Kulim gets DPMM letter to buy QSR shares at RM6.90

KUALA LUMPUR (Jan 10): Kulim (Malaysia) Bhd has received an offer letter from Kumpulan Syarikat Pelaburan DPMM on behalf of the Malay Chamber of Commerce Malaysia (MCCM) seeking to acquire all the QSR BRANDS BHD [] shares it owns for RM6.90 per share.

Kulim said on Tuesday the offer letter from the deputy president cum chairman of Kumpulan Syarikat Pelaburan DPMM, dated Dec 30, 2011, was unsolicited.

At RM6.90, this was 10 sen above the offer made by Massive Equity Sdn Bhd (MESB) to acquire QSR’s business and undertakings, including substantially all the assets and liabilities of QSR for RM6.80 per share.

Kulim said following the latest development and offer from Kumpulan Syarikat Pelaburan DPMM, it would convene a board meeting to deliberate on the offer.

It also noted that on Dec 21, QSR’s independent directors had agreed to accept the offer from MESB to acquire QSR’s business and undertakings, including substantially all the assets and liabilities of QSR for RM6.80 per share and RM3.79 per warrant.

To recap, the boards of QSR and KFC HOLDINGS (M) BHD [] (KFCH), which accepted the joint takeover offer by Johor Corp (JCorp) and CVC Capital Partners Asia III Ltd, said on Dec 21, they were not seeking any alternative bids for the sale of their assets and liabilities.

Both companies had stated they would not invite alternative bids will put to rest speculations on possible counter bids for the fast food chain assets.

However, both companies noted that the takeover offers are subjected to “further negotiations and mutual agreement on terms and conditions to be incorporated into the definitive sale and purchase agreement”.

MESB is a special purpose vehicle created to undertake the take-over exercise to acquire all assets and liabilities in QSR and KFCH. The shareholders of MESB are Triple Platform Sdn Bhd, a wholly-owned subsidiary of JCorp, with a 51% stake and Melati Asia Holdings Ltd, a wholly-owned unit of CVC Capital Partners, with 49%.

Currently, JCorp owns a 57.05% stake in KULIM (M) BHD [], which in turn holds 58.68% of QSR. QSR is the major shareholder of KFCH with a 50.64% equity stake.

MESB is offering RM6.80 cash per share for QSR Brands, and RM3.79 for the company’s warrants. Meanwhile, the SPV offered to buy the assets in KFCH at RM4 per share and RM1 for all its outstanding warrants.

Upon completion of the takeover exercise, both QSR and KFCH will become empty shell companies, and the two companies intend to return the bulk of the sale proceeds to shareholders through capital repayment exercises.



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Ibrahim Petra seeks RM891,000 gratuity payment from Petra Energy

KUALA LUMPUR (Jan 10): PETRA ENERGY BHD []’s former chairman Tengku Datuk Ibrahim Petra Tengku Indra Petra is seeking RM891,000 as gratuity payment from the company and the transfer of a company car.

Petra Energy said on Tuesday it was served with a writ of summons together with the statement of claim from Ibrahim Petra’s solicitors Messrs Bodipalar Ponnudurai De Silva.

According to the statement to Bursa, he is seeking the gratuity payment of RM891,000, based on 1.5 months’ salary for every year of service for 22 years.

He is also seeking the transfer of the ownership of the company car, a Mercedes Benz CLS Brabus to him.

He is also seeking interest at 4% per annum to be paid by Petra Energy on the judgement sum from June 18, 2010, the date of his resignation as chairman and executive director, to the date of full settlement.

“The claims stated in the summons are in respect of the plaintiff's request for payment of a gratuity following his resignation as a director and in view of his contribution and service to the group of companies which he had set up and served for 22 years. It was claimed that Petra Energy board of directors did not make the gratuity payment as agreed nor transfer the company car to the plaintiff,” said the company.



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Petra Energy to hold EGM over removal of director

KUALA LUMPUR (Jan 10): PETRA ENERGY BHD [] will hold an extraordinary general meeting (EGM) on Feb 9 following a resolution to seek the removal of Kamarul Baharin Albakri as a director.

It said on Tuesday the EGM was requisitioned by a shareholder, Shorefield Resources Sdn Bhd to remove Kamarul with immediate effect.

He was the former chief executive officer of Petra Energy and his services were terminated on Dec 20. Despite his removal then, he still remained a director of the company.



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Jetson subsidiary awards RM20.9m sub-contract to Lucksoon

KUALA LUMPUR (Jan 10): KUMPULAN JETSON BHD []’s subsidiary has awarded a RM20.90 million sub-contract job for the Ritz Corporate Suites in Kuala Lumpur to Lucksoon Metal Works Sdn Bhd (LMWSB).

Jetson said the sub-contract would involve the internal glazing and façade works for package one which includes the carparks, lobby and one block of 38 level of offices. The overall completion date is Aug 15, 2013.

Jetson said the 70% owned sub-subsidiary, Jetson Lucksoon Sdn Bhd had awarded the contract to LMWSB. LMWSB holds 30% of Jetson Lucksoon. Cha Ti @ Cheah Tai, a director and major shareholder of LMWSB, is also a director of Jetson Lucksoon.

Explaining the rationale in awarding the contract, Jetson said LMWSB is an aluminium specialist and experienced in façade works and it had the factory facilities and equipment to undertake the project.

“By virtue of 30% shareholdings of LMWSB in Jetson Lucksoon, LMWSB will ensure the quality of the works and timely completion of the job,” it said.



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SapuraCrest joint venture gets RM315m subsea job offshore Vietnam

KUALA LUMPUR (Jan 10): SAPURACREST PETROLEUM BHD []’s joint venture has secured a subsea CONSTRUCTION [] project worth RM315 million (US$100 million) offshore Vietnam.

The company said on Tuesday that SapuraAcergy Sdn Bhd, which is equally owned by SapuraCrest and Subsea 7 S.A. was awarded the contract, adding that the offshore work was expected to be performed in mid 2012.

SapuraCrest said the scope of work requires the installation of 28km of 12” diameter pipeline, a 28km umbilical, Pipeline End Terminations (PLETs) and Subsea Isolation Valve (SSIV), Structures, spools and pre-commissioning.

It said the contract was expected to contribute positively to its earnings for the financial year ending Jan 31, 2012.



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Kuok Group sells 7.69m Hexagon Holdings shares

KUALA LUMPUR (Jan 10): The Kuok Group disposed of 7.69 million shares of HEXAGON HOLDINGS BHD [] in early January 2012 at an average price of 20 sen.

A filing with Bursa Malaysia on Tuesday showed that its unit Gaintique Sdn Bhd disposed of the shares from Jan 4 to 9 and reduced its stake to 9.78% or 12.978 million shares.



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Market Commentary

The FBM KLCI index gained 0.26 points or 0.02% on Tuesday. The Finance Index increased 0.06% to 13451.3 points, the Properties Index dropped 0.16% to 1000.62 points and the Plantation Index rose 0.45% to 8507.98 points. The market traded within a range of 5.34 points between an intra-day high of 1524.10 and a low of 1518.76 during the session.

Actively traded stocks include TAKASO, JCY-CD, JCY, MBSB-CA, XDL, HWGB-WB, TIME, HWGB, VERSATL and KHSB. Trading volume increased to 1858.39 mil shares worth RM1872.05 mil as compared to Monday’s 1642.72 mil shares worth RM1706.14 mil.

Leading Movers were DIGI (+4 sen to RM3.90), PETGAS (+24 sen to RM15.34), KLK (+26 sen to RM24.84), TM (+5 sen to RM4.91) and PETCHEM (+3 sen to RM6.36). Lagging Movers were GENTING (-24 sen to RM10.90), GENM (-3 sen to RM3.88), TENAGA (-2 sen to RM6.07), MMHE (-11 sen to RM5.65) and IOICORP (-1 sen to RM5.39). Market breadth was positive with 416 gainers as compared to 330 losers. -- JF Apex Securities Bhd



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KLCI edges marginally higher but external headwinds still a concern

KUALA LUMPUR (Jan 10): The FBM KLCI edged marginally higher at the close on Tuesday, in line with the gains at most key regional markets.

Analysts, however, cautioned that the outlook remains fragile, given external headwinds.

The 30-stock FBM KLCI edged up 0.26 of a point higher to 1,521.99, lifted by select blue chips.

Gainers overtook losers by 416 to 330, while 346 counters traded unchanged. Volume was 1.86 billion shares valued at RM1.87 billion.

At the regional markets, the Shanghai Composite Index rose 2.69% to 2,285.74, South Korea’s Kospi was up 1.46% to 1,853.22, Taiwan’s Taiex gained 1.21% to 7,178.87, Hong Kong’s Hang Seng Index rose 0.73% to 19,004.28, Japan’s Nikkei 225 was up 0.38% to 8.422.26 and Singapore’s Straits Times Index

Meanwhile, European stocks rose but the euro stayed under pressure on Tuesday, with markets nervous about the outlook for the region's economy and banks, prospects for government debt sales and a slowdown in the export-focused Chinese economy, according to Reuters.

MIDF Research acting head of equity Syed Muhammed Kifni said the market was expected to remain jittery going forward with the possibility of the KLCI re-testing its 2011 lows.

Nonetheless, he said that the Euro debt issue would begin to show credible signs of healing later in the 1H2012, adding that when that transpires, the underperforming indices can be expected to show swifter resurgence on the way up.

In contrast, the KLCI is anticipated to experience relative underperformance during the recovery phase, he said.

“With that in mind, we reiterate our KLCI year-end 2012 base case target of 1,530 points.

“As our base case KLCI year-end target for this year virtually matched its 2011 close, in our view, 2012 may quintessentially be a consolidation year.

In his review of the second half of 2011, Syed Muhammed said it was clear that during the turbulence period of 2H2011 (beginning end-July), the performance of key major and regional equity benchmarks could be grouped into four distinct classes, i.e. out-performers, mid-performers, under-performers, and China.

He said the outperformers comprised of S&P500 (SPX), Philippines Composite (PCOMP) and the FBM KLCI.

He said the US benchmark benefitted somewhat from either, (i) a plain misdiagnosis, or (ii) market conditioning, by the US Fed when it publicly warned earlier of the “significant downside risks” to the economy.

He said the FBM KLCI, was also among the least volatile due to its relatively nature vis-à-vis the other markets in the region.

Syed Muhammed said the mid-performers were the Jakarta Composite Index and Thailand’s SET, while the under-performers’ group comprised the Euro region benchmark (SX5E) as well as developed Asian (i.e. Hong Kong’s HSI, Korea’s KOSPI, Taiwan’s TWSE, and Singapore’s FSSTI) markets.

“We believe the underperformances reflect the relative sensitiveness of their economies towards the crisis-hit Euro region,” he said.

On Bursa Malaysia, United PLANTATION []s was the top gainer and rose 78 sen to RM20; F&N added 28 sen to RM19.02, Petronas Dagangan and KLK up 26 sen each to RM17.40 and RM24.84, LPI Capital and Petronas Gas 24 sen each to RM14.08 and RM15.34, Maybulk 23 sen to RM1.95 and Malaysia Smelting Corp 20 sen to RM4.27.

Takaso was the most actively traded counter this morning with 79.2 million shares done. The stock gained half a sen to 24.5 sen.

Other actives included JCY, MBSB, XDL, HWGB, Time, Versatile and KHSB.

Decliners included Genting, GAB, KLCCP, Lafarge Malayan Cement, Tradewinds, MMHE, Amway and KPJ.



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Harvest shoots up after lifting of designated status

PETALING JAYA: Harvest Court Industries Bhd’s shares sailed north, gaining 33 sen close at RM1.41, its highest level since mid-November after market regulator Bursa Malaysia lifted its designation status yesterday.

The company’s stock was among the top gainers yesterday with 5.27 million shares changing hands.

Its call warrant, Harvest-WA, also shot up yesterday to RM1.14, 31 sen higher from last Friday’s close, with 44.64 million warrants traded.

Harvest Court’s securities were put under designation status by Bursa Malaysia effective Nov 16, 2011 due to excessive speculative trading in its shares and warrants.

“In the discharge of its frontline regulatory role, the exchange will continue to monitor the trading activities of Harvest and Harvest-WA, and where trading concerns are noted, the exchange may take appropriate regulatory actions,” Bursa said in a statement last Friday.

Much of the exuberance in Harvest Court’s shares stemmed from the emergence of Mohd Nazifuddin Najib, son of Prime Minister Datuk Seri Najib Razak, and his business partner Datuk Raymond Chan Boon Siew, as directors and shareholders in the ailing company at end-October.

However, Nazifuddin resigned from the board a month later, while Chan remains a director and holds a 15.7% stake in the company.

Despite the rally yesterday, Harvest Court’s share price is still some 34% lower than the 52-week high of RM2.13 on Nov 14, 2011.

Prior to the run-up last October, Harvest Court’s shares were trading at below 10 sen.

Since Oct 14, 2011, Harvest Court’s share price has increased by 1,558% to yesterday’s close, and is much higher than its net asset per share of 17.5 sen as at Sept 30, 2011.

The company reported losses of RM957,000 during the nine-month period ended Sept 30, 2011.


This article appeared in The Edge Financial Daily, January 10, 2012.



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DRB-Hicom confirms bid for Proton

KUALA LUMPUR: DRB-Hicom Bhd confirms that it has submitted a bid to acquire Khazanah Nasional Bhd’s 42.7% stake in Proton Holdings Bhd.

In a statement to Bursa Malaysia yesterday, DRB-Hicom said the proposal was pending decision by Khazanah.

“We wish to inform Bursa Malaysia that DRB-Hicom has always viewed Proton as an important automotive industry player. Accordingly, DRB-Hicom was on the lookout for an opportunity to arise to explore any viable proposals which will benefit and add value to the group’s business and expansion plans,” it said.

The statement was in response to a telephone query by Bursa Malaysia following news that DRB-Hicom was eyeing the Proton stake.

DRB-Hicom gained two sen to close at RM2.08 yesterday with 5.25 million shares done, while Proton added 26 sen to close at RM5.25.


This article appeared in The Edge Financial Daily, January 10, 2012.




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Kam appointed RHB Banking group MD

KUALA LUMPUR: The RHB Banking Group yesterday appointed RHB Capital Bhd (RHBCap) managing director Kellee Kam Chee Khiong as group managing director to lead the financial services group’s strategic direction.

In a filing with Bursa Malaysia yesterday, RHBCap said Kam will provide strategic direction and ensure execution of the RHB Banking Group’s initiatives and roadmap towards achieving its long-term aspiration of becoming Aisa’s leading financial services provider.

Kam’s new role came into effect yesterday, RHBCap said.

Kam was appointed RHBCap’s managing director in May last year, having joined the RHB Banking Group in February 2005 as its general manager of corporate finance and treasury.

“Having been with the group for the last seven years, Kam carries with him an in-depth knowledge of the group in terms of strategic growth and business directions,” RHBCap said.

During his tenure at RHB Group, Kam headed the group’s corporate and strategic planning division and later became its chief financial officer in 2007. According to RHBCap, Kam had read law at Manchester Metropolitan University and has two Masters degrees, one in Arts and the other in business administration.


This article appeared in The Edge Financial Daily, January 10, 2012.



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JAKS proposes two partners for Vietnam power project

KUALA LUMPUR: JAKS Resources Bhd is roping in China’s Meiya Power (HD) Ltd and Island Circle Investment Holding Ltd as joint venture (JV) partners in its coal-fired thermal power plant project in Vietnam.

Meiya Power is an indirect subsidiary of China Guangdong Nuclear Power Holding Corp while Island Circle is a wholly-owned subsidiary of Island Circle Development (M) Sdn Bhd.

In a filing with Bursa Malaysia yesterday, JAKS said the proposed JV would be facilitated by a shares sale in a subsidiary, and two shareholder agreements.

At present, JAKS’ wholly-owned unit JAKS Power Holding Ltd wholly owns JAKS-MPC (HD) Ltd and JAKS Pacific Power Ltd.

JAKS Pacific Power is the holding company for JAKS Hai Duong Power Ltd which is licensed by the Vietnam government to undertake the design, engineering, construction, operation and maintenance of the 2 x 600MW coal-fired thermal power plant in the Hai Duong Province.

On Jan 6, JAKS Power entered into an agreement to divest a 50% stake in JAKS-MPC to Meiya Power for US$5 million (RM15.8 million) cash.

JAKS-MPC and Island Circle will respectively subscribe for an 80% and 10% equity interest in JAKS Power for HK$800 (RM324.90) and HK$100 cash respectively.

Upon completion of the proposed JV, the effective interest of JAKS Power, Meiya Power and Island Circle in JAKS Pacific Power would be 50%, 40% and 10% respectively.

Simultaneously, JAKS Power, Meiya Power and JAKS-MPC will enter into a shareholders’ agreement to regulate their relationship as shareholders of JAKS-MPC, as will JAKS Power, JAKS-MPC, Island Circle and JAKS Pacific Power.

“The agreements were entered into to formalise the entry of Meiya Power and Island Circle as equity partners in the proposed joint venture,” JAKS said in its announcement to the local bourse.

JAKS said the proposed JV would enhance JAKS Pacific Power’s ability to raise funds for the projects.

“The proposed joint venture will also provide JAKS an opportunity to gain expertise and generate opportunities for transfer of technology from its partners in operating and maintaining the power plant,” the company said.

The proposed JV is subject to shareholders’ approval at a forthcoming EGM, JAKS said.

According to JAKS, it had invested about US$26.8 million in the project up until Oct 31, 2011.

Trading in JAKS shares was suspended from 10.10am pending this announcement late yesterday. Over the last two trading days, its stock was heavily traded while its share price rose 12.38% from 56.5 sen on Jan 5 to 63.5 sen yesterday prior to the suspension.

Trading in JAKS shares resumes today.


This article appeared in The Edge Financial Daily, January 10, 2012.




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WCT’s FY11 new contract wins fall short of target

WCT Bhd
(Jan 9, RM2.23)
Maintain market perform at RM2.23 with revised fair value of RM1.97 (from RM2.08): WCT was unable to meet its new construction order book guidance of RM2 billion for FY11 ended December. It only managed to secure RM187 million. The key culprits were its unsuccessful bids for Yas Mall in Abu Dhabi, Four Seasons Hotel in Bahrain, Madinah Airport in Saudi Arabia, airport extension in Brunei and “Package B” of the LRT line extension project.

WCT has yet to issue guidance on its FY12 new construction order book. However, it is certainly putting a lot of faith in its RM4 billion outstanding tender book at present, with the key contracts being two highway packages in Oman as well as building jobs in Malaysia. Over the short to medium term, WCT is also eyeing infrastructure and building jobs from Vale SA, Putrajaya, Iskandar Malaysia, Permodalan Nasional Bhd, the Kuala Lumpur International Financial District (KLIFD), Langat 2 water treatment plant, Gemas-Johor Baru double tracking, West Coast Expressway and Penang traffic alleviation. On a less positive note, WCT is staring at the prospect of not being involved at all in the RM20 billion Sungai Buloh-Kajang (SBK) line of the Klang Valley MRT project. In our earnings forecasts, we assume WCT will secure RM1.5 billion worth of new jobs per annum in FY12/FY13.

We are cutting FY12/FY13 net profit forecasts by 7% to 12%, having reflected an actual new construction order book secured of only RM187 million in FY11 (vis-à-vis our previous assumption of RM1.5 billion), partially mitigated by an upward revision in property profit.

Risks to our view include: (i) new contracts secured in FY12/FY13 coming in below our target of RM1.5 billion per year; and (ii) escalation in input costs.

We have turned less enthusiastic on construction stocks as we believe their share price performance is likely to be muted over the next three to six months as: (i) investor confidence and comfort level that the Klang Valley MRT project will start work soon are being chipped away by further delays in the rollout of certain long overdue large-scale projects; (ii) even if the Klang Valley MRT project starts work as scheduled, initial progress is likely to be painfully slow due to bureaucratic hurdles, which means realistically that earnings impact from the Klang Valley MRT may be a few quarters, or even a year or two away; and (iii) there is generally a lack of credible new large-scale projects in the pipeline. Indicative fair value for WCT is reduced by 5% from RM2.08 to RM1.97. — RHB Research, Jan 9


This article appeared in The Edge Financial Daily, January 10, 2012.




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Can-One to revamp KJCF’s board?

KUALA LUMPUR: The tussle for control of the board of Kian Joo Can Factory Bhd (KJCF) may happen immediately after Can-One Bhd pays for its 32.9% stake in KJCF and has the shares transferred from Kian Joo Holdings Sdn Bhd (KJH).

According to sources, Can-One, upon getting the KJCF shares, is set to call for an EGM to install its own directors at the country’s largest can manufacturing outfit.

“It is not clear if Can-One wishes to retain some of the existing directors of KJCF. But speculation is rife that they will go against the members of KJCF’s founding See family, who make up half the board now,” said a source.

Out of KJCF’s nine directors listed in its 2010 annual report, four are members of the See family — Datuk See Teow Chuan (who recently retired as managing director at 71 years of age) and his brothers Datuk Anthony See, See Teow Koon and See Tiau Kee.

“Anthony, Teow Koon and Tiau Kee are the only executive directors in KJCF. If they leave the company, there could be concerns over operational issues, at least temporarily,” said a market observer.

However, it is believed the See family will not give in easily should such a boardroom tussle occur. Apart from sentimental reasons, sources said the family feels that KJCF is worth much more than what it is trading now, and they have the resources to buy back a substantial block of KJCF shares on the open market, by utilising the sale proceeds to be received from Can-One. Meanwhile, the Employees Provident Fund, which is familiar with the See family, owns almost 9% equity interest in KJCF.

Can-One managing director Yeoh Jin Hoe and executive director Ooi Teik Huat were not available for comment at press time.

It is learnt that Can-One is in the process of lining up financing for the 32.9% stake in KJCF it is acquiring for RM241.12 million or at RM1.65 a share. The company is buying the stake from KJH, a See family vehicle that is under liquidation as a result of a longstanding family feud.

Can-One’s acquisition of the KJCF stake has faced many hurdles. One camp of the See family, led by Teow Chuan, disputed in court the validity of the tender exercise that was carried out by KJH’s liquidator KPMG in 2009. Can-One won the open tender for the 32.9% block in KJCF. It was not until last Thursday that the Federal Court ruled in favour of KJH’s liquidator and Can-One over the transaction.

At yesterday’s closing, Can-One’s shares rose 23 sen or 14.47% to close at RM1.82, while KJCF’s dropped eight sen or 3.64% to RM2.12. Can-One’s market capitalisation stood at RM277.4 million, while KJCF’s was three times larger at RM941.6 million.

Operationally, Can-One registered a net profit of RM20.01 million for the nine months ended Sept 30, 2011, on revenue of RM463.69 million. KJCF’s net profit and revenue were much bigger, amounting to RM89.75 million and RM793.54 million during the same period.


Market observers feel a boardroom fight is inevitable when Can-One gets the shares. While the Federal Court has cleared the path, there is still another sore point in the form of a “highly dilutive” bonus and rights issue that the present board of KJCF is trying to push through.

The exercise, which is still pending approval from the Securities Commission, doesn’t sit well with Can-One, which considers that it would prevent it from gaining firm control of KJCF.


This article appeared in The Edge Financial Daily, January 10, 2012.

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AMMB, Friends Life set up takaful JV

KUALA LUMPUR: AMMB Holdings Bhd has teamed up with Friends Life FPL Ltd to set up AmFamily Takaful Bhd (AmTakaful) to tap into Malaysia’s family takaful business where the market penetration still remains relatively low.

According to a press release yesterday, AMMB said AmTakaful, the 12th licensed takaful operator in Malaysia, will run the family takaful business with effect from yesterday.

“AmTakaful’s range of family takaful products will appeal to all Malaysians in line with Bank Negara Malaysia’s efforts in actively promoting Islamic finance as an additional avenue for Malaysian consumers in meeting their financial services needs,” AMMB’s and AmTakaful’s chairman Tan Sri Azman Hashim said in the statement.

AmTakaful is 70%-owned by AMMB’s wholly-owned subsidiary AMAB Holdings Sdn Bhd. Friends Life FPL, a member of Friends Life Group of the United Kingdom, holds 30%.


This article appeared in The Edge Financial Daily, January 10, 2012.



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XiDeLang confirms major shareholder not selling

KUALA LUMPUR: XiDeLang Holdings Ltd, a China-based sports shoes and apparel maker, yesterday confirmed The Edge weekly’s report that its largest shareholder HongPeng International Holdings Ltd does not have any plans to sell its stake.

“After having made due and diligent enquiry with our major shareholder, namely HongPeng, and the board of directors, we wish to inform that HongPeng has been receiving enquiries from external parties including private equity firms, but HongPeng has no intention of selling its stake at this juncture,” it said in an announcement to Bursa Malaysia.

HongPeng, an investment vehicle of XiDeLang’s managing director Ding PengPeng, holds a 54.55% stake in the company. XiDeLang came into the limelight last week after a vernacular newspaper reported that Navis Capital Partners, a Malaysia-based private equity firm, was looking at acquiring HongPeng’s stake.

The counter closed 1.5 sen or 3.75% lower to 38.5 sen yesterday with a total of 27.2 million shares changing hands.


This article appeared in The Edge Financial Daily, January 10, 2012.




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KHSB, KPS up on privatisation talk

PETALING JAYA: The share price of Kumpulan Hartanah Selangor Bhd (KHSB) and its largest shareholder Kumpulan Perangsang Selangor Bhd (KPS) both rose to multiple-month highs yesterday, following a report in The Edge weekly that KPS could privatise KHSB as part of a restructuring exercise.

KHSB’s stock rose by 13.5 sen or 37% to 50 sen yesterday, closing at its highest level in almost a year.

The property company’s stock was the most actively traded stock on Bursa Malaysia yesterday with close to 107 million shares transacted.

Its parent, KPS, shot up by 13 sen or 12.4% to close yesterday at RM1.18 per share, which is the highest level since end-May last year.

According to The Edge report, Amin Lin Abdullah, KPS’ head of public relations and media said the group is always looking at ways to enhance its investment value, and privatisation of its listed entity KHSB may just be one.

“As an investment holding company, KPS is always looking at all available ways and means to enhance the value of all its investments, regardless of whether it involves restructuring, reorganisation, mergers, acquisitions, privatisation and so on,” he stated in an email reply to questions from The Edge last week.

Market observers pointed out that by consolidating KHSB and KPS under one entity, investors would get a better value proposition to invest in, as both companies are linked to the investment arm of the Selangor government, Kumpulan Darul Ehsan Bhd (KDEB). It was reported that KDEB has given KPS the mandate to look into restructuring its investment holdings in both companies.

KDEB owns 60.57% of KPS, while the latter owns 56.57% of KHSB.

KDEB, as the Selangor government investment arm, operates in several industries such as property development, hospitality, waste management and utilities in the state through KPS and KHSB.

As at Sept 30, 2011, KHSB’s net assets per share stood at about 80 sen, while KPS has net assets per share of RM2.33.

For its nine months ended September last year, KPS posted a net profit of RM78.31 million on the back of RM305.09 million in revenue.

For its nine months ended September last year, KHSB suffered a net loss of 31.06 million from RM96.81 million in sales.


This article appeared in The Edge Financial Daily, January 10, 2012.



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Inari expects Amertron to triple revenue

KUALA LUMPUR: ACE Market- listed Inari Bhd is expecting the proposed purchase of a 100% stake in Amertron Inc (Global) Ltd to triple its revenue.

Inari managing director Dr Tan Seng Chuan said the proposed acquisition was part of the group’s diversification within the electronics manufacturing services (EMS) sector.

“There are good prospects for Inari after the acquisition. We expect Inari’s revenue to increase three-fold while our staff count will also increase to 5,000 from 1,350 currently,” he said at the signing of the memorandum of understanding (MoU) between Inari and Amertron yesterday.

Tan said Inari will conduct its due diligence on Amertron and hopes to complete the acquisition in the second half of 2012. The sales and purchase agreement is expected to be signed in the next 60 days.

“With the acquisition, we intend to broaden our current customer base from the radio frequency (RF) industry to optoelectronics. It will also allow us to expand our production facilities beyond Malaysia and give us access to Amertron’s customer base in Asia, the US and Europe,” he said.

Amertron has three EMS plants, two operating in the Philippines and one in China. Its president and CEO Roger Wang said Amertron had achieved US$120 million (RM379.2 million) in revenue in the last financial year.

Tan said the final purchase price for Amertron will be determined after due diligence is completed, and will be based on Amertron’s audited net tangible assets (NTA). As at June 30, 2011, Amertron’s NTA stood at US$32 million.

(From left) Inari executive director Edward Mai Mang Lee, Tan, Amertron CEO Richard Wang Ta Chung and Emie Tugadi of corporate resource management, Amertron, at the signing ceremony of an MoU between Inari and Amertron.

“There will be no premium for the acquisition for Amertron. We will purchase the stake based on Amertron’s actual NTA value once due diligence is completed,” said Tan.

He added that Inari is considering various options to fund the purchase. As at Sept 30, 2011, Inari had RM35.7 million in cash and bank balances while short-term and long-term borrowings stood at RM13.81 million.

“There is a lot of synergy between the two companies in terms of business platform, philosophy and manpower. Amertron grew organically in the past and this will be the next stage for Amertron,” said Wang.

This is the second proposed merger and acquisition by Inari after it was listed on the ACE Market in July last year. In December, Inari proposed to acquire a 51% stake in Ceedtec Sdn Bhd, which has an agreement to produce electronic test and measurement equipment for NYSE-listed Agilent Technologies Inc.

Incorporated in 2006, Inari produces end-to-end semiconductor packaging services for RF chips in the wireless and mobile technology markets. It currently has four production facilities in Penang that produce key components used in mobile phones and tablets.

Established in 1988, Amertron produces optoelectronic components such as infra-red, fibre optics, smart displays and light-emitting diode (LED) products. These products are used in the automotive, consumer electronics, industrial electronics and military sectors.

Inari rose 2.5 sen to close at 40 sen yesterday with 1.21 million shares traded.


This article appeared in The Edge Financial Daily, January 10, 2012.




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UEM Land targets RM3b sales this year

UEM Land Holding Bhd, which plans to launch RM5.5 billion worth of properties, aims to record sales of RM3 billion this year.

Managing Director/Chief Executive Officer Datuk Wan Abdullah Wan Ibrahim said the properties were located in Johor, Kuala Lumpur Central Business District, Mont Kiara and Bangi.

UEM Land achieved sales of RM2 billion last year, he told reporters here today after the company inked a joint venture agreement with Medini Securities Services Sdn Bhd to enhance security features in Nusajaya.

Since the mid-90s, 11,000 units of residential properties were sold in Nusajaya by UEM Land and other developers.

"The company alone sold 3,500 units since 2006.

"We expect the demand structure to continue this year," Wan Abdullah said, adding that the take up rate stood at 85 per cent, currently.

On the joint-venture, he said the company has collaborated to form a full-fledged security service company with Medini Security to provide enhanced security for Nusajaya.

Eight million ringgit has been budgeted this year to implement this initiative as part of the Nusajaya Security Blueprint, he added.

"We are looking into areas of improvement such as the expansion of our CCTV coverage in the vicinity to further add value to the current security features," he said.

By 2015, the joint venture company is expected to have an estimated 160 auxiliary police officers who will be deployed in critical areas.

UEM Land, is the master developer of Nusajaya, the key driver of Iskandar Malaysia, Johor. -- Bernama



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Top Glove eyes RM5b revenue in 5 years

Top Glove Corporation Bhd aims to increase its revenue to RM5 billion in the next five years in sync with its plan to boost efficiency, its chairman Tan Sri Lim Wee Chai said today.

The world's largest rubber gloves manufacturer posted RM2.05 billion revenue for the financial year ended Aug 31, 2011.

“There’s always a chance to double revenue or profit. We want to have RM4 billion or even RM5 billion in the next five years,” he said.

Lim said the target was achievable in tandem with the company’s plan to invest heavily in technology and automation.

“It’s important for the company to invest in technology and automation in order to take it to the next level. We will invest more in human capital, technology, automation and research and development.

"This will include recruiting, retraining and retaining of staff,” he told a briefing for fund managers and the media.

Top Glove has allocated RM100 million for its capital expenditure (CAPEX) for this year. Last year, between RM100 million and RM120 million was spent for CAPEX.

Lim said the company expects to achieve 30 per cent earnings growth by December this year with the weaker latex price and stronger US dollar.

“This will be achieved if we are able to sell 45 billion pieces of gloves. Today, we are selling 40 billion pieces of gloves. We are getting closer to the five billion pieces.

“We are in a much better position this year. Last year was competitive with the headwinds and high latex price,” he said.

Managing Director Lee Kim Meow said Top Glove planned to buy 10,000 hectares of plantation land in Cambodia.

He said the company was looking at several pieces of plantation land in the north-east and south-east of Cambodia, bordering Vietnam.

Lee said Top Glove would go into this venture on its own as it had some experience in the rubber business.

“This plan is expected to materialise this year. The timing is right due to the weaker latex price. It’s good to be in a country where there's labour,” he said.

The company has estimated RM160 million for development cost, which includes land purchase, for seven years.

With the purchase, Top Glove will be involved in downstream, mid-stream and upstream business.

Lee said the company would continue acquiring plantation land in Cambodia, Indonesia, Sabah and Sarawak.

Lee said the company would look for land at good prices in these four places. “We are in the midst of applying through the governments and agencies. We hope to firm up on these in the next three to six months,” he added. -- Bernama



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Poh Kong bullish on its 2012 performance

Poh Kong Holdings Bhd (PKHB), Malaysia's largest jewellery chain store, hopes to sustain its sterling performance this year with the opening of between three and five outlets, supported by the strong demand for gold bullion and jewellery.

Executive Chairman and Group Managing Director Datuk Eddie Choon Yee Seiong said the board of directors remained positive of the group's performance and hoped to achieve better results this year.

"Moving forward, the demand for gold globally is still on the uptrend as such we were still expecting double-digit growth for gold bullion and gold bars, as a form of investment.

"So, there's still potential for us to perform better (this year)," he told reporters after the company's annual general meeting today.

He said although gold price was currently trending downwards, the outbreak of a war in Iran would actually see gold prices surging as much as 30 per cent.

"The gold price will be pretty choppy this year but if the Iran war starts, we will see gold prices surging ahead.

"War will give an advantage to this precious metal industry," he added.

Choon said demand for gold remained resilient over the long-term due to its intrinsic value, the Asian culture of giving gold as customary gifts and as a hedge against inflation and global currency risks.

"Demand for gold still remains resilient. In fact, when the price goes up, many investors go for gold bar and bullion as a form of investment," he added.

On the company's restructuring programme, Choon said:"The internal restructuring is for us to wind up some of the non-key subsidiaries and to consolidate our business to specific functions.

"Once the internal restructuring is completed, we will have PKHB as the sole propriety to manage and control the 100 retail outlets that we have today," he added.

Choon said the restructuring programme would also help the company improve its operations and efficiency and bring down the cost of maintaining subsidiaries.

"On top of the restructuring, we will also consolidate all our bank facilities. The internal restructuring will take between three and five years to complete," he said.

Updating on outlet expansion, Choon said PKHB would open its 101 outlet at Station 18, Ipoh, in March with an investment of more than RM5 million.

"We will also terminate our franchise agreement in Sabah. So far, we don't have any exposure in Sabah but we were looking to the near future to expand our business there," he said. -- Bernama



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Poh Kong to benefit from upward trend in gold price

KUALA LUMPUR (Jan 10): The high gold price on the global futures market will boost the gross profit margin of top Malaysian jeweler, POH KONG HOLDINGS BHD [].

The increase in gold futures prices would eventually be passed down to consumers, according to Poh Kong's head of corporate affairs, administration and human resources. Margaret Hon

Speaking to reporters after its AGM on Tuesday, she expected gold price to see volatile trade as the market had corrected from the high of nearly US$2,000 per oz last year while a possible war between the West and Iran would boost demand for gold.

"The gold price will look pretty choppy for this 2012, but if the Iran war is on, we would see the gold price to rise,” she said. She added at present, gold price was on a downward trend but she expected prices to pick up.

Poh Kong managing director and executive chairman Datuk Eddie Choon Yee Seiong said gold price could increase by as much as 30% this year compared to the average price seen last year.

In 2011, the average price for gold was at US$1,572.86 per oz, with the year's high and low was at US$1,900.23 per oz on Sept 5 and US$1,313.93 per oz on Jan 27.



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KL shares mixed at midafternoon

Share prices on Bursa Malaysia continued their mixed trend during mid-afternoon trading today, dealers said.

They added despite the anticipated short-term volatility of the market, particularly from external headlines, expectations of acceleration in Economic Transformation Programme projects and a positive Chinese New Year performance will further augment an upward trajectory.

At 3pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.88 of a point to 1,520.85.

The Finance Index inched up 7.51 points to 13,451.21,the Plantation Index advanced 4.510 points to 8,474.37 and the Industrial Index added 4.950 points to 2,779.64.

The FBM Emas Index shed 3.479 points to 10,470.65 but the FBM 70 Index was 2.549 points higher at 11,660.59 and the FBM Ace added 19.940 points to 4,209.96.

Decliners led advancers 363 to 288 while 352 counters were unchanged, 482 untraded and 17 others suspended.

Volume stood at 1.136 billion shares valued at RM975.614 million.

Of the active stocks, Takaso Resources rose 1.5 sen to 25.5 sen, JCY-CD improved four sen to 59.5 sen and JCY International firmed by five sen to RM1.16.

Among heavyweights, Maybank declined one sen to RM8.23, Sime Darby rose two sen to RM9.09 and CIMB Group added three sen to RM7.32. -- Bernama



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Danajamin guarantees WCT-MAHB Segi Astana’s RM470m debt notes

KUALA LUMPUR (Jan 10): Danajamin Nasional Bhd is guaranteeing Segi Astana Sdn Bhd’s RM470 million 14-year medium term notes (MTN) programme to part finance an integrated complex at the Kuala Lumpur International Airport 2 (KLIA2).

Danajamin said on Tuesday the first tranche of the MTN programme totaling RM150 million, with maturity ranging from 11 years to 14 years, was issued today. The issuance, rated AAA(fg), was fully subscribed.

Segi Astana is a special purpose vehicle jointly owned by WCT BHD []’s unit WCT Land Sdn Bhd and Malaysia Airports Holdings Bhd.

AmInvestment Bank Bhd was the principal adviser, lead arranger and lead manager for the MTN Programme.

“Including this issuance, to-date Danajamin has provided guarantees to 16 companies for bond programmes totaling RM4.4 billion. The companies are from various sectors including PLANTATION [], utilities, education, retail and manufacturing,” it said.



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KL shares mixed at mid-day

KUALA LUMPUR: Share prices on Bursa Malaysia ended the morning session on mixed note today.

At 12.30pm, the FBM KLCI declined 1.58 points to 1,520.15.

Dealers said players were waiting for the release of the index of industrial production for November and the December monthly plantation statistics today.

The Plantation Index gained 14.180 points to 8,484 and the Industrial Index gained 5.070 points to 2,779.76.

The Finance Index, however, shed 1.730 points to 13,441.97.

The FBM 70 Index firmed 8.301 points to 11,650.14 and the FBM Ace perked 18.510 points to 4,208.52.

The FBM Emas Index, however, depreciated 11.210 points to 10,462.92.

Turnover stood at 955.356 million shares worth RM788.273 million.

Losers led gainers by 352 to 274 while 329 counters were unchanged, 530 untraded and 17 others suspended.

Of the active stocks, Takaso Resources rose 1.5 sen to 25.5 sen, JCY-CD improved four sen to 59.5 sen and MBSB-CA was up four sen to 20.5 sen.

Among heavyweights, Maybank declined one sen to RM8.23, Sime Darby rose one sen to RM9.08 and CIMB Group added two sen to RM7.310. - BERNAMA



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PA Resources to cancel 40c from each share, plans rights issue

KUALA LUMPUR (Jan 10): PA Resources Bhd has proposed a corporate exercise which includes cancellation of 40 sen from each 50 sen share while it will issue up to 894.62 million rights shares to raise between RM15.75 million and RM89.46 million.

It said on Tuesday its cancellation of 40 sen from each share would reduce the share capital to a maximum of RM25.56 million comprising of 255.60 million shares.

“The total credit of up to RM102.24 million arising from the proposed share capital reduction will be utilised to offset the accumulated losses of PA Resources at the company level,” it said. It has accumulated losses of RM51.61 million as at March 31, 2011.

PA Resources also proposed a renounceable rights issue of up to 894.62 million rights shares at an indicative issue price of 10 sen per rights share on the basis of seven rights shares for every two shares held on an entitlement date to be determined later after the proposed share capital reduction.

“The proposed share capital reduction would serve to rationalise the balance sheet of PA Resources by cancellation of the share capital that is not represented by available assets,” it said.



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KLCI stays in the red, lags regional markets

KUALA LUMPUR (Jan 10): The FBM KLCI lagged behind the regional markets and remained in negative territory at the mid-day break on Tuesday, weighed down by select blue chips, with GENTING BHD [] among the major decliners

Asian shares and the euro rose on Tuesday, but concerns over funding of euro zone sovereigns ahead of key auctions this week and of the debt crisis spilling into the wider financial system kept investors cautious about taking riskier positions, according to Reuters.

The FBM KLCI was down 1.58 points to 1,520.15 at the mid-day break. The broader market displayed signs of caution, with losers beating gainers by 352 to 274, while 329 counters traded unchanged. Volume was 955.36 million shares valued at RM788.27 million.

The ringgit strengthened 0.43% to 3.1389 versus the US dollar; crude palm oil futures for the third month delivery added RM11 to RM3,221, crude oil rose 37 cents to US$101.68 while gold gained US$4.25 an ounce to US$1,615.82.

At the regional markets, Japan’s Nikkei 225 was up 0.41% to 8,424.49, Hong Kong’s Hang Seng Index added 0.55% to 18,969.75, the Shanghai Composite Index rose 1.53% to 2,259.88, Taiwan’s Taiex added 1.05% to 7,167.20, South Korea’s Kospi up 1.61% to 1,855.97 and Singapore’s Straits Times Index gained 0.93% to 2,716.18.

On Bursa Malaysia, Genting fell 20 sen to RM10.94, Lafarge Malayan Cement down 19 sen to RM6.71, Ta Ann and BHIC lost 12 sen each to RM5.48 and RM3.67, Nestle, Genting PLANTATION []s, GAB and Tradewinds down 10 sen each to RM55.90, RM8.80, RM12.50 and RM9.68 respectively, KLCCP eight sen to RM3.30 while Goldis fell seven sen to RM1.78.

Takaso was the most actively traded counter this morning with 58.4 million shares done. The stock gained 1.5 sen to 25.5 sen.

Other actives included JCY, KHSB, Versatile, Maybulk and Coastal warrants.

Gainers included Dutch Lady, Cepco, United Plantations, Petronas Gas, KLK, Harvest Court, F&N and Maybulk.



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A turnaround for Shin Yang: ECM Libra

KUALA LUMPUR: ECM Libra Investment Research has recommended Shin Yang Shipping Corp (SYS Corp) as a 'trading buy', saying that at its current price, the shipping operator offers a dividend yield of 3.6 per cent and it could potentially double to its targeted price of RM1.

SYS Corp, the largest shipping operator in Malaysia by number of vessels, was hovering at 47 sen, lower by 1.5 sen at 11am today on Bursa Malaysia.

The research house based its optimism on the recent strong rebound on volume by competitor Malaysian Bulk Carriers, despite risks of shipping oversupply and lower global trade demand.

"If so, SYS Corp's share price could also be starting to turn around," ECM Libra said.

Based on estimates, 30 per cent of SYS Corp's shipping business caters to SY Holding Group (Shin Yang Group), a Sarawak-based conglomerate owned by the Ling family, which also owns 29 per cent of listed Sarawak Oil Palms Bhd, a well-managed and profitable plantation company.'

Shin Yang and the Ling family own 67 per cent of SYS Corp.

Another advantage is SYS Corp’s cost advantage against other shipping companies as it builds its own ships, it said. - BERNAMA



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Flash: UEM Land targets RM3 billion in property sales this year, says CEO

KUALA LUMPUR (Jan 10): UEM LAND HOLDINGS BHD [] targets RM3 billion in property sales this year, said its chief executive officer Datuk Wan Abdullah Wan Ibrahim.

"We will be launching RM5.5 billion worth of PROPERTIES [] this year across Malaysia with a target of RM3 billion in sales," said Abdullah at a signing between UEM Land and Medini Security Services Sdn Bhd on Tuesday.

He said the group planned to launch these properties in Kajang and the KL central business district.

Abdullah added that the group had managed to fulfill its 2011 target of RM2 billion sales.



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Danajamin guarantees Segi Astana's bond

KUALA LUMPUR: Danajamin Nasional Bhd today announced that it will guarantee Segi Astana Sdn Bhd's RM470 million 14-year Medium Term Notes (MTN) Programme.

In a statement today, Dananjamin said the first tranche of the MTN programme, totalling RM150 million, with maturity ranging between 11 years and 14 years, were issued today.

"The issuance, rated AAA, was fully subscribed," the country's first Financial Guarantee Insurer said.

Segi Astana is a special purpose vehicle (SPV) jointly owned by WCT Land Sdn Bhd, a wholly-owned subsidiary of WCT Bhd and Malaysia Airports Holdings Bhd (MAHB).

The funds raised from the MTN Programme will be used to primarily part finance the development of an integrated complex at the Kuala Lumpur International Airport 2 (KLIA2).

Including this issuance, to-date, Danajamin has provided guarantees to 16 companies for bond programmes totalling RM4.4 billion.

The companies are from various sectors including plantation, utilities, education, retail and manufacturing.

Danajamin was established by the Government to be a catalyst to stimulate and further develop the domestic bond and sukuk market.

It's objective is to provide financial guarantee and credit enhancement to bond/sukuk issuances to help viable companies raise long-term fixed rate financing from the bond/sukuk market. -- BERNAMA



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Top Glove targets 30% of global market share by year-end

KUALA LUMPUR (Jan 10): Glove manufacturer Top Glove Corp Bhd is targeting to achieve 30% of total global market share by end-2012, said its chairman Tan Sri Lim Wee Chai.

He said this was achievable if the latex price falls to RM6 and forex remains stable.

"We currently produce 40 billion pair of gloves annually out of the 150 billion globally. With the expansion of our new capacity, we hope to increase our market share to 45 billion or 30% of the global market share," he said on Tuesday.

Meanwhile, Top Glove's managing director KM Lee said latex prices would come down further and the migration of capacity from latex to nitrile gloves will slow down.

Latex price had fell from a high of RM10.99 per kg on April 11, 2011 to RM6.37 on Jan 6, 2012.

"Last year, we were at a disadvantage due to our product mix as natural rubber were expensive. However, we would be at a better position this year as natural rubber prices are falling and becoming cheaper compared to nitrile," said Lim.

Compared to its peers, Top Glove did not migrate its product mix heavily to nitrile last year.

On its upstream venture, Lim said it was still looking at lands in Malaysia, Cambodia and Indonesia for rubber PLANTATION [].

"We have visited about 20 lands but we want to be careful with our investment. We have the intention to plant rubber trees with a long-term view of 20 to 30 years," said Lim.

He added that it costs about RM160 million in plantation and development over 7 years for 10,000 hectare of land.

"We are looking into Cambodia as the land and labour cost are cheaper compared to Malaysia. We are in the process of applying to government and itt would take about three to six months to firm up anything," said Lim.

Meanwhile, Lee added that this year could be a good time for Top Glove to buy rubber plantation land as natural rubber prices are expected to trend down, which would result in cheaper plantation land.



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Harvest Court shares and warrants continue rally

KUALA LUMPUR (Jan 10): HARVEST COURT INDUSTRIES BHD [] shares and warrants continued to rally on Tuesday, extending its gains from Jan 9 after Bursa Malaysia Securities Bhd removed the trading curbs on the company’s securities nearly eight weeks after they were imposed on Nov 16.

At 11am, Harvest gained 14 sen to RM1.55 with 11.7 million shares done, while its warrants rose 14 sen to RM1.28.

The stock exchange regulator said last Friday with the removal of the designated securities status on Harvest Court securities, they would be traded on a ready basis.

The delivery and settlement of contracts would be effected on a T+3 basis as provided under the rules of Bursa Malaysia.

However, the exchange said it would continue to monitor the trading activities of the shares and warrants and “where trading concerns are noted, the exchange may take appropriate regulatory actions”.

The exchange’s move last November to declare the securities as designated counters was the sternest warning to speculators who had chased up the stock. The trading curbs saw the securities falling sharply.



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KLCI dips at mid-morning, sentiment continues to be jittery

KUALA LUMPUR (Jan 10): The FBM KLCI fell at mid-morning on Tuesday amidst lackluster trade, weighed by losses at select blue chips including Genting-related stocks.

The FBM KLCI shed 0.61 of a point to 1,521.12 at mid-morning.

Losers edged gainers by 195 to 189, while 260 counters traded unchanged. Volume was 412.49 million shares valued at RM268.33 million.

Asian shares and the euro rose on Tuesday, but concerns over funding of euro zone sovereigns ahead of key auctions this week and of the debt crisis spilling over into the wider financial system kept investors cautious about taking riskier positions, according to Reuters.

With European woes overshadowing recent positive economic data from the United States, market players will be seeking from Chinese trade data due later in the session signs of how the euro zone debt crisis is affecting Asian growth, it said.

At the regional markets, Japan’s Nikkei 225 rose 0.41% to 8,424.47, South Korea’s Kospi gained 1.67% to 1,856.98, Taiwan’s Taiex was up 1.08% to 7,169.96, Singapore’s Straits Times Index gained 0.44% to 2,703.07, the Shanghai Composite Index edged up 0.28% to 2,232.11 and Hong Kong’s Hang Seng Index added 0.09% to 18,882.63.

MIDF Research acting head of equity Syed Muhammed Kifni said the market was expected to remain jittery going forward with the possibility of the KLCI re-testing its 2011 lows.

Nonetheless, he said that the Euro debt issue would begin to show credible signs of healing later in the 1H2012, adding that when that transpires, the underperforming indices can be expected to show swifter resurgence on the way up.

In contrast, the KLCI is anticipated to experience relative underperformance during the recovery phase, he said.

“With that in mind, we reiterate our KLCI year-end 2012 base case target of 1,530 points.

“As our base case KLCI year-end target for this year virtually matched its 2011 close, in our view, 2012 may quintessentially be a consolidation year.

Among the losers at mid-morning, Genting lost 12 sen to RM11.02, Genting PLANTATION []s down 10 sen to RM8.80, BHIC nine sen to RM3.70, KPJ eight sen to RM4.18, BLD Plantations seven sen to RM7.956, JCY six sen to RM1.05. Paragon 5.5 sen to 24.5 sen, while Tradewinds and Kian Joo lost five sen each to RM9.73 and RM2.07.

Takaso was the most actively traded counter with 41.99 million shares done. The stock gained 2.5 sen to 26.5 sen.

Other actives included KHSB, JCY, Harvest Court, Focus and Ingenuity Solutions.

Gainers included United Plantations, Petronas Dagangan, Petronas Gas, Harvest Court, BAT, CBIP and Mudajaya.



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Senate vote a win for Genting in Florida

Florida would become the most populous state with full casino gambling outside American Indian control under a proposal that has cleared its first legislative hurdle.

The decision was a win for Malaysia’s Genting Bhd, which controls Asia’s second-biggest gaming company by market value. Yesterday’s vote in the Senate Regulated Industries Committee would allow the fourth-largest state by population to have as many as three Las Vegas-style casinos, with dealers and table games in addition to slot machines.

Genting Malaysia Bhd, a unit of Kuala Lumpur-based Genting, has pitched lawmakers on a US$3.8 billion casino-and-hotel complex on Miami’s Biscayne Bay as an antidote to the state’s 10 percent unemployment rate in November, ahead of the national rate of 8.7 percent. It also has plans to build the biggest convention center in the U.S., in New York City where it last year opened a casino at the Aqueduct Racetrack in Queens.

“The potential legalization of commercial gaming in Miami and table gaming in New York could provide a boost to earnings growth,” UOB-Kay Kian Holdings Ltd analysts Vincent Khoo and Moey Su En wrote in a report today.

Genting Bhd fell 0.7 percent to RM11.06 at 9:45 a.m. local time in Kuala Lumpur trading today, while Genting Malaysia dropped 0.5 cent. The benchmark FTSE Bursa Malaysia KLCI Index was little changed.

The Florida measure is opposed by the Walt Disney Co, the world’s biggest theme-park company, whose flagship Walt Disney World is near Orlando. Hoteliers, restaurant owners and betting parlors who say they’ll lose business to destination casinos also are lobbying against the bill.

Governor Rick Scott, a Republican who took office last year, hasn’t signaled whether he supports the plan. His insistence that any county that wants to land one of the resorts first get voter approval was included in a rewrite of the bill last week.

“This is the beginning of the discussion,” Republican Senator Ellyn Bogdanoff, the bill sponsor, said during the hearing at the state Capitol in Tallahassee. -- Bloomberg



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Gamuda gains on rail bid report

Gamuda Bhd, a builder and property developer, rose to a one-week high in Kuala Lumpur trading after the Star newspaper reported that the company joined a consortium bidding to construct the Gemas-Johor Bahru electrified railway.

The stock gained 2.1 percent to RM3.48 at 9:20 a.m. local time, set for its highest close since Jan. 3. -- Bloomberg



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SP Setia's RM500m bond rating reaffirmed

Malaysia’s RAM Ratings has reaffirmed the AA3 rating of SP Setia Bhd’s RM500 million nominal value of two percent redeemable serial bonds with 168 million detachable warrants (2007/2012).

The long-term rating has a stable outlook, says the rating agency.

The outstanding amount of the bonds stood at RM250 million presently.

The rating reflects S P Setia’s strong business profile as a prominent property developer in Malaysia. S P Setia boasts strong diversification in terms of product range and geographical presence.

The group has a proven ability to offer a wide array of properties with different price tags to cater to different segments of the market, with most of its offerings achieving full take-ups within 1-2 years.

“SP Setia’s strong branding and product innovation underscore its robust revenue generation capability. We believe these factors, guided by the group’s capable management team will continue to fuel its operating performance,” says Shahina Azura Halip, RAM Ratings’ Head of Real Estate and Construction Ratings.

The group’s record level of unbilled sales of RM2.83 billion as at end-October 2011 should ensure some earnings stability over the next few years.



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OSK maintains Buy on LPI Capital, FV RM15.40

KUALA LUMPUR (Jan 10): OSK Research said LPI Capital’s (LPI) FY11 earnings were in line with consensus and its full-year forecasts.

The research house said on Tuesday that LPI’s net profit expanded by 12% on-year, largely owing to the group’s impressive underwriting numbers, fortified by its strong gross premium growth.

“However, the group’s claims ratio ticked up due to higher motor claims resulting from losses incurred by the Malaysian Motor Insurance Pool (MMIP).

“Maintain BUY, with a higher FV RM15.40, pegged to a three-year PE band of 19.4 times (previously 17.2 times),” OSK Research said.



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Kump Hartanah climbs on privatization news

Kumpulan Hartanah Selangor Bhd rose to a two-year high in Kuala Lumpur trading after its parent said it may take the Malaysian property developer private.

The stock climbed 1 percent to 50.5 sen at 9:05 a.m. local time, set for its highest close since Jan. 19, 2010. -- Bloomberg



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Proton extends gains, DRB-Hicom up on confirming bid for stake

KUALA LUMPUR (Jan 10): Shares of PROTON HOLDINGS BHD [] and DRB-HICOM BHD [] advanced on Tuesday after the latter confirmed that it had submitted a bid to acquire Khazanah Nasional Bhd’s 42.7% stake in Proton.

At 9.18am, Proton was up six sen to RM5.31 with 494,200 shares done, while DRB-Hicom added three sen to RM2.11 with 209,000 shares traded.

DRB-Hicom on Monday said it had always viewed Proton as an important automotive industry player while some analysts said DRB-Hicom was the best bet for Proton.



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RHB Research maintains underperform on LPI at RM11.60

KUALA LUMPUR (Jan 10): RHB Research Institute is maintaining its Underperform call on LPI Capital with an unchanged fair value of RM11.60.

It said on Tuesday that LPI’s FY11 net profit of RM154.5 million (up 12% on-year) was in line with its and consensus expectations.

RHB Research said the FY11 earnings growth was driven by the 20.1% on-year growth in gross premiums, slightly higher than its assumption of an 18% growth.

However, FY11 claims ratio of 48.9% was higher versus FY10 of 47.7%, although slightly lower than its own projections of 49.5%.

“Our FY12-13 earnings forecasts trimmed slightly by 0.1%-1.7% after: 1) imputing FY11 gross premium numbers, thus resulting in lower FY12 gross premiums; and 2) slight adjustments in our key expenses assumptions. We also introduce our FY14 earnings forecast,” it said.



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DRB-Hicom up on offer for Proton stake

DRB-Hicom Bhd, a Malaysian auto-assembler, rose the most in almost one month in Kuala Lumpur trading after confirming it made an offer to buy a controlling stake in national car manufacturer Proton Holdings Bhd.

DRB rose 1.4 percent to RM2.11 at 9:02 a.m. local time, set for its highest close since Dec. 13.

Proton gained 1.9 percent to RM5.35, set for its highest close since October 2007. -- Bloomberg



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Bina Puri gains on share placement pricing

Bina Puri Holdings Bhd, a Malaysian builder, rose in Kuala Lumpur trading after pricing placement shares at RM1 each, a premium to the company’s last closing price of 87.5 sen yesterday.

The stock gained 1.1 percent to 88.5 sen at 9:08 a.m. local time, set for its highest close since Dec. 29. -- Bloomberg



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HDBSVR: KLCI may stage pullback

KUALA LUMPUR (Jan 10): Hwang DBS Vickers Research (HDBSVR) said the FBM KLCI, after staging a run-up in the last few minutes of trading on Monday, could pull back when trading resumes on Tuesday.

“Still, we expect the benchmark index to show a fairly resilient performance, possible treading above the resistance-turned-support level of 1,515 ahead,” it said.

HDBSVR said on Wall Street, major U.S. equity indices were marginally up Monday night – by between 0.1% and 0.3% at the closing bell – as investors have hopes that the U.S. corporate would show better earnings in the ongoing reporting season and Europe would make progress in resolving its debt mess.

As for Malaysia, it said in terms of local news flows, the index of industrial production (IPI) for Nov and the Dec monthly PLANTATION []s statistics are due for release later Tuesday.

HDBSVR said on the corporate front, we may see share price actions in: (a) Gamuda, following a local media report saying that it has been roped in to be part of a consortium which is the frontrunner to bag the RM8 billion Gemas-Johor Bahru electrified double-tracking project; and (b) Jaks Resources, which has entered into a shareholders’ agreement to formalise a joint venture vehicle to undertake a power plant project in Vietnam.



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CIMB Research has technical buy on Zelan at 39 sen

KUALA LUMPUR (Jan 10): CIMB Equities Research has a technical buy on Zelan Corp at 39 sen at which it is trading at a price-to-book value of 1.5 times.

It said on Tuesday Zelan swung above its wedge resistance and 200-day SMA on Monday, suggesting that the consolidation from October 2011 is likely over.

“The next upleg is likely to push prices higher towards 41 sen to 42.5 sen levels.

“Technical landscape is improving. MACD signal line has staged a golden cross while RSI is also rising. The bulls seem to have the upper hand here as the candles are trading above all its key moving averages,” it said.

CIMB Research said traders may start to take some position here. However, always put a stop between 37.5 sen and 36 sen depending on one’s risk appetite.



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CIMB Research has technical sell on Selangor Properties at RM3.22

KUALA LUMPUR (Jan 10): CIMB Equities Research has a technical sell on Selangor PROPERTIES [] at RM3.22 at which it is trading at a price-to-book value of 0.6 times.

It said on Tuesday Selangor Properties violated its triangle support the previous day and it viewed this as a prelude to more downside ahead.

“Selling pressure would likely accelerate over the next few days if the candles fail to climb back above the support-turned-resistance trend line soon,” it said.

CIMB Research said the MACD signal line has staged a dead cross while RSI has also hooked downward.

“Our strategy here is to unload on strength, preferably near the RM3.32-RM3.40 resistances. Only a rise above RM3.50 would negate this bearish view,” it said.



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CIMB Research has technical buy on Land & General at 37.5 sen

KUALA LUMPUR (Jan 10): CIMB Equities Research has a technical buy on Land & General at 37.5 sen at which it is trading at a price-to-book value of 0.9 times.

It said on Tuesday Land & General broke out of its wedge pattern on Monday.

“It appears that prices could still make one more push towards its recent high of 42 sen again.

“However, in the immediate term, we see some hindrance near the 39.5 sen level. The 200-day SMA (at 38.5 sen) is also a magnet for prices,” it said.

CIMB Research said the technical landscape was improving. MACD signal line has returned to the black while RSI is above the 50pts mark.

The research house said aggressive traders may start to nibble now. However, always put a stop at below 35 sen.

“A fall below its 30-day SMA (at 34.5 sen) would mean that the stock is still trapped in a prolonged consolidation mode,” it said.



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CIMB Research maintains trading buy on Mudajaya, lowers TP to RM3.43

KUALA LUMPUR (Jan 10): CIMB Equities Research said Mudajaya Corp Bhd’s 49% share price plunge last year due to concerns over the delay of its Indian independent power project and surprise changes at the helm present a good opportunity to ride on the rollout of major projects under the Economic Transformation Programme and 10th Malaysia Plan in 2012.

“Upside could be fairly limited because of macro fears," it said on Tuesday.

"We make no changes to our forecasts or BUY call but raise our RNAV discount from 30% to 40% as we downgrade the CONSTRUCTION [] sector from Overweight to Trading Buy."

CIMB Research said its target price was lowered from RM4.81 to RM3.43 while the main potential re-rating catalyst was contract wins.



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Stocks to watch: LPI, Proton, DRB-Hicom, KHSB, Xidelang, Can-One

KUALA LUMPUR (Jan 10): Stocks on Bursa Malaysia could see some positive bias on Tuesday, underpinned by the investors’ firmer sentiment across the broader market, with focus also on stocks with fresh corporate news.

Then again, the sentiment would also hinge on the outcome of the European meeting on Monday to tackle a debt crisis.

World stocks and the euro gained on Monday after last week's sell-offs, but worries over Europe's banks persisted and fears over demand for the region's debt at auctions due this week left riskier assets vulnerable to further losses, Reuters reported.

German and French leaders were meeting to discuss ways to boost growth in euro zone states struggling with a debt crisis and rising unemployment, and to finalize a deal to increase fiscal coordination within the currency union.

At Bursa Malaysia, the market was weaker in early trade on Monday before putting up a stronger performance in the afternoon, underpinned by external news and on-going corporate developments.

Among the stocks which could see trading interest are LPI CAPITAL BHD [], PROTON HOLDINGS BHD [], DRB-HICOM BHD [], KUMPULAN HARTANAH SELANGOR BHD [] (KHSB), Xidelang Holdings Ltd and CAN-ONE BHD [].

LPI Capital Bhd reported a 6.5% increase in net profit to RM39.33 million for the fourth quarter ended Dec 31, 2011 from RM36.94 million a year ago, boosted by the general insurance business.

LPI announced a second interim single tier dividend of 50 sen per share versus 45 sen a year ago.

DRB-Hicom Bhd has confirmed it has submitted a bid to acquire Khazanah Nasional Bhd’s 42.7% stake in Proton Holdings Bhd. DRB-Hicom said it had always viewed Proton as an important automotive industry player while some analysts said DRB-Hicom was the best bet for Proton.

Meanwhile, KHSB has confirmed its major shareholder KUMPULAN PERANGSANG SELANGOR [] Bhd (KPS) has been given the mandate to enhance or revive its investments.

KHSB said that KPS was mandated by the board to explore and evaluate the available options, which may include a reorganisation and restructuring of its investments and mergers, acquisitions or divestments of its non-performing investments.

As for Xidelang, the company said its major shareholder HongPeng International Holdings Ltd does not have any plans to sell its stake.

Xidelang said it had made due and diligent enquiry with HongPeng which replied while it had been receiving enquiries from external parties including private equity firms, “but HongPeng has no intention of selling its stake at this juncture”.

Xidelang also said the discussions between Navis Capital and HongPeng held during October and November last year were solely exploratory in nature and there was no offer being made or a price range indicated by Navis Capital.

Can-One, whose share price has run up over the past three days, could see some pullback as investors take profit unless the company announces its plans to gain more control of KIAN JOO CAN FACTORY BHD []. However, there could be some fightback by some Kian Joo shareholders.

Can-One had won the court tussle to buy the 146.13 million Kian Joo Can Factory shares held by Kian Joo Holdings Sdn Bhd after a Federal Court ruled in its favour last Thursday.

Can-One announced to Bursa Malaysia last Friday that the apex court had allowed its appeal to proceed with the completion of the acquisition of the 32.9% stake for RM241.11 million.



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