BToto rakes up RM105m net profit in 2Q, up 62 pct on-yr

KUALA LUMPUR: BERJAYA SPORTS TOTO BHD []’s earnings jumped 62.3% to RM105.67 million in the second quarter ended Oct 31, 2011 from RM65.08 million a year ago when it was affected mainly due to the higher prize payout then.

It said on Monday its revenue rose 1.9% to RM862.37 million from RM845.79 million while its earnings per share were 7.90 sen compared with 4.87 sen. It declared an interim dividend of 8.0 sen per share.

BToto said the stronger earnings were mainly due to the improved performance of Sports Toto Malaysia Sdn Bhd where it posted a higher percentage increase in pre-tax profit of 56.1% mainly attributed to higher prize payout in the previous year corresponding quarter.

Berjaya Philippines Inc. group also contributed to the growth in the Group's revenue but it reported a marginal drop in pre-tax profit in the current quarter under review.

For the first half, its earnings increased by 53.2% to RM197.77 million from RM129.04 million in the previous corresponding period. Its revenue increased by 1.6% to RM1.708 billion from RM1.681 billion.



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Guinness Anchor declares special dividend of 60 sen

KUALA LUMPUR (Dec 12): GUINNESS ANCHOR BHD [] is rewarding it shareholders with a sing tier special interim dividend of 60 sen per 50 sen share for the financial year ending June 30, 2012.

“The single tier special interim dividend will be paid on Jan 20, 2012 to the stockholders registered in the record of depositors at the close of business on Jan 11,” it said.



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KYM to raise RM7.65m from private placement of 5m new shares

KUALA LUMPUR (Dec 12): KYM HOLDINGS BHD [] expects to raise RM7.65 million from the proposed placement of five million new shares of 50 sen each.

It said on Monday the new shares, representing 4.6% of its paid-up, would be placed out at RM1.53 per share. Its share price closed one sen lower at RM1.55 with 35,000 shares done.

The proceeds would be used as working capital for the group including initial investment of about RM5 million for a reclamation of 3,400 acres at Bagan Datoh, Perak, building of the infrastructure requirements, including jetties.

KYM will have a 37.5% stake in PEIH Holdings Sdn Bhd which will build the infrastructure for the Perak Eco Industrial Hub (PEIH).

“The proceeds from the proposed private placement are adequate for the group’s present working capital requirements. Due to the size of the PEIH project, it is envisaged that further investment and funding will be required in the future.

“However, the quantum of the additional investment and funding required for the PEIH project can only be reasonably ascertained until the detailed layout plan and CONSTRUCTION [] designs which are expected to be finalised in the next six months,” it said.

Meanwhile, according to its financial statements for the second quarter ended July 31, its net asset per share was 93 sen.



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Market Commentary

The FBM KLCI index gained 6.97 points or 0.48% on Monday. The Finance Index increased 0.51% to 13007.11 points, the Properties Index up 1.41% to 957.51 points and the Plantation Index rose 0.85% to 7927.41 points. The market traded within a range of 10.82 points between an intra-day high of 1474.55 and a low of 1463.73 during the session.

Actively traded stocks include UTOPIA-WA, PROTON-CG, SANICHI, UTOPIA, COMPUGT, PROTON-CH, LFECORP, PROTON-CI, DRBHCOM-CI and FLONIC. Trading volume increased to 1595.73 mil shares worth RM1129.18 mil as compared to Friday’s 1296.67 mil shares worth RM1057.03 mil.

Leading Movers were GENTING (+20 sen to RM10.82), CIMB (+6 sen to RM6.95), IOICORP (+6 sen to RM5.10), AMMB (+12 sen to RM5.86) and PETCHEM (+8 sen to RM6.08). Lagging Movers were MISC (-20 sen to RM5.60), TENAGA (-3 sen to RM5.50), DIGI (-1 sen to RM3.68), MAXIS (-1 sen to RM5.48) and HLFG (-6 sen to RM11.42). Market breadth was negative with 357 gainers as compared to 362 losers. -- JF Apex Securities Bhd



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Asian markets pare down gains as European euphoria fades

KUALA LUMPUR (Dec 12): Asian markets, including at Bursa Malaysia, retreated in the afternoon session on Monday as the initial euphoria over the European leaders’ summit deal to pursue stricter budget rules and a stronger fiscal union did little to abate fears of a deepening financial crisis in the region.

European shares fell on Monday as euphoria over a European Union deal on deeper economic integration faded, weighed by concerns over politicians' response to the debt crisis in the short-term and the likely impact of austerity measures on growth, according to Reuters.

The FBM KLCI could not sustain its earlier gains and closed 0.48% or 6.97 points higher at 1,467.10. The index had earlier risen to its intra-day high of 1,474.55.

Losers overtook gainers by 362 to 357, while 325 counters traded unchanged. Volume was 1.6 billion shares valued at RM1.13 billion.

At the regional markets, Japan’s Nikkei 225 close 1.36% higher at 8,653.82, South Korea’s Kospi up 1.33% to 1,899.76, Taiwan’s Taiex gained 0.81% to 6,949.04 and Singapore’s Straits Times Index edged up 0.26% to 2,701.72.

Meanwhile, the Shanghai Composite Index fell 1.02% to 2,291.54 and Hong Kong’s Hang Seng Index shed 0.06% to 18,575.66.

On Bursa Malaysia, Nestle was the top gainer and rose RM1.52 to RM55.90; Dutch Lady gained RM1.06 to RM25.98, PPB 30 sen to RM16.60, GAB and Tahps 28 sen each to RM12.28 and RM4.48, Proton 24 sen to RM4.23, while Inno, F&N and Genting rose 20 sen each to RM1.50, RM18 and RM10.82.

Among the decliners, MISC and Lafarge Malayan Cement fell 20 sen each to RM5.60 and RM6.66, Ajinomoto, DKSH and BAT lost 10 sen each to RM3.92, RM1.73 and RM47.20 respectively, Quality Concrete down nine sen to RM1.25, Boxpak eight sen to RM1.72 while Malpac lost seven sen to RM1.33.

The actively traded stocks included Utopia, Proton, Sanichi, Compugates and Flonic.



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Efficiency for earnings sustainability

KUALA LUMPUR: Poultry outfit LTKM Bhd said it will not jump on the consolidation and expansion bandwagon, unlike its competitors over the past year.

Instead, its main focus for now will be on improving the efficiency of its core business in layer farming, managing director Datuk Tan Kok told The Edge Financial Daily in an exclusive interview recently.

“We are aiming to be the most profitable company rather the largest poultry company. We are still very focused on ensuring that we have efficient operations” said Tan.

“By managing our costs and productivity well, we will ensure that our profitability is sustained for the long term,” he added.

In the past five years, LTKM’s earnings recorded a compound annual growth rate (CAGR) of 31% from RM5.44 million in FY07 (ended March 31) to RM16.01 million in FY11.
In the same period, its revenue CAGR was 15%, from RM85.55 million in FY07 to RM150.49 million in FY11.

With an output of 1.4 million eggs per day, LTKM is considered the fifth largest egg producer in Malaysia. It exports 35% to 40% of its total production to Singapore and Hong Kong. Premium eggs, such as its LTK Omega Plus brand, make up for 20% of its total production.

LTKM’s sole 179ha farm in the district of Durian Tunggal in Malacca is the single largest centralised poultry farm in Malaysia, with layer hens in over 140 closed house systems.
Having all the poultry houses in one location improves efficiency, while its centralised location in Malacca is strategic for distributing eggs in the peninsula and across the causeway, said Tan.

Although LTKM has no current expansion plans, it will be on the lookout for opportunities, particularly in land acquisitions, he said.

However, the acquired land will unlikely be developed into poultry farms, but will be for investment purposes.

Tan said developing land into a farm is one of the main difficulties poultry companies face.

“LTKM’s plan to develop land into farms has been opposed by residents who live in the area, who worry about the smell,” he explained.
This scenario was faced by LTKM when it purchased 81ha of land in Bukit Senggeh, Malacca, back in 2003. As a result, LTKM has been using the land for sand mining since 2008, which contributed to around 2% of its revenue in FY11.

The more convenient way is to purchase existing poultry farms, said Tan. Still, LTKM is not in a hurry as its farm in Malacca is not yet fully occupied, allowing the company to build more chicken houses in the future. In the last two years, four chicken houses were added, increasing output by 100,000 eggs per day, said Tan.


LTKM has its own feedmill with a production capacity of 7,000 tonnes per month. Despite producing its own feed, Tan said costs remain the main challenge of the company.

Poultry feed, which accounts for 70% to 75% of cost of sales, is made mostly from corn and soyabean meal. To buffer against volatile prices, Tan said LTKM keeps the stock for three to four months, in addition to buying futures contracts.

LTKM has also started its maiden property development in Banting comprising 26 units of terraced houses. Tan said involvement in the small project is more to gain experience rather than profit. LTKM may consider expanding further into property development, he added.

In FY11, LTKM paid net dividends of 13 sen, which represented 35% of the year’s net profit.

At the closing price of RM1.82 last Friday, the net dividend yield came to 7.1%. LTKM has also been trading below its end-September book value of RM2.77. The stock was traded at 4.9 times FY11 earnings.

As at end-September, the company had cash reserves of RM10.1 million and short- and long-term borrowings of RM21.54 million.

For its 2QFY12 ended Sept 30, LTKM posted a net loss of RM6.73 million from a net profit of RM4.85 million a year ago, while revenue increased marginally to RM38.87 million from RM38.31 million previously.

LTKM said the loss was caused by ceasing its loss-making processed glass manufacturing business, which it started in January. Costs from the cessation and impairment losses from the disposal of machinery amounted to RM6.96 million.



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Rights issues by REITs a tough sell?

KUALA LUMPUR: It remains to see whether investors will warm up to recent proposals by Malaysian real estate investment trusts (REITs) to embark on rights issues for fundraising.

This comes as Hektar REIT and AmFirst REIT separately proposed rights issues in recent months. The former is doing so to fund new asset acquisition while the latter is seeking to reduce its bank borrowings. CapitaMalls Malaysia Trust (CMT) also recently told The Edge Financial Daily that it is considering a rights issue to raise fresh capital.

Analysts and market observers said it is generally undesirable for REITs to embark on rights issues as investors expect dividends from REITs instead of having to plough in more capital.

“Effectively, they are asking investors to spend more on their stock in these uncertain market conditions,” said a property analyst.

However, judging from the price performance of both Hektar REIT and AmFirst REIT, investors have not reacted negatively to the news. This, surprisingly, is in contrast to investors’ harsh treatment of Singapore-listed REITs that embarked on rights issues.

According to analysts, the reason why Malaysian REITs are now turning to rights issues to raise funds, instead of the usual way of borrowing or unit placement, could be because their gearing is already near the 50% threshold (of total asset value) permitted for a REIT to borrow, or that the capital they seek to raise is larger than what can be achieved with a placement exercise.

In Hektar REIT’s case, its gearing ratio is 43.4%, just below the 50% limit, based on its total debt of RM347 million and total assets of RM799.47 million as at Sept 30. AmFirst’s REIT’s gearing as at Sept 30 was 39.8% based on total borrowings of RM419.6 million and total assets of RM1.053 billion.

On Dec 8, Hektar REIT proposed a renounceable rights issue to raise gross proceeds of about RM98.4 million. Proceeds from the rights issue will be used to partially fund the acquisition of two shopping malls in Kedah for RM181 million cash.

Hektar REIT added that it would also obtain bank borrowings of up to RM87.1 million to purchase the assets. Note that it held cash and cash equivalents of RM21.3 million as at Sept 30.

The REIT has yet to finalise the actual number of rights units and entitlement basis will be determined later based on the final issue price of the rights unit.
Hektar REIT added that it will procure a written irrevocable undertaking from its substantial unitholders to fully subscribe for their entitlements, failing which underwriting arrangements would be made.

AmFirst REIT’s proposed rights issue, set on a three-for-five basis, is expected to raise gross proceeds of about RM218.8 million, based on an illustrative issue price of 85 sen per unit. The proceeds are to be used to pare down borrowings.

CapitalMalls Malaysia Trust, which also manages The Mines shopping mall, recently said it is also considering a rights issue to raise fresh capital.

AmFirst said the rights unit issue price is expected to be fixed at a discount of no more than 20% to the theoretical ex-rights price of the unit. “The discount on the issue price of the rights unit is intended to reward unitholders for their continuous support of the fund,” AmFirst said.

Thus far, investors have not reacted negatively to the REITs proposal to conduct rights issues. The unit prices of both Hektar REIT and AmFirst REIT are still traded near their peaks.

“It could be because the unit prices are currently near historical highs, and more interestingly, at the current high prices they still offer rather good yields as well [Hektar REIT at 7.6% and AmFirst at 8.6% historical yield], so unitholders are happy,” said a market observer.

Other than that, he explained that there is still strong demand for REITS in times of market volatility, especially among institutional shareholders.
“Pavilion REIT has gained 13.6% since last week’s IPO to RM1, and the yield is now only 5.7%. So, the management of REITs thought maybe a rights issue is a good idea,” he said.

The scenario is different in Singapore.

K-REIT Asia, a unit of the Keppel Land group, saw its unit priced plunge 9.7% to S$0.857 sen on Oct 18 after it announced plans to raise S$976.3 million (RM2.4 billion) through a 17-for-20 rights issue. Most of the funds raised by the REIT will be used to buy a 87.5% stake in Ocean Financial Centre (OFC) from its parent Keppel Land Ltd.

It was reported that investors didn’t like the pricing for the OFC deal, and the fact that it was a related party deal. It wasn’t entirely because K-REIT Asia had proposed to acquire it via rights issue funding.

“At the end of the day, REIT managements have to justify why they have to do a rights issue to ask for more money from the unitholders. While institutional shareholders are okay with a rights issue, it could be a turn-off for minority shareholders,” said a market observer.



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Kencana strikes RM1b job from O&G giant

Kencana Petroleum Bhd
(Dec 9, RM2.76)

Maintain buy with fair value RM3.17: Kencana announced last Thursday that its wholly-owned subsidiary Kencana HL Sdn Bhd had secured a contract from US-headquartered oil and gas (O&G) service company Bechtel International Inc on Dec 2 for the fabrication and assembly of structures and components for a liquefied natural gas (LNG) processing facility in Australia.

The contract, worth about RM1 billion, includes fabrication, assembly, testing and loading of process equipment modules for the Wheatstone project LNG plant facility in Ashburton
North (near Onslow) in Western Australia. The fabrication will be carried out at Kencana’s fabrication yard in Lumut.

The Chevron-operated Wheatstone project is one of Australia’s largest resource projects in Ashburton North, 12km west of Onslow in Western Australia. This project is a joint venture between the Australian subsidiaries of Chevron (73.6%), Apache (13%), Kuwait Foreign Petroleum Exploration Company (7%) and Shell (6.4%).

The initial phase will consist of two liquefied natural gas trains with a combined capacity of 8.9 million tonnes per year and a domestic gas plant.

Positive news but we make no change yet to our FY12/FY13 earnings because:
(i) we have assumed some order book replenishment for the company based on the expected average utilisation of its yard of 60% to 70%; and
(ii) as a detailed breakdown on the contract is not available, we are unable to gauge when revenue and profit would be recognised. Hence, we are keeping our FY12/FY13 earnings unchanged for now.



Judging from the project description in the announcement to Bursa Malaysia, Kencana seems to be tasked with not only carrying out the fabrication works but also the assembly, testing and loading of process equipment modules. Such services should fetch margins that are 10% to 20% higher than the usual 10% to 15% from normal fabrication works.

On Nov 22, Kencana announced that it had entered into several sale and purchase agreements with Lumut Maritime Terminal Sdn Bhd to acquire about 27ha of land for RM28.1 million to expand the fabrication yard in Lumut to about 97ha.

We believe this was in preparation for the Wheatsone project, which may utilise a huge chunk of the existing yard space, as well as to avoid interruptions to some of Kencana’s ongoing fabrication works.

Landing this massive job is testament to the global market recognition of Kencana’s delivery track record. Including the Wheatstone project, we believe that the company’s order book should balloon to more than RM3 billion, which will keep it sufficiently busy over the next two to three years.

Our fair value for the company remains unchanged at RM3.17, based on the existing price earnings ratio of 23 times FY12 earnings per share. Kencana remains our top pick in the O&G sector, apart from Dialog Group Bhd. — OSK Research, Dec 9



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Benalec is making things happen

Benalec Holdings Bhd
(Dec 9, RM1.34)

Maintain buy with fair value RM2.85: Maintain “buy” on Benalec with an unchanged sum-of-parts-based fair value of RM2.85 per share. Benalec has signed an MoU with Rotary Engineering Ltd to co-develop an integrated petroleum storage facility for storing, blending and distributing crude oil and its derivatives on 101ha of reclaimed land at Tanjung Piai, southwest Johor.

With an initial capacity of one million cu m, the storage facility is scalable up to three million cu m and comes with jetties capable of handling very large crude carriers (VLCC).
Both parties will jointly construct and develop the first independent deepwater storage terminal for oil products at Tanjung Piai. Benalec will undertake the land reclamation, with Rotary handling the design, construction and maintenance of the terminal.

Singapore-based Rotary is the region’s largest engineering procurement, construction and maintenance (EPCM) provider for the oil and gas (O&G)/petrochemical industry in the region, having built almost half of the independent storage tanks in Jurong.

We are increasingly upbeat with Benalec’s astute landbanking moves, and the speed at which they are being executed. The Rotary deal comes just under one month after the group had secured development rights in principle to 2,123ha of prime seafront land in south Johor.his trailblazer deal validates our earlier conviction of Tanjung Piai’s strategic

positioning in complementing the vibrant Jurong petrochemical hub with its excellent location within the busy Straits of Malacca and close proximity to Singapore.

Most importantly, Benalec is in a sweet spot to monetise the deep development potential of its Tanjung Piai landbank with the solid backing of Rotary. The JV will be at the forefront to exclusively promote Tanjung Piai as an O&G/petrochemicals hub within Asia, notably in Malaysia and Singapore.

Benalec is set to gain from multiple new earnings streams via marine-related works and associated recurring income from the ownership of this proposed oil terminal.
By extension, this implies more upside to our fair value, whereby we have only assumed land sales of about 121ha each for FY13F/FY14F.

We continue to highlight Benalec as a cheaper but early stage play on the repositioning of south Johor as a rising O&G hub (fully diluted FY12F to FY14F price earnings ratio (PER) five to 10 times against earnings per share compound annual growth rate of 27%). The crystallisation of more landbanking deals in Tanjung Piai following this maiden oil terminal project would help prod a further PER re-rating, we believe. — AmResearch, Dec 9



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DRB-Hicom building up its defences

DRB-Hicom
(Dec 9, RM2.12)

Maintain outperform with target price RM3.95: DRB-Hicom has partnered with Saab AB to bid for the Ministry of Defence’s airborne early warning system.

This is a positive move in the development of its defence business which is one of the many catalysts behind our high conviction call.

The announcement is unlikely to affect DRB-Hicom’s share price which is still driven by speculation of a potential merger with Proton. With or without Proton, we maintain our
“outperform” call. We make no change to our target price which is based on 10% discount to revalued net asset value (RNAV).

At the Langkawi International Martime and Aerospace Exhibition (LIMA 2011), DRB-Hicom announced it is partnering Saab to bid for the airborne early warning and control (AEWC)
system for the Royal Malaysian Airforce. The AEWC system will enhance the government’s monitoring of its territorial and international domains.

DRB-Hicom is broadening its defence portfolio to aerospace. Since 1996, it has supplied and maintained land vehicles for the Malaysian army. The AEWC deal, if successful, will allow it to cross as a defence contractor for the air force and the navy. It is a positive step in its plans to become a local defence champion.

The announcement is not material at this stage as DRB-Hicom is essentially forming a strategic collaboration with Saab and needs to formulate the working requirements of the
AEWC system with the Ministry of Defence before it can come up with any figures for the contract bid.

However, four units of a similar system were purchased by the Singapore defence forces in 2007 for US$375 million (RM1.18 billion) each.

DRB-Hicom remains a high conviction play. This latest announcement is unlikely to be the reason behind the recent share price activity. The press continues to speculate on the
possibility of the company tying up with Volkswagen to acquire Proton Holdings Bhd.

However, VW has come out to say that it has no plans to expand its Malaysian operations beyond its partnership with DRB-Hicom. With or without Proton, the current deal with VW is a large enough catalyst for DRB-Hicom’s auto business. VW-related earnings are expected to contribute 13% of FY14 net profit. — CIMB IB, Dec 9



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Faber in RM30m lawsuit

Faber
(Dec 9, RM1.48)

Maintain market perform with fair value RM1.53: Faber announced yesterday that it had received a statement of claim from Baynona Group. Its UAE subsidiary, Faber LLC, and Project Penyelenggaraan Lebuhraya Berhad (Propel) are defendants in a net claim of about RM29.8 million.

The claims made by Baynona Group are in relation to completed contract works in the UAE first awarded to Faber LLC by the Department of Municipal Affairs, Western Region Municipality. Upon being awarded the contract, Faber LLC contracted out works to Propel which in turn, subcontracted out works to Baynona Group.

As for Faber, we understand that there is no direct award of subcontracting works (for the improvement, development, upgrade and maintenance of infrastructure facilities at Madinat Zayed) to Baynona Group.

Propel informed Faber that the outstanding amount owed to Baynona Group is significantly lower at about RM3.2 million.



The lawsuit against Faber is currently at a preliminary stage as Baynona Group is seeking the Abu Dhabi Court’s approval for the appointment of a committee of experts to examine the documents and project work in relation to the amount claimed. Therefore, Baynona Group has yet to make any specific claim against Faber. Faber is unable to assess the financial impact, if any, arising from the statement of claim.

Risks to our view include:
(i) Failure to secure an extension to the concession agreement with the government; and
(ii) Delays in property launches and approvals, which could affect revenue from the property segment.

We make no changes to our forecasts pending the outcome of the court decision. Our sum-of-parts fair value estimate of RM1.53 remains as we await further announcements on the lawsuit. We reiterate our “market perform” call on the stock. — RHB Research, Dec 9





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FBM KLCI continues uptrend at mid-afternoon

Share prices on Bursa Malaysia continued the positive momentum at midafternoon today with continued gains seen in selected bluechips, dealers said.

At 2.58 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) was up 10 points to 1,470.13, after opening 3.6 points higher at 1,463.73.

A dealer said the uptrend on the local bourse was in line with key regional markets, following last Friday's firmer close on Wall Street as well as positive sentiment from the European region.

Risk appetite also improved on fresh optimism that the eurozone debt crisis could be contained after the pact reached by the European countries for deeper economic integration and a proposal to increase the rescue fund's size.

The Finance Index rose 111.21 points to 13,052.10 and the Plantation Index jumped 60.74 points to 7,921.43 while the Industrial Index added 8.32 points to 2,658.28. The FTSE Bursa Malaysia Emas Index increased 67.26 points to 10,066.81, the Ace Index gained 6.65 points to 4,181.10 and the Mid 70 Index went up 72.50 points to 10,988.21.

Gainers led losers 352 to 274 while 304 counters were unchanged with 547 untraded and 18 others suspended. Trading volume stood at 1.02 billion shares valued at RM586.2 million.

For the actives, 1 Utopia Bhd-WA was unchanged at 5.0 sen, 1 Utopia Bhd rose 0.5 sen to 12 sen, Proton Holding - CG went up 6.0 sen to 37 sen and Sanichi decreased 2.5 sen to 18 sen.

Among heavyweights, Maybank added 3.0 sen to RM8.18, CIMB rose 10 sen to RM6.99, Sime Darby climbed 2.0 sen to RM8.92, Petronas Chemicals increased 8.0 sen to RM6.08 and Tenaga Nasional Bhd gained 2.0 sen to RM5.55. -- Bernama



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Sersol unaware of unusual market activity

KUALA LUMPUR (Dec 12): SERSOL TECHNOLOGIES BHD []’s shares were suspended from trading since 3.56pm on Monday after the company announced it was unaware of the reasons for the unusual market activity.

Trading will resume at 9am on Tuesday, according to a Bursa Malaysia Securities circular.

The company was earlier queried by Bursa Securities over the sharp rise in price and high volume in the shares recently.

Sersol, in its reply to the regulator, said the directors and major shareholders were not aware of any factors which might have contributed to the unusual market activity.



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Proton’s shares rally on takeover talks again, DRB-Hicom up

KUALA LUMPUR (Dec 12): PROTON HOLDINGS BHD []’s shares and call warrants rallied on Monday as market talk that Khazanah Nasional would sell its stake to DRB-HICOM BHD [] went into overdrive.

At 3.28pm, Proton was up 31 sen to RM4.30 with 13.15 million shares done. Its call warrants Proton-CG added 7.5 sen to 38.5 sen and Proton-CI added 12 sen to 45 sen.

DRB-Hicom rose one sen to RM2.13. There were 3.59 million shares traded at prices ranging from RM2.13 to RM2.19.

The FBM KLCI was up 7.79 points to 1,467.92. Turnover was 1.15 billion shares valued at RM685.36 million. There were 342 gainers versus 311 losers while 304 stocks were unchanged.

Tun Dr Mahathir Mohamad, Proton’s adviser, said Khazanah was selling its stake to DRB-Hicom. He was quoted saying on Sunday that Khazanah was selling its stake because it was not pumping more money into Proton, which needed funds for research and development work on new products such as hybrid cars.

“I worry about the buyer (DRB-Hicom) having enough money to inject into Proton. The shares it will be buying are above market price, which will make profitability difficult,” Dr Mahathir said. “But I believe in DRB-HICOM's capabilities,” he said, adding that the status of Proton as a national car would remain after the sale

The Edge weekly reported that the Shanghai Automotive Industry Corp (SAIC) has expressed strong interest in owning a stake in Lotus, following its recent visit to the Lotus manufacturing plant in England.

OSK Research said given the encouraging market potential for Lotus in China and the dire need for funds by Proton in view of its burgeoning capex allocation; “we think the entry of SAIC in the form of equity injection would be meaningful”.

The research house said SAIC was both the JV partner of Volkswagen and GM, which we think would spur more interest from DRB being Proton's suitor.

“We maintain our Trading Buy with our fair value unchanged at RM5,” OSK Research said.



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Cakna to distribute Ayamas products

KFC Holdings (Malaysia) Bhd has agreed in principle to appoint Cakna Sdn Bhd as the distributor for Ayamas products in Terengganu, a state executive councillor said today.

Datuk Mohamed Awang Tera, state executive councillor for rural and entrepreneur development and cooperatives, said Cakna would distribute frozen products such as frozen chicken and frozen chilli sauce.

The products would be distributed to all T'Shoppe convenient stores nationwide from early next year, he told reporters after launching Universiti Malaysia Terengganu's YoungPreneurs' programme.

Mohamed said there are 30 T'Shoppe shops nationwide, 20 in Terengganu and the rest in Melaka, Selangor, Kedah and Perlis.
With Cakna taking charge of distribution via the strategic business partnership with KFC Holdings, Ayamas products would be readily available at convenient stores, he said.

"Currently, consumers are facing problems to get Ayamas products as they are available only in certain outlets such as supermarkets," he said.

Mohamed said 1Malaysia products would also be sold at T'Shoppe outlets from next year to make it easier for consumers to buy the products. -- Bernama



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Toyo Ink extends losses, more details of US$2.5b power plant needed

KUALA LUMPUR (Dec 12): Shares of TOYO INK GROUP BHD [] fell to RM1.60 on Monday, extending its losses from last Friday as investors turned cautious about the return on investment from the US$2.5b coal-fired thermo power plant power plant in Vietnam.

At 3.04pm, it was down seven sen to RM1.60, off the day’s high of RM1.80. There were 28,000 shares done.

However, the 30-stock FBM KLCI was up 10.69 points to 1,470.82. There were 1.05 billion shares done valued at RM601.71 million. There were 350 gainers, 288 losers and 298 stocks unchanged.

Last Friday, Toyo Ink said it planned to finance the US$2.5b coal-fired thermo power plant power plant in Vietnam from a corporate exercise and also through borrowings.

Since the project involved a massive capital outlay, the company said it would consider raising certain portion of the project capital via corporate exercise and then funding the balance through borrowings.

Toyo Ink said it would also seek equity partnerships to incorporate a joint venture company in Vietnam.



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Celcom, Broadcast Australia in digital TV transmission network venture

KUALA LUMPUR (Dec 12): Celcom Axiata Bhd and Broadcast Australia are teaming up to set up a nationwide digital television transmission network in Malaysia.

The two parties signed the agreement on Monday which would enable them to bid for projects in the design, CONSTRUCTION [] and long term operation of digital TV infrastructure.

Celcom chief executive officer Datuk Seri Shazalli Ramly said Celcom had been seeking to diversify its business and this partnership was the first step towards achieving that objective.

“This collaboration lowers the risk for such a crucial and large national project, with both partners having a proven track record and easy access to the required funding," he said.



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KL shares firmer at mid-day

Share prices on Bursa Malaysia ended the morning session in positive territory today with continued gains seen in selected bluechips, dealers said.

At 12.30pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) was up 11.72 points to 1,471.85, after opening 3.6 points higher at 1,463.73.

A dealer said the uptrend on the local bourse was in line with key regional markets, following a firmer overnight close on Wall Street as well as positive sentiment from the European region.

Risk appetite also improved on fresh optimism that the eurozone debt crisis could be contained after the pact reached by the European countries for deeper economic integration and a proposal to increase the rescue fund's size.

The Finance Index rose 120.271 points to 13,061.16 and the Plantation Index jumped 58.41 points to 7,919.1 while the Industrial Index added 11.1 points to 2,661.06.

The FTSE Bursa Malaysia Emas Index increased 74.141 points to 10,073.69, the Ace Index gained 15.45 points to 4,189.9 and the Mid 70 Index went up 79.14 points to 10,994.85.

Gainers led losers 336 to 250 while 290 counters were unchanged with 601 untraded and 18 others suspended. Trading volume stood at 874.853 million shares valued at RM493.640 million.

For the actives, 1 Utopia Bhd-WA and 1 Utopia Bhd were unchanged at five sen and 11.5 sen respectively, Proton Holding - CG went up five sen to 36 sen and LFE Corp Bhd perked 4.5 sen to 27 sen while Compugates Holdings Bhd lost a sen to six sen.

Among heavyweights, Maybank added three sen to RM8.18, CIMB rose 11 sen to RM7, Sime Darby climbed a sen to RM8.91, Petronas Chemicals increased nine sen to RM6.09 and Tenaga Nasional Bhd gained three sen to RM5.56. -- Bernama



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DRB-Hicom best buyer for Proton stake: Mahathir

DRB-Hicom Bhd, a Malaysian automobile assembler controlled by billionaire Syed Mokhtar Shah Al-Bukhary, is the best potential buyer for Khazanah Nasional Bhd’s 43 percent stake in carmaker Proton Holdings Bhd, former Prime Minister Mahathir Mohamad said.

Khazanah has yet to select a buyer, said Mahathir, who is an adviser to Proton. A new shareholder would need to invest fresh funds to develop new products, so the stake should be sold at a “reasonable” price, he said in a joint interview today in Putrajaya, outside of Kuala Lumpur. -- Bloomberg



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NSOP advances as dividend of 24 sen per share goes ex

KUALA LUMPUR (Dec 12): Share price of NEGRI SEMBILAN OIL PALMS BHD [] (NSOP) rose on Monday as its second interim dividend of 24% or 24 sen per share went ex.

At midday, it was up 20 sen to RM5.62 with 1,000 shares done.

The FBM KLCI rose 11.72 points to 1,471.85. Turnover was 874.85 million shares valued at RM493.64 million. There were 336 gainers, 250 losers and 290 stocks unchanged.



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Banks, select blue chips lift KLCI at mid-day

KUALA LUMPUR (Dec 12): The FBM KLCI rose 0.80% at the mid-day break on Monday, in line with most key regional markets that advanced after a European leaders’ summit over the weekend offered a glimmer of hope of a solution to the eurozone debt crisis.

Analysts however said that the deal reached at the summit was not an adequate measure the address the region’s long-term debt crisis.

The FBM KLCI was up 11.72 points to 1,471.85, lifted by gains at banking stocks and select blue chips.

Gainers led losers by 336 to 250, while 290 counters traded unchanged. Volume was 874.85 million shares valued at RM493.64 million.

The ringgit weakened 0.14% to 3.1518 versus the US dollar; crude palm oil futures for the third month delivery lost RM34 per tonne to RM3,052, crude oil fell 12 cents per barrel to US$99.29 while gold slumped US$17.45 an ounce to US$1,694.15.

MIDF Research chief economist Anthony Dass in a note Monday said he was fairly sceptical over the outcome although he acknowledged that there had been progress.

However, he cautioned that there still remained inadequate satisfactory resolution over the debt crisis.

“Risk of downgrading by rating agencies remains since it did not address the increasingly shaky banks or go far enough to shore up the euro-zone battered debt markets remains.

“What turned out to be a disappointment is when ECB remains as ‘lender of last resort’ to only banks not governments,” he said.

At the regional markets, Japan’s Nikkei 225 rose 1.63% to 8,675.54, Hong Kong’s Hang Seng Index gained 1.42% to 18,850.70, South Korea’s Kospi was up 0.92% to 1,891.96, Singapore’s Straits Times Index added 0.75% to 2,714.86 and Taiwan’s Taiex edged up 0.67% to 6,939.55.

Meanwhile, the Shanghai Composite Index shed 0.45% to 2,304.80.

On Bursa Malaysia, the gainers were led by Dutch Lady that rose 98 sen to RM25.90; Nestle was up 62 sen to RM55, GAB 42 sen to RM12.42, KLK 28 sen to RM22.56, Proton 27 sen to RM4.26, Shell 21 sen to RM9.51 while PPB, NSOP and Inno gained 20 sen each to RM16.50, RM5.62 and RM1.50 respectively.

Among banks, RHB Capital rose 15 sen to RM6.95, AMMB 14 sen to RM5.88, CIMB 11 sen to RM7, Public Bank, Hong Leong Bank and HLFG added six sen each to RM12.68, RM11.54 and RM10.68 respectively, Maybank three sen to RM8.18 while Affin added two sen to RM2.81.

Decliners this morning included Lafarge Malayan Cement, APM Automotive, Quality Concrete, Tahps, Suria, Malpac, DKSH and Lingui.

The actives included Utopia, Proton, Compugates, LFE Corp, Flonic, Sersol and SYF Resources.



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Infortech Alliance sells 25% stake in Shanghai associate

KUALA LUMPUR (Dec 12): INFORTECH ALLIANCE BHD [] is selling a 25% stake in Shanghai Infortech Software Development Co. Ltd -- which develops computer software and provides support services -- for RM572,000 to its major shareholder, who is a Chinese national.

It said on Monday it had signed a conditional share sale agreement with Luo Xin – who currently holds a 70% stake in Shanghai Infortech – to dispose of its 25% stake for RM572,000 or RM4.54 per share.

Infortech Alliance said the pricing was reasonable as it was a premium of RM2.665 or about 142% above the audited net asset per share of RM1.876.

It said Shanghai Infortech develops, sells and provides support for convenience store management software and human resource management software. Most of the customers are Japanese companies based in China.



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Maybank’s Fortune8 closed-end fund targets RM300m investments

KUALA LUMPUR (Dec 12): MALAYAN BANKING BHD []’s closed-end fund Fortune8, targets RM300 million in sales when the fund closes on Dec 31, 2011.

It said on Monday the Fortune8 is a single premium and capital guaranteed investment-linked insurance plan. It is a closed-end three-year, six-month investment-link plan.

The fund provides a guaranteed investment return and capital protection on the investment with additional potential upside return from the performance of commodity prices.

Maybank deputy president and head of community financial services Lim Hong Tat said Fortune8 provided potential upside return apart from guaranteeing 100% of the capital on maturity and paying a 5% guaranteed cash payout at the end of the 18th policy month.

“Customers can start investing with a minimum investment of RM15,000 and additional investments in multiples of RM1,000,” he said.

“The fund provides exposure to commodities as a hedge against the global inflationary environment, including items such as food, transportation and many more. Commodities are able to protect investors from short term effects of inflation while providing capital appreciation,” he said.

Fortune8 investors can choose to invest in commodities like energy, precious metals, industrial metals, agriculture and livestock.

Lim said Fortune8 was in line with Maybank Group’s strategy to extend its asset management business, not only in Malaysia but regionally.

“Given the growing demand from customers for a diversified range of investment products, especially from those with a low risk profile, we believe that Fortune8 will provide them the confidence to invest even in volatile market conditions,” he added.



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Maybank eyes RM300m from Fortune8 fund

Maybank's latest single premium and capital guaranteed investment-linked insurance plan, the Fortune8, aims to achieve its cap of RM300 million in sales by the time the fund closes on Dec 31, 2011.

The Fortune8, is a closed-end three-year, six-month investment-link plan, that provides a guaranteed investment return and capital protection on the investment with an additional potential upside return from the performance of commodity prices.

"The Fortune8 is appealing to customers as it provides a potential upside return apart from guaranteeing 100 per cent of the capital on maturity and paying a five per cent guaranteed cash payout at the end of the 18th policy month," its deputy president and head of community financial services, Lim Hong Tat said in a statement today.

Customers can start investing with a minimum RM15,000 and additional investments in multiples of RM1,000.

"The fund provides exposure to commodities as a hedge against the global inflationary environment, including items such as food, transportation and many more.

"Commodities are able to protect investors from the short term effects of inflation while providing capital appreciation," he said.

The investment-linked plan allows investors the choice to invest in commodities like energy, precious metals, industrial metals, agriculture and livestock.

The Fortune8 is in line with Maybank Group’s strategy to extend its asset management business, not only in Malaysia but regionally.

"Given the growing demand from customers for a diversified range of investment products, especially from those with a low risk profile, we believe that the Fortune8 will provide them the confidence to invest even in volatile market conditions,"Lim said.

The Fortune8 is underwritten by Etiqa Insurance Berhad can be purchased at all Maybank branches nationwide. -- Bernama



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Bursa queries Sersol over price surge

Bursa Malaysia Securities Bhd has issued an Unusual Market Activity (UMA) query to Sersol Technologies Bhd today due to the recent sharp rise in price and high volume in the company’s shares.

As at 11.29am, its share price was 6.5 sen or 23.63 per cent higher at 34 sen.

The UMA query is posted on Bursa Malaysia’s website, www.bursamalaysia.com, under the classification of "Listing Circular," said Bursa in a statement.

It said investors are advised to take note of Selsol's reply to the UMA query which will be posted on Bursa Malaysia’s website under company announcements, http://announcements.bursamalaysia.com, when making their investment decision. -- BERNAMA



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Fitch: Malaysian banks’ outlook stable

SINGAPORE: Fitch Ratings says in a new report that the outlooks of its rated Malaysian banks are expected to remain stable, even if a fresh economic slowdown were to emerge from the mounting global uncertainty.

Downward rating risks could arise should such a downturn, particularly if sharp and protracted, lead to significant capital impairment risks for the local banks.

However, the agency views this likelihood as fairly low, due to their satisfactory loss-absorption qualities and risk management, as well as a prudent regulatory environment.

Fitch believes Bank Negara Malaysia will closely monitor household debt, which - at 76 per cent of end-2010 GDP - remains high and leaves the banking sector vulnerable to sharp increases in unemployment and interest rates.

Precautionary measures may be tightened further to those introduced in 2010-H111 to prevent households from over-extending themselves, particularly in an environment of continued ample liquidity, low interest rates and rising asset prices.

This, together with banks’ satisfactory risk management, underpins Fitch’s view that domestic loans to individuals will remain of fairly sound quality through credit cycles.

While the ongoing sovereign turmoil in Europe is unlikely to materially impact on the Malaysian bank’s credit profiles, global economic prospects are becoming increasingly weak, posing fresh downside risks to the Malaysian economy and banking system.

Fitch believes that the impact of higher credit costs can be absorbed largely through banks’ earnings, leaving limited risk of capital erosion.

Such resilience was also observed in the 2008-2009 global economic crisis and is broadly consistent with the conclusion of the agency’s stress test.



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Bursa Securities queries Sersol Technologies

KUALA LUMPUR (Dec 12): Bursa Malaysia Securities Bhd has issued an unusual market activity query over the trading of SERSOL TECHNOLOGIES BHD []’s shares on Monday.

The regulator said on Monday the query was due to the sharp rise in price and high trading volume in Sersol’s shares.

At 11.25am, Sersol rose 6.5 sen to 34 sen with 13.7 million shares traded.



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SYF Resources active, up on positive 1Q results

KUALA LUMPUR (Dec 12): SYF RESOURCES BHD [] shares rose in active trade on Monday after the company’s first quarter financial results showed a significant improvementg after regularising its financial condition.

At 10.50am, SYF rose 1.5 sen to 71 sen with 11.9 million shares done while its warrants added 1.5 sen to 55 sen with 10.76 million units traded.

SYF recorded net profit of RM39.24 million in the first quarter ended Oct 31, 2011 when compared with net loss of RM581,000 a year ago after the waiver of debts and overprovision of interest.

Its revenue for the quarter rose to RM42.98 million from RM40.44 million in 2010, while earnings per share was 43.37 sen from loss per share of 0.69 sen.



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MIDF Research: Eurozone may not be seeing a lasting impact

KUALA LUMPUR (Dec 12): MIDF Research said the eurozone would not be seeing a lasting relief following the summit of European policymakers over the weekend.

MIDF Research chief economist Anthony Dass in a note Monday said he was fairly skeptical over the outcome although he acknowledged that there had been progress, but cautioned that there still remained inadequate satisfactory resolution over the debt crisis.

He also said that the Summit saw Germany as the clear winner, while UK was full of resentment.

He said the concern was whether the agreement would shift to treaty should there be lack of synchronisation.

“Risk of downgrading by rating agencies remains since it did not address the increasingly shaky banks or go far enough to shore up the euro-zone battered debt markets remains.

“What turned out to be a disappointment is when ECB remains as ‘lender of last resort’ to only banks not governments,” he said.

Dass said that ECB’s lowering of its borrowing costs to lift the economy was limited in the near-term.

He said the other underlying concerns were possibilities for a change in the game plan as the fiscal compact are being put in place.

“Also, will the ECB be more dovish, now that fiscal austerity is supposedly taking shape? Could all these be a wishful thinking? Also they may fail to calm the tensions in the financial market.

“Risk of EU seeking funds from BRIC’s cannot be ruled out and will be a slap,” he said.



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KLCI firmly higher at mid-morning

KUALA LUMPUR (Dec 12): The FBM KLCI was firmly higher at mid-morning on Monday, as key regional markets steadied following European policymakers coming to a consensus towards fiscal union.

At 10am, the FBM KLCI rose 11.60 points to 1,471.73.

Gainers led losers by 294 to 96, while 195 counters traded unchanged. Volume was 344.29 million shares valued at RM158.96 million.

Regional markets advanced after twenty-six of the 27 European Union leaders on Friday agreed to pursue stricter budget rules for the single currency area and also to have euro zone states and others provide up to 200 billion euros in bilateral loans to the International Monetary Fund (IMF) to help tackle the crisis, according to Reuters.

Last week, a Reuters report that China planned a new US$300 billion vehicle to invest in Europe and the United States also buoyed investor sentiment, boosting US stocks on Friday.

At the regional markets, Hong Kong’s Hang Seng Index rose 1.49% to 18,862.71, Japan’s Nikkei 225 added 1.32% to 8,649.36, South Korea’s Kospi gained 1.29% to 1,898.91, Taiwan’s Taiex was up 0.19% to 6,975.39, and Singapore’s Straits Times Index gained 0.90% to 2,718.83.

Meanwhile, the Shanghai Composite Index shed 0.41% to 2,305.86.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Dec 12 said the FBM KLCI lost 28.89-points and closed at 1,460.13 last Friday, adding that the local market remained negative in light of the volatile global markets.

He said a drop in the global markets (from last Monday to Friday) led to the softer sentiment for the local bourse, and that some blue chips stocks led the fall in fairly lack lustre trading.

“Although the tone of the global indices has improved somewhat, Eurozone worries on how to tame their debt crisis still persist.

“There could still be inherent and great price volatility in the next two weeks before the global markets wind-down for the Christmas and New Year holidays in late December,” he said.

On Bursa Malaysia, Nestle was the top gainer at mid-morning and rose RM1.90 to RM56.28; Dutch Lady added 58 sen to RM25.50, BAT 54 sen to RM47.84, KLK 28 sen to RM22.56, NSOP 27 sen to RM5.69, Petronas Gas 26 sen to RM14.10, while GAB, PPB, HLFG and Shell gained 20 sen each to RM12.20, RM16.50, RM11.68 and RM9.50 respectively.

Decliners included Lafarge Malayan Cement, Quality Concrete, Shangri-La, South Steel, Triplc and Ekovest, while the actives included Utopia, Compugates, SYF Resources, Flonic and Emico.



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UM Land in JV with Raffles for international school in Johor

KUALA LUMPUR (Dec 12): UNITED MALAYAN LAND BHD [] is teaming up with Raffles Campus Pte Ltd for the proposed development of an international school for use by Raffles as its Johor campus.

It said on Monday UM Land’s unit Seri Alam PROPERTIES [] Sdn Bhd would also sell a piece of freehold land, measuring 19.71 acres, in Plentong, Johor, for RM10.83 million to Raffles.

Elaborating on the deal, UM Land said the shareholders agreement would see both parties setting up a joint venture company, Raffles Campus (Seri Alam) Sdn Bhd to develop an international school for use by Raffles as its Johor campus.

To recap, Raffles is a unit of Singapore’s Strategic TECHNOLOGY [] for Education and Academic Management Pte Ltd which in turn is 70% held by Strategic Foundation Ltd (a not-for-profit organisation).



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Petronas Chems upgraded, stock rises

Petronas Chemicals Group Bhd, the petrochemicals arm of Malaysia’s state oil company, rose the most in more than a week in Kuala Lumpur trading after the stock was upgraded to “outperform” with an increased so-called fair value of RM6.72 at RHB Capital Bhd.

Its shares gained 1.3 percent to RM6.08 at 9:15 a.m. local time, set for their biggest increase since Dec. 1. -- Bloomberg



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Proton climbs on stake sale report

Proton Holdings Bhd, Malaysia’s national carmaker, gained the most in a week in Kuala Lumpur trading after Business Times reported that Khazanah Nasional Bhd will sell its stake in the carmaker to DRB-Hicom Bhd.

The stock climbed 5 percent to RM4.19 at 9:03 a.m. local time, set for its steepest increase since Dec. 5.

DRB-Hicom rose 2.8 percent to RM2.18. -- Bloomberg



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SYF Res gains on Q1 profit turnaround

SYF Resources Bhd, a home-furnishings company, advanced to its highest level in a week in Kuala Lumpur trading after posting first-quarter net income of RM39.2 million, compared with a RM581,000 loss a year earlier.

The stock gained 1.4 percent to 70.5 sen at 9:09 a.m. local time, set for its highest close since Dec. 5. -- Bloomberg



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O&G-related counters advance, RHB Research upgrades sector to Overweight

KUALA LUMPUR (Dec 12): Stocks in the oil and gas industry advanced on Monday after RHB Research upgraded the sector to Overweight, given its positive long-term view of the industry.

At 9.35am, Petronas Gas rose 26 sen to RM14.10, MMHE eight sen to RM5.53, Petronas Chemicals seven sen to RM6.07, Kencana three sen to RM2.79, Wah Seong Corp one sen to RM1.93 and KNM half a sen to 99 sen.

RHB Research in a note Dec 12 said that the excess liquidity flows had resulted in crude oil prices holding up (vs. plunge in the 2008 global financial crisis).

This was despite the persistent global economic uncertainties, it said.

“We revise our average crude oil price assumptions to US$95/bbl for FY12 and US$99.8/bbl for FY13 (from US$80/bbl and US$89/bbl previously) and upgrade our benchmark sector PER to 15x (from 13x).

“We upgrade our call on the sector to Overweight, as we take into account the positive long-term view.

RHB Research said its top picks were Petronas Gas and Dialog, given their long-term fundamentals.

The research house said it was also positive on the the merger of SapuraCrest and Kencana as it would emerge as a formidable non-Petronas oil & gas company.



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OSK Retail Research: Emico may trade higher, support at 27 sen

KUALA LUMPUR (Dec 12): OSK Retail Research said Emico Holdings’ share price may trade higher after closing firmer last Friday.

It said on Monday the stock has been trending higher since spiking up in early November. After failing to break above the 45 sen resistance level, a correction phase has set in.

“But the stock appears to have found support at 27 sen, which held for the past eight days. That is also the 62% retracement level of the November surge. The second leg of rally may have resumed last Friday after the price closed at its highest in 10 days, above the psychological 30 sen.

OSK Research said the “Long White” candle formed on high volume suggests the conviction of buyers.

The research house said buying could be made above 27 sen, with a close below as a stop.

“As strong move could see it testing 55 sen, a measured move based on the November spike up, but two resistance levels stand in the way,” it said.

OSK Research said the first is 35 sen, the high of Nov 25, which is also the 38% retracement of the November surge, and followed by the November high of 40 sen.

A close below 27 sen will invalidate the trade, with a close below the Nov 22 low of 24 sen as the confirmation.

“If so, look for the stock to continue its long-term downtrend move,” it said.



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KL shares open higher

Share prices on Bursa Malaysia were traded higher in the early session Monday on technical rebound, dealers said.

Thirty minutes after the opening bell, the FTSE Bursa Malaysia KLCI (FBM KLCI) gained 11 points or 0.7 per cent to 1,471.13.

Dealers said the uptrend was in tandem with the Wall Street which recovered on Friday when its key stock indices jumped between 1.6 per cent and 1.9 per cent at the closing bell.

This followed a pact reached by the European countries for deeper economic integration and a proposal to increase the rescue fund size, HwangDBS Vickers said in a research note.

The Finance Index rose 109.45 points to 13,050.34; the Plantation Index surged 67.76 points to 7,928.45 and the Industrial Index perked 15.7 points to 2,665.66.

The FBM Emas Index was up 68.99 points to 10,068.54, the FBM Mid 70 Index jumped 62.22 points to 10,977.93 and the FBM ACE Index advanced 32.93 points to 4,207.38.

Gainers led losers by 251 to 54 while 146 counters were unchanged. Turnover stood at 223.92 lots worth RM97.75 million.

Actives, Utopia-Wa earned one sen to six sen, Proton CG added two sen to 33 sen and Emico gained one sen to 32 sen.

For heavyweights, Maybank rose two sen to RM8.17, CIMB added nine sen to RM6.98 but Sime Darby lost one sen to RM8.89. -- Bernama



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KLCI snaps losing streak as Asian markets rise

KUALA LUMPUR (Dec 12): The FBM KLCI snapped its losing streak and rose in early trade on Monday, in line with the gains at key regional markets after European policymakers took a step closer to fiscal union over the weekend.

At 9.05am, the FBM KLCI rose 5.69 points to 1,465.82.

Gainers led losers by 144 to 22, while 88 counters traded unchanged. Volume was 57.56 million shares valued at RM31.05 million.

Among the early gainers were Proton, Lafarge Malayan Cement, Toyo Ink, Nestle, AirAsia, CIMB, Genting, MAHB, Petronas Chemicals and Bumi Armada.



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OSK Retail Research: SYF Resources may trade lower

KUALA LUMPUR (Dec 12): OSK Retail Research said SYF Resources’ share price may trade lower after failing to break above resistance level.

In its technical outlook on Monday, it said the stock has been trending higher since early October and it was quite natural for a correction to set in, especially after the price failed to violate the psychological RM1.

“The second leg of rally started again in December and a continuation appears to be on the cards after the price found support at 60 sen last Wednesday. However, the stock again failed to close above the resistance level of 72 sen, the high of Nov 10. It formed a “Shooting Star”, which denotes a bearish outlook.

“However, weakness is only confirmed by a close below the “Shooting Star” low of 68 sen. As such, positions can be liquidated on a close below that level,” it said.

OSK Research said a speculative sell may even exit on rebound towards Friday’s high of 75 sen and a close below 60 sen will completely erase the upward bias. However, the rebound from last Wednesday’s low may continue if the price manages to close above 68 sen for the next couple of days.

The research house said a close back above 72 sen should confirm the return of buying and thereafter, look for the retest of RM1.



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RHB Research downgrades Gamuda to market perform, FV RM3.02

KUALA LUMPUR (Dec 12): RHB Research Institute had downgraded GAMUDA BHD [] to market perform and cut its fair value to from RM3.41 to RM3.02.

It said on Monday that it expects 1QFY07/12 net profit to come in at RM100 million to RM105 million that will have met its expectations but miss the market consensus.

“We believe 1QFY07/12 core net profit declined 17-21% on-quarter due to the absence of a writeback of over-provision of scheduled highway maintenance, continued easing in property profits and slightly reduced CONSTRUCTION [] margins,” it said.

“Fair value cut from RM3.41 to RM3.02, now valuing Gamuda’s construction business at 12 times one-year forward earnings (from 14 times previously),” it said.

RHB Research said this was in line with the downgrade in its one-year forward target PER for the construction sector to 8.0 times and 12 times (from 10 times to 14 times previously).



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CIMB Research has technical sell on Naim Holdings at RM1.55

KUALA LUMPUR (Dec 12): CIMB Equities Research has a technical sell on Naim Holdings at RM1.55 at which it is trading at a price-to-book value of 0.5 times.

It said on Monday Naim Holdings violated its triangle support on Friday. This is a worrying sign as it may signal the beginning of next downleg.

“If prices continue to stay below the support-turned-resistance trend line, we expect the candles to fall towards its next support levels are RM1.45 and RM1.35,” it said.

CIMB Research said the MACD is falling deeper into the negative territory while RSI has also fallen into the oversold territory.

“Unload on strength looks like a good option here, especially near the RM1.58-1.60 resistances. However, always put a buy stop at RM1.65,” it said.



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CIMB Research has technical sell on Muhibbah at RM1.02

KUALA LUMPUR (Dec 12): CIMB Equities Research has a technical sell on Muhibbah Engineering at RM1.02 at which it is trading at a FY13 price-to-earnings of 4.4 times and price-to-book value of 0.8 times.

It said on Monday Muhibbah Engineering broke below its triangle pattern last week.

“If the candles fail to push back above the support-turned-resistance trend line soon, we expect prices to fall towards 95 sen and 90 sen,” it said.

CIMB Research said the near term outlook does not look encouraging as prices are trading below all its key moving averages. Resistance is seen at RM1.05-RM1.08.

“Technical landscape looks subdued. MACD signal line has slipped into the negative territory while RSI has also hooked downward,” it said.



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CIMB Research has technical sell on Meda Inc at 56.5 sen

KUALA LUMPUR (Dec 12): CIMB Equities Research has a technical sell on Meda Inc at 56.5 sen at which it is trading at a price-to-book value of 1.5 times.

It said on Monday Meda is consolidating in a huge ascending wedge pattern and this is usually perceived as a reversal sign.

“If prices fail to swing past the recent swing high of 59 sen soon, there is a high possibility that prices may dwindle towards the 54 sen support trend line. The following support levels are 52 sen and 49.5 sen,” it said.

CIMB Research said aggressive traders may start to lock in some profits now while others should only join the seller’s camp when prices slip below the support trend line. Near term gains are likely capped at 59 sen. Put a buy stop at 60 sen.

The research house said the bearish divergence on MACD indicator shows that buying momentum is weakening. RSI too has hooked downward.



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HDBSVR: KLCI may recoup part of losses from last week

KUALA LUMPUR (Dec 12): Hwang DBS Vickers Research expects the FBM KLCI to likely recoup part of its cumulative loss of 28.9-point (or 1.9%) last week as it will likely climb towards the immediate resistance line of 1,475 ahead.

It said on Monday the positive sentiment would be underpinned by the recovery on Wall Street last Friday when its key stock indices jumped between 1.6% and 1.9% at the closing bell.

The firmer close on Wall Street was supported by a pact reached by the European countries for deeper economic integration as well as a proposal to boost a rescue fund size.

“While the latest developments may not mean the eurozone has already found a solution to its sovereign debt problems, we reckon Asian equities – including Malaysia – could be in for a technical rebound today,” it said.

HDBSVR said among the counters that may ride on a market bounce-up today include: (a) Proton shares, after its adviser Tun Dr Mahathir Mohamad was quoted as saying that Khazanah would be selling its controlling stake in Proton to DRB-Hicom at above market price with a general offer likely to be made; and (b) MBSB, after its CEO reportedly said it should be able to achieve a pretax-profit of RM500 million next year instead of 2015 as previously planned.



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Genting group invests RM1 bln in new JPO attractions

JOHOR BAHARU, Dec 11 (Bernama) -- Prime Minister Datuk Seri Najib Tun Razak said the Genting Group will invest RM1 billion on new attractions in phase two of the development of Johor Premium Outlets (JPO) in Kulaijaya.

Najib, who launched JPO early Sunday, said the new attractions include a water theme park, convention centre and 2,000-room hotel.

"The Genting Group will also spend RM100 million to build 60 more outlets at JPO, which are expected to be completed in a year," he told reporters at the media conference after Iskandar Malaysia's fifth anniversary celebrations at Puteri Harbour, Nusajaya Sunday.

Also present were Johor Menteri Besar Datuk Abdul Ghani Othman and Khazanah Nasional managing director Tan Seri Azman Mokhtar.

JPO is the 70th Premium Outlets megastore in the world and the first in Southeast Asia.

It features some 80 brand names at discounts of 25 to 65 per cent every day.

JPO is a joint venture between Genting Group and the Simon Property Group of the United States. - Bernama



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Petronas Chemical building new plants in Sabah, Johor

KEMAMAN (Dec 11): Petronas Chemical Group (PCG) is in the process of constructing two new plants, one each in Sabah and Johor, at a cost of over US$21 billion.

Its president Dr Abdul Hapiz Abdullah said PCG will build the Sabah Ammonia Urea (SAMUR) fertiliser plant in Sipitang, Sabah at a cost of US$1.6 billion, while in Pengerang, Johor, it will set up the US$20 billion RAPID (Refinery and Petrochemicals Integrated Development) plant.

"PCG is still new, but our business keeps expanding," he said after attending a Beach Care programme organised by its subsidiary Ethylene and Polyethylene (M) Sdn Bhd (EPEMSB) at Kuala Kerteh beach here Sunday.

Abdul Hapiz said PCG owns 22 companies, with seven joint ventures with firms in Europe, Japan and South Africa.

PCG's profit this year at RM4.6 billion is the same as last year's, he said.

"However, it is better as last year's profit was calculated from March to March, while this year's figure is only for the nine months from April to December.

"With the company expanding, we hope PCG will post better profits next year compared to this year," he said. - Bernama



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Stocks to watch: IGB, Notion, Axiata, SYF

KUALA LUMPUR (Dec 10): Stocks on Bursa Malaysia could be given a boost on Monday following the firmer close on Wall Street as EU leaders worked out a plan to restore market confidence.

The Dow Jones industrial average ended up 186.56 points, or 1.55%, at 12,184.26. The Standard & Poor's 500 Index was up 20.84 points, or 1.69%, at 1,255.19. The Nasdaq Composite Index rose 50.47 points, or 1.94%, at 2,646.85.

For the week, the Dow rose 1.4%, the S&P gained 0.9% and the Nasdaq was up 0.8%.

As for Bursa Malaysia, the FBM KLCI fell 12.79 points or 0.87% to 1,460.13, weighed by losses including at KL Kepong, GENTING BHD, PPB, AMMB and Gamuda.

Hong Kong’s Hang Seng Index lost 2.73% to 18,586.23, South Korea’s Kospi fell 1.97% to 1,874.75, Japan’s Nikkei 225 was down 1.48% to 8,536.46, Taiwan’s Taiex lost 1.28% to 6,893.30, the Shanghai Composite Index shed 0.62% to 2,315.27 and Singapore’s Straits Times Index lost 1.24% to 2,694.60.

However, whether the rebound could last in the week ahead also remains to be seen.

Affin Investment Bank head of retail research Dr Nazri Khan is more cautious as he believes the FBM KLCI is likely to pullback lower to 1,430 to 1,420 support level on absence of an EU catalyst and lack of momentum from last week liquidity boost rally.

“We reckon the bearishness are driven by two important factors namely : (1) further caution from S&P 500 warning to massively downgrade EU countries and (2) investors losing expectation over EU summit to produce a financial bazooka to contain the debt crisis,” he said.

Stocks which could see trading interest on Monday include IGB Group Bhd, Axiata Group Bhd, NOTION VTEC BHD [] and SYF RESOURCES BHD [].

On Monday, Broadcast Australia will ink and agreement with Axiata Group Bhd’s unit Axiata Celcom wherein the former will be Celcom’s technical partner to bid for the RM2 billion digital terrestrial television broadcasting (DTTB) project.

Celcom would ultimately be providing infrastructure for the (DTTB) network and rent it out for stable income in the future.

Celcom, which invested RM1 billion in the 3G infrastructure this year and plans to spend another RM1 billion next year.

The Edge weekly reports that the IGB group is said to have engaged investment banks to look into structuring a real estate investment trust. The property group is hoping to launch the REIT by first half of 2012.

It also reported that Notion VTec Bhd is hoping to grow its hard disk drive segment by 40% next year with the growing momentum in its 2.5in HDD base plate business, which is expected to turn profitable in the second quarter.

Meanwhile, SYF is now on firmer footing after regularising its financial condition. It recorded net profit of RM39.24 million in the first quarter ended Oct 31, 2011 when compared with net loss of RM581,000 a year ago after the waiver of debts and overprovision of interest.

Its revenue was 6.3% higher at RM42.98 million compared with RM40.44 million a year ago. Its earnings per share were 43.37 sen compared with loss per share of 0.69 sen.



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