MAS-Airasia warrant exchange gets SC nod

The Securities Commission (SC) has approved the proposed warrants exchange exercise between Malaysian Airline System Bhd
(MAS) and Airasia Bhd.

In a filing to Bursa Malaysia today, MAS said the SC approved the warrant exchange exercise under Section 212 (5) of the Capital Market and Services Act 2007 of Malaysia.

The approval is subject to the condition that the company must comply with the relevant requirements pertaining to the implementation of the proposal as stipulated under the SC's Equity Guidelines. -- Bernama




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JCY sees surge in earnings, approves RM300m capex

KUALA LUMPUR (Jan 4): JCY International Bhd, whose share price had surged in recent weeks, has stated that the group is likely to record a surge in earnings for the quarter ended Dec 31, 2011.

In a statement to Bursa Malaysia on Wednesday, it said based on current available information, the group was likely to record an increase in net profit for the financial quarter ended Dec 31, 2011 “of approximately 1,900%” compared with a year ago where net profit was RM7.5million.

For the quarter ended Dec 31, 2011, it expected net profit to be an increase of 460% compared with the quarter ended Sept 30, 2011’s net profit of RM26.4million.

JCY cited the surge in earnings to an increase in average selling prices caused by component shortages arising from the October 2011 floods in Thailand; effective product mix; appreciating US dollar against the ringgit and continuous efficient cost management.

“To cater for the increase in the component demands from the company’s major customers, the board of directors has approved a capital expenditure budget of approximately RM300 million over the next 24 months period, for expansion of its facilities in Malaysia, Thailand and China,” it said.

JCY also said barring any unforeseen factors, the company expects to be able to increase its global market share of the hard-disk drive mechanical component industry over the next 24 months.


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Govt to consider any plan to enhance Felda Global Venture listing

PUTRAJAYA, Jan 4 (Bernama) -- The government is prepared to listen to any proposal from any Felda interest group to enhance the listing process of Felda Global Ventures Holdings (FGVH) on Bursa Malaysia, Deputy Minister in the Prime Minister's Department Datuk Ahmad Maslan said.

He said on Tuesday that interest groups like Gabungan Peneroka Generasi Wawasan Felda Kebangsaan (Gempak) will be invited for discussions in the next few weeks.

"Groups with an interest in Felda can submit their proposals as soon as possible and I will forward them officially in one or two weeks.

"Official discussions with these interest groups are held so that a proposal paper can be submitted to the team preparing the listing document for approval by the Securities Commission," he said at a media conference here.

Ahmad said the consultations should be completed by the end of January and the listing document is expected to be ready in a month or two. FGVH is expected to be listed on the main board of Bursa Malaysia in April this year.

Earlier, he met representatives of Gempak led by its president Samsudin Othman and deputy president Tan Sri Rozali Ismail.

Ahmad again gave an assurance that the interests of Felda settlers would continue to be upheld with the listing of FGVH on Bursa Malaysia. - Bernama



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Johor MB talks of KFCH, QSR privatisation

KUALA LUMPUR, Jan 4 (Bernama) -- Following is BERNAMA's question-and-answer session with Johor Menteri Besar and Chairman of Johor Corporation (JCorp) Datuk Abdul Ghani Othman on KFC Holdings Bhd and QSR BRANDS BHD [] privatisation.

Q1: How does JCorp aims to acquire KFC Holdings Bhd (KFC) and QSR Brands Bhd (QSR)?

A: JCorp proposes to acquire 100 per cent of KFC's and QSR's business and undertakings through a special-purpose vehicle, Massive Equity (ME) Sdn Bhd. Massive Equity is majority-owned by JCorp (51 per cent) with CVC Capital Partners (CVC) owning 49 per cent. The offers were made at a price equivalent to RM4 per KFC share and RM6.80 per QSR share. When the transaction is completed, JCorp's stake in KFC will increase from 17 per cent to 51 per cent, while its interest in QSR will increase from 33 per cent to 51 per cent.

Q2: Have KFC and QSR accepted the ME (JCorp/CVC) offer?

A: Both the KFC and QSR boards have given the greenlight to the buyout offer made by JCorp and CVC, seven days after the offer was made; and their respective boards have also stressed that they are not seeking alternative bids from other parties. The next step is for the proposal to be presented to the shareholders of KFC and QSR for their approval.

Q3: What is the rationale behind the ME offer for KFC and QSR? Who is driving this transaction and what are the benefits?

A: This is part of the overall JCorp rationalisation programme for its various divisions to focus on their core businesses. For example, via this restructuring, Kulim would exit the food retail business and focus on PLANTATION []s. In fact, JCorp is reviewing all of its assets with a view to making them more efficient, while growing them in a focused manner and generating greater value.

JCorp is a state-owned entity and the Johor State Government is driving the overall rationalisation programme (including this transaction) to ensure the long-term sustainability of JCorp. We want JCorp to be a profitable SEDC, enabling it to play a significant socio-economic role in the state for the benefit of the rakyat. The transaction allows JCorp to directly access the cashflow of the two businesses compared to the current convoluted structure.

Q4: Why was CVC enlisted by JCorp to participate as its minority partner in this transaction?

A: CVC was brought in to help further improve the businesses of KFC and QSR. They were chosen carefully (among various alternatives) based on their strong track record and vast experience in managing similar businesses and investing in our region. They are friendly value-added partners who will work with us to ensure an even better KFC and QSR in the future.

Q5: Will JCorp incur any new debts from KFC and QSR acquisition?

A: This acquisition will be funded via a combination of cash (equity) and debt. However, the debt we are incurring is not at JCorp itself. Rather, it is at the acquisition company level, relying on the strength of the cash flow of the two businesses.

In addition, JCorp's current debt is being resolved. For example, JCorp's sale of palm oil plantations to Kulim (which was recently approved) is part of our plan to fulfil JCorp's 2012 debt obligations.

The RM700 million cash accruing from the estates sale is the first part of the expected RM1 billion cash to be generated for debt repayment prior to July 31, 2012 (being the due date for the bond repayment). The balance of RM300 million will come from internally-generated funds. As for the remaining JCorp debt obligations, we are finalising the repayment plan with advice from CIMB as our financial advisor. As part of the exercise, CIMB and Maybank will act as Joint Lead Managers for the issuance of new bonds in 2012.

Q6: Is this move a sell-out to outsiders and foreigners by JCorp as alleged by the Malay Chamber of Commerce?

A: This is not a sell-out to foreigners or outsiders. On the contrary, JCorp is actually privatising QSR and KFC to keep it within JCorp directly, whilst at the same time increasing JCorp's holdings in QSR and KFC from 33 per cent and 17 per cent, respectively, to a majority of 51 per cent.

This is merely an internal reshuffle to make the corporate structure of JCorp Group more efficient. The move will also present Kulim Berhad, which is currently the controlling shareholder of QSR, an opportunity to dispose its stake in the food retail business and focus on its core plantation business.

Q7: Does JCorp plans to retain KFC and QSR within the group or farm them out to other bidders?

A: JCorp Group has always maintained that it intends to keep the two businesses within the group believing in their long-term value. JCorp does not intend to sell this assets or flip them to a third party or strip their assets for cash. The entire transaction is premised on keeping the asset within the group. So it is baseless to claim otherwise. Had the intention been different, the businesses would have been sold much earlier.

Q8: Are QSR and KFC considering other offers?

A: In addition to JCorp's clear message that it won't sell, the intention not to entertain any other bids has also been made clear by both the KFC and QSR boards.

Q9: Will this move in any way harm Bumiputeras and/or the people's interests?

A: I wish to state clearly that KFC is a franchisee, so it is not a Bumiputera-only outlet, nor is it stated anywhere that it should only be owned by Bumiputeras. It is open to everyone. On the other hand, JCorp as a state government agency will continue to safeguard the interests of the rakyat, including in developing the Bumiputera community through various means. It has achieved many successes in this field and will continue to do so, not least by being more focused and profitable in its core businesses.

Q10: Is there any other "cheaper" way to execute the proposed acquisitions as claimed by some quarters?

A: There is no cheaper way for a third party to acquire QSR and KFC. Of course, acquiring Kulim's shares (as proposed by the Malay Chamber) may appear to be a way to gain control of QSR and thereby KFC. But for that to happen, Kulim and JCorp will first have to agree to sell to a third party. They are not interested to do so.

Nonetheless, even if that route was pursued by say the Malay Chamber, there is no cheaper way. It will still cost the Malay Chamber and its partners the whole amount, as acquiring Kulim's stake in QSR will trigger a mandatory general offer for the remaining shares held in QSR. It will also trigger a general offer on KFC shares as well. Essentially, the end effect is that you will have to acquire 100 per cent of both entities. So, certainly the RM1 billion or so proposed will not be sufficient. - Bernama



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SC approves AirAsia, MAS proposed warrants exchange

KUALA LUMPUR (Jan 4): The Securities Commission has approved the proposed warrants exchange between AIRASIA BHD [] and MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) under a tie-up between both airlines.

The airlines said in their statements to Bursa Malaysia on Wednesday the SC has approved the warrants exchange under the Capital Markets and Services Act 2007 of Malaysia.

However, the exchange was subject to the condition that their investment banks and the airlines comply with the relevant rules pertaining to the implementation of the proposal as stipulated under the SC’s Equity Guidelines.

In August, 2011, the tie-up would see Khazanah Nasional Bhd, which owns 69.5% in MAS, taking up a 10% of shares in AirAsia. Tune Air Sdn Bhd, which owns some 23% in AirAsia will hold 20.5% shares in MAS.

The partnership was estimated to potentially save both airlines as much as RM1 billion annually.




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Priceworth unit apptd logging contractor in Solomon Islands

KUALA LUMPUR (Jan 4): Priceworth International Bhd’s unit has been appointed a contractor to carry out logging on Kolombangara Island, in the western province of Solomon Islands.

Priceworth said on Wednesday, its unit, Ligreen (SI) Ltd had sealed a logging management and TECHNOLOGY [] agreement with Success Company Ltd to undertake the logging at a concession site measuring 1,053 ha.

“The licensee and contractor shall jointly market the logs harvested from the concession area. In consideration of the logging activities to be carried out by the contractor, the contractor shall receive 55% of the declared sales contract from the licensee,” it said.

Priceworth said the upside from the contract was that the group would have access additional source of logs for the group’s business involving the manufacturing and sale of timber products and logs.



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Market Commentary

The FBM KLCI index lost 9.32 points or 0.62% on Wednesday. The Finance Index fell 0.92% to 13337.72 points, the Properties Index dropped 1.43% to 990.8 points and the Plantation Index rose 0.90% to 8292.81 points. The market traded within a range of 23.05 points between an intra-day high of 1525.14 and a low of 1502.09 during the session.

Actively traded stocks include HWGB-WB, HWGB, JCY-CD, HIBISCS-WA, ASUPREM, ASUPREM-WA, MAXBIZ, NEXTNAT, MAS-CD and JCY. Trading volume increased to 1658.84 mil shares worth RM1527.52 mil as compared to Tuesday’s 1604.56 mil shares worth RM1406.53 mil.

Leading Movers were KLK (+50 sen to RM23.50), TENAGA (+2 sen to RM5.97), YTLPOWR (+2 sen to RM1.85), BAT (+36 sen to RM49.80) and PETCHEM (+1 sen to RM6.20). Lagging Movers were CIMB (-14 sen to RM7.10), AXIATA (-11 sen to RM4.89), MAYBANK (-7 sen to RM8.27), GENTING (-10 sen to RM11.14) and SIME (-5 sen to RM9.07). Market breadth was negative with 387 gainers as compared to 404 losers. -- JF Apex Securities Bhd



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Govt extends iDimension unit's pioneer status for another 5 yrs

KUALA LUMPUR (Jan 4): The government has extended the pioneer status of iDimension Consolidated Bhd’s unit iDimension MSC Sdn Bhd for another five years.

The company said on Wednesday the Ministry of International Trade and Industry and the Ministry of Finance had approved the extension for the period, effective Dec 15, 2010 to 2015.



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BNM okays Hubline plan to issue more warrants to third party investors

KUALA LUMPUR (Jan 4): HUBLINE BHD [] has received Bank Negara Malaysia’s (BNM) approval to issue additional warrants to third party investors subscribing to its shares under a proposed private placement exercise.

The company said on Wednesday it had received BNM’s letter, dated Dec 23, for the share issuance for the placement exercise, which might include non-resident investors.

Hubline had proposed to place out new share of20 sen each, representing up to 16.45% of its paid-up together with free detachable warrants on the basis of three additional warrants for every two placement shares subscribed.




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KLCI extends loss as renewed eurozone worries weigh on global markets

KUALA LUMPUR (Jan 4): The FBM KLCI reversed its earlier gains and extended its losses on Wednesday as key regional markets retreated on renewed concerns over the eurozone debt crisis.

The FBM KLCI fell 9.32 points to 1,504.22, down from its intra-day high of 1,525.14.

Losers overtook gainers by 404 to 387, while 318 counters traded unchanged. Volume was 1.66 billion shares valued at RM1.53 billion.

Asian shares closed mixed, while European shares broke a four-session rally on Wednesday as concerns over the euro zone's huge refinancing needs lead investors to cash in on recent gains, according to Reuters.

Banking stocks, many of which are heavily exposed to euro zone debt, fell 0.9% ahead of a German debt auction later in the session, it said.

At the regional markets, the Shanghai Composite Index fell 1.37% to 2,169.39, Hong Kong’s Hang Seng Index lost 0.80% to 18,727.31, and South Korea’s Kospi was down 0.49% to 1,866.22.

Meanwhile, Japan’s Nikkei 225 rose 1.24% to 8,560.11, Taiwan’s Taiex up 0.42% to 7,082.97 and Singapore’s Straits Times Index added 0.84% to 2,711.02.

On Bursa Malaysia, Petronas Dagangan lost 44 sen to RM17, Y&G down 24.5 sen to 75.5 sen, HLFG shed 22 sen to RM11.52, APM 20 sen to RM4.30, Mah Sing and UEM Land lost 15 sen each to RM1.95 and RM2.23, CIMB 14 sen to RM7.10, Ibraco 13 sen to RM1.23 and GAB fell 12 sen to RM13.22.

Among the gainers, Dutch Lady gained 58 sen to RM24, KLK 50 sen to RM23.50, Batu Kawan 48 sen to RM17.98, BAT 36 sen to RM49.80, BHIC 23 sen to RM3.85, Allianz 18 sen to RM4.94, Lafarge Malayan Cement 16 sen to RM7.14, Shell 15 sen to RM9.30 while MISC gained 13 sen to RM5.73.

The actives included HWGB, JCY, Hibiscus, Astral Supreme, Maxbiz and Nextnation.



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OSK maintains neutral view on the market

TEFD: What is your outlook for the Malaysian stock market and economy for 2012?
Eng: We remain neutral on the market as we see downside potential for the global economy and the Malaysian market.

What is your target for the FBM KLCI for 2012?
We maintain our 2012 fair value for the KLCI at 1,466 points.

How do you think the euro debt crisis will play out and what impact will it have on Malaysia?
I believe there is a high chance that Greece will eventually have to default. Whether it leaves the euro region at that point is still too difficult to say. Whether or not Greece defaults, a number of European countries should slip into recession in 2012 dampening global growth and trade and thus affecting Malaysia.

The years 2010-2011 were seen as years of merger and acquisition (M&A) activities, and the government’s Economic Transformation Programme (ETP). What do you see as the domestic theme for 2012?
For 2012, it will be the election and post-election Malaysia which could well see a rollback of subsidies and how Malaysian companies will need to increase their efficiency to cope with this.

If general elections are held in 2012, how do you expect the market to react, pre- and post-election?
We found that buying just before an election and exiting one month later is the most consistent strategy for the Malaysian market, especially since we feel that there is a strong chance of the ruling coalition improving on its 2008 poll performance.

Election trading strategy should be short and tight. As such, investors should: (1) wait for profit-taking ahead of the general election before entering the market; (2) buy just before the election date and ride on the positive post election sentiment; (3) exit about one month after the election; (4) focus on blue chips in the banking, oil and gas and construction sectors rather than on so-called “election plays”.

However, we caution that the longer the government waits to hold an election, the greater the uncertainty of the results.

What sectors do you like for 2012?
Consumer, telco and healthcare.

What sectors would you avoid in 2012?
Tech and auto.

What are your top stock picks and why?
AirAsia Bhd as it benefits from lower oil price and the IPO of an associate; Axiata Group Bhd is still the cheapest telco with room for capital management; Malayan Banking Bhd — cheap and liquid bank vs return on equity; Petronas Gas Bhd — defensive with growth catalyst in liquefied natural gas; Telekom Malaysia Bhd — boosted by Unifi; Dialog Group Bhd — defensive O&G with tank terminals as its catalyst; KPJ Healthcare Bhd — hospital chain still growing strongly with re-rating catalyst from Parkway Pantai’s listing; QL Resources Bhd — replicating Malaysia’s success in Indonesia and Vietnam; Media Chinese International Ltd — benefiting from falling newsprint prices; TRC Synergy Bhd — strong exposure to the ETP via the MRT project.

Your wish list for the year?
For a free and fair election regardless of the outcome. And for racist rhetoric to be made a crime.



This article appeared in The Edge Financial Daily, January 4, 2012.



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LBS targets RM1b annual property sales

PETALING JAYA: LBS Bina Group Bhd is targeting RM1 billion worth of annual property sales in the near term as the company focuses on various segments of the residential market apart from commercial and industrial real estate.

Managing director Datuk Lim Hock San said the target was deemed achievable as the company was expected to achieve property sales of RM800 million and RM950 million for financial years 2012 and 2013 respectively. This will be boosted by the developer’s offerings in the affordable, medium and high-end segments.

“We are confident,” Lim told reporters after the company EGM yesterday. In 2011, LBS raked in property sales of RM650 million. Its unbilled sales stood at RM649 million as of last year.

LBS takes aim... LBS Bina Group Bhd is targeting RM1 billion worth of annual property sales in the near term, managing director Datuk Lim Hock San (centre) told a press conference yesterday. With him are executive directors Cynthia Lim (left) and Alan Chia

Lim, who acknowledged that 2012 would be a tough year for global business, said LBS’ RM1 billion target was subject to the macro landscape.

Apart from the ongoing European debt crisis, Lim also highlighted the threats of rising construction and land costs which could crimp the company’s bottom line.

Last year, LBS lined up 16 launches involving 2,400 properties worth about RM1.5 billion. These are in addition to the 21 existing projects with a gross development value of RM665 million, according to Lim.

LBS’ 2,300-acre landbank across Selangor, Johor, Perak and Pahang can accommodate about RM9.1 billion worth of properties, according to Lim. The developer also has around 200 acres in China.

In Malaysia, LBS’ existing projects include the upmarket RM3.5 billion mixed development D’Island Residence within a 175-acre tract in Puchong and the RM3 billion Bandar Saujana Putra affordable properties on a 835-acre tract within the southern corridor of Selangor. Elsewhere, LBS is the developer of Taman Golden Hills in Cameron Highlands in Pahang and Bandar Putera Indah in Batu Pahat, Johor.

Lim said LBS might venture into Sabah and Sarawak, but this would hinge on the feasibility of the property development projects. Lim said the firm had been approached to undertake projects in Sabah, but he declined to provide details.

“Although 2012 will be a challenging year globally, we believe the demand for property in Malaysia will remain strong as prices continue to rise although at a lower rate.

“As part of our multi-pronged strategy, we will aggressively develop not just residential homes but also non-residential property,” Lim said.

Commercial and industrial projects by LBS include the Tasik Perdana Industrial Park in Puchong and Saujana Business Park within Bandar Saujana Putra.

LBS’ strategy is bearing fruit as net profit rose more than five times to RM27.7 million in the nine months ended Sept 30, 2011 from RM5.32 million a year earlier, while revenue grew 59% to RM302.06 million from RM190.43 million. The better numbers were supported by progressive recognition of earnings from LBS’ ongoing property projects.

At the EGM yesterday, shareholders of LBS approved the company’s proposal to buy back up to 10% of the company’s shares from the open market. Lim said the buybacks highlighted the company’s concern that its shares were undervalued.

The stock closed at 78.5 sen, rising one sen from its previous close on Dec 30. Its latest net assets per share stands at RM1.08.



This article appeared in The Edge Financial Daily, January 4, 2012.


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Maxbiz jumps on RM510m job

KUALA LUMPUR: Maxbiz Corp Bhd was yesterday’s third most active stock as investors chased the stock higher after it bagged infrastructure work contracts worth over RM510 million.

Maxbiz rose 12.9% or two sen to close at 17.5 sen yesterday, the highest since January last year, with over 52.7 million shares traded. The stock rose to as high as 19 sen intra-day after the company said it received a letter of intent from Fibre-N Sdn Bhd for a fibre-to-the-home and fibre-to-the-office contract for 100,000 high-rise buildings in Klang Valley, Penang and Johor Bahru worth RM510 million.

In a statement to Bursa Malaysia yesterday, Maxbiz also said its wholly-owned Dutamas SME Sdn Bhd had received a letter of award for an infrastructure works job worth RM4.94 million from Harta Mesra Development Sdn Bhd for a development in Ipoh, Perak. No other details were provided for the contracts that Maxbiz expect to positively boost earnings for FY ending Dec 31, 2012.

A Practice Note 17 (PN17) issuer, Maxbiz has two weeks to submit its regularisation plan for authorities’ approval, unless it is granted a three-month extension from the Jan 18, 2012 deadline. The request for extension was submitted yesterday.

Maxbiz, which took over the listing status of Geahin Engineering Bhd via a reverse takeover exercise, is still trying to recover what it alleged to be “missing” assets. In late June 2011, Maxbiz filed a suit against 18 defendants including accounting firm Ernst & Young, Public Investment Bank Bhd and Pacific Trustees Bhd. Maxbiz is claiming damages to the tune of RM163.48 million from the defendants along with general and exemplary damages, interest, legal costs and other relief deemed proper by the court.

Maxbiz, which is also categorised as a Practice Note 1 (PN1) issuer, is also in default on RM3 million of redeemable unsecured loan stocks (RULS) and RM22.62 million of redeemable convertible secured loan stocks (RCSLS).

In a separate filing yesterday, Maxbiz said the trial date for a suit involving its wholly-owned unit MKK Industries Sdn Bhd against Tenaga Nasional Bhd (TNB) has been fixed on Feb 24. On Dec 23, 2011, Maxbiz said MKK is claiming RM1.3 million (the amount overpaid to TNB due to TNB installing the wrong meter), damages, and costs and other relief.

For its 3QFY11 ended September, Maxbiz said its revenue decreased by almost 98% compared with the preceding quarter last year, as operations were suspended due to a dispute with TNB. Maxbiz posted a revenue of RM52,000 in 3QFY11 compared with RM2.83 million a year ago. It posted a net loss of RM1.33 million compared with a net loss of RM1.95 million last year.



This article appeared in The Edge Financial Daily, January 4, 2012.



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Bonia buys into Braun Büffel

KUALA LUMPUR: Just over a year after expanding its brand portfolio to include rights for Braun Büffel in the Asia-Pacific, homegrown fashion label Bonia Corp Bhd is taking a bigger step abroad by taking a 49% stake in the Germany-based leather goods maker in a deal worth €3.2 million (RM13.1 million).

In an announcement to Bursa Malaysia, Bonia said its 70%-owned subsidiary Jeco Pte Ltd has signed a sales and purchase agreement with Christiane Brunk for the purchase of a 49% equity stake in Braun Verwaltungs-GmbH and Braun GmbH & Co KG (Braun KG) for €980,000 cash.

Brunk, who is the great granddaughter of Braun Büffel founder Johann Braun, is the director and sole shareholder of the companies.

Jeco also entered into a loan receivable sale agreement with several parties to restructure the total debts of €3.15 million owed by Braun KG to Sparkasse Rhein-Nahe, which will be settled through a lump sum of €2.2 million.

Other parties in the loan agreement are Brunk, Braun Büffel Retail GmbH & Co KG, Braun Büffel Retail Management GmbH and Braun Büffel Suisse GmbH.

Jeco also entered into a trademark purchase and transfer agreement with Büffel Markenverwertungs GmbH & KG, Karl-Heinz Braun and Frau Liesel Braun for the purpose of acquiring the Braun Büffel trademark for €20,000 cash.

The entire deal will be funded by internally generated funds.

Essentially the agreements will allow Jeco, which is the brand representative and owns the trademark for Braun Büffel in Asia-Pacific up until June 30, 2034, an opportunity to work closer with Braun KG to help build the brand in Europe, Asia as well as other parts of the world, according to the announcement. Under the agreement, Jeco is now the rights owner of the Braun Büffel trademark in the UAE, the US and Canada.

“The company believes that with the long established brand of Braun Büffel, the Bonia group will be able to further grow its market share and recognition in the Asia-Pacific region and the rest of the world.

“The acquisition is expected to widen earnings base of the Bonia group and this will eventually enhance the company’s shareholders value,” said Bonia.

Bonia had acquired the stake in Jeco in late 2010 for S$28 million (RM68.3 million). Jeco is also the licensee for Pierre Cardin and Bruno Magli leather goods in Singapore and master licensee for Renoma in Singapore, Malaysia and Indonesia.

According to the announcement, Braun KG is a family-run business entity with a history that dates back to 1887. It also owns a production facility in Germany.

“Pursuant to the acquisition and as regards to the business of production and distribution of luxury leather goods under the trademark ‘Braun Büffel’ and other luxury goods, Braun KG and Jeco wish to split up the geographical markets and cooperate closely in the areas of the development of new markets, product design and sourcing, and to expand the business,” said Bonia.

While Braun KG will cater to markets in Europe, the former Soviet Union and Turkey for its leather goods, Jeco will distribute to the rest of world including markets such as India and Japan.

However, Jeco will have the right to produce and distribute any other luxury goods including watches, sunglasses and clothing under the Braun Büffel trademark to all countries worldwide.

Brunk will also be appointed agent to secure licence partners for the distribution of Braun Büffel goods in the world except Europe, countries of the former Soviet Union and Turkey.

Bonia ended at a 52-week high of RM2.13 with 267,700 shares traded yesterday.



This article appeared in The Edge Financial Daily, January 4, 2012.


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Tan Chong gets exclusive SYM distributorship in Laos

KUALA LUMPUR: Tan Chong Motor Holdings Bhd (TCMH) has won a three-year exclusive distributorship for SYM motorcycles in Laos where it expects to sell 12,200 units in the first three years of operations.

In a statement to Bursa Malaysia yesterday, TCMH said its wholly-owned subsidiary Tan Chong Motorcycles (Laos) Co Ltd (TCML) had been appointed by Vietnam Manufacturing and Export Processing Co Ltd (VMEP) to be the exclusive distributor, importer and after-sales service provider for all SYM motorcycles in Laos.

The distribution of SYM motorcycles in Laos is expected to commence in the first half of 2012 with showrooms set up in Savan-Seno Special Economic Zone and Vientiane, it said. The three-year agreement effective Monday is renewable with written consent from both parties.

An established motorcycle manufacturer in Vietnam with over 230 authorised sales and service centres in Vietnam, VMEP is wholly-owned by Hong Kong-listed VMEP Holdings Ltd, a subsidiary of Taiwan-listed Sanyang Industry Co Ltd.

Incorporated on Dec 9, 2010 in Vietnam, TCML is licensed to undertake the assembly of SYM motorcycles for domestic sale and export. TCML is also licensed to import “spare parts of motorcycles and all types of vehicles in Laos”.

TCMH expects the distributorship to boost group earnings “in the long term” but would not materially affect numbers for FY ending Dec 31, 2012.



This article appeared in The Edge Financial Daily, January 4, 2012.




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Tricubes bags RM6m contract, submits regularisation plan

KUALA LUMPUR: The developer of the 1Malaysia email service, Tricubes Bhd, yesterday said its 70%-owned unit had clinched a RM6 million job from the Home Ministry to provide maintenance service for two mobile management system used by the Royal Malaysian Police.

In an statement to Bursa Malaysia, Tricubes said the letter of award dated Dec 19 for the two-year project was given to Tricubes NCR JV Sdn Bhd. The contract, that would run through Dec 31, 2013, is for the provision of “preventive and corrective maintenance service” to the police department’s server enhanced mobile management system (EMMS) and mobile card acceptance device (MCAD) hardware and software.

The contract would positively boost earnings for the financial year ending March 31, 2012, Tricubes said. In November last year, the company secured a contract to handle the police’s collection of traffic summons and enquiries.

The Practice Note 17 (PN17) company had to date accumulated losses amounting to RM17.24 million. Tricubes submitted a plan to regularise its PN17 status to Bursa Securities on Dec 29, the company said in a separate statement yesterday.

Tricubes gained the spotlight last year after it was revealed that it would develop the 1Malaysia myemail service, which is expected to cost the group RM50 million in investments over 10 years. One of the main contentions to the project is that subscribers are expected to be charged 50 sen per email while additional charges would be imposed on added security features.

Tricubes shares, which hit a 52-week high of 45 sen on April 21, 2011, closed at 17.5 sen yesterday on thin trade.



This article appeared in The Edge Financial Daily, January 4, 2012.



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REDtone sells controlling stake in MVNO arm

KUALA LUMPUR : REDtone International Bhd has disposed a 65% stake in REDtone Mobile Sdn Bhd to two individuals for a token RM1 sum as part of a rationalisation exercise to improve the performance of its loss-making unit and free it to focus resources on other businesses.

In a statement yesterday, REDtone International chief executive officer Lau Bik Soon said Teh Beng Hock and Tee Yew Yaw will each hold 32.5% in REDtone Mobile, its Mobile Virtual Network Operator (MVNO) arm. REDtone Mobile would benefit from the entry of Teh and Tee who also own Elepoint Sdn Bhd, the largest reseller for mobile operator Celcom Axiata Bhd within the corporate segment in Malaysia.

“Teh and Tee have more than 15 years of experience and a deep understanding of the mobile business in the country. Together with REDtone’s expertise in the SMB/SME (small and medium-sized business/small and medium-sized enterprise) segment, we believe it’s a strong partnership that will be able to take the company to a new level of growth,” Lau said in the emailed statement.

In its statement to Bursa Malaysia, REDtone said Teh and Tee would be injecting RM350,000 into REDtone Mobile, which had RM2.63 million net liabilities and RM3.16 million net loss for FY ended May 31, 2011. REDtone Mobile will pay REDtone Technology Sdn Bhd RM10,000 a month for support services, research & development as well as customer billing services.

“The ‘new’ REDtone Mobile will be more vibrant with better distribution channels to extend the reach of its services, and with more appealing offerings,” Lau said. Following the share sale, REDtone International will still own 35% of REDtone Mobile, which does not own its own network but offers mobile phone services by leasing network capacity from mobile operators like Celcom.

REDtone, whose clientele is mainly from the SME segment, launched its MVNO services in 2009 and had invested some RM3 million into the business, the company said.

Lau said the new shareholders will help loss-making REDtone International improve the prospects of its data and broadband operations which is seen as a major contributor to the company’s financials in the year ending May 31, 2012.

In financial year ended May 31, 2011, REDtone International’s net loss widened to RM11.72 million compared with a net loss of RM5.41 million a year ago.

Besides divesting its stake in the mobile business, Lau said REDtone International has also put in place other initiatives to reverse its fortunes.



This article appeared in The Edge Financial Daily, January 4, 2012.



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Xidelang hits six-month high

KUALA LUMPUR: China-based sports shoes and apparel maker, Xidelang Holdings Ltd, jumped 27% and was among yesterday’s most active stocks even as the normally quiet counter saw 2% of its share base done off-market at a discount to prevailing market prices.

A total of nine million shares changed hands in six direct trades off-market yesterday for RM2.78 million or an average of 30.9 sen apiece. Five million shares changed hands for 30 sen apiece in the morning session while four million shares were done at 32 sen apiece in the afternoon session, stock market data showed.

On the open market, Xidelang traded between 31 sen and 39 sen before closing at 37.5 sen, up 8 sen or 27.1% for the day, its highest in six months. Some 42 million shares or 9.6% of its 440 million-share base changed hands.

There were no new filings for substantial shareholding changes at press time.

Ding Peng Peng, its co-founder, managing director and CEO, owned 54.55% of the company as at May 3, 2011.

At yesterday’s close of 37.5 sen, there is a 14.7% upside potential to the 43 sen apiece that Mercury Securities said the stock was worth in a note dated Nov 25, 2011.

Notably, Xidelang’s unaudited net asset per share stood at 72.72 sen as at Sept 30, 2011, up from 56.14 sen as at Sept 30, 2010.

Xidelang, which recently got shareholders’ mandate to buy back its shares from the open market, sold its shares for 63 sen apiece at its IPO on Nov 11, 2009.

The low valuations accorded by the market had sparked rumours that its major shareholder may take the company private, one source said. This could not be immediately confirmed at press time.

In any case, Xidelang looks poised to report higher year-on-year earnings for FY ended Dec 31, 2011, and the figures are slated for release by end-February 2012.

For the nine months ended Sept 30, 2011, net profit rose 7.1% year-on-year to RM63.2 million, even as revenue grew 5.2% to RM357.3 million over the same period. For the full year of FY10, net profit was RM77.9 million on the back of RM465.1 million sales.

Mercury Securities expects net profit to come in at RM87.4 million for FY11 and RM95.5 million for FY12. “We expect the group’s dividend payout ratio to be within the 10% to 15% range of annual net earnings for FY11 and FY12,” it said on Nov 25, forecasting a dividend per share of 3.3 sen for both years. That implies an 8.8% yield at yesterday’s 37.5 sen-close.

For FY10, the company paid dividend per share of 2.5 sen.



This article appeared in The Edge Financial Daily, January 4, 2012.

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KLCI ends first trading day lower

KUALA LUMPUR: After rising strongly in the last few trading days of 2011 to end the year on a barely-there gain of 0.78% last Friday, the FBM KLCI bucked the trend of its regional counterparts and ended the first trading day of 2012 17.19 points down.

This represented a drop of 1.1% from last Friday’s close of 1,530.37 points — a 21-week high. In comparison, the Singapore’s Straits Times Index ended yesterday 1.6% up, Hong Kong’s Hang Seng Index was 2.3% higher and Indonesia’s Jakarta Composite Index gained 0.9%.

Japan’s Nikkei 225 was closed for a public holiday. The stronger performance regionally was attributed to improved manufacturing data from China, according to reports.



Although the local market had started strong in morning trade, it was unable to sustain gains going into the afternoon. HwangDBS Investment Management Bhd’s head of equities Gan Eng Peng opined that given the FBM KLCI’s strong finish last week, the market was overbought.

“If you take a look at the regional markets, there was no sudden surge in buying towards the end compared to the FBM KLCI. Most of those markets behaved in a more natural manner.

“We also heard that most of the local funds were selling today, while there wasn’t much buying on the part of government-linked funds; this would explain the dip in the market,” said Gan.

OSK Research has a “sell” call on the market for the month of January stating: “We see the KLCI as overpriced and lacking fundamentals to sustain at this level.”

The risks that OSK sees in the coming weeks include a disappointing outcome from the meeting between the leaders of France and Germany over the current European crisis and the possibility of an early general election.

Banks were among the worst hit with Malayan Banking Bhd (Maybank), Public Bank Bhd and CIMB Group Holdings Bhd in the top 10 losers yesterday.

Maybank’s share price dropped to RM8.34 from last Friday’s RM8.58, Public Bank fell to RM13.16 from RM13.38, while CIMB shed 20 sen to RM7.24. As for other banks, RHB Capital Bhd dropped 2.2% from its Friday close of RM7.48 to RM7.31, Hong Leong Bank Bhd slid to RM10.76 from RM10.90 and AMMB Holdings Bhd lost 2.5% to close at RM5.80.

According to analysts, the weaker performance by banks could be due to Bank Negara Malaysia’s monthly statistics that revealed slower loan growth for the month of November. Overall loan growth moderated for the second consecutive month to 12.8% year-on-year compared with 13.1% for October and 13.8% for September, on the back of slower growth for both the household and business segments.

According to CIMB Economics Research’s report, loan growth is expected to ease between 9% and 10% for 2012, reflecting the impact of weaker growth outlook and new banking guidelines.

On the flipside, there was an uptick in plantation counters as the price of crude palm oil futures for the third month delivery rose to a six-week high of RM3,244 per tonne on the back of weather concerns.

The contract closed higher at RM3,225 yesterday compared with RM3,175 last Friday.



This article appeared in The Edge Financial Daily, January 4, 2012.



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JCorp intends to keep KFC and QSR

Following is Bernama's question-and-answer session with Johor Menteri Besar and Chairman of Johor Corporation (JCorp) Datuk Abdul Ghani Othman on KFC Holdings Bhd and QSR Brands Bhd privatisation.

Q1: How does JCorp aims to acquire KFC Holdings Bhd (KFC) and QSR Brands Bhd (QSR)?

A: JCorp proposes to acquire 100 per cent of KFC's and QSR's business and undertakings through a special-purpose vehicle, Massive Equity (ME) Sdn Bhd. Massive Equity is majority-owned by JCorp (51 per cent) with CVC Capital Partners (CVC) owning 49 per cent. The offers were made at a price equivalent to
RM4 per KFC share and RM6.80 per QSR share. When the transaction is completed, JCorp's stake in KFC will increase from 17 per cent to 51 per cent, while its interest in QSR will increase from 33 per cent to 51 per cent.

Q2: Have KFC and QSR accepted the ME (JCorp/CVC) offer?


A: Both the KFC and QSR boards have given the greenlight to the buyout offer made by JCorp and CVC, seven days after the offer was made; and their respective boards have also stressed that they are not seeking alternative bids from other parties. The next step is for the proposal to be presented to the shareholders of KFC and QSR for their approval.

Q3: What is the rationale behind the ME offer for KFC and QSR? Who is driving this transaction and what are the benefits?

A: This is part of the overall JCorp rationalisation programme for its various divisions to focus on their core businesses. For example, via this restructuring, Kulim would exit the food retail business and focus on plantations. In fact, JCorp is reviewing all of its assets with a view to making them more efficient, while growing them in a focused manner and generating greater value.

JCorp is a state-owned entity and the Johor State Government is driving the overall rationalisation programme (including this transaction) to ensure the long-term sustainability of JCorp. We want JCorp to be a profitable SEDC, enabling it to play a significant socio-economic role in the state for the benefit of the rakyat. The transaction allows JCorp to directly access the
cashflow of the two businesses compared to the current convoluted structure.

Q4: Why was CVC enlisted by JCorp to participate as its minority
partner in this transaction?

A: CVC was brought in to help further improve the businesses of KFC and QSR. They were chosen carefully (among various alternatives) based on their strong track record and vast experience in managing similar businesses and investing in our region. They are friendly value-added partners who will work
with us to ensure an even better KFC and QSR in the future.

Q5: Will JCorp incur any new debts from KFC and QSR acquisition?

A: This acquisition will be funded via a combination of cash (equity) and debt. However, the debt we are incurring is not at JCorp itself. Rather, it is at the acquisition company level, relying on the strength of the cash flow of the two businesses.

In addition, JCorp's current debt is being resolved. For example, JCorp's sale of palm oil plantations to Kulim (which was recently approved) is part of our plan to fulfil JCorp's 2012 debt obligations.

The RM700 million cash accruing from the estates sale is the first part of the expected RM1 billion cash to be generated for debt repayment prior to July 31, 2012 (being the due date for the bond repayment). The balance of RM300 million will come from internally-generated funds. As for the remaining JCorp
debt obligations, we are finalising the repayment plan with advice from CIMB as our financial advisor. As part of the exercise, CIMB and Maybank will act as Joint Lead Managers for the issuance of new bonds in 2012.

Q6: Is this move a sell-out to outsiders and foreigners by JCorp as alleged by the Malay Chamber of Commerce?

A: This is not a sell-out to foreigners or outsiders. On the contrary, JCorp is actually privatising QSR and KFC to keep it within JCorp directly, whilst at the same time increasing JCorp's holdings in QSR and KFC from 33 per cent and 17
per cent, respectively, to a majority of 51 per cent.

This is merely an internal reshuffle to make the corporate structure of JCorp Group more efficient. The move will also present Kulim Berhad, which is currently the controlling shareholder of QSR, an opportunity to dispose its
stake in the food retail business and focus on its core plantation business.

Q7: Does JCorp plans to retain KFC and QSR within the group or farm them out to other bidders?

A: JCorp Group has always maintained that it intends to keep the two businesses within the group believing in their long-term value. JCorp does not intend to sell this assets or flip them to a third party or strip their assets for cash. The entire transaction is premised on keeping the asset within the
group. So it is baseless to claim otherwise. Had the intention been different, the businesses would have been sold much earlier.

Q8: Are QSR and KFC considering other offers?

A: In addition to JCorp's clear message that it won't sell, the intention not to entertain any other bids has also been made clear by both the KFC and QSR boards.

Q9: Will this move in any way harm Bumiputeras and/or the people's interests?

A: I wish to state clearly that KFC is a franchisee, so it is not a Bumiputera-only outlet, nor is it stated anywhere that it should only be owned by Bumiputeras. It is open to everyone. On the other hand, JCorp as a state government agency will continue to safeguard the interests of the rakyat, including in developing the Bumiputera community through various means. It has achieved many successes in this field and will continue to do so, not least by being more focused and profitable in its core businesses.

Q10: Is there any other "cheaper" way to execute the proposed acquisitions as claimed by some quarters?

A: There is no cheaper way for a third party to acquire QSR and KFC. Of course, acquiring Kulim's shares (as proposed by the Malay Chamber) may appear to be a way to gain control of QSR and thereby KFC. But for that to happen, Kulim and JCorp will first have to agree to sell to a third party. They are not interested to do so.

Nonetheless, even if that route was pursued by say the Malay Chamber, there is no cheaper way. It will still cost the Malay Chamber and its partners the whole amount, as acquiring Kulim's stake in QSR will trigger a mandatory general offer for the remaining shares held in QSR. It will also trigger a general offer on KFC shares as well. Essentially, the end effect is that you will have to acquire 100 per cent of both entities. So, certainly the RM1 billion or so proposed will not be sufficient. -- Bernama



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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 0.6 per cent to 1,504.22, its second day of declines.

Plantation stocks: Kuala Lumpur Kepong Bhd gained 2.2 per cent to RM23.50, a record close. IJM Plantations Bhd advanced 3.9 per cent to RM2.96, its highest close since April 29. Kulim Malaysia Bhd climbed 2.3 per cent to RM4.42, a record.

The March-delivery palm oil contract advanced 1.6 per cent to RM3,225 per metric ton on the Malaysia Derivatives Exchange yesterday, the highest close since Nov. 18. It traded at RM3,220 at 5:08 p.m. today.

Property stocks: Mah Sing Group Bhd lost 7.1 per cent to RM1.95, the most since Sept. 13. UEM Land Holdings Bhd slid 6.3 per cent to RM2.23, its steepest decline since Sept. 26.

Malaysia’s property industry was downgraded to “trading buy” from “overweight” by CIMB Group Holdings Bhd, which cited concerns economic growth will slow this year. UEM Land was cut to “neutral” and Mah Sing was downgraded to “trading buy,” CIMB analyst Terence Wong wrote in a report.

YTL Power International Bhd, a power producer, added 1.1 per cent to RM1.85, its highest close since Dec. 8. UBS AG upgraded the stock to “neutral” from “sell” following a 29 per cent drop in its share price since November 2010, Nicole Goh, an analyst at UBS, wrote in a report. She also raised the stock’s price estimate to RM1.90 from RM1.75. -- Bloomberg




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UEM Land, Mah Sing fall on CIMB

UEM Land Holdings Bhd and Mah Sing Group Bhd fell in Kuala Lumpur trading after CIMB Group Holdings Bhd downgraded Malaysia’s property industry on concern economic growth will slow this year.

UEM Land dropped 4.2 per cent to RM2.28 at 3:32 p.m. local time, set for its steepest decline since Nov. 1. Mah Sing lost 5.7 per cent to RM1.98, bound for its largest drop since Sept. 26. UEM Land was cut to “neutral” from “trading buy” and Mah Sing was downgraded to “trading buy” from “outperform,” CIMB said in a report. -- Bloomberg




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Palm oil to sustain above RM3,100/tonne

Crude palm oil (CPO) prices are likely to sustain above RM3,100 per tonne in the near term until La Nina subsides, said
Hong Leong Investment Bank (HLIB).

In a research note today, HLIB said, with the current La Nina event expected to last for the next few months, coupled with the recently-expanded price gap between CPO and soyabean oil, the CPO price will likely sustain at high prices over the next few months.

HLIB said despite its bullish view on the near-term CPO prices, it would keep its average CPO price assumption of RM3,000 per tonne for this year as the price would likely to weaken once La Nina subsided.

"Also, the current global economic headwinds will likely remain a long-drawn issue in our view, and this may curb demand for palm oil, and hence palm oil prices," it said.


It said it would also raise its target price earnings (PEs) for plantation companies under its coverage by 1-2 times to 11-15 times from 9-14 times previously.

"Despite the upgrade in target PE, we are keeping our 'neutral' stance on the sector given the unattractive valuation (in particularly, the bigger plantation players) relative to their regional peers and our less optimistic view on the downstream segment's fortunes," it said.

HLIB said its top picks were Tradewinds Plantantation Bhd (buy with target price of RM5.04) and TSH Resources Bhd (buy with target price of RM2.13). -- Bernama




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Malaysia O&G to ramp up in 2012

Malaysia's oil and gas (O&G) upcycle will start in 2012 with Petronas going full throttle to sustain oil production, according to a research house.

HwangDBS Vickers Research said the national oil company's record RM300 billion capital spending over five years would be a strong re-rating catalyst for domestic O&G players.

"Critical gas shortage in the country has also prompted Petronas to fast-track upstream activities, which will benefit local players," it said in a note today.

The deepwater development at Gumusut-Kakap is on track for first production by 2013, while the investment decision for Malikai may be finalised in 2012, it said.

It added downstream activities are picking up, led by the RM5 billion Pengerang deepwater petroleum terminal, while Petronas' RM60 billion Refinery & Petrochemical Industrial Development (RAPID) project in southern Johor will conclude its feasibility study by end-2012.

"Bumi Armada is poised to secure large contracts from Petronas, especially floating production, storage and offloading jobs and marginal field projects, which could re-rate the stock," the research house said.

Its other top picks include Dialog, which is in the midst of a major transformation to propel future earnings growth, and Dayang for its niche expertise in topside maintenance and hook-up commissioning services. -- Bernama




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Buy Bumi Armada shares, says HwangDBS

Bumi Armada is set to win big contracts from Petronas, especially floating production, storage, off-loading jobs (FPSO) and marginal field projects, which could re-rate the stock, HwangDBS Vickers Research said today.

The research house maintained a "Buy" for Bumi Armada at RM5 target price as it expected the company to secure the lucrative risk service contracts (RSCs) for Petronas’ marginal fields this year.

"It is also premised on long-term earnings visibility of RM7.2 billion firm order book (excluding a joint-venture FPSO project in India worth RM1.9 billion) and strong three-year earnings compounded annual growth rate of 26 per cent.

"Its excellent track record and synergistic oil and gas services, especially FPSO solutions, may appeal to foreign oil companies seeking to rope in a local partner for RSCs.

"We understand Bumi Armada is keen to bid for marginal fields and its new oil field services division sends a strong signal that it is leveraging on its expertise to aggressively bid for RSCs, which are believed to command 11-20 per cent Internal Rate of Return." it said in a statement.

The research firm said FPSO tenders were picking up and Bumi Armada would bid for more FPSO contracts in Malaysia as more jobs take off.

It said the FPSO tender process for Petronas’ RM15 billion North Malay Basin development had started, with the contract slated to be awarded by year-end to meet production by 2013.

Petronas is also likely to apply FPSO solutions to its "Bunga Dahlia" and "Teratai" fields, it said.

Meanwhile, the FPSO tender for the "ONGC Cluster 7" marginal fields in India has started and Bumi Armada is likely to bid for it, it added.

As at midday, Bumi Armada shares gained two sen to RM4.09. -- Bernama



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BCorp gets Bursa Securities’ nod for RM765m new loan stocks

KUALA LUMPUR (Jan 4): BERJAYA CORPORATION BHD [] has received Bursa Malaysia Securities Bhd’s approval for a corporate exercise involving the issuance of RM765.32 million new loan stocks under its rights issue.

It said on Wednesday that Bursa Securities had in its Jan 3 letter approved the corporate exercise subject to obtaining approval from the Securities Commission for the issuance of the new ICULS.

BCorp planned to issue up to RM765.32 million nominal value of 10-year 5% irredeemable convertible unsecured loan stocks (ICULS)at 100% of its nominal value together with 765.32 million free detachable warrants.

It also proposed to privatise Cosway Corporation Ltd, a 56.83% subsidiary of BCorp.



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KL shares wring gains at midday

Share prices on Bursa Malaysia remained in positive territory at mid-day today, despite gains being capped by selected finance and property counters, dealers said.

As at the end of the morning session, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 1.21 points to 1,514.75, after opening 4.15 points lower at 1,517.69.

The economic data from major markets have been encouraging, thus bolstering investor sentiments globally, dealers said.

On the local front, investors were cautious over concerns on the eurozone debt crisis.

The Finance Index fell 14.86 points to 13,446.37, the Plantation Index gained 95.18 points to 8,313.62 and the Industrial Index was up 4.72 points to 2,743.06.

The FBM Emas Index advanced 10.35 points to 10,427.64, the FBM Mid 70 Index added 8.12 points to 11,660.45 while the FBM Ace Index advanced 37.06 points to 4,116.71.

Gainers beat losers by 377 to 267 with 306 counters unchanged, 524 untraded and 17 suspended. Turnover stood at 958.424 million shares worth RM782.151 million.

The actives were led by Ho Wah Genting-WB, which gained 6.5 sen to 32 sen, Ho Wah Genting added six sen to 41 sen and Maxbiz was flat at 17.5 sen.

Among heavyweights, Maybank lost three sen to RM8.31, Sime Darby erased four sen to RM9.06, CIMB lost one sen to RM7.23 while Petronas Chemicals added three sen to RM6.22. -- Bernama



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EPF sells 3.54m UOA Devt shares

KUALA LUMPUR (Jan 4): The Employees Provident Fund (EPF) disposed of 3.534 million shares of UOA Development Bhd on Dec 29.

A filing with Bursa Malaysia on Wednesday showed that after the disposal, the EPF’s shareholding was reduced to 59.95 million shares or 5.01%.

The share price closed at RM1.37 on Dec 29.

Listed in May 2011, the current share price of RM1.37 is RM1.15 below its final retail price of RM2.52. The institutional price was fixed at RM2.60.



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KLCI pares down gains at mid-day, Asian markets mixed

KUALA LUMPUR (Jan 4): The FBM KLCI pared down it gains at the mid-day break on Wednesday as the Hong Kong and China markets retreated into negative territory, while other markets saw limited gains.

Hong Kong shares reversed early gains to finish lower at midday on Wednesday, underperforming Asian peers, with lackluster turnover suggesting investors were cautious, refraining from chasing recent gains, according to Reuters.

Mainland Chinese markets reopened after a New Year holiday to an ambivalent start despite expectations that some favourable policy news over the long weekend could boost sentiment. Weakness in China weighed on Hong Kong, Reuters cited traders as saying.

The FBMKLCI was up 1.21 points to 1,514.75 at 12.30pm, lifted by gains at select blue chips. The index had earlier risen to its intra-morning high of 1,525.14.

Gainers led losers by 377 to 269, while 306 counters traded unchanged. Volume was 958.42 million shares valued at RM782.15 million.

The ringgit strengthened 0.38% to 3.1388 versus the US dollar; crude palm oil futures for the third month delivery fell RM23 per tonne to RM3,198, crude oil shed 17 cents per barrel to US$102.79 while gold lost US$4.50 an ounce to US$1,599.00.

At the regional markets, Japan’s Nikkei 225 was up 1.32% to 8,566.67, Singapore’s Straits Times Index added 0.54% to 2,702.87, Taiwan’s Taiex rose 0.32% to 7,075.94 and South Korea’s Kospi edged up 0.01% to 1,875.57.

Meanwhile, Hong Kong’s Hang Seng index fell 0.29% to 18,822.68 and the Shanghai Composite Index shed 0.22% to 2,194.67.

On Bursa Malaysia, Dutch Lady was the top gainer at the mid-day break and was up 78 sen to RM24.20.

Other gainers included KLK that rose 60 sen to RM23.60, BAT 44 sen to RM49.88, Batu Kawan 40 sen to RM17.90, BHIC 22 sen to RM3.84, Shell 15 sen to RM9.30, MISC 13 sen to RM5.73, Ajiya and Jaya Tiasa up 12 sen each to RM1.75 and RM7.02, while LPI Capital added 10 sen to RM13.78.

Among the decliners, Petronas Dagangan fell 22 sen to RM17.22, GAB down 12 sen to RM13.22, Kluang 11 sen to RM2.54, AIC 10 sen to RM1.20, Iretex nine sen to 91 sen, while Tradewinds, Asdion and UEM Land lost seven each to RM9.90, 35 sen and RM2.31 respectively.

The actives included HWGB, JCY, Maxbiz, Envair, XDL, Karambunai and Nextnation.



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Construction sector rated 'neutral' by OSK

Domestic contracts are expected to be higher this year, mainly fuelled by some packages of the Sungai Buloh-Kajang mass rapid transit elevated line works, says a leading research house.

OSK Research said the "V5-V5" packages, costing RM500 million to RM600 million each, are expected to be awarded sometime next month or in March.

"We should also see some awards coming from the recently-revised value of KLIA2 from RM2 billion to RM3.9 billion," it said in a research note.

From a full year perspective, OSK said it expects to see an overall increase this year in domestic jobs, but the magnitude was hard to ascertain at this juncture.

"To justify our views, if all the elevated packages of the Sungai Buloh-Kajang elevated line were awarded this year, the value of this portion of the project alone would have already matched that of the total domestic contracts for last year," it said.

The research house said the domestic contract in the fourth quarter of last year totalled RM2.2 billion, while the full year domestic jobs came to RM11.9 billion, down 24 per cent year-on-year.

"Nonetheless, we maintain a "neutral" rating for the construction sector, given its high beta nature and our overall market strategy to sell into strength, coupled with the fact that it under-performed by 11 to 15 per cent in the last three major market downturns," it added. -- Bernama



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'MMHE's new orders may slowdown'

Malaysia Marine & Heavy Engineering Bhd (MMHE), Petroliam Nasional Bhd's deepwater fabrication arm, may face a slow order book replenishment this year, said HwangDBS Vickers Research Sdn Bhd.

In a research note today, HwangDBS said, for the first time in recent years,foreign firms were invited to bid for the contracts in Malaysia, which had been monopolised by MMHE in the past.

"Shell has formally invited international yards to participate in a re-tender for the tension leg platform fabrication job at Malikai deepwater field, offshore Sabah.

"The contract may be worth about RM1 billion. It is expected to be awarded by second half of 2012 as the bids are only due in April 2012," it said.

The research house said MMHE's outstanding order book stood at RM3.7 billion, and there was unlikely to be any major replenishment at least until after first half of 2012.

"This latest development reaffirms our concern over MMHE's weak earnings visibility. If there is no major replenishment in the next 12 months, its order book could drop below RM800 million by end 2012," it said.

Additionally, HwangDBS said, MMHE's estimated RM2.8 billion year to date contract wins may not be able to sustain its current RM4 billion annual burn rate. -- Bernama



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Media Prima dips, Affin Research has Sell, TP RM1.68

KUALA LUMPUR (Jan 4): Shares of MEDIA PRIMA BHD [] were marginally lower at RM2.54 at the midday break with trading volume on the thin side while Affin Investment Bank Research was cautious on the outlook for the group.

At 12.30pm, it was down one sen to RM2.54. There were 277,200 shares traded at prices ranging from RM2.54 to RM2.55.

The FBM KLCI was up just 1.21 points to 1,514.75. Turnover was 958.42 million shares valyed at RM782.15 million. Tthe overall broader market was slightly higher with advancing stocks lead decliners 377 to 269 while 306 counters were unchanged.

Affin Research said Media Prima was trading at a forward price-to-earnings (PE) multiple of 17 times (near its +1 standard deviation mean PE) but it was likely to come off, and could potentially test its -1SD historical mean PE level of 10.8 times, triggered by earnings disappointment ahead.

“Our FY12-13 EPS estimates are 10%-30% below street. Risk to our anti-consensus SELL rating lies on us being too early in our recommendation as the stock price could potentially be lifted by an election rally.

“Nevertheless, we believe that any stock price rally would optimally be the best time to trim positions in the stock ahead of a more challenging adex environment in 2012,” it said.

Affin research said Media Prima was highly leveraged to the broadcast segment which was highly vulnerable to an economic slowdown.

“Maintain our SELL rating on Media with an unchanged target price of RM1.68 based on 12x FY12 EPS,” it said.



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Buy Genting shares: OSK

OSK Retail Research is advising traders to buy Genting Bhd shares at the current level or buy on weakness at above RM11.06 a share.

It said the stock might eventually exceed the tough resistance between RM11.78 to RM11.98 to clinch a record high.

OSK's cut-loss point is pegged at below RM11.06 a share.

"The RM11.06 level now represents the immediate strong support.

A minor support could be found at the lower level of RM10.68 and further down, strong support is detected at RM10.24 level.

"The RM11.78 and RM11.98 levels are the remaining tough resistance to overcome," it said in a research note today.

The research firm said Genting gained 24 sen yesterday after it cracked above the RM10 and RM11.06 consolidation phase in the September-October rebound. -- Bernama



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SC reprimands Mulpha International directors

KUALA LUMPUR (Jan 4): The Securities Commission has reprimanded the board of the directors of MULPHA INTERNATIONAL BHD [] for failure to ensure the full disclosure of information in its abridged prospectus.

The SC said on Wednesday 4 that Mulpha was reprimanded the previous day for failure to ensure the final basis of allocation of excess rights shares was consistent with the basis disclosed in the company’s abridged prospectus dated Feb 24, 2010.



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KL shares higher at midmorning

At 10.30 am today, there were 350 gainers, 183 losers and 274 counters traded unchanged on the Bursa Malaysia.

The FBM-KLCI was at 1,515.97 up 2.43 points, the FBMACE was at 4,108.63 up 28.98 points, and the FBMEmas was at 10,436.80 up 19.47 points.

Turnover was at 665.284 million shares valued at RM451.120 million. -- Bernama



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Plantation stocks advance on commodity rally

Kuala Lumpur Kepong Bhd gained 1.9 percent to RM23.44, on course for a record close, as global commodities posted the biggest rally in almost eight months on speculation that increased factory output in countries ranging from China to the U.S. signals increasing demand for raw materials.

The Standard & Poor’s GSCI Spot Index of 24 commodities rose 3.4 percent to settle at 666.55 yesterday, the largest gain since May 9.

TH Plantations Bhd rose 2.3 percent to RM2.24, while Kulim Malaysia Bhd added 1.4 percent to RM4.38.

The March delivery palm oil contract advanced 1.6 percent to RM3,225 (US$1,027) per metric ton on the Malaysia Derivatives Exchange yesterday, the highest close since Nov. 18. -- Bloomberg



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KLCI remains edgy, limited gains at mid-morning

KUALA LUMPUR (Jan 4): The FBM KLCI rose at mid-morning on Wednesday in line with its regional peers, but the gains were limited as investors remained cautious given the continuing concerns over the eurozone debt crisis.

Asian stocks and the euro firmed after upbeat U.S. and European economic data boosted global shares and commodities, according to Reuters.

The FBM KLCI added 5.38 points to 1,518.92 at 10am.

Gainers led losers by 339 to 125, while 230 counters traded unchanged. Volume was 521.62 million shares valued at RM327.52 million.

At the regional markets, Japan’s Nikkei 225 rose 1.32% to 8,566.95, Hong Kong’s Hang Seng Index edged up 0.15% to 18,904.86, the Shanghai Composite Index added 0.77% to 2,216.39, Taiwan’s Taiex was up 0.78% to 7,108.52 and Singapore’s Straits Times Index rose 0.79% to 2,706.66.

Meanwhile, South Korea’s Kospi shed 0.02% to 1,875.03.

RHB Research in its market update on Jan 4 said that 2012 starts with the overhanging concerns of 2H 2011, this could be another year of “more of the same”.

However, on a brighter note, it noted the possibility of two market rallies in the near term – “January effect” and “Chinese New Year rally”.

It said that while the January effect had been evident every year for the last 10 years (and had led to a positive annual return in seven of the 10 years), the historical data for the pre-Lunar New Year rally was less conclusive (but the post-festival returns have actually been negative in 7 of the last 10 years).

“Beyond January, we believe 2012 will be influenced by 2011 legacy issues.

“We thus continue to advocate a cautious stance, although we also recommend accumulating fundamentally-robust stocks on weakness for tactical plays with a longer-term view towards the recovery that will undoubtedly follow,” it said.

On Bursa Malaysia, BAT and KLK rose 44 sen each to RM49.88 and RM23.44, United PLANTATION []s 22 sen to RM19.40, Allianz 19 sen to RM4.95, YHS 16 sen to RM2.22, Batu Kawan 14 sen to RM17.64, Ajiya 12 sen to RM1.75, Jaya Tiasa 11 sen to RM7.01 while BHIC and DiGi added nine sen each to RM3.71 and RM3.90.

The actives included HWGB, Maxbiz, JCY, Envair, Karambunai and XDL, while decliners included Asdion, Tradewinds, Hibiscus, Yinson, Harrisons, Sime Darby, Kretam and Tanjung Offshore.



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YTL Power climbs on UBS upgrade

YTL Power International Bhd, a Malaysian power producer, rose to a one-month high in Kuala Lumpur trading after the stock was upgraded to “neutral” at UBS AG.

Its shares climbed 1.1 percent to RM1.85 at 9:20 a.m local time, set for their highest close since Dec. 8.

Analyst Nicole Goh upgraded the stock with a RM1.90 price target following a 29 percent drop in its share price last year, UBS said in a report today. -- Bloomberg



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AirAsia gains on Credit Suisse report

AirAsia Bhd, the region’s biggest budget airline, rose the most in two weeks in Kuala Lumpur trading after Credit Suisse Group AG named it among 15 Asian equity “survivors” for 2012 in a report today.

Its shares gained 1.4 percent to RM3.73 at 9:16 a.m. local time, set for their biggest increase since Dec. 21. -- Bloomberg



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LBS Bina advances on RM1b annual sales target

KUALA LUMPUR (Jan 4): LBS BINA GROUP BHD [] shares advanced on Wednesday after the company said it was targeting RM1 billion annual property sales target in the near term as the company focuses on the various segments of the residential market apart from commercial and industrial PROPERTIES [].

At 9.25am, LBS was up two sen to 80.5 sen with 1.43 million shares done.

Its managing director Datuk Lim Hock San on Tuesday said LBS was expected to achieve property sales of RM800 million and RM 950 million in the financial year ending Dec 2012 and 2013 respectively.



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Foreign funds bought KL shares for 3rd month

Overseas investors bought Malaysian stocks for a third straight month in December, the longest monthly streak since July, as the benchmark index posted its largest quarterly gain in more than a year.

Foreign funds purchased a net RM800 million (US$255 million) of Malaysian shares last month, according to data on the Kuala Lumpur stock exchange’s website.

They bought RM700 million of stocks in November and RM1.5 billion in October. -- Bloomberg



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KLCI rebounds in early trade as Asian stocks rise

KUALA LUMPUR (Jan 4): The FBM KLCI rebounded in early trade in line with the higher opening at regional markets following the firmer overnight close at Wall Street.

Asian stocks and the euro firmed on Wednesday, as investor risk appetite returned after upbeat U.S. and European economic data boosted global shares and commodities and hopes for improved growth outlook grew despite worries over the euro zone debt crisis, according to Reuters.

The FBM KLCI was up 11.60 points to 1,525.14 at 9.05am.

Gainers beat losers by 194 to 18, while 129 counters traded unchanged. Volume was 98.88 million shares valued at RM62.41 million.

Among the early gainers were KLK, BAT, Hong Leong Bank, Allianz, DiGi, Harvest Court, Scientex, IGB, IOI Corp and Cepat.

Meanwhile, Maxbiz was the most actively traded counter after it received a letter of intent (LOI) in respect of a fibre-to-the-home and fibre-to-the-office (FTTX) contract worth RM510 million.

Maxbiz gained one sen to 18.5 sen with 10.73 million shares done.

The company had received the LOI from Fiber-N Sdn Bhd on Dec 30, 2011 for the infrastructure works for 100,000 FTTX connections on high rise residential and office buildings in Klang Valley, Penang and Johor Bahru.



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RHB Research maintains Underweight on semicon sector

KUALA LUMPUR (Jan 4): RHB Research Institute is maintaining its Underweight call on the semiconductor sector as it has yet to see any strong indications that the industry is poised for a stronger recovery.

It said on Wednesday the EU debt crisis has already taken its toll on the chips demand in the region as reflected by a sharper decline of 11.5% on-year in November (versus October: 7.7%).

“Although sales of smartphones with the latest wireless chips remained the bright spot for the industry, this was not able to offset the weak demand from the broader market.

“We believe that chip sales (especially from the US and Europe regions) will be a better indicator as to whether a sustainable recovery is in sight,” it said.

On the outlook for MPI, it said although MPI was focusing on new segments such as the automotive and mobile devices (i.e. X3-MLP and MEMS), it believes the slowing consumer spending on the broader market such as PCs and consumer electronics would have bigger knock-on effects on MPI’s medium-term earnings.

“This is mainly because revenue contributions from these segments are the highest. Hence, we maintain our Underperform call on the stock and a fair value estimate of RM2.10/share based on 0.6 times forward P/BV,” it said.

RHB Research also said Unisem was not spared too despite qualifying for new customers. Unisem’s earnings visibility remains poor given weak order visibility and customers’ lower order rate despite commencing volume loading for newly acquired customers.

“We believe medium-term chips demand would remain uninspiring given weakness in end-market demand for consumer electronics and corporate IT equipment. Therefore, we reiterate our Underperform call and fair value estimate of RM0.92/share based on 0.6 times forward P/BV,” it said.

As for Notion Vtec, the research house said while it remains positive on Notion’s camera segment on the back of rising adoption of SLR cameras amongst consumers, it is wary of its renewed focus on the HDD business.

“Recall that the company incurred substantial cost increase following its capacity ramp-up of its 2.5’’ HDD in FY09/10. Furthermore, we believe demand for HDDs could be hampered in the longer term by demand for alternative storage mechanisms i.e. cloud computing and hybrid storage. Thus, we maintain our Underperform call on the stock with a fair value estimate of RM1.21/share based on 6x FY09/12 EPS,” it said.



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HDBSVR: Firmer Wall Street to boost Malaysian market sentiment

KUALA LUMPUR (Jan 4): Hwang DBS Vickers Research said on Wednesday Wall Street was off to a strong start in the New Year when key U.S. equity indices jumped between 1.5% and 1.7% last night.

It said apparently, investors’ confidence was boosted by expectations that the global manufacturing sector would show promising growth this year.

“The positive external vibes could give a lift to our Malaysian bourse today. Its benchmark FBM KLCI will probably recover all the losses suffered yesterday to rise towards the immediate resistance level of 1,530 ahead,” it said.

HDBSVR said stocks that may see action today include: (a) CI Holdings, after a local daily, quoting sources, reported that the company is looking to acquire a new business soon; (b) Bonia, following its acquisition of a German leather goods maker for RM13 million; and (c) Tricubes, which has just been awarded a government contract worth RM6 million.



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CIMB Research has technical buy on Landmarks at RM1.10

KUALA LUMPUR (Jan 4): CIMB Equities Research has a technical buy on Landmarks at RM1.10 at which it is trading at a price-to-book value of 0.3 times.

It said on Wednesday Landmarks has been hovering near its 30-day and 50-day SMAs after prices broke out of its wedge resistance.

“We think a base has been formed and prices are likely to push for one more upswing,” it said.

CIMB Research said the MACD has staged a positive crossover while RSI is above the 50 points mark. The next targets to beat are RM1.16 and RM1.20. The 200-day SMA at RM1.28 would also be a magnet for prices.

“Traders may start to take some position now before the next upleg kicks in. However, always put a stop at below RM1.03,” it said.



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