which some analyst say could be called within the next six months.

There were also corporate announcements by PROTON HOLDINGS BHD [], TENAGA NASIONAL BHD [], Catcha Media Bhd and Cypark Resources that could put them in focus, while tobacco players may see some selling pressure on worries of a tax hike.

On the external front, US stocks rose for a fifth day in a row on Friday and the S&P 500 scored its best week since early July on signs euro zone leaders were acting together to limit any damage from its sovereign debt crisis.

Affin Investment Bank Bhd head of retail research Dr Nazri Khan said he expects the FBM KLCI to do corrective rebound next week before resuming its downtrend spotted since July this year.

We believe next week to be interesting as most regional indices including FBMKCLI is close to test its year-to-date low (with FBMKLCI testing 1,423 level).

“A strong rebound from the support may suggest a reliable bottom in progress.

“The fact that FBM KLCI is currently down by 11% (since mid July 2011 week) on the past eleven losing weekly session may suggest an oversold rebound is imminent,” he said.

Proton and Japan’s Mitsubishi Motors Corporation (MMC) are considering joint production of engines in Malaysia and production of MMC-brand vehicles at Proton’s plants under their proposed strategic collaboration.

Confirming The Edge FinancialDaily report on Thursday, Sept 15 about the broad ranging strategic collaboration, they said in a joint statement they were in “serious collaboration” to enhance their competitiveness in the global market place.

Tenaga plans to raise RM5 billion from a 20-year ringgit denominated Sukuk to be issued at the end of October, its president and chief executive officer Datuk Seri Che Khalib Mohd Noh was reported as saying to Bernama on Sept 15.

Che Khalib said the book building exercise was to be held in the third week of October and that the proceeds from the Sukuk would be used to finance the extension of the 1,000-MW Janamanjung coal-fired power plant in northern Perak.

Catcha Media is foraying into the luxury goods business after acquiring a Singapore-based company Haute Groupe Pte Ltd, which also sells luxury goods online, for S$5 million or RM12.34 million.

Catcha Media said on Thursday, Sept 15 it was acquiring the entire equity from Loong Siew Fong and her spouse Low Choong Lang.

Haute Groupe’s core activities are retail of bags, luggage and travel accessories and the wholesale of bags, luggage and travel accessories. It also operates the luxury flash sales website hauteavenue.com and luxury flash sales event business.

Cypark could see some trading interest after it secured a RM29.88 million contract from Putrajaya Holdings Bhd for infrastructure, landscape and road works in Putrajaya.

It said on Thursday, Sept 15 that it had accepted the letter of award for the project from Putrajaya Holdings on Sept 14.

Meanwhile, BRITISH AMERICAN TOBACCO (M) [] Bhd and JT INTERNATIONAL BHD [] may see continued selling pressure on concerns of a hike in the tobacco duty in the Budget 2012 proposals to be tabled on Oct 7.

OSK Research on Sept 15 said it expected a moderate hike in tobacco duty in the upcoming Budget but it believes that the breweries will be spared.

“We prefer BAT to JTI as the former is less exposed to value-for-money brands which are more price elastic and prone to substitution,” it said.


RHBInvest Research

Friday, September 16, 2011

Top Story: Education – The bigger picture Overweight

Sector Update

¨ More students are choosing to pursue degree programmes vs. diploma programmes as degrees become more affordable and due to the increased employability of degree holders. Hence, around 41.5% of total tertiary students in Malaysia during 2010 were pursuing degrees (vs. 35.1% pursuing diplomas). SEGi and HELP will benefit from the shift in demand from diploma to degree programmes. However, we are cautious on Masterskill’s performance as it is mainly dependent on its diploma courses, with less than 10% of students enrolled in its degree courses.


Maybank IB Views

Wednesday, September 14, 2011

Axiata Group RM4.81: Hold
Lacking catalysts in the short term Shariah-compliant

Hold maintained. Axiata's Analyst Day was a much welcomed opportunity to catch up on latest developments at the individual subsidiaries. Overall, however, we see little share price catalyst for the group in the near term amid a challenging environment, with stiff competition particularly in the Indonesian, Cambodian and domestic markets. Reflecting this outlook, our cost of equity is raised to 11.8% from 11.1% and our sum-of-parts TP is cut to RM5.10 from RM5.50.

The FBM KLCI rose 1.74-points to close at 1,448.00 yesterday. Its resistance areas of 1,448 and 1,467 will cap market gains, whilst the weaker support areas are located at 1,423 and 1,445. Despite the US markets’ minor rebound tone last night; we may see a volatile tone for the local bourse today.In the longer-term, we foresee an eventual move to 1,378.66 (the next EW extension target).

Trading Idea is a Take Profit call on HLBANK.

Other Local News
TNB: May have to raise funds to keep going. Tenaga Nasional Bhd (TNB) may look to the market to raise funds to sustain itself amid concerns on the continued gas shortage as it has to spend an additional RM3b on power generation this year. (Source: The Malaysian Reserve)

MAS: Sponsorship for Queen Park Rangers jersey to cost RM18m. Malaysia Airlines' (MAS) recently-announced sponsorship for the Queen Park Rangers (QPR) home jersey in the Barclays Premier League will cost the national carrier some RM18m. The total sponsorship fee for both MAS and AirAsia for the English professional football club, which involves a term of two years, would cost some RM30m. (Source: The Star)

Bursa: FCPO volume hits new high. Bursa Malaysia Derivatives' (BMD) crude palm oil (CPO) futures set a new record at the close of mid-day trading yesterday, with a total of 4.07m contracts traded YTD. Open interest for FCPO contracts on BMD has also risen steadily on the back of an even mix of players in the futures market. (Source: The Edge Financial Daily)

Ramunia: Confident of Bursa approval. Ramunia Holdings Bhd is confident it will get its regularisation plans approved as soon as it sorts out safety issues associated with its newly-acquired Pulau Indah Oilfab fabrication yard. Some parts of the Oilfab fabrication yard were found to be without a valid Certificate of Fitness, an official document that states that a building is safe to be occupied. (Source: Business Times)

Iskandar: Farglory may invest in Iskandar Malaysia. Taiwan-based Farglory Group has expressed interest in setting up industrial parks in Iskandar Malaysia in Johor. If the interest were to materialise, it would attract investments from Taiwan and other countries as well. Farglory is Taiwan's leading international land development and construction company that operates in Taiwan, China, the US and France. (Source: The Malaysian Reserve)

O&G: M'sia proposes two oil and gas related projects in Brunei. Malaysia has proposed to undertake two oil and gas (O&G)-related projects in Brunei. One of the projects is Petronas to build a petrochemical complex with BASF in Pulau Muara Besar, involving an investment of about USD1.6 bilion, while the other is the development of a fabrication yard by Petronas' subsidiary, Malaysia Marine and Heavy Engineering Holdings Bhd. (Source: The Star)


Stocks to watch: Telcos, KKB, Puncak Niaga, Formis

Tuesday, September 13, 2011

KUALA LUMPUR: Stocks on Bursa Malaysia may see another volatile trading day on Tuesday, Sept 13 in line with the regional markets as investors worried whether there could be a permanent solution to the Euro zone.

Lack of clarity from the Group of Seven finance chiefs over the weekend on how to boost their struggling economies added more woes to the markets.

The 30-stock FBM KLCI index fell 1.56% or 22.86 points to 1,446.26, the steepest single day loss since Aug 9, weighed by losses including at banking and key blue chips. Year-to-date, the KLCI is down 4.78%.

Other regional markets which have fallen sharply year-to-date are the Nikkei 225, which is down 16.55%, Hang seng Index down 17.39%, Shanghai Composite Index 11.05%, Taiwan Taiex 11.61% and South Korea’s KOSPI 11.61% and Singapore’s FTSE Straits Times Index.

Stocks to watch on Tuesday are telecommunications companies have agreed to defer the 6% service tax for pre-paid users which was to come into effect on Thursday, Sept 15.

Bernama reported that Information, Communications and Culture Minister Datuk Seri Dr Rais Yatim said the agreement was reached at a meeting between the four major telcos in the country and the ministry at Angkasapuri here on Monday.

"The meeting with the managements of Celcom, Maxis, Digi and U Mobile was held in a cordial atmosphere ...they responded positively to the ministry's advice, the government's views and sentiments expressed by Prime Minister Datuk Seri Najib Tun Razak on the matter," he told reporters after the meeting which lasted about an hour.

Telcos which are expected to be most impacted by the recent decision include DIGI.COM BHD [] which has the largest number of prepaid users. DiGi fell 30 sen to RM31.70.

KKB ENGINEERING BHD [] has secured two contracts totaling RM30.7 million to supply water pipes and LPG cylinders.

Its subsidiary, Harum Bidang Sdn Bhd accepted a contract from YWP Builders Sdn Bhd to manufacture and supply MSCL water pipes and pipe specials for the rural water supply project in Sarawak.

KKB also said it had accepted a letter of award from PETRONAS DAGANGAN BHD [] to fabricate and supply the LPG cylinders to Petronas Dagangan Bhd for one year commencing September with an option to extend for another year.

PUNCAK NIAGA HOLDINGS BHD [] announced that holders of its RM546.87 million nominal value 15-year redeemable unconvertible notes can exercise their right to sell any of the notes. he company said the 10th anniversary of the date of the issue or put date would be on Nov 18.

All noteholders have the right to require the company to repurchase all or some only of their outstanding notes on the put date. The company shall be obliged to repurchase the same at the full outstanding principal amount.

Meanwhile, US-based global investment management firm T. Rowe Price Associates, Inc. has exited from REXIT BHD [] after the disposal of its 13.36 million shares or 7.22% stake on Sept 7.

An earlier filing showed that Rexit’s non-independent non-executive director Kuah Hun Liang had acquired 12 million shares on Sept 7 at 22 sen each for RM2.64 million. The acquisition increased the veteran banker’s stake to 10.35% or 19.157 million shares.

INSAS BHD [] saw its indirect stake in Formis Bhd increase to 15.09 million shares or 8.12% after the acquisition of three million shares on Sept 8. The shares were acquired by its subsidiary Insas Plaza Sdn Bhd via a direct business transaction.


Maybank IB Views

Monday, September 12, 2011

Construction: Overweight
Offers shelter from external turmoils

Maintain Overweight. Construction awards should pick up after a slow 1H 2011, to provide the multiplier impact to the domestic economy in anticipation of a slowdown at the global front. During the previous major downturns, government development spending continued to rise. Over the near-term, this will include the new public-private partnership (PPP) projects. We expect major awards only in 2012 relating to the MRT and SCORE. Our top buys are still Gamuda and Hock Seng Lee (HSL).

Gamuda RM3.03: Buy
Record profits, Vietnam's conundrum Shariah-compliant

Record profits, Vietnam's conundrum. Gamuda's final results, due on 29 Sept, should meet expectations for record profits in FY11. We forecast FY12 to be another record year, on strong domestic property sales locked in. Nonetheless, we have tweaked our FY12-13 net profit forecasts by -1% after factoring lower sales forecast for the Vietnam property projects. We also reduce our RNAV-based TP to RM4.10 (-8%) after adjusting for lowered GDVs for the Vietnam projects and other house-keepings. The stock remains our top pick in construction.

Industrial Production Index (IPI), Jul '11
On slippery pole...

Volatile monthly industrial production trend… Industrial production in Jul '11 slipped back into the red as it contracted by -0.6% YoY (revised Jun'11: +1.3% YoY; Maybank-IB: +1.7% YoY; consensus: +2.4% YoY), dragged primarily by mining output and not helped by slower manufacturing production. MoM, the overall index fell by -0.6% (Jun: +1.3% MoM). For the first seven months of 2011, total output expanded by a mere +0.2% YoY (2010: + 7.2% YoY). Excluding mining, the adjusted industrial production grew by +1.8% YoY (June '11: +4.8% YoY).

The FBM KLCI fell 4.97-points and closed at 1,469.12 last Friday. The local market remained somewhat quiet in lack luster and low volume trading. The weaker support areas for the FBM KLCI are located in the 1,423 to 1,455-zone. The next resistance levels of 1,469 and 1,511 will see very heavy liquidation activities.

Trading Idea is a Short-Term Buy call on KFIMA.

Other Local News
Sime: Open to GO for E&O. Sime Darby Bhd is open to increase its stake and make a general offer (GO) for Eastern & Oriental Bhd (E&O) shares at the right time, having recently purchased a 30% stake in the latter at RM2.30 per share, said its president and group CEO Datuk Mohd Bakke Salleh. (Source: The Star)

CIMB: Nazir reorganizes CIMB. CIMB Group Holdings Bhd has embarked on its biggest reorganization since a restructuring in 2005 gave birth to the second largest banking group in the country. After the exercise, CIMB’s group management committee will be trimmed to 15 people from 21. Datuk Seri Nazir Razak will hold dual functions as group CEO and head of Malaysian consumer bank. Meanwhile, Datuk Charon Wardini Mokhzani will be designated as CEO of CIMB Investment Bank Bhd. (Source: The Edge Financial Weekly)

UEM Land: 5 biotech proposals. Malaysian Biotechnology Corp says five more foreign biotech companies are planning to invest millions of ringgit at BioXCell@Nusajaya. One of them is India’s Biotech giant, Biocon Ltd that will be setting up a RM500m plant in BioXCell. UEM Land holds 40% equity in Malaysian BioXCell with remaining 60% held by Biotech Corp. (Source: The Star)

O&G: Gas Malaysia guarantees dividends in first two years, IPO set at RM2.20/sh. Gas Malaysia Bhd will pay a guaranteed dividend of 100% and 75% in the first two years, respectively, after floating its shares on Bursa Malaysia in December this year. Separately, Gas Malaysia shares will be sold at an indicative offer price of RM2.20 a share to prospective investors. (Source: The Star, The Malaysian Reserve)

Construction: Works Ministry to discuss Bumi contracts with Prasarana. The Works Ministry will hold discussions with Syarikat Prasarana Negara Bhd to identify job scope and contracts worth RM8b to be distributed to Bumiputera contractors via the implementation of the Sg-Buloh-Kajang stretch of the Mass Rapid Transit (MRT) system. (Source: Bernama)


RHBInvest Research

Top Story: IJM Plantation – Harvesting for the future Outperform

Visit Note

¨ Key highlights from our recent meeting: (1) Strong recovery in FFB production so far but can it last?; (2) Happy with current CPO prices; (3) Not required to implement MAPA wage hike; (4) New planting targets reduced; and (5) Capex guidance raised.

Corporate Highlights

MAHB: Hike charges to be put on hold Outperform

News Update

¨ MAHB announced that it has been advised by the Ministry of Transport to delay the hike in charges until further review which was scheduled to commence on Sept 15.

¨ Given that the hike will now be put on hold, we believe there is a possibility of two scenarios: 1) Hike in charges will likely be structured into Marginal Cost Support (MARCS), a compensation mechanism which MAHB will be paid by the government of the difference between the actual amount charged and the revised level; or 2) Hikes to be completely called off.


RHBInvest Research

Saturday, September 10, 2011

Top Story: Hartalega – Expansion Plans Key To Capture Europe Market Market Perform (down from OP)

Visit Note

¨ Management targets FY12 revenue growth of 20-30%, driven by growing demand from markets in Europe and steady demand from the US.

¨ We believe the rapid growth in demand for nitrile gloves there is mainly due to customers shifting purchases from natural rubber gloves to nitrile gloves due to the higher volatility in latex prices (as compared to nitrile prices), leading to uncertainty and fluctuations in natural rubber glove ASPs.

Macro View

Trade: Exports moderated in July, on the back of slowing global demand

Economic Highlights (published 8 Sep 2011)

¨ Exports moderated to 7.1% yoy in Jul, after picking up to +9.6% in Jun, but higher than +5.4% in May. The slowdown was mainly due to a sharper decline in the exports of electronic & electrical (E&E) products, on the back of a slowing global demand as well as a moderation in the exports of non-electronic & electrical (E&E) manufactured goods.

Interest rates: Bank Negara kept the OPR unchanged at 3.0%

Economic Highlights (published 8 Sep 2011)

¨ This was the second time in a row that BNM held its OPR stable, suggesting that it has shifted its focus from containing inflation to sustain growth. Indeed, BNM highlighted that global growth has moderated in recent months as growth in advanced economies slowed by more than expected following the greater policy uncertainties, worsening of confidence and heightened financial market volatilities, amidst continued weaknesses in labour market conditions.

Corporate Highlights

DiGi: Fulfilling dividend promise Outperform (up from TB)

Briefing Note

¨ We are positive that DiGi intends to distribute excess cash of about RM509m (65 sen/share) to shareholders by 1HCY12. This would be done after utilising the share premium at its wholly-owned subsidiary, DiGiTel (DiGi Telecommunications Sdn Bhd). The entitlement date will be announced later.

¨ DiGi should be paying more dividends for FY11 (vs. FY10: RM1.63/share) totalling RM1.6bn (RM2.05/share) comprising: 1) FY11 DPS forecast of RM1.40 based on 100% payout of FY11 EPS; and 2) RM509m capital distribution (65/share). Based on core FY11 earnings (after stripping out accelerated depreciation), this implies a payout ratio of 114%.

Telecoms: 6% service tax no longer absorbed from 15 sep Overweight

Sector Update

¨ As anticipated, the telcos are passing on the 6% service tax to prepaid users effective 15 Sep. The move is positive given the positive earnings impact (already imputed into our earnings forecasts) as the telcos would no longer absorb the tax.

¨ We believe the telcos may want to preempt any further potential increase in the service tax, as Budget 2012 is due to be tabled by the Prime Minister on 7 Oct.


Maybank IB Views

Friday, September 9, 2011

BNM Monetary Policy
No change in key policy instruments...

Bank Negara Malaysia (BNM) kept the Overnight Policy Rate (OPR) at 3.00% and the Statutory Reserve Requirement (SRR) at 4% following its Monetary Policy Committee (MPC) meeting yesterday. BNM’s decision to leave both OPR and SRR unchanged sent a strong signal that the central bank’s monetary policy bias has shifted to supporting growth. We see the OPR staying at current 3% level at least until mid-2012, although it is possible that this could be extended into 3Q 2012. The same goes for SRR, as BNM's monetary policy now seek to not only maintain accommodative cost of financing, but also to ensure availability of liquidity to support growth.

Economic Transformation Programme (ETP)
Update #7

PM announced 8 new entry point projects (EPP) under the Economic Transformation Programme (ETP) involving RM1.43b investments in six National Key Economic Areas (NKEAs). The biggest investment was in the palm oil NKEA where KL Kepong will invest RM706m in four downstream projects. Cumulatively, over half of EPPs and over one-fifth of investment targets have been announced. On progress of earlier announced EPPs, 26% are fully operational, 57% have commenced implementation, and 16% are still work-in-progress.

External Trade, Jul 2011
A mixed bag of data...

Exports growth of +7.1% YoY in Jul '11 was better than expected (revised Jun '11: +9.6% YoY, Maybank-IB: +4.6% YoY; Consensus: +6.6% YoY). But import growth came in below estimates at +2.9% YoY (revised Jun '11: +6.9% YoY, Maybank-IB: +4.1% YoY; Consensus: +6.5% YoY). As export growth outpaced import growth, the trade surplus was a larger-than-expected RM9.45b (revised Jun '11: +RM7.88b, Maybank-IB: +RM7.6b; Consensus: +RM7.8b). MoM, exports gained by +2.4% while imports fell by -0.4%. YTD, exports rose by +6.9% while imports increased by +8.7% giving a RM68.6b trade surplus. Our full-year forecasts for export growth, import growth and trade surplus are +8.4%, +10.8% and RM106.9b respectively.
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Telcos: Neutral
6% service tax passed through

A pleasant surprise. That the 6% service tax will be passed through from the telcos to prepaid customers is a pleasant surprise. While this move has been talked about for awhile, the timing of it is earlier than expected. Biggest beneficiary of this is Digi, with its larger prepaid customer base. The telco sector remains defensive for its domestic focus and decent yields - Telekom remains our top pick.

Digi.Com RM31.12: Hold
Capital management plans Shariah-compliant

Marginally positive, Hold maintained. Digi's proposals ensure that as much is returned to shareholders out of reserves as possible. In addition to the expected nominal DPS of RM1.63/share in 2011, investors could possibly see another 30sen in special DPS next year. Separately, we have raised 2012/2013 earnings by 8% and 6% respectively and our DCF-derived TP has been lifted to RM31.50 with the pass-through in the 6% service tax (see separate writeup today).

Kuala Lumpur Kepong RM21.60: Hold
Seeking downstream growth Shariah-compliant

Rain or shine, expansion goes on. KLK will invest RM706m capex in 4 downstream projects in Malaysia, PM Najib announced during the Economic Transformation Programme update session yesterday. While the impact may only be felt three years later, we are nonetheless positive on this development especially as it comes along with RM134m of approved MPOB grants to reduce costs and enhance returns. No earnings impact for now; funding is not an issue. Maintain Hold with an unchanged TP of RM21.60 based on 16x FY12 EPS.

The FBM KLCI ended 5.22-points higher to close at 1,469.83 yesterday. Its resistance areas of 1,471 and 1,497 will cap market gains, whilst the obvious support areas are located at 1,443 and 1,469. Due to the US markets’ weaker tone last night, we may see a steady tone for the local bourse today. Some further profit-taking activities may persist to depress the markets’ rebound from its recent 1,423.47 low.

Trading idea is a Short-term Buy call on MALTON

Other Local News
TNB: Sees delay in gas recovery. Tenaga Nasional Bhd (TNB) gas supply curtailment issues are likely to continue as the key Bekok field is only expected to commence operations by another month. The expected delay is paired with another negative surprise TNB might not get back the full 150-200m standard cu ft per day (mmscfd) as it has to share the capacity with the industrial sector. (Source: The Star)

DRB-HICOM: Going for more M&As. DRB-HICOM Bhd is still hungry for more mergers and acquisitions (M&A) to add synergy to its core businesses and to expand its operating profit. It is allocating RM700m to RM1b as capital expenditure. This comprises investments for its Volkswagen assembly, the design and manufacturing of BAE System's 8x8 armoured wheel vehicles, and property development along with its automotive university college in Pekan. (Source: The Star)

Puncak Niaga: Syabas files RM1.05b suit against Selangor Government. Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), a subsidiary of Puncak Niaga Holdings Bhd, has filed a RM1.05b claim against the Selangor Government. The claim, filed at the Kuala Lumpur High Court, was for compensation for the period from Jan 1, 2009 to March 31, 2011 from the state government under the 2004 concession agreement between Syabas, the Federal Government and the Selangor Government. (Source: Bursa Malaysia)

Consumer: McD Malaysia to open 87 new restaurants by 2014. McDonald's Malaysia will invest RM348m to open another 87 restaurants by 2014, spending RM4m on each new restaurant. The company aims to have 100 franchised stores by 2014. Currently, it has 13 local franchisees in Malaysia and 27 franchised restaurants. (Source: The Edge Financial Daily)

Utilities: 1MDB evaluating plan to privatise Indah Water. 1Malaysia Development Bhd (1MDB) is evaluating a plan to privatise Indah Water Konsortium Sdn Bhd (IWK), the national sewerage company. It is believed that 1MDB is part of a consortium that intends to take over IWK. The other member of the consortium is believed to be either Puncak Niaga Holdings Bhd or controlling shareholders of the company. (Source: Business Times)


RHBInvest Research

Thursday, September 8, 2011

Top Story: Gamuda – What if MMC-Gamuda JV walks away from MRT tunnelling package? Outperform

Company Update

¨ The recent correction in Gamuda share price may be partially attributable to an increased risk being priced in by the market of MMC-Gamuda not winning the MRT tunnelling package, with the “mighty” Chinese contractors coming into the picture.


Maybank IB Views

Wednesday, September 7, 2011

Alam Maritim Resources RM0.73: Hold
Stepping up contract wins Shariah-compliant

Bags RM220m of OSV contracts, a positive. OSV hiring is gaining momentum, reflecting the improving prospects for local-flagged vessels in tandem with the intensification of PETRONAS' capex programs. However, Alam’s fleet growth remains constrained by its stretched balance sheet, impeding its earnings potential. Maintain Hold with a RM0.85 target price, pegged to 9x 2012 EPS.

The FBM KLCI tumbled 8.75 points to close at 1,454.37 yesterday. Its resistance areas of 1,454 and 1,474 will cap market gains, whilst the weaker support areas are located at 1,423 and 1,450.Due to the US markets’ weaker tone last night; we will see a softer mode for the local bourse today.

Trading Idea is a Take Profit call on RHBCAP

Other Local News
RHBCap: Looks for new chief by year-end, Delays application to buy Bank Mestika. RHB Bank Bhd is on the lookout for a new MD now since Renzo Viegas, its principal officer that was supposed to be MD, intends to take time off. A potential candidate is likely to be finalised soon, possibly in the next two to three weeks, and will likely be appointed before the year-end if the central bank has no objections to the candidate. RHBCap has put on hold its application to acquire Indonesia's PT Bank Mestika Dharma pending a review by Indonesia’s central bank to impose a limit on single-party ownership in commercial banks there. (Source: Business Times)

MAS: US firm sues for USD80m. Malaysian Airline System Bhd has been sued by GIRO — Warranty House International Inc, which is seeking damages of up to USD80m (RM239m). MAS is reviewing the complaint with the assistance of external counsel. (Source; Bursa Malaysia)

Sime Darby: E&O deal under scrutiny. The securities commission (SC) is examining the circumstances of the transaction involving Sime Darby buying 30% stake in Eastern & Oriental Bhd. The premium paid by Sime Darby is one, among several factors which the SC will take into consideration in deciding whether an acquirer has obtained control of a company. (Source: The Star)

Mining: Perak passes EIA reports for Brazil's Vale to set up maritime terminal. The Perak state government has passed the Environmental Impact Assessment (EIA) reports for Brazilian mining giant Vale SA to set up a maritime terminal in Teluk Rubiah near Lumut. Vale is investing an initial USD1.4b, or RM4.1b, to develop the first phase of an iron ore complex with capacity to dock vessels and handle as much as 30m tonnes of iron ore a year, starting 1H14. (Source: Business Times)


RHBInvest Research

Top Story: Motor – Jun 2011 quarter report card Neutral

Sector Update

Tan Chong: Fair value maintained at RM5.50 Outperform

DRB-Hicom: Fair value maintained at RM2.95 Outperform

MBM Resources: Fair value maintained at RM3.25 Market Perform

UMW: Fair value maintained at RM7.35 Market Perform

APM: Fair value maintained at RM5.10 Market Perform

Proton: Fair value lowered to RM2.50 Underperform

¨ Of the six stocks in the sector under our coverage, only three (Tan Chong, APM and DRB) reported Jun quarter earnings that were in line with expectations. Results at MBM, UMW and Proton disappointed.

Sector Call

Education: 1HCY11 results affected by regulatory changes Overweight

Sector Update

¨ SEGi delivered strong numbers in 1HCY11, with results in line with estimates, but HELP and Masterskill’s 1HCY11 results were below our and consensus expectations as their student numbers dropped due to external factors including regulatory changes that affected student intakes during the 1HCY11 peak period.

Corporate Highlights

Hong Leong Bank: Rights shares priced at RM8.65/share Market Perform

News Update

¨ HL Bank announced that the issue price for its RM2.6bn rights issue has been fixed at RM8.65/share, at an entitlement basis of 1 Rights Share for every 5 existing HL Bank shares held. Based on the last closing price of RM12.20, the issue price represents a discount of 25.5% to the theoretical ex-rights price.


Stocks to watch: Plantations, Taliworks, Alam Maritim, MAS

KUALA LUMPUR: After two days of straight losses, the market may just edge up on Wednesday, Sept 7, aiding by some selected buying of index-linked stocks by local funds following the more positive Asian and European markets.

However, the overnight fall on Wall Street could rein in interest. Wall Street fell for a third day on Tuesday on fears Europe still has failed to tackle its debt crisis, prompting worries the market is headed to new lows for the year.

The Dow Jones industrial average dropped 100.96 points, or 0.90 percent, to 11,139.30. The Standard & Poor's 500 Index fell 8.73 points, or 0.74 percent, to 1,165.24. The Nasdaq Composite Index lost 6.50 points, or 0.26 percent, to 2,473.83.

Among the stocks which could see trading interest are PLANTATION []s which are currently affected by the decline in crude palm oil (CPO) prices.

CPO for third-month delivery fell RM33 to RM2,985 per tonne on concerns that Europe’s debt crisis was getting worse, impacting demand for commodities.

Meanwhile, as expected, foreign investors were net sellers on Bursa Malaysia, selling RM3.8 billion of Malaysian equities in August.

Maybank Investment Research said it believed that there could still be some near-term downside potential as August’s net activities reversed out just 58% of the total net foreign buying in April to July.

“We remain defensive at the core, expecting a rebound towards year-end to lift KLCI closer to our recently revised 1,520 target,” it said.

The research house said the last time that Malaysian equities saw such a magnitude of foreign outflow from equities was in February this year (-RM3.4b). Domestic funds, which had been net sellers since 2H 2010, were the net buyers in August.

TALIWORKS CORPORATION BHD [] was awarded a RM339.39 million sub-contract for the Mengkuang Dam expansion project. The sub-contract involved earthworks for CONSTRUCTION [] of dam, draw-off tunnel and others over a 60-month period. The completion date is July 31, 2016.

ALAM MARITIM RESOURCES BHD [] has inked a charter party agreement with ExxonMobil Exploration and Production Malaysia Inc (EMEPMI) worth up to RM220.83 million.

Its unit Alam Maritim (M) Sdn Bhd had received the letter of award from EMEPMI to provide one unit accommodation vessel and of one unit anchor handling tug. It said the contract was for a primary period of three years with an extension option exercisable by EMEPMI for another two years.

“The contract is for a value of up to RM220.83 million (if EMEPMI engages the vessel and tug for the full duration - inclusive of optional period),” it said.

US-based GIRO-Warranty House International, Inc. is seeking US$80 million (RM238.4 million) in damages from MALAYSIAN AIRLINE SYSTEM BHD [] (MAS).

MAS was served with a complaint in the US District Court for the Northern District of Oklahoma on Aug 22. “GIRO – Warranty House International, Inc. alleges breach of contract and fraudulent misrepresentation and seeks damages of up to US$80 million,” it said.

CME GROUP BHD [] secured a RM14.25 million contract to supply four fire-fighting vehicles with the associated equipment and services for the Sabah Oil & Gas Terminal (SOGT) project.

Its unit CME Edaran Sdn Bhd had accepted the letter of award dated Aug 22 from Petronas Carigali Sdn Bhd.

The contract was from Aug 19 until Aug 21, 2012.ACE Market-listed Ariantec Global Bhd’s unit secured a RM19.76 million sub-contract for bandwidth management equipment for TELEKOM MALAYSIA BHD [].

Ariantec Sdn Bhd secured the contract from Niagara Technologies International Sdn Bhd, a systems integrator to supply, install and maintain TM’s bandwidth equipment.


Maybank IB Views

Monday, September 5, 2011

Banking: Neutral
Earnings growth cut

Neutral. We maintain our Neutral stance on the banking sector on the premise that valuations are fair for most of the stocks within our coverage, particularly amid a competitive operating environment and slower earnings growth projections. Top picks in the sector continue to be AMMB Holdings, BIMB Holdings and CIMB Holdings.

The FBM KLCI rebounded 29.28-points and closed at 1,474.09 last Friday. The local market remained somewhat firm on low volume buying on blue chip stocks as the bourse played catch-up with global markets over the 3-day holiday break. The weaker support areas for the FBM KLCI are located in the 1,423 to 1,470-zone. The next resistance levels of 1,474 and 1,511 will see very heavy liquidation activities.

Trading Idea is a technical Take Profit call on GAMUDA.

Other Local News
AirAsia: EPF buys 10m more shares. The Employees Provident Fund (EPF) had bought 4.27m shares on Aug 25 and 5.72m shares the following day. With the acquisition, EPF increased its equity interest to 12.5%. (Source: Bursa Malaysia)

RHB: Withdraws MD application to Bank Negara. RHB Banking Group has withdrawn its application to Bank Negara Malaysia to seek the appointment of Renzo Viegas as MD of RHB Bank Bhd. The reason for the withdrawal is its current internal reorganization. (Source: The Edge Financial Weekly)

BRDB: To reward shareholders, divest BSC. Bandar Raya Developments Bhd (BDRB) is looking to pay a bumper dividend to its shareholders in a complex corporate exercise that may see it dispose its Bangsar Shopping Centre (BSC). (Source: The Edge Financial Weekly)

Plantation: Oil palm seeds to cost 30% more. The price of oil palm seeds, now at RM1.85 each, will be raised by 30% to RM2.35 starting January next year. The increase is due to the recent hike in labour wages and foreign worker levy, fertiliser cost, electricity tariff and packaging material cost. (Source: Business Times)


RHBInvest Research

Friday, September 2, 2011

Top Story: Earnings Review – Stumbling growth and global risk aversion

Strategy Update

¨ 2Q results continued to surprise on the downside despite our recent downward revision in earnings to take into account a slower-than-expected global economic recovery. Of the 115 companies that we cover, 62 of the results (53.1% of the total) were within our expectations, 38 below projections (33.0% of the total) and 15 above forecasts (13.1% of the total).

Sector Call

Banks: 2QCY11 report card – Another quarter of record profits but growth slowing Neutral

Sector Update

¨ Generally, there were no major earnings surprises in the recent 2QCY11 reporting season.

Telecom: Mega school internet project Overweight

Sector Update

¨ Six companies (Maxis, Celcom, YTL Comms, Jaring, Multimedia Synergy Corp and a joint TM-Time dotCom bid) have been reportedly shortlisted for the RM1.5bn 5-year contract to provide Internet access and a virtual learning module (VLM) platform for the 9,924 schools in the country.


Stocks to Watch: Opcom, Tambun Indah, Harrisons, LFIB

KUALA LUMPUR: Investors are expected to stay on the sidelines in September, as they reel from the foreign selldown of key stocks in August.

A total of RM97.44 billion was wiped out from Bursa Malaysia’s market capitalisation in August, reducing it to RM1.241 trillion.

The 30-stock FBM KLCI fell 6.5% or 101.54 points to 1,447.27, but off the earlier lows, aided by some late buying of key heavyweights especially Petronas Chemicals Bhd which had been earlier sold down. As at Aug 29, the KLCI is down 4.72% year-to-date.

The FTSE Bursa Malaysia 100 saw the index decline 7.32% to 9,692.8 but the broader EMAS Index fell the most, down 7.81% to 9,908.81.

Corporate results also disappointed. Investors are also not expected to draw comfort from OSK Research’s cautious report that based on the 100 companies under its coverage that have released results as of Aug 25, the corporate results were “not pretty”.

The research house said 13% outperformed and 33% underperformed for one of the poorest results since the fourth quarter of 2009.

“While small caps had already experienced more earnings downgrades than upgrades since 2Q2010, Big Caps had only seen more downgrades since 1Q2011. However, that situation accelerated this quarter with high profile downgrades of CIMB, MAS and Axiata,” it said.

Most importantly, OSK Research said the sell-off in the KLCI therefore reflects a closing of the fourth quarter gap between earnings (fundamentals) and the market (sentiment).

“We had hoped that earnings would catch up with the KLCI. Unfortunately it seems that the KLCI is catching up with declining earnings. Maintain NEUTRAL on the market with our 2012 KLCI fair value intact at 1,466,” it said.

OSK Research advised investors that now was not the time for aggressive bottom fishing but preferred its defensive buys.

“On another note, we note with distaste developments surrounding the Esso-San Miguel deal. We believe that rumoured ‘outside’ parties are generating an unhealthy newsflow for future investments in Msia. Objections over a brewery should also apply to Asahi’s takeover of Pemanis if that were truly the case,” it pointed out.

Meanwhile, stocks to watch on Friday, Sept 2 are fibre optic cables manufacturer OPCOM HOLDINGS BHD [], Tambun Indah Bhd, Harrisons Holdings (Malaysia) Bhd and LION FOREST INDUSTRIES BHD [] (LFIB).

Opcom declared a special interim dividend of 22.50 sen per share and the dividend will go ex on Sept 14 and the entitlement date is Sept 19.

Its largest shareholder is M Ocean Capital Sdn Bhd with a 26.94% stake or 34.75 million shares. Datuk Seri Mukhriz Mahathir owns 23.5% or 30.31 million shares while Rezeki Tegas Sdn Bhd holds 20.93% or 27 million shares

Tambun Indah is acquiring property development company Premcourt Development Sdn Bhd for RM5.5 million which is slated to undertake a project with gross development value (GDV) of RM180 million in Bandar Jelutong on Penang island.

Harrisons Holdings (Malaysia) Bhd has declared a special interim gross dividend of 50 sen per share for the financial year ending Dec 31, 2011. The ex-date was Sept 15 and the entitlement date was Sept 20.

LFIB is acquiring 58,000 hectares under an economic land concession (ELC) in Cambodia for US$26.1 million (RM78.3 million) to cultivate oil palm and rubber trees. LFIB’s concession would not be less than 70 years under the master service agreement.

Other companies which could see trading interest are CYMAO HOLDINGS BHD [] and MYCRON STEEL BHD [].

Cymao’s earnings surged to RM2.68 million in the second quarter ended June 30, 2011 from only RM179,000 a year ago, underpinned by an 18% increase in plywood prices. This was despite that revenue fell 21% to RM26.02 million from RM33.02 million. Earnings per share were 3.17 sen vs 0.24 sen.

Mycron Steel sustained losses of RM3.29 million in the fourth quarter ended June 30, 2011, a contrast from a year ago’s earnings of RM3.34 million as it was impacted by decrease in sales volume and lower sales margin.

Revenue fell 22.2% to RM104.85 million from RM134.89 million. Loss per share was 1.85 sen compared with earnings per share of 1.88 sen.

Meanwhile, a local newspaper reports that six companies are in the running for the RM1.5 billion five-year contract to provide Internet access and a virtual learning module (VLM) platform for the 9,924 schools in the country under the 1Bestarinet project, sources said.

The six are said to be Celcom Axiata Bhd, Jaring Communications, Maxis Bhd, YTL Communications, Multimedia Synergy Corp while TELEKOM MALAYSIA BHD [] and TIME DOTCOM BHD [] submitted a joint bid.

According to the news report, the access job comes with an option to extend the contract period for another five plus five years, totalling 15 years, and this would include installation, maintenance and provision of a VLM.

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