Friday, 11 November 2011

Market Commentary

The FBM KLCI index lost 3.90 points or 0.26% on Friday. The Finance Index fell 0.23% to 13152.76 points, the Properties Index up 0.68% to 951.46 points and the Plantation Index rose 0.43% to 7519.15 points. The market traded within a range of 9.58 points between an intra-day high of 1478.33 and a low of 1468.75 during the session.

Actively traded stocks include COMPUGT, JCY, TAKASO, IDMENSN, JCY-CD, MARCO-WA, IRCB-WA, TIGER, KBUNAI and RSAWIT. Trading volume decreased to 2068.34 mil shares worth RM1230.49 mil as compared to Thursday’s 2644.11 mil shares worth RM1462.10 mil.

Leading Movers were SIME (+3 sen to RM8.89), MAXIS (+4 sen to RM5.31), KLK (+8 sen to RM20.90) and PLUS (+1 sen to RM4.41). Lagging Movers were GENTING (-10 sen to RM10.58), CIMB (-4 sen to RM7.22), TENAGA (-4 sen to RM5.75), PPB (-22 sen to RM16.62) and DIGI (-22 sen to RM33.78). Market breadth was positive with 425 gainers as compared to 310 losers.-- JF Apex Securities Bhd

KLCI succumbs to profit taking, extends losses

KUALA LUMPUR: The FBM KLCI reversed its earlier gains and slipped into negative territory on Friday, Nov 11 as some mild profit taking on select blue chips weighed on the index.

The FBM KLCI fell 3.90 points to 1,468.75, weighed by losses at select blue chips.

Gainers led losers by 425 to 310, while 282 counters traded unchanged. Volume was 2.07 billion shares valued at RM1.23 billion.

At the regional markets, Hong Kong’s Hang Seng Index closed 0.91% higher at 19,137.17, South Korea’s Kospi jumped 2.77% to 1,863.45, Taiwan’s Taiex up 0.80% to 7,367.29, Japan’s Nikkei gained 0.16% to 8,514.47 and the Shanghai Composite Index edged up 0.06% to 2,481.08, while the Singapore Straits Times Index added 0.14% to 2,790.94.

On Bursa Malaysia, DiGi and PPB fell 22 sen each to RM33.78 and RM16.62, Ya Horng down 18 sen to 42 sen, Sunchirin 14 sen to RM1.38, Uzma 13 sen to RM1.68, Petronas Dagangan 12 sen to RM16.10, Tasek and Genting 10 sen each to RM8 and RM10.58, while Benalec fell eight sen to RM1.35.

Compugates was the most actively traded counter with 79.8 million shares traded. The stock gained half a sen to 8.5 sen.

Other actives included JCY International, Takaso, iDimension, Tiger, Karambunai and Rimbunan Sawit.

Meanwhile, gainers included United PLANTATION []s, BLD Plantations, CI Holdings, Harvest Court, Manulife, Dutch Lady, BAT, TSH Resources and GAB.

KL shares close lower

Shares of the following companies had unusual moves in Malaysia trading. Stock symbols are in parentheses and prices are as of the close in Kuala Lumpur.

The FTSE Bursa Malaysia KLCI Index fell 0.3 per cent to 1,468.75, a second day of losses. The gauge declined for the second straight week, dropping 0.6 per cent.

C.I. Holdings Bhd, a beverage group, jumped 5.5 per cent to RM5.22, its highest close since June 6, 2000. The company is proposing to increase the size of its cash distribution to RM5.10 a share.

Century Logistics Holdings Bhd, a transport services provider, climbed 3 per cent to RM1.70, its highest close since Aug. 23. Earnings in the third quarter grew to RM8.99 million.

Equine Capital Bhd, a property developer, increased 6.7 per cent to 56 sen, the steepest gain since April 1. Profit in the second quarter almost doubled to RM12 million from RM6.3 million a year earlier.

iDimension Consolidated Bhd, a Malaysian software developer, rose 1.3 per cent in its debut on the Kuala Lumpur stock exchange today. The stock climbed to 38.5 sen from an initial public offering price of 38 sen.

MWE Holdings Bhd, a yard and fabric manufacturer, increased 1.6 per cent to RM1.25, its highest close this month. Third-quarter profit rose 3 per cent to RM12.5 million.

United Malayan Land Bhd, a Malaysian property developer, gained 2.1 per cent to RM1.44, its biggest increase since Oct. 13. The company agreed to buy Tentu Teguh Sdn Bhd and land in Iskandar, Johor, for RM11 million. -- Bloomberg

Dijaya, Ivory to develop land in Penang

Dijaya Corp and Ivory Properties Group Bhd said they planned to jointly develop 102 acres of land in Malaysia’s northern Penang state.

The developers will build residential and commercial properties on the land which they estimate may generate sales worth RM10 billion, the companies said in separate exchange filings today in Kuala Lumpur. -- Bloomberg

UM Land grows Iskandar real estate cheaply

KUALA LUMPUR: United Malayan Land Bhd (UM Land) has proposed to acquire 332.68 acres (133ha) in Iskandar Malaysia, Johor, through the purchase of Tentu Teguh Sdn Bhd. This will expand its landbank there at the low price of just over RM4 per sq ft (psf).

The property development company announced to Bursa Malaysia yesterday that it had entered into a conditional share sale agreement to acquire Tentu Teguh for RM10.98 million cash. Upon completion, Tentu Teguh will become a wholly-owned subsidiary of UM Land.

If the proposal is approved, UM Land will subsequently receive 332.68 acres from Tentu Teguh’s February 2011 purchase from SAP Holdings Bhd.

The 332.68 acres comprise three parcels of freehold land in Felda Cahaya Baru in Johor Bahru. Tentu Teguh bought the land from SAP for RM45 million and has so far paid RM2.55 million.

UM Land will make the remaining payment of RM42.45 million for the land to SAP and Cahaya Baru Development Bhd and will absorb Tentu Teguh’s liabilities up to a maximum of RM9.3 million.

Based on the purchase price, the assumption of Tentu Teguh’s liabilities plus the remaining payments for the land, The Edge Financial Daily estimates the total effective cost to UM Land for the 332.68 acres will be RM62.73 million, or RM4.33 psf.

An analyst deems the price attractive given its strategic location within Iskandar Malaysia and its proximity to the major ports and petroleum hubs in the southern tip of the state.

“[The land] is within close proximity of UM Land’s flagship township Bandar Seri Alam and surrounding developments such as Taman Scientex, Bandar Bistari Perdana, Kota Masai and Lakehill Resort City,” said the company.

The company said fast expanding townships in the vicinity will provide a good base of potential buyers for its proposed developments on the land.

Pasir Gudang Port and the Tanjung Langsat industrial area are also close to the land. Tanjung Langsat is slated to be developed into a port for petrochemicals and non-edible chemicals and storage facilities. Ten multinationals have already committed to invest RM4 billion in the estate over the next few years.

Benalec Holdings Bhd announced yesterday that it had won approval from the Johor government to reclaim 1,760 acres on the coast of Pengerang and 3,485 acres on the Tanjung Piai coast in Johor, close to UM Land’s tract (please see separate story).

Benalec plans to develop the reclaimed land into a hub for petroleum and petrochemicals as well as maritime industrial parks.

Its ambitious plans, the large presence of oil and gas projects on the coast and the growing recognition of Iskandar Malaysia auger well for UM Land’s large landbank in the area.

A market observer notes that UM Land’s cost for the latest piece of land will likely be much lower than Benalec’s reclamation costs for the new project.

In a separate filing yesterday, UM Land announced that it had received approval of its earlier proposal to Bursa Malaysia in August to acquire a 8.89-acre parcel of land in Plentong, Johor, through its indirect wholly-owned subsidiary, PMS Services Sdn Bhd.

The purchase was made with a cash consideration of RM19.37 million, or RM50 psf, from TCB Realty Sdn Bhd.

UM Land said in its proposal filed with Bursa Malaysia in August that it “intends to build a commercial and retail complex to complement the existing amenities and facilities within the township”. The estimated gross development value of the project is RM90 million.

Despite a relatively small market capitalisation of RM426 million, UM Land has a large landbank of close to 2,000 acres located in Iskandar Malaysia and Selangor, as well as several niche projects in downtown Kuala Lumpur.

Its two main townships in Iskandar are Seri Alam and Taman Seri Austin, while its Bangi project is Bandar Seri Putra.

While UEM Land Holdings Bhd is synonymous with Iskandar Malaysia, UM Land is also one of the largest landowners there, with a landbank of around 1,790 acres following the latest purchase.

The company’s major shareholders include CapitaLand Ltd.

UM Land’s shares were untraded yesterday, and last closed at RM1.41. The stock is trading at less than half its net assets per share of RM2.95 as at June 30, after adjusting for a one-for-four bonus issue in August.

This article appeared in The Edge Financial Daily, November 11, 2011.

Dijaya and Ivory to undertake property JV?

PETALING JAYA: Dijaya Corp Bhd and Ivory Properties Group Bhd have asked for a one-day suspension in trading of their shares today pending a material announcement. There is market speculation that the two developers could tie up to undertake a major property project on Penang island, where Ivory Properties is one of the most prominent developers.

These expectations were foreshadowed when the two companies established a shell joint-venture company on Oct 14, called Tropicana Ivory Sdn Bhd, which is 51% owned by Ivory Properties and 49% by Dijaya.

Market observers say a joint venture with Ivory Properties will enable Dijaya to gain a strong foothold in Penang. It is also set to launch freehold townships in Cheras and Balakong or Kajang this year, with a combined GDV of over RM500 million.The landbank of about 66 acres in Kajang and 28 acres in Cheras were acquired at RM16 to RM17 psf in 2007 and 2008 as agricultural land and have been converted for residential use.

In an interview with The Edge weekly in June, founder and CEO Tan Sri Danny Tan said he wanted to grow Dijaya into a RM2 billion to RM3 billion company in terms of market capitalisation, from RM500 million then. Despite the market turmoil since then, its market capitalisation has increased to RM635 million as at yesterday.

Ivory Properties, listed in the middle of last year, has completed a number of quality Penang projects, including The View Twin Towers in Batu Uban; Tanjung Park and Seri Taman Tanjung in Tanjung Tokong; Plaza Ivory and Palace Hill in Bukit Gambir and Penang Times Square.

This article appeared in The Edge Financial Daily, November 11, 2011.

Benalec wins 2,123ha land reclamation job

KUALA LUMPUR: Benalec Holdings Bhd yesterday announced that it has received approvals for reclamation works totalling 5,245 acres (2,122.6ha) in Pengerang and Tanjung Piai, Johor.

The company said the Economic Planning Unit of Johor (UPENJ) had awarded two of its subsidiaries, Spektrum Budi Sdn Bhd and Spektrum Kukuh Sdn Bhd, approval letters for reclamation works on 1,760 acres in Pengerang and 3,485 acres in Tanjung Piai respectively.

“The projects will be undertaken to facilitate the development of petroleum and petrochemical hubs and maritime industrial parks,” Benalec told Bursa Malaysia.

No details were given as the value of the project, or how much of the reclaimed land will accrue to Benalec.

Benalec has a market capitalisation of RM1.04 billion.

Benalec said formal agreements with the Johor government will be subject to a detailed analysis of the projects, a feasibility study and detailed environmental impact assessment report. The approvals received will be valid for six months, it said.

It added that the projects are expected to contribute positively to the company’s earnings and net assets from its FY13 onwards.

Benalec’s partner in the two companies is the crown prince of Johor, Tunku Ismail Idris Tunku Ibrahim.

Tunku Ismail and Daing A Malek Daing A Rahaman are directors of Spektrum Kukuh and Spektrum Budi, and they hold the remaining stakes of 21% and 9% respectively in the two companies awarded the contracts, according to an earlier announcement by Benalec.

Benalec had last week acquired a 70% stake in each of the two companies for a nominal sum of RM7,000 each.

The announcement by Benalec confirms speculation, including a report in The Edge Financial Daily yesterday. The project will be the single biggest reclamation job for the company, and the first major one outside its traditional base of Melaka, where it has reclaimed over 2,000 acres, mostly for mixed development use.

The company undertook its first reclamation job in Langkawi, Kedah in 2000, followed by one in Port Klang in 2003, but has since focused mostly on Melaka.

Benalec shares will resume trading today after a one-day suspension yesterday.

The counter closed five sen higher at a three-month high of RM1.41 with 15.29 million shares traded on Wednesday, prior to the suspension.

According to Bloomberg data, the stock has three “buy” calls and one “sell” with an average target price of RM2.08.

Benalec had announced at end-October that it had secured a contract worth RM36.6 million to reclaim 60 acres in Pulau Koney, Alor Gajah, Melaka.

The company’s core activities are in marine construction, vessel chartering and marine transport.

For its FY11 ended June 30, it registered a net profit of RM96.08 million and revenue of RM214.49 million.

Marine construction accounted for the bulk of its FY11 revenue, followed by vessel chartering and ship maintenance and shipbuilding.

Revenue for its 4QFY11 rose 29% to RM14.8 million from a year ago mainly due to an increase in marine construction income.

The company previously said it was in the process of bidding for land reclamation works with a combined estimated value of RM8 billion.

It had an unbilled order book of RM590 million, according to a recent AmResearch report, before the latest developments.

This article appeared in The Edge Financial Daily, November 11, 2011.

SC cautions investors on speculative penny stocks

KUALA LUMPUR: Securities Commission (SC) chairman Tan Sri Zarinah Anwar has warned investors to be cautious over the rising number of penny stocks whose prices have skyrocketed of late without material corporate developments.

“I would like to remind investors that they have to exercise caution and make informed investment decisions. Everybody has a role to play in terms of ensuring fair and orderly trading in the market,” Zarinah commented when asked about the growing speculative interest in penny stocks.

She noted that the SC and Bursa Malaysia have surveillance systems in place and monitor all price movements for all counters listed on the exchange.

“Action will be taken depending on the outcome of our surveillance,” she told reporters on the sidelines of the 5th International Islamic Capital Market Forum yesterday.

Recently, penny stocks, particularly on the ACE Market, have seen heavy trading volume and sharp spikes in share prices. Despite poor financial results, these stocks have garnered strong speculative interest.

Among the counters, notably, is Harvest Court Industries Bhd. In barely four weeks, the stock has jumped 16 times from 8.5 sen to RM1.40 yesterday.

The company saw the emergence of a new shareholder, Datuk Raymond Chan, who bought part of his 13.83% stake from the company’s managing director Ng Swee Kiat. Ng later proposed to Affin Bank Bhd to acquire the bank’s 18.3% equity interest for 25 sen per share.

Other penny stocks that have joined the euphoria include Karambunai Corp Bhd, Envair Holdings Bhd, Focus Dynamics Technologies Bhd, Sanichi Technologies Bhd and GPRO Technologies Bhd.

Bursa has queried some of these counters on unusual market activity (UMA). Most of them have replied by saying the board is not aware of any material corporate developments in the companies. Those queries, however, do not seem to have stopped some of those counters from climbing further.

Asked about the share swap deal between state investment arm Khazanah Nasional Bhd and Tune Air Sdn Bhd of shares in Malaysian Airline System Bhd (MAS) and AirAsia Bhd, Zarinah said the SC is reviewing all the trading data. “We will make a decision upon our review and determination of our findings.”

There is no time frame for the investigation, she added.

Deputy Finance Minister Datuk Dr Awang Adek told the Dewan Rakyat last week that the SC and Bursa have launched an investigation into the swap deal involving MAS and AirAsia shares. He said the probe would also look into the possibility of insider trading and will take time because it involves many accounts and a huge value.

He said if the probe finds evidence of insider trading, the Malaysian Anti-Corruption Commission may also be invited to investigate.

Under the swap deal announced in August, Tune Air and Khazanah, major shareholders of AirAsia and MAS respectively, agreed to swap their shares in the two airlines. After the swap, Tune Air now owns 20.5% equity interest in MAS, while Khazanah holds a 10% stake in the low-cost carrier.

This article appeared in The Edge Financial Daily, November 11, 2011.

Sime Darby yet to appoint directors at E&O

KUALA LUMPUR: Sime Darby Bhd has yet to appoint representatives for the Eastern & Oriental Bhd (E&O) board since it bought a 30% equity stake in the property firm over a month ago.

The conglomerate’s president and CEO Datuk Mohd Bakke Salleh said it would do so “in due time”.

“We have to go through the process. Obviously we would need to table a paper to our nomination and remuneration committee and then to the board of directors. After that we would need to write in [to] E&O, notify them of our nominee directors, etc, etc,” he told the media after Sime Darby AGM yesterday.

Sime Darby became E&O’s single largest shareholder after it acquired the 30% stake for RM766 million cash or RM2.30 per share from E&O managing director Datuk Terry Tham, Tan Sri Wan Azmi Hamzah and GK Goh Holdings of Singapore.

Asked if Sime Darby intends to raise its stake in E&O, Bakke said this is not in the group’s agenda for the near future.

“At the moment we are happy to just work on the 30%. As for the future, that will depend on the kind of developments that will take place subsequent to this date,” he said.

Bakke also ruled out the possibility of Sime Darby looking for acquisition targets.

The shares’ purchase by Sime Darby prompted the Securities Commission (SC) to investigate the requirement for the conglomerate to extend a mandatory general offer (MGO) for the balance of the 70% stake in E&O.

Last month, the SC ruled that Sime Darby was not required to do so.

In a letter to the conglomerate, the SC said it had found no collusion between Sime Darby and E&O managing director regarding the deal.

When asked about possible collaborations with E&O, Bakke replied, “We’re working on it.”

RHB Research said last month that Sime Darby is likely in the longer term to participate in E&O’s Seri Tanjung Pinang 2 project in Penang, which has a gross development value of RM12 billion.

On the price of crude palm oil (CPO), Bakke said Sime Darby and other plantation companies are expecting the spot prices to remain currently at RM3,000 for the rest of the year.

For FY11 ended June 30, Sime Darby posted a net profit of RM3.84 billion, more than tripled RM854.8 million achieved previously. Revenue increased by nearly 29% to RM41.8 billion from RM32.5 billion. Revenue from the motor division contributed the most for FY11 at 35.4%, an increase from 31.1% for FY10.

However, revenue from the plantation and industrial sectors, second and third largest contributors respectively, decreased marginally. Contributions from plantations dropped from 25.6% to 24.5% and industrial from 33.4% to 31.5%.

Sime Darby’s share price has been on an uptrend from its six-month low on Sept 19 at RM7.70. Yesterday, the stock ended at RM8.86, four sen lower than its close on Wednesday.

This article appeared in The Edge Financial Daily, November 11, 2011.

EPF’s Johari is new RHB Bank managing director

KUALA LUMPUR: The RHB banking group has appointed Johari Abdul Muid, who was the deputy CEO of the Employees Provident Fund (EPF), RHB Bank Bhd’s new managing director.

In a filing with Bursa Malaysia yesterday, RHB Capital Bhd (RHBCap) said Johari will assume his duties on Monday with Renzo Viegas named as RHB Bank deputy managing director.

Viegas has been RHB Bank’s principal officer prior to his new appointment.

Johari has resigned from his positions as non-independent and non-executive director of RHBCap, RHB Bank and RHB Islamic Bank.

“He (Johari) will drive the next stage of the group’s commercial banking business in Malaysia and the region,” RHB Bank said in a press statement.

Viegas will be responsible for RHB Bank’s retail banking and global financial banking businesses, RHB Bank said.

The 54-year-old Johari has three decades of financial sector experience. He began his career as a money market dealer at Asian International Merchant Bankers Bhd in 1981.

Johari to drive next stage of the group's commercial banking business in the region.

Johari has also spent 11 years at Commercial International Merchant Bankers Bhd until 1994 and nine years at CIMB Securities Sdn Bhd until 2004 before joining the EPF.

During his stint at the EPF, Johari was the chief investment officer (equity) from 2004 to September 2007 before he was made deputy CEO of investment until September 2009.

His last position at the EPF was deputy CEO, a position he held from September 2009.

This article appeared in The Edge Financial Daily, November 11, 2011.

Equine’s 2Q earnings up 90%

KUALA LUMPUR: Equine Capital Bhd posted a 91.4% year-on-year jump in net profit to RM12.02 million for 2QFY12 ended Sept 30.

Revenue was up 115% in the same period to RM99.2 million, boosted by its property development segment, according to its announcement to Bursa Malaysia yesterday.

The company noted that the improved results were due to the disposal of a parcel of leasehold land that was recognised in the income statements in the quarter under review as well as the higher construction progress achieved for ongoing projects in Seri Kembangan.

Equine’s 2QFY12 net profit was 17.84% higher than its 2QFY11 net profit of RM10.2 million.

This article appeared in The Edge Financial Daily, November 11, 2011.

Shangri-La sees dip in 3Q net

KUALA LUMPUR: Shangri-La Hotels (M) Bhd registered a 38% y-o-y decrease in net profit to RM16.5 million for 3QFY11 ended Sept 30, while revenue was 0.8% lower at RM111 million.

In its announcement to Bursa Malaysia yesterday, the group attributed the decline to higher write-offs of fixed assets and costs charged in 3Q for its guestroom renovation.

While Shangri-La expects overall market conditions to remain stable through the rest of the year, its outlook on its investment properties in Kuala Lumpur “remains challenging due to the ongoing weak levels of demand and significant oversupply pressures”.

Its net profit for 3QFY11 of RM16.5 million was 26.42% higher quarter-on-quarter (q-o-q) than its net profit of RM13.02 million in 2Q. It posted revenue of RM111 million in 3Q, a 9.18% increase from RM101.67 million in 2Q.

“The group’s 3Q results largely benefited from the improved performance of Rasa Sayang Resort and Golden Sands Resort, reflecting healthy increases in both occupancy and average room rates,” said the group.

This article appeared in The Edge Financial Daily, November 11, 2011.

Eversendai 3Q profit down 25%

KUALA LUMPUR: Eversendai Corp Bhd has seen a 25% quarter-on-quarter (q-o-q) decrease in its 3QFY11 ended September net profit to RM30.72 million, from RM40.84 million in 2Q. Its cumulative net profit for its three quarters is RM97.04 million.

In its announcement to Bursa Malaysia yesterday, the group attributed the decline to revenue recognised in 2Q from projects that are in completion phase and partly the write-off of IPO expenses amounting to RM3.8 million.

Group revenue dropped to RM254.41 million in 3Q from RM258.15 million in 2Q, a 1.45% decrease q-o-q.

The group said 88.5% of its revenue was from its Middle East operations in UAE, Saudi Arabia and Qatar. Operations in India contributed 5% and Malaysia 6.5%.

The group said it is “optimistic on its prospects based on the order book in excess of RM1 billion”.

This article appeared in The Edge Financial Daily, November 11, 2011.

Resorts World NY opens to a roaring success

KUALA LUMPUR: The larger- than-expected crowd at the newly opened Resorts World New York (RWNY) gives a big boost to Genting Malaysia Bhd’s (GenM) share price.

The casino stock climbed to a 52-week high of RM3.87 during the week when its Aqueduct racino commenced operations on Oct 28.

According to media reports, the racino drew 20,000 patrons on the opening day, exceeding its capacity of 15,000.

The New York Lottery Organisation’s weekly net win statistics for racinos in New York showed an average daily net win per machine of US$651 (RM2,051) for GenM’s RWNY for the week ended Oct 29, trumping all the other eight racinos in the state.

This was more than double the US$267 recorded by Empire City Casino at Yonkers Raceway, GenM’s biggest rival there. The casino’s average daily net win per machine fell 14% upon RWNY’s opening, which suggests punters may have been lured by RWNY’s new facilities.

“This had exceeded expectations as consensus was only projecting an average daily net win per machine of between US$300 and US$400,” said a gaming analyst. Under Phase 1, RWNY will be offering 2,485 gaming machines with slightly over 220 electronic table games (ETG).

RWNY will eventually have 5,000 machines, of which 475 units will be ETG.

In a research note, CIMB Research said: “We attribute the strong winnings to the novelty effect of the new facility and the inclusion of ETG which we gather can fetch up to two to three times the revenue of a regular video lottery terminal (VLT).”

However, CIMB Research acknowledged that this “novelty” effect “is not sustainable” and will eventually subside. It anticipates the “novelty” effect to last until early new year with the second phase of the racino due to be launched by mid-December.

It said a better gauge of how RWNY will perform moving forward would be best seen early next year when the racino is fully operational.

CIMB Research forecasts a 10% increase to GenM’s earnings next year. It projects net profit of RM1.56 billion and earnings per share of 26 sen.

In terms of return on investment, RHB Research estimates it at 9% based on capex of US$580 million.

Historically, other casinos in the state have done quite well, recording 4% to 5% year-on-year (y-o-y) growth. However, an analyst commented that GenM’s management has been too conservative in its expectations as it has guided for a 1% y-o-y growth.

Moving forward, another major catalyst as well as risk to GenM would be the approval of the destination resort legislature by the Florida state.

GenM has submitted its proposal on a US$3.8 billion casino holiday resort at Miami to Florida Gaming Commission. But the group has yet to receive the authorities’ green light to run a casino in the state.

Apart from GenM, MGM Resorts International, Wynn Resorts Ltd and Las Vegas Sands have expressed interest in running a casino there.

However, only GenM has submitted a complete masterplan so far. Apart from the challenge of getting the legislation passed and securing the bid, the proposal on building a casino has drawn criticism from the local community, including the Walt Disney Co.

Analysts expect GenM to continue its mega project in Florida even in the scenario where it fails to obtain a casino licence. However, GenM’s investment is likely to spread over 10 to 15 years, instead of three to five years.

This stark comparison in the completion timeline may be attributed to the time GenM would be able to recoup its investment.

“With the casino licence, Genting would be able to ramp up the payback period for its investments as earnings would be recouped faster,” an analyst said.

The bulk of the financing for Resorts World Miami would be taken from GenM’s existing cash pile as revenue from RWNY would not be fully realised yet, she elaborated.

This article appeared in The Edge Financial Daily, November 11, 2011.

IBM and Toshiba to invest RM1.3b

KUALA LUMPUR: Shares in SYF Resources Bhd, a rubberwood furniture manufacturer, emerged on the top gainers list yesterday, after rising to their highest level in more than four years.

Bucking the downtrend on the local bourse, the stock rose 25% to an intra-day high of 72 sen, its highest level since May 2007. It finished at 65.5 sen yesterday, up 14% from its close of 57.5 sen the day before.

Trading volume rose to 9.05 million shares — its peak in over two years.

Year-to-date, SYF’s share price has gained 156% with market capitalisation of RM111.4 million.

The reason behind the sudden interest is unclear. The senior management of the company could not be reached for comment at press time.

SYF announced on Oct 25 that its status as a Practice Note 1 (PN1) company had been lifted upon the completion of several corporate proposals.

The company was labelled PN1 in May last year due to a default on payment, after failing to make interest payments amounting to RM2.19 million. The default was due to a lower demand for its products.

“For the past two years, the company had incurred substantial operating losses due to the global economic crises which affected the furniture industry. As the company’s furniture products are mainly for the export market, demand was affected by the downturn in the economies of the various markets exported to,” said SYF.

The company’s earnings were also affected by higher cost of materials and fluctuation in the US dollar.

SYF’s restructuring involved a capital reduction, rights issue and issuance of 102.7 million redeemable convertible secured loan stocks (RCSLS) of 25 sen each.

As at end-July, the company was still in the red. For 4QFY11 ended July 31, it incurred a net loss of RM340,000 compared with net profit of RM863,000 a year ago while revenue fell 7.5% to RM42.6 million.

For the full year, its net loss shrunk to RM2.2 million from RM7.8 million in FY10. Revenue dipped 9.4% to RM156.1 million in FY11.

It attributed its poor quarterly performance for 4QFY11 to lower production output due to a shortage of foreign workers and the weakening US dollar, in addition to provision for a late interest payment on bank borrowings under its debt restructuring scheme.

It has a net debt position of RM98.3 million, with RM3.64 million in cash and RM101.9 million in short-term borrowings. Its net assets per share stood at 30 sen as at July 31, 2011.

SYF’s activities comprise the planting of rubber trees for commercial harvesting, the logging of plantation wood, saw milling, treatment of timber, and the manufacturing of furniture parts and components.

This article appeared in The Edge Financial Daily, November 11, 2011.

IOI to invest RM130m to expand downstream activities

KUALA LUMPUR: IOI Corp Bhd plans to invest RM130 million to expand its downstream oleochemical operation.

Tan Sri Lee Shin Cheng, IOI Corp group executive chairman, said the group is committed to the palm oil industry and is now moving to grow its downstream section.

“A few years ago we managed to achieve six tonnes of oil per hectare for upstream which is a record. And now we are going towards downstream. One is for oleochemicals and the other is for food ingredients,” Lee said on the sidelines of the ninth Economic Transformation Programme (ETP) update yesterday.

The new production facility will be built at the Prai Industrial Complex where the country’s second largest palm oil company has already invested about RM1 billion in its facilities.

The new facility will have two plants to produce glycerol derivatives, bio-lubricant and other speciality fatty esters. It will source most of its feedstock from IOI Oleochemical Industries Bhd’s existing 450,000 tonne capacity oleochemical production clusters in the vicinity.

Lee said the investment will be internally funded, while the company has also received a RM43.6 million grant, equivalent to 33% of the project cost, to subsidise the project.

The project is expected to generate a return on investment of 13% to 15% once the plant is operational in mid-2013.

Tan Kean Hua, executive director of IOI Oleochemical, said margins for the project are much better than basic oleochemical products.

“For downstream derivatives, we are talking about even up to four to five times difference in gross margins compared with basic oleochemicals,” said Tan.

Presently, IOI’s downstream activities contribute about 20% to group revenue annually.

Tan said IOI will collaborate with the Malaysian Palm Oil Board (MPOB) to commercialise some of the products that MPOB has developed in the food, pharmaceutical and cosmetic areas.

“We are taking some of the products they have developed and commercialising them,” he said.

Asked to comment on the crude palm oil price, Lee said he expects the price to reach RM3,300 per tonne in the first half of next year due to demand from China, India and Pakistan, while unpredictable weather will affect production.

This article appeared in The Edge Financial Daily, November 11, 2011.

KPJ to invest RM763m in 5 new hospitals

KUALA LUMPUR: KPJ Healthcare Bhd will spearhead a macro project to introduce five different hospitals by 2020, offering 822 beds at an investment of RM763 million.

In an announcement at the ninth Economic Transformation Programme (ETP) progress update yesterday, Prime Minister Datuk Seri Najib Razak said KPJ’s project is a boost to the Healthcare National Key Economic Area (NKEA) especially in relation to attracting foreign patients.

The five hospitals that would be built are Dato Onn International Specialist Hospital, Pasir Gudang Specialist Hospital, Sabah Medical Centre, Bandar Baru Klang Specialist Hospital and Pahang Specialist Hospital. These hospitals will be furnished with additional beds and added facilities.

This article appeared in The Edge Financial Daily, November 11, 2011.

Harvest Court unit to build properties for Sagajuta

KUALA LUMPUR: Harvest Court Industries Bhd has accepted an award to construct commercial and residential developments for Sagajuta (Sabah) Sdn Bhd, a property developer controlled by its new substantial shareholder Datuk Raymond Chan Boon Siew.

This comes a week after Harvest Court denied reports that Chan, who surfaced in the group last month, was in talks with the group for a potential asset injection.

Chan, who is Sagajuta managing director, recently acquired a 15.41% equity stake in Harvest Court and Sagajuta’s shareholder Mohd Nazifuddin Najib took up a 1.59% stake.

In a filing with Bursa Malaysia yesterday, Harvest Court said its wholly-owned unit, Harvest Court Development Sdn Bhd (HCD), would enter into a related party transaction (RPT) with Sagajuta after accepting a letter of intent on Tuesday.

Harvest Court said the non-binding letter of intent is for the design and construction of a 28-storey medium-cost apartment (950 units), double-storey shop offices (eight units), a common facilities podium and a five-level car park. They are part of Gold Tower, which forms Parcel 3 of Sagajuta’s 1Sulaman project in Kota Kinabalu, Sabah.

The 1Sulaman project has an estimated gross development value (GDV) of RM500 million, which includes Gold Tower’s GDV of RM173.35 million.

Chan has recently acquired a 15.41% equity stake in Harvest Court.

According to Harvest Court, the contract is subject to a maximum of RM129 million for a duration of 2½ years.

Harvest Court noted that it had no expertise in building construction but would rope in Sagajuta’s team to undertake the project. HDC will undertake the superstructure, architecture, mechanical and engineering, and external works.

“The rational for HDC to enter the RPT is to take advantage of new business opportunities. The RPT is meeting the business needs of group at the best possible terms and is expected to generate positive recurring income for the group,” Harvest Court said.

Gold Tower’s gross and net profit margin are estimated at 13.41% and 10.06% respectively, Harvest Court said. It added that the capital requirement for the project is RM5 million based on monthly progress claims.

The Gold Tower project will be financed via a combination of bank borrowings and proceeds from the proposed rights issue and placement exercise, Harvest Court said.

However, the proposed rights issue with warrants announced in July will be utilised for Harvest Court’s timber business.

Harvest Court expects to commence the project one month after obtaining shareholders’ approval at an EGM next month. It noted that the project was proposed by Sagajuta and is subject to the finalisation of the contract agreement to be signed within two weeks from Tuesday.

Harvest Court said its board, excluding the interested directors, will deliberate on the RPT at a later stage. Its share price had surged from 40 sen on Nov 1 to RM1.45 on Wednesday. Yesterday, the stock closed down three sen to RM1.42 with 13.58 million shares traded.

This article appeared in The Edge Financial Daily, November 11, 2011.

MPOB data shows better-than-expected demand

KUALA LUMPUR: Unexpectedly strong demand for palm oil has helped prices stay afloat amid increasing supply. The Malaysian Palm Oil Board (MPOB) which released the October data showed a 2.1% increase in crude palm oil (CPO) production.

Inventory levels fell 1.55% to 2.1 million tonnes from September but remained significantly higher than the five-year average of 1.7 million tonnes.

Kenanga Investment Bank Bhd research analyst Alan Lim told The Edge Financial Daily that inventory levels were still very close to the all-time high of 2.27 million tonnes in November 2008. “The stock to usage ratio decrease to 8.8% from 10.5% in September this year has supported CPO prices recently,” he noted.

Demand has been mostly external with exports increasing by 19.04% month-on-month (m-o-m).

Lim said this was largely driven by exports to Pakistan (+80% m-o-m) and Europe (+23% m-o-m).

“However, I do not think this number is sustainable. As winter comes, demand for palm oil traditionally falls in countries in the northern hemisphere as consumers switch to soyabean oil which does not solidify in colder temperatures. In fact, cargo surveyor Intertek Testing Services has reported a 5.9% drop in Malaysian palm oil exports for the first ten days of November,” said Lim.

“Furthermore, the economic outlook in Europe is uncertain. CPO prices have a strong 80% correlation with European GDP growth,” he added.

With European exports expected to fall, Lim said there is China which is still the biggest export market. “Year to date (YTD), Malaysia has exported over 3.34 million tonnes of palm oil to China, which represents 23% of total exports against last year’s 22% with 2.95 million tonnes,” said Lim.

He noted that the supply side would depend largely on the weather which can be difficult to predict. “There are two kinds of La Nina, mild and severe. A mild La Nina may not affect production very much as the fresh fruit bunch (FFB) harvesting process can still continue. However, a severe La Nina may disrupt FFB harvesting, especially if it rains during the day for several consecutive days,” he said.

“Excessive rain can also reduce yields affecting the pollination of (oil palm) flowers which results in fewers fruits,” Lim said, adding that the US climate prediction centre forecast that the La Nina weather would gradually strengthen and continue through the winter in the northern hemisphere.

However, he reckons the current La Nina will not be as bad as the one that ended in April. Lim expects CPO prices to stay between RM2,950 and RM3,050 per tonne until the end of the year.

CPO prices have slipped after reaching a seven-week high on Wednesday when January palm oil futures hit RM3,068 per tonne on the Bursa Malaysia Derivatives Exchange.

The average spot settlement price of CPO futures for October was RM2,839.70 per tonne, down from RM3,130 in September.

Lim has a negative price outlook and forecasts CPO prices to average RM3,000 per tonne in 2012 with a downward bias on expectations of weakening demand.

Planters and producers in the oil palm industry will continue to be profitable, said Lim, as costs are still below CPO prices. As CPO prices fall, he expects most plantation companies to underperform.

“One exception will be Ta Ann which has relatively young trees of about 4½ years old. We expect double-digit growth in earnings for the company as FFB yields will continue to increase until the trees peak at nine to 10 years old,” said Lim.

Lim gave an “outperform” call for Ta Ann Holdings Bhd, which has turned to plantation from timber. For FY11, Lim expects 80% of Ta Ann’s earnings to be derived from the oil palm segment.

Kenanga has an “underperform” call for Kuala Lumpur Kepong Bhd, IOI Corp Bhd and Genting Plantations Bhd and “market perform” for Sime Darby Bhd.

This article appeared in The Edge Financial Daily, November 11, 2011.

Wei denies making exit from REDtone

KUALA LUMPUR: REDtone International Bhd co-founder Datuk Wei Chuan Beng clarified he is not cashing out from the telco despite his disposal of a 4.67% equity stake, or five million shares, at 35 sen each, some two weeks ago.

Wei, who is also the company’s managing director, said his shareholding in REDtone would increase to above 5% in short order.

“I am not cashing out. There was a local investor in the market who wanted a block of five million shares and I thought it was okay to place out these shares considering that I have about 15 million Iculs that I have yet to exercise, on top of the stock options,” Wei told The Edge Financial Daily.

“My interest in the company is very clearly and firmly entrenched. I’m not going anywhere,” he added. However, he declined to identify the investor who bought the shares via a direct deal.

There was no filing with Bursa Malaysia on the emergence of new substantial shareholders in REDtone as at press time.

Wei had ceased to be a substantial shareholder and currently holds a 4.66% equity stake in REDtone after the share disposal. The telco’s single largest shareholder is Datuk Wira Syed Ali Syed Abbas Al Habshee, who recently raised his stake to 28.2%, followed by Berjaya Corp Bhd (9.81%).

Wei: My interest in the company is firmly entrenched.

Syed Ali, via his investment vehicle Indah Pusaka Sdn Bhd, had been buying shares on the open market at between 16 sen and 34 sen recently.

Wei’s share divestment seems to have caught the right timing as REDtone’s share price rebounded from a low of 16 sen in late September to a peak of 34 sen on Oct 18 — the highest level since January last year. The counter retreated from its October peak in the past two weeks to close at 27.5 sen yesterday.

Year to date, the stock has surged nearly 45%.

This article appeared in The Edge Financial Daily, November 11, 2011.

S&P lowers TNB to negative

Tenaga Nasional Bhd (Nov 10, RM 5.79)
Maintain neutral with unchanged target price of RM6.70: With reference to Tenaga Nasional Bhd’s US dollar-based bond exposure (totalling RM2.9 billion and accounting for 15% of TNB’s total borrowing profile), Standard & Poor’s (S&P) Ratings Services has revised down its outlook on TNB from stable to negative. This is premised on weakened profitability and higher operating cost.

S&P affirmed its BBB+ long-term corporate credit rating and the axA+/ axA-1 Asean regional scale rating on TNB. It also affirmed the BBB+ issue rating on its senior unsecured notes.

Similar to Moody’s rating outlook published yesterday, S&P is of the view that the government would provide timely and sufficient extraordinary support to TNB in the event of financial distress. S&P could revise TNB’s outlook to stable if the government provides some fuel price relief that would enable TNB to recover losses from fuel shortages.

Otherwise, S&P will likely downgrade TNB’s US dollar bond ratings. This may cause the yields to rise, thereby pushing up future borrowing costs for TNB’s international bonds in the future.

Having said that, we do not expect a downgrade by international rating houses (S&P, Moody’s) to materially impact TNB’s borrowing cost because TNB is unlikely to raise future capex funding via US dollar debt given that its revenue cash flow is ringgit-based.

It has been actively retiring its US dollar debts in the past year in view of the depreciation of the greenback against the ringgit. The next rating reviews, which are more crucial, are expected at the end of this year or in January 2012 by Malaysian Rating Corp Bhd (MARC) and RAM Rating Services Bhd.

Any negative outlook from MARC and RAM would have an impact on TNB’s ringgit-based bond borrowing cost. We do not expect significant deviation in MARC and RAM’s rating on TNB as any downgrade would have wider repercussions on the broader Malaysian bond market — especially the bond ratings on independent power producers — and this may impede the country’s ability to plan its future power plant capacity efficiently (as a downgrade in TNB’s rating will likely result in higher borrowing cost for all future power plant projects).

At this juncture, we see little risk from S&P’s negative outlook. Maintain “neutral” with an unchanged RM6.70 per share price target, a 10% discount to our discounted cash flow of RM7.44 per share (8% discount rate; 3% terminal growth rate). — Affin Investment Bank, Nov 10

This article appeared in The Edge Financial Daily, November 11, 2011.

TRC Synergy going all out for MRT, bullish on Brunei

TRC Synergy Bhd (Nov 10, 64 sen)
Maintain outperform with fair value of 81 sen: TRC is going all out for mass rapid transit (MRT) work packages. Its tender department has been instructed to prepare and put in bids for all 18 above-ground work packages of the Sg Buloh-Kajang (SBK) Line of the Klang Valley MRT project worth a total of RM12 billion to RM13 billion based on our estimate.

For elevated civil works, TRC has a significant edge by virtue of the specialised construction equipment it owns, particularly, the RM20 million girder launcher and gantry that we estimate can translate to a two percentage point margin advantage.

TRC is bullish on the construction market in Brunei, given the tremendous room for basic infrastructure spending including roads, housing, hospitals and universities. Already, TRC in October secured a RM319 million contract for the “modernisation” of Brunei International Airport Terminal.

Brunei is not a new market to TRC. Apart from eyeing basic infrastructure projects, TRC has been pitching for a multi-billion ringgit crude oil refinery and storage project there.

The risks include: (i) new contracts secured in FY12/FY13 coming in below our target of RM300 million per year; and (ii) escalation of input costs.

We have turned positive on the construction sector as there is now even more urgency for the government to expedite the rollout of various public projects to pump prime the economy to shield it against the increased risk of the global economy slipping into a double dip recession.

TRC is one of our top picks for the construction sector given that it is a good proxy to the MRT project, the single largest project that will anchor the current construction cycle.

TRC is the only one of the 28 companies shortlisted to bid for the 18 above-ground work packages that is pre-qualified to bid in all six categories.

Indicative fair value is 81 sen based on 12 times fully-diluted FY12 earnings per share of 6.7 sen, in line with our benchmark one-year forward target price earnings ratio of 10 to 14 times for the construction sector.

An additional downside protection to its share price will come from a strong balance sheet with a net cash of RM118.5 million as at June 30, translating to 25.4sen per share. — RHB Research, Nov 10

This article appeared in The Edge Financial Daily, November 11, 2011.

MPHB’s market share rebounds after 4D Jackpot launch

Multi-Purpose Holdings Bhd (Nov 10, RM 2.63)
Initiate coverage with buy at target price RM3.50: Since the launch of 4D Jackpot in 2009, MPHB’s market share has rebounded to 37% in 1H11, almost back to 2002 levels when it was the market leader. With Berjaya Sports Toto (BToto) launching its 4D Jackpot game recently, the overall 4D Jackpot market size grew with a minimal dent seen in MPHB’s sales. 4D Jackpot is still in its infancy (at just 13% of MPHB’s gaming revenue) and should benefit from rising awareness and absence of illegal betting.

MPHB has first-mover advantage and stands to benefit from a lower blended prize payout (4D Jackpot: 55% against traditional 4D: 64.5%). Being a small-ticket item, numbers forecast operators (NFO) are less vulnerable to an economic slowdown and may benefit from the introduction of a minimum wage policy in Malaysia by end-2011.

MPHB is transforming into a purer gaming play post acquisition of a 49% stake in Magnum 4D from CVC Funds for a reasonable RM1.6 billion. With strong three-year earnings compound annual growth rate of 24%, MPHB offers a cheaper exposure to the resilient NFO segment (8.6 times CY12F price-earnings ratio against BST’s 13.5 times).

MPHB’s stockbroking, insurance and hotel units are up for sale. Including recently sold Menara Multi-Purpose, these could fetch RM1.6 billion which it could use to pare down debt (net gearing would drop to 40% from 66%, leading to RM96 million interest savings) and pay special dividends (up to 56 sen per share). Dividend payout could better 2010’s 32% (BToto: more than 75%) given stronger operating cash flows and minimal capital expenditure.

MPHB’s crown jewel is the RM3 billion gross development value (GDV) mixed development in Jalan Imbi, Kuala Lumpur, adjacent to the KL International Financial District (future MRT stop). Its JV with Bandar Raya Development in the Klang Valley and Penang could see RM65 million cash up front plus RM86 million earnings per year from 2014. Its other landbank in Pengerang, Johor (4,641 acres [1,878 ha]), and Balik Pulau, Penang, (208 acres), also have long-term appreciation potential. There could be upside to earnings and revised net asset value if we include contribution from property development and future disposal of non-core assets. — Hwang DBS Vickers, Nov 10

This article appeared in The Edge Financial Daily, November 11, 2011.

A dividend boost from SEGi

SEG International Bhd (Nov 10, RM1.89)
Maintain buy with revised fair value RM2.16 from RM2.23: SEG International Bhd’s (SEGi) 9MFY11 core earnings of RM36.3 million were in line with both our and consensus forecasts at 71% and 72% of the projections. A second interim gross dividend per share (DPS) of 10 sen was declared, bringing FY11 payout to 13.5 sen (excluding a special DPS of 7.3 sen paid in 1Q) which implies payout of more than 100%. We continue to like its diversified course offering as well as established balance sheet operating on an asset-light model. Hence, we maintain “buy” at revised fair value of RM2.16 based on an unchanged 18 times FY12 price-earnings ratio.

SEGi’s 9MFY11 revenue came in 29% higher year-on-year (y-o-y) at RM207.7 million due to higher student enrolment, which we believe has risen to 26,000 from 21,000. Earnings before interest and tax (Ebit) margin widened correspondingly to 33% from 25% on improved economies of scale as enrolment growth outpaced a marginal increase in operating expenditure.

Lower financing costs and a more favourable effective tax rate helped to further lift 9MFY11 core earnings to RM54.6 million, surging over 74% y-o-y. On a quarterly basis, 3QFY11 numbers were generally flattish q-o-q while on a y-o-y basis, 3QFY11 top line rose 25% to RM70 million while core earnings surged 66% to RM18.3 million on improved utilisation of its existing facilities as the group rolled out healthcare and medical courses.

Although we previously incorporated a FY11 dividend payout of only 50%, year-to-date gross DPS amounted to 13.5 sen (implying a payout ratio of more than 100%) following its second interim gross DPS of 10 sen. This high payout ratio does not entirely catch us by surprise as we have highlighted previously such a possibility given its robust balance sheet operating on an asset-light model. Given its sturdy cash pile of RM106.8 million as of 3QFY11, we believe further upside is not unlikely as capital expenditure remains largely manageable at RM15 million to RM20 million per year, hence we bump up our DPS forecast to 17.7 sen for FY11 and 9.5 sen for FY12 at a payout ratio of 180% and 80% respectively.

We make no major changes to our core assumptions for now. Our FY11 and FY12 earnings per share estimates are lowered by 3% and 1% respectively as we tweak our opex structure to account for higher overhead expenses in the belief that the group will likely recruit more lecturers for the commencement of its vocational courses catering for foreign students. In a separate announcement, SEGi mentioned that courses for an initial batch of 600 Vietnamese students will commence in late 4Q11. — OSK Research, Nov 10

This article appeared in The Edge Financial Daily, November 11, 2011.

Sleepy September for advertising

Maintain underweight: September 2011 total gross advertising expenditure was up 4% year-on-year (y-o-y), but down 17% month-on-month (m-o-m) to a counter-seasonal six-month low. The underperformance was due to weakening consumer sentiment. October is expected to be another quiet month due to a lack of adex-friendly events. The 3Q11 results season may see earnings contractions y-o-y as adex growth will not outpace cost inflation. We maintain underweight on the media sector.

Despite Hari Raya Aidilfitri falling in September last year versus August this year, September 2011 total gross adex was still up 4% y-o-y. Newspaper adex, especially Malay and Chinese newspapers, grew 7% y-o-y while TV only grew 3% y-o-y. Radio adex contracted 7% y-o-y, the first time this year, while outdoor adex snapped its seven-month losing streak, growing 4% y-o-y.

We expected September total gross adex to be down m-o-m due to a lack of adex-friendly events, but we were disturbed that it was the lowest since March 2011. Historically, September total gross adex is seasonally higher than that of March.

Historically, October and November are quiet months due to a lack of adex-friendly events with their total gross adex levels little changed from September. In terms of total gross y-o-y adex growth, we reiterate our view that it will be mid single digits in percentage terms at best, due to the high base effect and weakening consumer sentiment.

In 3Q11, total gross adex grew 8% y-o-y led by newspaper adex which grew 12% y-o-y while TV grew 4%. Adex revenue of individual media companies will continue growing y-o-y but will not outpace cost inflation at low double digits in percentage terms y-o-y. Therefore, 3Q11 results season may witness earnings contractions y-o-y, especially TV-centric Media Prima Bhd.

We maintain our assumptions and earnings estimates for the media companies under our coverage. As we expect three-year forward sector earnings compound annual growth rate of only 2%, we believe media companies should not be trading at historical averages but at close to -1 standard deviation valuations. Media Prima is a “sell” for its vulnerability to slower adex growth. Media Chinese International Ltd is a “sell” for its vulnerability to newsprint prices. Star Publications (M) Bhd is a “hold” for its stable dividend yields of over 5%. — Maybank IB Research, Nov 10

This article appeared in The Edge Financial Daily, November 11, 2011.

Armada Bayumas to develop homes in Kuantan

KUALA LUMPUR: Armada Bayumas Sdn Bhd plans to launch the first phase of its residential development, Bandar Indera Mahkota 2, in Kuantan, Pahang early next year.

Phase 1 comprises 148 two-storey terraced houses with a gross development value (GDV) of RM45 million. Indicative selling prices are from RM318,000, said Armada Bayumas CEO Datuk Lai Yeng Fock. Armada Bayumas is an associate company of New Age Portfolio Sdn Bhd which developed Kinrara Hills in Bandar Kinrara, Puchong.

Plans are for the launch to take place after Chinese New Year in 1Q12, Lai, a former executive director at WCT Land Bhd, told a media briefing yesterday.

The development within Bandar Indera Mahkota 2 has an estimated GDV of RM123 million and covers 26 acres (10.4ha) of leasehold land. There will be 369 homes in total when the housing estate is fully developed.

The site is situated within a mature residential area acquired from the Employees Provident Fund for RM12.1 million in May. Basic infrastructure such as roads and sewerage pipes have already been built, Lai said.

“We’re getting certain approvals finalised and will start the residential development in Bandar Indera Mahkota 2 once we get them,” he said.

Lai: We are receiving many enquiries regarding the
development and we think sales will be encouraging.

Lai is optimistic about the upcoming launch. “We are receiving many enquiries regarding the development and we think sales will be encouraging,” he said.

The unit have built-ups from 1,700 sq ft with land areas of 22 ft by 65 ft and 22 ft by 70 ft.

Lai said demand has been strong in the Kuantan housing market.

“The past five to six years have been good for the property market in Kuantan. Prior to that, demand was sluggish. We believe one of the pull factors could be better connectivity via the East Coast Highway which shortens the travel time between Kuala Lumpur and Kuantan. We also believe property in Kuantan is still affordable while the incomes of the people there are improving.”

The target market for the project includes government servants and middle-income earners.

“Since the government has increased the loan rates under the My First Home Scheme to RM400,000, we believe purchasers will be able to get 100% loans if they are interested in acquiring units in Indera Mahkota 2,” Lai said

The developer will provide customer care service to purchasers for up to three years upon handover.

“We wish to provide services to our customers for a period of at least three years even after we have sold off our properties to take care of any problems that arise. The services go beyond the normal defects and liabilities agreement by taking care of small matters such as help with moving a fridge into the home.

Bandar Indera Mahkota 2 is expected to be completed in the next two years.

This article appeared on the Property page, The Edge Financial Daily, November 11, 2011.

MPI to raise brand awareness at MIPIM Asia

PETALING JAYA: Malaysia Property Inc (MPI) and its delegation of six major Malaysian developers expect to increase awareness among regional real estate players on Malaysian real estate investment opportunities at its debut participation in MIPIM Asia 2011.

Set up in February 2008, MPI is a government initiative under the Economic Planning Unit created to bring real estate investment into Malaysia. The six developers are IJM Land Bhd, Sunway Bhd, the Selangor State Development Corp (PKNS), Multimedia Development Corp, UOA Development Bhd and Cyberview Sdn Bhd.

MIPIM Asia 2011 will be held at Hong Kong Convention and Exhibition Centre from Nov 15 to 17.

MIPIM Asia is a premier real estate event aimed at corporate and institutional investors in the Asia-Pacific region. Last year, the event drew a total of 1,727 participants from 40 countries, including 797 companies, 412 investors, end-users, hotel groups and retailers, and 150 exhibiting companies.

MPI CEO Kumar Tharmalingam said the MPI delegation will be targeting private equity funds, pension funds and property funds, pointing out that the purpose of holding MIPIM in Hong Kong is to target the large number of fund managers that operate out of the city.

“These are blue chip investors who want to take the first bite at new projects with good investment potential. Typically, they have an investment time frame of about five years,” he said.

Kumar: This will be the first of more and larger concerted efforts
to highlight Malaysian real estate players to the region

He also noted that foreign fund investors tend to look for investments of a minimum US$50 million (RM155.72 million).

“They need that kind of volume so they can attract the best talent to come and manage the asset instead of handing it to people they don’t know in Malaysia,” he added.

MPI is confident the contingent this year will garner investors’ interest through the companies’ strong track records and available investment opportunities.

“With MIPIM Asia’s initiatives such as a Malaysia lunch table co-chaired by Malaysian industry captains and Malaysia specific networking tables, MPI is confident of making a significant [impression on] the institutional and corporate investors attending MIPIM Asia, both in terms of Malaysia’s country presence as well as individual engagement by the Malaysian companies,” said Kumar.

“This will be the first of more and larger concerted efforts to highlight Malaysian real estate players to the region,” he added.

Looking at the key themes highlighted at major real estate conferences in 2011 and 2012, Kumar noted that there has been increased attention and focus on the Southeast Asian markets, complementing the usual attraction of the China market.

While there has been participation from local developers at MIPIM in previous years, the 2011 event marks the first time Malaysian developers will showcase their products as one delegation and under one “roof”.

MPI has commissioned award-winning architectural and design firm, Hijjas Kasturi Associates, to design the Malaysia pavilion at the exhibition.

Themed The weave of wealth, the 1,356 sq ft pavilion design is based on the concept of a single continuous strand of ribbon to reflect Malaysia’s shared values and development quality in a diversity of property offerings.

This article appeared on the Property page, The Edge Financial Daily, November 11, 2011.

S P Setia’s Melbourne project achieves strong sales

MELBOURNE: S P Setia Bhd’s maiden Australian venture, Fulton Lane apartments, has achieved strong sales to date. With a gross development value (GDV) of A$470 million (RM1.5 billion), Fulton Lane comprises two towers of 28 storeys and 45 storeys, with a retail component on the ground level.

Of the 291 units in the shorter tower offered for sale in June, 80% have been sold. The 487 units in the taller tower were available for sale end-September via launches only in Melbourne, Indonesia, Hong Kong and Singapore. There is no date set for a Malaysian launch. So far, about 30% of the units have been sold.

The project was officially launched by Housing and Local Government Minister Datuk Wira Chor Chee Heung on Monday in Melbourne.

Also present were S P Setia CEO and president Tan Sri Liew Kee Sin and Setia Melbourne Development Co Ltd CEO Choong Kai Wai.

Fulton Lane is designed by architect Karl Fender of Fender Katsilidis and is located minutes from the Queen Victoria Market and close to RMIT University, La Trobe University and Melbourne University.

Units at the 28-storey tower comprise studio, 1-bedroom, 1-bedroom+study, 2-bedroom and 3-bedroom types. The built-ups range from 500 sq ft to 1,475 sq ft.

(From left) Choong, Liew, Fender, Chor, S P Setia Foundation chairman Tan Sri Lee Lam Thye and Consul General of Malaysia Dr Mohd Rameez Yahya at the launch of Fulton Lane on Monday.

An artist's impression of the retail component at Fulton Lane.

In the taller tower, units include studio, 1-bedroom, 2-bedroom, 3-bedroom, 4-bedroom and dual-key units. Built-ups are from 430 sq ft to 1,507 sq ft. The dual-key units are designed to have two separate spaces where one part can be leased out and the other can be used by the owner. Prices start from A$365,000.

Buyers can expect the units to be partially-furnished with kitchen appliances like refrigerator, dishwasher, cooker and hob. Furniture packages will also be offered to owners to help furnish their units.

A property management office will be available to help in leasing out units on behalf of owners about six months before handover. Gross yields are anticipated to be about 6%.

Fulton Lane will also provide a total of 14,000 sq ft of retail net lettable space for convenience stores and food and beverage outlets to cater for the residents. Liew said the retail space will be retained by S P Setia for recurring income.

“I hope that S P Setia will bring back positive lessons to be implemented in Malaysia,” Chor said at the launch.

Liew concurred saying, “Melbourne is a good place to invest and we wish to exchange knowledge between Malaysia and Melbourne.”

He cited how Australia considers the environment and pays attention to details such as “where the shadow of a building lands because you cannot have the shadow of your building falling on another property.”

S P Setia’s second project in Melbourne on a 2.22-acre plot in South Yarra along St Kilda Road will be targeted at the local market, said Liew. There are plans for a residential development of 329 apartments with an estimated GDV of A$250 million.

The design of the project will ensure that the view of the Shrine of Remembrance, a war memorial and landmark in the area, will not be blocked.

On the outlook for Melbourne’s property market, Choong expects buyer sentiment to improve in the first half of next year in anticipation of a further interest rate cut in 1Q.

“The A$700,000 sub-property sector is performing consistently which was recently encouraged by the fall in official interest rates, a traditional driver to increase buyer sentiment especially for investors who are active in this price sector,” he said.

According to Choong, S P Setia will seek new landbank in the CBD and city fringes. “Locations which attract us must have evidence of strong development fundamentals, including close proximity to transport hubs, retail/commercial centres and a strong surrounding demographic profile.”

This article appeared on the Property page, The Edge Financial Daily, November 11, 2011.

UMLand to acquire Tentu Teguh for RM10.9m

United Malayan Land Bhd (UMLand) has entered into a conditional share sale agreement (SSA) for the proposed acquisition of the entire equity interest in Tentu Teguh Sdn Bhd (TTSB) for RM10.9 million cash.

UMLand, in a filing to Bursa Malaysia here today said, the proposed acquisition would allow access to the land recently acquired by TTSB in the eastern corridor of Iskandar Malaysia, Johor.

Upon completion of the acquisition, TTSB shall become a wholly-owned subsidiary of UMLand.

The developer said the land would be developed into a self-contained township, comprising residential and commercial properties, complemented by community parks and amenities.

The exercise is expected to be completed within 24 month from the date of the SSA. TTSB is a property investor, incorporated in Malaysia on July 9, 2009. -- Bernama

Salcon completes two RMB230m jobs in China

Salcon Bhd today marked the completion of its 100,000 cubic metre per day water treatment plant and 100,000 cubic metre per day raw water transfer project in Changle County, Shandong Province, China.

Following the completion of the projects, Salcon is now the sole integrated water and wastewater solutions provider in Changle.

The company had invested 230 million renminbi on both projects which involved the construction of a new water treatment plant.

In a statement today, Salcon said the new raw water scheme included the laying of new raw water and treated water pipelines, totalling 38 kilometres, from the intake site at Goaya reservoir to the city centre.

The group owns and has been operating a 40,000 cubic metre per day wastewater treatment plant in Changle since 2005.

Salcon also owns and operates nine water and wastewater concessions located in Shandong, Fujian, Zhejiang and Jiangsu provinces. -- Bernama

KL shares higher at mid-afternoon

Share prices on Bursa Malaysia stayed in positive territory at midafternoon today in line with the rebound on regional Asian markets following signs of progress in resolving the eurozone debt crisis.

As at 3.13 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) gained two points to 1,474.65 after opening 1.97 points higher at 1,474.62.

Affin Investment Bank, Head of Retail Research, Dr Nazri Khan said the new leadership in Greece and Italy had brought about optimism in tackling the debt crisis as well as calmness on global markets.

"The FBM KLCI found its support at 1,460. The market is expected to stage a further technical rebound with an improved sentiment on global markets," he told Bernama.

The Finance Index, gained 3.09 points to 13,186.56 and the Plantation Index rose 52.19 points to 7,539.11 and the Industrial Index increased 0.27 of a point to 2,696.32.

The FBM Emas Index rose 28.271 points to 10,071.69, the FBM Mid 70 Index added 65.989 points to 10,869.39 and the FBM ACE Index increased 0.33 of a point to 4,260.80.

Gainers beat losers 409 to 248 with 279 counters unchanged, 548 counters untraded and 24 others suspended. Turnover stood at 1.506 billion shares worth RM731.8 million.

Newly-listed iDimension Consolidated Bhd, which made its debut on the ACE Market today, gained 2.5 sen to 40.5 sen after opening at 48 sen, which was 10 sen above its 38 sen issue price with 2.8 million units traded.

For other actives, Compugates Holdings was unchanged at eight sen, Marco Holdings Warrants rose one sen to 6.5 sen and Takaso Resources gained 3.5 sen to 22 sen.

Among heavyweights, Maybank slipped one sen to RM8.23, CIMB eased one sen to RM7.25, Sime Darby increased five sen to RM8.91 and Petronas Chemicals slipped two sen to RM6.37. -- Bernama

KPJ to lease hospital in Seberang Perai for 10 years

KUALA LUMPUR: KPJ Healthcare is to lease a medical care facility to be built on four acre-land in Seberang Perai Tengah, Pulau Pinang under an initial ten-year agreement with and Aseania Development Sdn Bhd.

In a filing Friday, Nov 11, KPJ said that its wholly-owned subsidiary, Penang Specialist Hospital Sdn Bhd (PgSHSB) together with Lembaga Kemajuan Wilayah Pulau Pinang (PERDA) and Aseania had entered into a design, build, and lease (DBL) agreement to construct the medical care facility.

KPJ said that in 1994, PERDA had granted Aseania the right to develop a township on 456.01 acres of land in Seberang Perai.

Aseania had earmarked 9.76 acres for the development of healthcare facilities exclusively for PgSHSB, of which four acres were allocated for the hospital.

Under the DBL agreement, Aseania will construct the hospital according to PgSHSB's specifications and upon completion, PgSHSB wil lease the hospital from Aseania for 10 years.

KPJ said that under the agreement, it had the option to renew the lease for a further ten-year period.

KPJ buys land for RM23.76m in Klang to build specialist hospital

KUALA LUMPUR: KPJ HEALTHCARE BHD [] is acquiring four plots of land in the district of Klang, Selangor for RM23.76 million cash as part of its plans to build a specialist hospital.

In a filing Friday, Nov 11, KPJ said it had entered into a sale and purchase agreement with Sazean Development Sdn Bhd to acquire the lands with an aggregate area of 1.84ha.

KPJ said the four plots of land were situated within a mixed development undertaken by Sazean known as “Sazean Business Park”, and that Sazean would make an application to convert the category of the lands it was buying from agricultural to building/commercial.

KPJ said the development cost of the lands was within RM110 million to RM120 million while the CONSTRUCTION [] cost of the hospital was estimated at RM80 million.

It said the costs were expected to be financed via internally generated funds.

“The propose acquisition is in line with KPJ Group’s objective to expand its network of hospitals to locations where private healthcare is in demand, enlarge the customer base and further establish itself as a key service provider in Malaysia,” it said.

KL shares higher at midday

Share prices on Bursa Malaysia retained the uptrend at midday today in line with the rebound on regional Asian markets following signs of progress in resolving the eurozone debt crisis.

Affin Investment Bank, Head of Retail Research, Dr Nazri Khan said the new leadership in Greece and Italy had brought about optimism in tackling the debt crisis as well as calmness on global markets.

"The FBM KLCI found its support at 1,460. The market is expected to stage a further technical rebound with an improved sentiment on global markets," he told Bernama.

At midday, the FTSE Bursa Malaysia KLCI (FBM KLCI) gained 3.75 points to 1,476.40 after opening 1.97 points higher at 1,474.62.

The Finance Index, gained 22.65 points to 13,206.12 and the Plantation Index rose 55.62 points to 7,542.54 and the Industrial Index increased 0.87 of a point to 2,696.92.

The FBM Emas Index rose 37.14 points to 10,080.56, the FBM Mid 70 Index added 65.609 points to 10,869.01 but the FBM ACE Index declined 12.42 points to 4,248.05.

Gainers beat losers 411 to 203 with 262 counters unchanged, 608 counters untraded and 24 others suspended. Turnover stood at 1.27 billion shares worth RM583.70 million.

Newly-listed iDimension Consolidated Bhd, which made its debut on the ACE Market today, gained 2.5 sen to 40.5 sen after opening at 48 sen, which was 10 sen above its 38 sen issue price with 2.8 million units traded.

For other actives, Compugates Holdings was unchanged at eight sen, Marco Holdings Warrants rose one sen to 6.5 sen and Takaso Resources gained four sen to 22.5 sen.

Among heavyweights, Maybank was unchanged at RM8.24, CIMB rose one sen to RM7.27, Sime Darby increased four sen to RM8.90 and Petronas Chemicals slipped one sen to RM6.38. -- Bernama

KLCI remains in positive territory but pares down gains at mid-day

KUALA LUMPUR: The FBM KLCI remained in positive territory at the mid-day break on Friday, Nov 11 but pared down some of its gains on signs of mild profit taking ahead of the weekend.

The FBM KLCI was up 3.75 points to 1,476.40 at 12.30pm. The index had earlier risen to its intra-morning high of 1,478.33.

Gainers led losers 411 to 203, while 262 counters traded unchanged. Volume was 1.27 billion shares valued at RM583.71 million.

The ringgit fell 0.02% to 3.1480 versus the US dollar; crude palm oil futures for the third month delivery fell RM11 per tonne to RM3,112, crude oil added 38 cents per barrel to USD98.16 while gold rose US$9.17 an ounce US$1,767.57.

At the regional markets, Hong Kong’s Hang Seng Index rose 1.14% to 19,179.78, South Korea’s Kospi jumped 2.41% to 1,856.96, Taiwan’s Taiex was up 0.78% to 7,365.49, the Shanghai Composite Index added 0.60% to 2,494.41, Japan’s Nikkei gained 0.54% to 8,546.40 and Singapore’s Straits Times Index edged up 0.15% to 2,790.95.

On Bursa Malaysia, BAT was the top gainer this morning and rose 50 sen to RM46; United PLANTATION []s gained 40 sen to RM19, DiGi 34 sen to RM34.34, CI Holdings 31 sen to RM5.26, Asas 19 sen to RM1.19, TSH Resources 17 sen to RM3.45, KLK 16 sen to RM20.98, Top Glove 14 sen to RM4.44 and CBIP 11 sen to RM3.79.

Takaso was the most actively traded counter with 44.33 million shares done. The stock gained four sen to 22.5 sen.

Other actives included Compugates, JCY, iDimension, DBE Gurney, Rimbunan Sawit and IRCB.

Decliners included Ya Horng, Sunchirin, Tong Herr, Tasek, Petronas Dagangan, Ta Ann, Boustead and Teck Guan.

Petronas, Shell ink oil project pacts

Petronas and Shell Malaysia today signed a Heads of Agreement (HOA) for two 30-year production-sharing contracts (PSCs) for enhanced oil recovery (EOR) projects in offshore Sabah and Sarawak.

The HOA will see staged work activities and new investments from Shell and its joint-venture partner, Petronas Carigali Sdn Bhd, to extend the life and increase the recovery factor of the Baram Delta and North Sabah fields.

"This new agreement confirms Shell’s commitment to continue investing in Malaysia and its position as a heartland for Shell.

"The agreement also provides an opportunity to work together with Petronas on building local knowledge and capabilities in enhanced oil recovery," Shell’s chief executive officer Peter Voser said in a statement.

Improvements in the recovery efficiency of oil fields may result in an additional 90 to 100 kilo barrel of oil equivalent per day of oil production and extend the field life to beyond 2040.

The new agreement will build upon the existing Baram Delta and North Sabah production-sharing contracts located offshore Sabah and Sarawak.

Meanwhile, Shell Malaysia chairman Anuar Taib said the new agreement would positively impact Malaysia’s oil reserves and benefit the country as well as, adding further value to the nation’s upstream oil and gas industry.

"Shell, as a long-term partner in Malaysia’s progress, is pleased to be able to continue contributing towards the national aspiration to become a high-income economy," he said.

Petronas Carigali holds 60 per cent equity interest in the Baram Delta production-sharing contract (expiry 2018) and is the operator while Shell holds the remaining 40 per cent stake.

The North Sabah PSC (expiry 2019) is Shell-operated, with each company holding an equal 50 per cent equity interest.

The projected increase in the average recovery factor in the Baram Delta and North Sabah fields will see a rise to 50 per cent from 36 per cent, adding significant value to the upstream industry in Malaysia and sustainable over the coming decades.

The technology employed in the North Sabah fields can potentially lead to the first field-scale offshore Chemical EOR in the world.

To date, Shell has participating interests in 14 PSCs in various offshore blocks in Sabah and Sarawak. -- BERNAMA

Petronas, Shell Malaysia ink HOAs for new oil recovery, PSC

KUALA LUMPUR (Nov 11): Petroliam Nasional Bhd and Shell Malaysia have signed heads of agreement (HOA) for new enhanced oil recovery projects offshore Sabah and Sarawak.

In a statement on its website Nov 11, Shell Malaysia said the HOA would see staged work activities and new investments from Shell and its joint venture partner Petronas Carigali Sdn Bhd (PCSB), to extend the life and increase the recovery factor of the Baram Delta (BDO) and North Sabah fields.

The improvement in the recovery efficiency of the oil fields may result in an additional 90,000 to 100,000 barrels per day equivalent (kboe/d) of oil production and extend the field life to beyond 2040.

Shell chief executive officer Peter Voser said the new agreement confirmed Shell’s commitment to continue investing in Malaysia and its position as a heartland for Shell.

“The agreement also provides an opportunity to work together with Petronas on building local knowledge and capabilities in enhanced oil recovery,” said Voser.

Shell Malaysia chairman Anuar Taib said this development would positively impact Malaysia’s oil reserves and benefit the country as a whole, adding further value to the country’s upstream oil and gas industry.

“Shell, as a long term partner in Malaysia’s progress, is pleased to be able to continue contributing towards the national aspiration to become a high-income economy,” said Anuar.

Shell said the new agreement would build upon the existing BDO and North Sabah production sharing contracts, located offshore Sarawak and Sabah, respectively.

Petronas Carigali holds a 60% equity interest in the BDO production sharing contract (expiry 2018) and is operator while Shell holds the remaining 40% interest.

The North Sabah PSC (expiry 2019) is Shell operated with each company holding an equal 50% equity interest.

Shell said the projected increase in the average recovery factor in the BDO and North Sabah fields will see a rise from 36% to 50%, adding significant value to the upstream industry in Malaysia sustainably over the coming decades.

The TECHNOLOGY [] employed in the North Sabah fields could potentially lead to the first field-scale offshore Chemical EOR in the world.

To date, Shell has participating interests in 14 PSCs in various offshore blocks in Sarawak and Sabah.

Tejari changes name to 1 Utopia

Bursa Malaysia Bhd has announced that Tejari Technologies Bhd and Tejari Technologies Bhd - Warrants will change its names to 1 Utopia Bhd and 1 Utopia Bhd - Warrants respectively.

In a statement today, Bursa Malaysia said the company's securities will be traded under the new name with effect from 9 am on next Tuesday, with unchanged stock numbers.

Tejari Technologies is listed on the ACE market. -- Bernama

KLCI rebounds but gains limited

KUALA LUMPUR (Nov 11): The FBM KLCI rebounded on Friday, Nov 11 in line with key regional markets, albeit gains remained limited as investors wary of the still uncertain global economic outlook treaded carefully.

At mid-morning, the FBM KLCI added 5.27 points to 1,477.92.

Gainers led losers by 302 to 116, while 214 counters traded unchanged. Volume was 644.02 million shares valued at RM213.32 million.

At the regional markets, Hong Kong’s Hang Seng Index added 0.92% to 19,138.73, Japan’s Nikkei 225 edged up 0.06% to 8,506.28, the Shanghai Composite Index rose 0.37% to 2,488.75, Taiwan’s Taiex up 0.27% to 7,328.47, South Korea’s Kospi added 1.2% to 1,834.99 and Singapore’s Straits Times Index gained 0.22% to 2,793.06.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Nov 11 said that due to the US markets’ weak rebound tone last night, there could be an initial rose for the local index.

Some later pre-weekend profit taking activities may trim the local market’s rise in the afternoon session, he said.

Lee said the Asian markets would still gyrate wildly due to the weak rebound tone for the overnight American markets.

“As such, we advise clients to still trade with a short-term time frame locally.

“It is unwise to join the recent penny stock activity (eg Harvest Court with so many gap-ups) as these stocks do not have any fundamentals and the companies are loss making. Take profits here swiftly,” he said.

Among the gainers on Bursa Malaysia, DiGi rose 80 sen to RM34.80, BAT 44 sen to RM45.94, United PLANTATION []s 40 sen to RM18, CI Holdings 23 sen to RM5.18, Glenealy 15 sen to RM5.99, HLFG 14 sen to RM11.88. Rimbunan Sawit 11.5 sen to 95.5 sen, TSH Resources 10 sen to RM3.38, while Tien Wah and Kretam added seven sen each to RM1.70 and RM2.19.

iDimension Consolidated Bhd, which made its debut on the ACE Market today, was among the most actively traded counters. The stock rose three sen to 41 sen with 27.6 million shares traded.

Other actives included Compugates, Takaso, DBE Gurney, Rimbunan Sawit, JCY International and Tiger.

Decliners included Sunchirin, Ta Ann, Boustead, Weida, Sarawak Oil Palms, Asas and Harvest Court.

KL shares higher at midmorning

At 10.30 am today, there were 347 gainers, 147 losers and 250 counters traded unchanged on the Bursa Malaysia.

The FBM-KLCI was at 1,475.72 up 3.07 points, the FBMACE was at 4,283.73 up 23.26 points, and the FBMEmas was at 10,073.78 up 30.36 points.

Turnover was at 862.306 million shares valued at RM326.671 million. - Bernama

KL shares wring gains in early trade

Share prices on Bursa Malaysia opened marginally higher in early trading today, recovering from yesterday's losses in tandem with the rebound in US stocks and easing debt crisis fears in Europe, dealers said.

As at 9.15am, the FTSE Bursa Malaysia KLCI (FBM KLCI) gained 2.34 points to 1,474.99 after opening 1.97 points higher at 1,474.62.

The Finance Index, however lost 1.189 points to 13,182.28, the Plantation Index rose 40.09 points to 7,527.01 and the Industrial Index shed 4.95 points to 2,691.10.

The FBM Emas Index rose 19.88 points to 10,063.30, the FBM Mid 70 Index added 18.38 points to 10,821.78 and the FBM ACE Index advanced 18.28 points to 4,278.75.

Gainers beat losers 216 to 40, 143 counters unchanged, 1,085 untraded and 24 suspended. Turnover stood at 261.6 million shares worth RM84.9 million.

Newly-listed iDimension Consolidated Bhd, which made its debut on the ACE Market today, gained 4.5 sen to 42.5 sen after opening at 48 sen, 10 sen above its 38 sen issue price with 2.8 million units traded.

Other active counters, Compugates Holdings was unchanged at eight sen, Jotech Holdings warrants earned one sen to seven sen and JCY International increased two sen to 71.5 sen.

Heavyweights, Maybank was unchanged at RM8.24, CIMB rose three sen to RM7.29, Sime Darby slipped three sen to RM8.83 and Petronas Chemicals gained one sen to RM6.40. -- Bernama

Benalec up on nod for reclamation works

Benalec Holdings Bhd, a Malaysian marine construction company, rose to the highest level in more than three months in Kuala Lumpur trading after it said it won approval from the country’s Johor state government to conduct reclamation works.

The shares rose 2.1 percent to RM1.46 at 9:04 a.m., set for the highest close since Aug. 4. -- Bloomberg

Utd Malayan gains on acquisitions

United Malayan Land Bhd, a Malaysian property developer, rose the most in almost a month in Kuala Lumpur trading after agreeing to buy Tentu Teguh Sdn Bhd and land in Iskandar, Johor, for RM11 million..

The stock gained 2.8 percent to RM1.45 at 9:30 a.m. local time, set for its biggest increase since Oct. 13. -- Bloomberg

Genting rises on better S'pore unit income

Genting Bhd, a Malaysian casino operator, rose to highest level in two days in Kuala Lumpur trading after its Singapore unit reported a 12 percent increase in third-quarter net income.

The shares rose 1.1 percent to RM10.80 at 9:11 a.m. in Kuala Lumpur trading, set for the highest close since Nov. 9. -- Bloomberg

CI Hlgs jumps on cash payout plan

C.I. Holdings Bhd, a Malaysian beverage group, rose to a decade-high in Kuala Lumpur trading after proposing to increase the size of its cash distribution to RM5.10 per share.

The stock jumped 5.3 percent to RM5.21 at 9:10 a.m. local time, set for its highest close since June 6, 2000.

iDimension climbs on KL listing debut

iDimension Consolidated Bhd, a Malaysian software developer, rose 10.5 percent in its debut on the Kuala Lumpur stock exchange today.

The stock climbed to 42 sen at 9:15 a.m. local time, from an initial public offering price of 38 sen. -- Bloomberg

OSK Research Neutral on plantations, CPO average RM2,700 in 2012

KUALA LUMPUR (Nov 11): OSK Research continues to have a Neutral stance on the sector with average crude palm oil (CPO) price assumption of RM2,700 for CY12.

It said on Friday, it believes investors should make use of the price lull to accumulate good growth stocks, which tend to be illiquid but are good to have as they provided the alpha.

“These stocks should have less earnings reduction as production growth will help to mitigate the effects of lower price,” it said.

OSK Research said inventory numbers continued to stay above the 2.0 million tonne-level but is starting to ease with shipment rising 19.0% month-on-month while production only grew by 2.1%.

“We believe the stockpile level will continue to ease in the coming months as we believe the upcoming low season will be one with very weak output,” it said.

The research house said it believed palm oil price will enter a very dull phase in the first two to three quarters next year.

“This is because palm oil price appears to have bottomed out but yet due to ample supply and unexciting demand growth, prices have limited upside.

“After this lull period, we could see the start of a new upcycle, which will be driven by a potential peak in Indonesia’s palm oil production in the not too distant future. A peak in palm oil supply will also mean that global edible oil supply also peaks. This will have very serious implication for edible oil price overall,” OSK Research said.

Pavilion Reit to market IPO at 90 sen/unit

Pavilion Real Estate Investment Trust, a Malaysian retail property trust, is marketing its initial public offering to institutions at 88 sen to 90 sen per unit, according to a note sent to investors.

The company expects a distribution yield of as much as 6.73 percent based on its 2012 earnings estimates, the note said. -- Bloomberg

Equine rises on doubling Q2 profit

Equine Capital Bhd, a Malaysian property developer, rose the most in more than seven months in Kuala Lumpur trading, after reporting its second-quarter profit almost doubled to RM12 million from RM6.3 million a year earlier.

The shares rose 5.7 percent to 55.5 sen at 9:19 a.m., set for the steepest gain since April 1. -- Bloomberg

Century climbs to 10-week high

Century Logistics Holdings Bhd, a Malaysian transport services provider, rose to a 10-week high in Kuala Lumpur trading after third-quarter earnings grew to RM8.99 million.

The stock climbed 3 percent to RM1.70 at 9:21 a.m. local time, set for its highest close since Aug. 23. -- Bloomberg

DRB-Hicom up in early trade

KUALA LUMPUR (Nov 11): DRB-HICOM BHD [] shares advanced in early trade on Friday, Nov 11 after CIMB Research initiated coverage on the stock with an Outperform rating and target price of RM3.95 based on 10% RNAV discount.

CIMB Research in a note Nov 11 said a series of catalysts in rapid succession – VW agreement, armoured vehicle contract, POS Malaysia acquisition – would transform DRB-Hicom into a strategic conglomerate, unlocking value and earnings growth on multiple levels.

At 9.10am, DRB-Hicom added 10 sen to RM2.15 with 339,700 shares traded.

“All its key businesses (autos, concession, finance, property) are at an earnings inflection point.

“The stock is on our high conviction list as it is trading at 8x CY13 P/E and below its RM2.60 NTA,” said CIMB Research.

iDimension Consolidated starts off on positive note

KUALA LUMPUR: iDimension Consolidated Bhd, which made its debut on the ACE Market on Friday, Nov 11, was active and advanced in early trade.

At 9.05am, the stock added seven sen to 45 sen with 8.75 million shares done.

iDimension is a one-stop supplier of manufacturing software solutions.

At an offer price of 38 sen, the company aimed to raise RM14.53 million via a public issue of 38.23 million new shares of 10 sen each.

It reported revenue of RM14.95 million in 2010 with a profit after tax of RM8.24 million.
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