Friday 17 February 2012

Shell Refining posts losses of RM99m in 4Q, RM125m in FY11

KUALA LUMPUR (Feb 17): Shell Refining Company (Federation of Malaysia) Bhd posted losses of RM99.49 million in the fourth quarter ended Dec 31, 2011 and RM125.74 million losses for the financial year 2011, impacted by weak refining margins.

For the 4QFY11, the net losses of RM99.49 million were a stark contrast to the net profit of RM114.66 million a year ago.

“The board explained that the loss was mainly due to weak refining margins and lower production resulting from the statutory turnaround. The weak refining margins were caused by a spike in crude prices as a result of the Japan energy crisis and Middle-east geopolitical turbulent events,” it said on Friday.

Shell Refining said its 4QFY11 revenue was 32.8% higher at RM3.369 billion compared with RM2.537 billion.

However, its cost of sales was RM3.415 billion versus RM2.371 billion a year ago. Loss per share was 33.16 sen compared with earnings per share of 38.22 sen.

It proposed a final dividend of 20 sen per share despite the losses compared with the 30 sen dividend a year ago.

In 4QFY11, the refinery processed 8.6 million barrels of crude oil and sold 9.2 million barrels of product.

It added the CONSTRUCTION [] of a 6,000 tonnes per day diesel processing unit was on schedule and allow it to vary its feedstock options, increase diesel production and improve refining margins.

On the outlook, it said refining margins were expected to be continuously under pressure in 1QFY12. It added its key focus areas were to optimise financial and operational performance, which included ensuring processing flexibility, high plant reliability and commissioning the diesel processing unit upon its anticipated completion in 4QFY12.

For FY11, its net loss was RM125.74 million compared with net profit of RM106.38 million a year ago.

It recorded revenue of RM11.212 billion, an increase of 8% from RM10.376 billion a year ago. However, its cost of sales in FY11 was RM11.310 billion versus RM10.222 billion in FY10.



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AMMB’s Indonesian subsidiary gets investment manager licence

KUALA LUMPUR (Feb 17): AMMB HOLDINGS BHD []’s subsidiary PT AMCI Manajemen Investasi Indonesia (AmInvestasi) has received an investment manager licence to operate the Indonesia.

AMMB said on Friday the Badan Pengawas Pasar Modal dan Lembaga Keuangan (Indonesia Capital Market and Financial Institutions Supervisory Agency) had issued the licence to AmInvestasi on Feb 14.

AmInvestasi is a 99.99% owned subsidiary of PT AmCapital Indonesia, which in turn is 99% owned by AMMB.

AmInvestasi would be able to undertake investment management activities which include portfolio fund management services and also issue and manage mutual fund products.

PT AmCapital Indonesia is involved in stockbroking and underwriting business in Indonesia.



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Listing of Gas Malaysia delayed again to 2Q

KUALA LUMPUR (Feb 17): The listing of Gas Malaysia Bhd on the Main Market of Bursa Malaysia Securities has been delayed again and the listing is now expected to be in the second quarter of 2012.

MMC Corp, which owns 41.8% of Gas Malaysia, said the latter was “still in the midst of complying with the conditions imposed by the Securities Commission” for the proposed listing as stated in the Oct 7, 2011 approval letter.

“Barring any unforeseen circumstances, the proposed listing which was earlier expected to be completed by the first quarter of 2012, is now envisaged to be completed by the second quarter of 2012,” it said.

The Edge Financial Daily reported in November 2011, that the listing, originally planned for the fourth quarter, of that year would likely be postponed to the first quarter of 2012.

According to a previous announcement by MMC, one of the SC’s conditions was Gas Malaysia should ensured that its petrol stations are not built on land that is not designated for the purpose and for the company to rectify any non-compliance within a year of SC’s approval.

Gas Malaysia announced on Oct 19 that it had received the approval from the Economic Planning Unit for its listing, changes in shareholding structure and a proposed issuance of special redeemable preference shares to Petronas.

The company’s IPO comprises 333.84 million ordinary shares of 50 sen each. MMC officials had said the IPO could be set at RM2.20 per share.



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KEuro to buy 15.8% of West Coast Expressway, up stake to 80%

KUALA LUMPUR (Feb 17): KUMPULAN EUROPLUS BHD [] has proposed to raise its stake in West Coast Expressway Sdn Bhd (WCESB) to 80% a move to strengthen its control of WCESB after it secured the RM7.07 billion west coast highway concession.

KEuro said on Friday it was buying a 15% stake or 4.59 million shares of WCESB from Prominent Xtreme Sdn Bhd for RM5.33 million.

KEuro said together with the current 18.649 million shares or 64.20%, the acquisition would see it holding 80% equity interest.

“Upon commencement of the CONSTRUCTION [] of the West Coast Expressway, WCESB is expected to contribute positively to the earnings as well as the shareholders’ value of the KEuro group,” it said.

To recap, on Jan 26, 2012, WCESB received an approval letter from the Public Private Partnership Unit of the Prime Minister’s Department to undertake the proposed privatisation of the construction of the West Coast Expressway.

This would be based on build-operate-transfer (BOT) with a concession period of 60 years, at an estimated project cost of RM7.07 billion.

WCESB’s existing directors are Tan Sri Chan Ah Chye @ Chan Chong Yoon, Datuk Abdul Hamid Mustapha, Datuk David Frederick Wilson, Loy Boon Chen and Datuk Neoh Soon Hiong.

The company has been loss making over the past five years. It posted net losses of RM21,594 in the financial year ended Jan 31, 2011.



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Market Commentary

The FBM KLCI index gained 6.66 points or 0.43% on Friday. The Finance Index increased 0.66% to 13863.47 points, the Properties Index up 0.08% to 1046.78 points and the Plantation Index rose 0.30% to 8821.29 points. The market traded within a range of 6.24 points between an intra-day high of 1559.92 and a low of 1553.68 during the session.

Actively traded stocks include PDZ, COMPUGT, GPA, DIALOG-WA, NICORP, TIGER, EXTOL, PERISAI, GOCEAN and IPOWER. Trading volume increased to 2265.97 mil shares worth RM1941.98 mil as compared to Thursday’s 2185.22 mil shares worth RM1972.18 mil.

Leading Movers were TENAGA (+11 sen to RM6.11), MAYBANK (+6 sen to RM8.56), GENTING (+12 sen to RM10.64), SIME (+5 sen to RM9.59) and PBBANK (+6 sen to RM13.70). Lagging Movers were DIGI (-2 sen to RM4.02), MAXIS (-2 sen to RM5.75), GENM (-1 sen to RM3.95), PPB (-4 sen to RM17.66) and MMHE (-3 sen to RM5.41). Market breadth was positive with 511 gainers as compared to 304 losers. -- JF Apex Securities Bhd



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Sarawak Cable ends MoU for transmission lines plan

KUALA LUMPUR (Feb 17): Sarawak Cable Bhd scrapped the plan to work with Sinohydro Corporation (M) Sdn Bhd and KEC International Ltd to develop transmission lines in Sarawak.

The company said on Friday the memorandum of understanding (MoU) had been terminated and the parties would not be submitting the proposal.

On Aug 17, 2011, the three parties had signed the MoU to prepare and submit proposals for the project.



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Market closes steadier, but down for the week

KUALA LUMPUR (Feb 17): Blue chips on Bursa Malaysia closed firmer on Friday, tracking the regional markets which posted gains of up to 1.6% as investors were somewhat upbeat that Greece had taken enough measures to ensure it would secure a second bailout.

The FBM KLCI closed up 6.66 points to 1,557.17, boosted by gains in Tenaga, Maybank and Genting. Turnover was 2.27 billion shares valued at RM1.94 billion. There were 511 gainers, 304 losers and 346 stocks unchanged.

All the key Asian markets posted gains. Japan’s Nikkei 225 rose 1.58% to 9,384.17, Hong Kong’s Hang Seng Index 1.01% to 21,491.62. Taiwan Taiex 0.32% to 7,894.36 and South Korea’s Kospi 1.30% to 2,023.47 while Singapore’s Straits Times Index edged up 0.79% to 3,000.59. The Shanghai Composite Index was a marginal 0.01% higher at 2,357.18 while the other China indices closed in the red.

Reuters reported optimism grew on Friday that Greece has finally done enough to secure a second bailout despite worsening relations with Germany, but doubts remained over lenders' demands for tighter supervision of how Athens will implement the deal.

Greek officials say they have done everything asked of them for euro zone finance ministers to sign off on the 130 billion euro (US$170 billion) rescue package on Monday -- a month before Athens needs the money to make 14.5 billion euros of debt repayments due on March 20 or go bankrupt.

At Bursa Malaysia, investors were happy to see the market closing higher after the pullback on Thursday. However, for the week, the KLCI lost 4.51 points down from 1,561.66 on Feb 10.

Analysts said the positive economic data from Bank Negara Malaysia on the economic growth in the fourth quarter of 2011 helped boost sentiment. The cautious outlook for 2012, as forecast by BNM, was expected.

Crude palm oil futures for third-month delivery rose RM54 to RM3,243 per tonne. The ringgit gained 0.0162 to 3.0430 to the US dollar.

Tenaga rose 11 sen to RM6.11, pushing the KLCI up 1.41 points. Maybank added six sen to RM8.56 and GENTING BHD [] 12 sen to RM10.64, nudging the index up by 1.06 points and 1.05 points.

HLFG rose 20 sen to RM11.74, Hong Leong Bank 12 sen to RM11.74, Public Bank six sen to RM13.70, AMMB four sen to RM6.14 and CIMB three sen to RM7.28.

Tasek was the top gainer, up 47 sen to RM8.47 after announcing its dividend payout. Petronas Dagangan rose 20 sen to RM18.02 and Petronas Gas 14 sen to RM16.50.

PDZ was the most active with 178.9 million shares done, adding two sen to 10.5 sen, GPA rose 1.5 sen tp 10.5 sen.

Perisai rose six sen to 98.5 sen. There were 50 million shares crossed in several off-market deals at an average price of 88 sen.

Among the decliners were DiGi, down eight sen to RM4.02, Maxis twos en tp RM5.75 and MMHE three sen to RM5.41.



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Perisai sees 5.87% stake crossed off-market

KUALA LUMPUR (Feb 17): Perisai Petroleum Bhd saw 50 million shares crossed in several off-market deals at an average price of 88 sen on Friday.

The 50 million shares represented a 5.87% stake, based on the company’s paid-up of 851.77 million shares.

As at 3.24pm, Perisai shares were up 5.5 sen to 98 sen.

In a recent report, CIMB Equities Research maintained its Outperform recommendation on Perisai with a target price of RM1.45.

The research house said Perisai was set to thrill investors with an anticipated RM10 million to RM12 million net profit for 4Q11, which implied a year-on-year growth of around 55% and a record core net profit of RM35 million for the full year.

“FY11’s 209% core EPS surge will be Perisai’s first earnings growth in four years. We continue to value Perisai at our CY13 target market P/E of 12.6 times. A potentially strong 4Q11 performance, fleet expansion and a prospective marginal field venture support our Outperform call. We have not factored in any contribution from marginal fields,” it said.



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UOB Kay Hian maintains Hold on Maxis, DCF-based TP RM5.25

KUALA LUMPUR (Feb 17): UOB Kay Hian Malaysia Research is maintaining a Hold call on Maxis Bhd with a discounted cashflow-based target price of RM5.25 versus the last done price of RM5.77.

It said on Friday the stock price was supported by a 7% net yield.

Maxis had on Thursday announced plans to issue Islamic medium-term notes with a nominal value of up to RM2.45 billion based on the sukuk musharakah principle for capital expenditure and working capital purposes.

The proposed unrated sukuk, which would have a tenure of up to 30 years, would also be used for general funding requirements as well as general corporate purposes of the company and its subsidiaries.

UOB Kay Hian Research said the coupon rate for the debt notes will be determined later as the debt will be issued via private placement, bought deal or book-building basis.

“As part of the disclosure requirement for this debt, Maxis announced that it had been approved by the Ministry of Finance in November 2011 for a total of RM320 million tax credit - RM233 million for prior years and RM97 million for nine-months 2011 – for its investments in last mile broadband,” it said.

The research house said the entire amount would be recognised in its 4Q11 results, representing 15% of its current forecast net profit, but will be deemed as a lumpy item.

“Besides, this has less than 1% (4.3 sen/share) impact on our valuation for Maxis,” it said.



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KL stocks higher at midday

Improved investor risk appetite pushed Bursa Malaysia to extend gains at midday today, led by Tasek Corporation, Batu Kawan and Petronas Gas, dealers said.

Reversing losses incurred earlier this week, the FTSE Bursa Malaysia KLCI (FBM KLCI) at 12.30 pm rose 7.04 points to 1,557.53, after opening 5.14 points lower at 1,484.81.

Affin Investment Bank head of retail research Dr Nazri Khan said the performance of the local bourse was now steadier on the back of an improved market sentiment globally.

Robust economic data from the United States and renewed hope that Greece would secure a long-awaited bailout next week, lifted the performance of global equities markets.

"The uptrend today was in line with our expectation that the market will rebound after the correction that took place this week.

"We anticipated the correction phase. The risk appetite is now stable amid an improved regional sentiment," he told Bernama.

The Finance Index added 61.71 points to 13,833.65, the Plantation Index increased 35.819 points to 8,830.39 and the Industrial Index climbed 21.54 points to 2,912.79.

The FBM Emas Index went up 48.29 points to 10,828.64, the FBM Mid 70 Index edged up 46.20 points to 12,330.29 and the FBM Ace added 28.66 points to 4,684. Gainers outstripped losers 426 to 232 with 349 counters unchanged. A total of 1.213 billion shares worth RM880.561 million were traded.

Among active stocks, Tasek Corporation added 49 sen to RM8.49, Batu Kawan gained 34 sen to RM19.86 and Petronas Gas advanced 22 sen to RM16.58.

For the heavyweights, Maybank rose four sen to RM8.54, Sime Darby increased nine sen to RM9.63, Petronas Chemicals was unchanged at RM6.88 and CIMB went up two sen to RM7.27. -- Bernama



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Markets firmer, rotational play of penny stocks

KUALA LUMPUR (Feb 17): Key Asian markets except China were firmer at midday on Friday, as investors were relieved that Greece had finally implemented measures to secure a second bailout.

At Bursa Malaysia, the FBM KLCI rose 7.04 points or 0.45% to 1,557.53. Turnover was 1.21 billion shares valued at RM880.56 million. Advancing stocks beat decliners nearly two to one, with 426 gainers to 232 losers. Rotational play was seen in several penny stocks which had been under the radar for several months such as PDZ, GPA, IPower and Marco.

Among key regional markets, Japan’s Nikkei 225 rose 1.68% to 9,393.50, Hong Kong’s Hang Seng Index added 0.70% to 21,425.90, Taiwan’s Taiex 0.12% to 7,879.30 and South Korea’s Kospi 1.48% to 2,027.05 and Singapore’s Straits Times Index 0.47% to 2,991.23. However, Shanghai’s Composite Index lost 0.14% to 2,353.51.

April Brent crude oil futures rose 17 cents to US$120.28 while US light crude oil added 14 cents to US$102.45.

The ringgit gained 0.0107 to 3,0485 to the US dollar. Crude palm oil third-month futures rose RM22 to RM3,211 per tonne.

At Bursa Malaysia, Tasek was the top gainer, up 49 sen to RM8.49 with 64,500 shares done after it declared dividends totaling 86% despite weaker earnings.

Among the index-linked stocks, GENTING BHD []’s 18 sen gain to RM10.70 pushed the KLCI up 1.57 points.

Tenaga saw some recovery, rising 10 sen to RM6.10 on news that the recommended price of natural gas is being finalised and is scheduled to be presented to the Cabinet by the end of March. The framework will decide how much should be borne by Tenaga, independent power producers (IPPs) and end- consumers.

Sime rose nine sen to RM9.63. Among the banks, HLFG added 22 sen to RM11.76, Maybank four sen to RM8.54, Public Bank six sen to RM13.70 and CIMB two sen to RM7.27.

Among PLANTATION []s, Batu Kawan added 34 sen to RM19.86, TDM 14 sen to RM4.84 and IOI Corp three sen to RM5.44. BLD Plantations fell 28 sen to RM9.72 in thin trade and United Plantations 12 sen lower at RM22.54.

Dialog-WA extended its rally for the third day, adding 17 sen to 83 sen with 62.71 million units.

Rotational play was seen in related penny stocks with PDZ to the fore, adding five sen to 13.5 sen with 95.16 million shares done, GPA 1.5 sen to 10.5 sen and IPower one sen to 5.5 sen and Marco-WA adding one sen to 7.5 sen.

Among the decliners were MUH, sliding as much as 22 sen to 38 sen, while Nestle gave up 16 sen to RM55.34 and BAT 12 sen to RM52.18 while Hartalega gave up some of the recent gains, down eight sen to RM7.74.



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RAM Ratings to maintain surveillance on Silver Bird Group’s RM30m debt notes

KUALA LUMPUR (Feb 17): RAM Rating Services Bhd will continue to monitor the A2/Negative/P2 rating of SILVER BIRD GROUP BHD []’s RM30 million commercial papers/medium-term notes programme (2005/2012).

The ratings agency also said on Friday it had received confirmation that Silver Bird Group fully redeemed the last tranche of its RM70 million serial bonds (2005/2012) on Jan 13, ahead of the debt facility’s maturity date of Feb 15.

RAM said the facility has been cancelled and it no longer has any rating obligation on the serial bonds which had been previously rated A2, with a negative outlook.



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HwangDBS maintains 'hold' call on BAT

British American Tobacco (Malaysia) Sdn Bhd's (BAT) lower profit after tax of RM180.6 million for the fourth quarter of last year was within expectations, says HwangDBS Vickers Research.

HwangDBS, in a research note here today, said the fourth quarter's profit after tax was reduced by 1.1 per cent, on a year-on year (y-o-y) basis, with shipment volume at 0.7 per cent higher to 2.04 billion sticks y-o-y.

It noted that for the financial year ended 2011, the company's y-o-y profit after tax declined by 1.6 per cent to RM719.6 million on the back of a 4.1 per cent y-o-y increase in the company's revenue.

Moving forward, the research firm said 2012 would be a challenging year for BAT as the illicit trade was firm at 36.1 per cent last year against 36.3 per cent in 2010 and its market size had shrunk by 3.2 per cent in 2011.

Meanwhile, HwangDBS has maintained a "hold" call for the company with a target price of RM46.60 based on BAT's announcement for its fourth interim dividend of 66 sen per share. -- Bernama



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Uzma up on RM350m Carigali contract win

Uzma Bhd, an oil and gas engineering-services provider, jumped 5.8 per cent to RM2.01, headed for its highest close since July 28.

The company won a RM350 million contract from Petronas Carigali Sdn Bhd to provide well- testing equipment and services, it said in a statement. - Bloomberg



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Tasek advances on dividends plan

Tasek Corp, a cement maker, advanced 7.5 per cent to RM8.60, on course for its highest close since May 16.

The company declared a special dividend and a final dividend totaling 80 sen per share, according to a filing to the exchange. - Bloomberg



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CI Hldgs surges as Q2 net jumps

CI Holdings Bhd, a manufacturer of building and construction-related products, surged 9.6 per cent to RM1.37, bound for its highest close since November 23.

Its second- quarter net income jumped to RM650.4 million from RM11.3 million a year earlier after making a RM710.9 million gain from selling a beverages business, according to a stock-exchange filing. - Bloomberg



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CI Holdings climbs on dividend plan

KUALA LUMPUR (Feb 17): Shares of CI Holdings Bhd climbed in mid-morning on Friday after it declared a dividend of RM4.60 per share totaling RM653.20 million.

At 10.32am, CIH was up 11 sen to RM1.36 with 6.45 million shares done.

The FBM KLCI rose 8.03 points to 1,558.52. Turnover was 686.25 million shares valued at RM474.41 million. There were 382 gainers, 150 losers and 310 stocks unchanged.

CI Holdings announced net profit of RM650.39 million in the second quarter ended Dec 31, 2011 from RM11.17 million a year ago, boosted by the disposal of its Permanis Group to Asahi for RM820.0 million cash.

Its revenue declined slightly to RM11.35 million from RM11.96 million a year ago due to a slowdown in the CONSTRUCTION [] sector.

The improvement in profit before tax was due largely to income received from the disposal of Permanis of RM688.43 million.



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Uzma advances on RM350m Petronas Carigali contract

KUALA LUMPUR (Feb 17): Shares of UZMA BHD [] climbed in early trade on Friday as investors were upbeat about its outlook after it secured a RM350 million contract from Petronas Carigali Sdn Bhd.

At 9.16am, Uzma was up 12 sen to RM2.02. There were 123,400 shares done.

The FBM KLCI rose 7.93 points to 1,558.42. Turnover was 218.81 million shares done valued at RM106.78 million. There were 283 gainers, 45 losers while 148 stocks were unchanged.

On Thursday, Uzma announced its unit was awarded acontract from Petronas Carigali to provide well testing equipment and services for Petroliam Nasional Bhd’s drilling projects in the west region.

The contract is for five years effective from April 1, 2012 to March 31, 2017.



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Tasek climbs on hefty dividends plan

KUALA LUMPUR (Feb 21): Shares of TASEK CORPORATION BHD [] jumped in early trade on Friday after the company decided to reward shareholders with dividends totaling 86%.

At 9.08am, it was up 66 sen to RM8.66. There were 14,100 shares transacted.

The FBM KLCI rose 8.98 points to 1,559.47. Turnover was 151.41 million shares done valued at RM69.93 million. The broader market was firmer, with gainers leading losers 251 to 32.

Tasek announced on Thursday its earnings fell 57.1% to RM33.44 million in the fourth quarter ended Dec 31, 2011 from RM78.00 million a year ago, due to higher production costs.

Despite the lower earnings, it declared dividends totaling 86%. They comprised of a special ordinary dividend of 50% less income tax of 25%; preference dividend of 6% single tier and final ordinary dividend of 30% single tier.



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RHB Research maintains Outperform on TH Plantations, FV RM3.15

KUALA LUMPUR (Feb 17): RHB Research is maintaining its outperform call on TH PLANTATION []s while it raised the fair value to RM3.15 from RM3.

It said on Friday that TH Plantations was joining the ranks of the mid-cap plantation stocks.

RHB Research highlighted four key points: 1) Strong FFB production growth for FY11 achieved; 2) Production costs to rise in FY12, on higher labour and fertiliser costs; and 3) Work has started on TH Plantations’ new land acquisitions already; and 4) More acquisitions in 2012?

“With TH Plantations’ recent land acquisition of 19,782ha, bringing total landbank to 58,895ha, it has achieved its KPI target of growing its landbank to 50,000ha by end-2011.

“We believe TH Plantations’ next stage of expansion could come from some of Lembaga Tabung Haji’s landbank that THP is currently managing. We highlight, however, that we would only be positive on any acquisitions provided the earnings accretion from the new landbank is greater than the potential dilutive effect of new shares issued,” the research house said.



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HDBSVR expects market sentiment to perk up, boost from Wall St

KUALA LUMPUR (Feb 17): HwangDBS Vickers Research (HDBSVR) expects market sentiment to perk up on Friday after the stronger overnight close on Wall Street.

Key U.S. equity indices climbed between 1.0% and 1.5% at the closing bell on account of positive economic reports (jobless claims fell while housing starts rose) and hopes that Greece remains on track to receive international financial aid.

“This is expected to lift investors’ sentiment on our Malaysian bourse today. The benchmark FBM KLCI – after losing 10.8-point or 0.7% yesterday – could attempt to overcome the support-turned-resistance line of 1,555 ahead,” it said.

HDBSVR said the big caps which were likely to ride on a market rebound on Friday include CIMB and Maxis.

“In the small-mid cap space, of probable interest could be: (a) Tasek Corporation, which has just declared a final-cum-special net dividend per share of 60 sen (implying a net yield of 7.5% at the current share price of RM8.00); (b) Extol MSC, in response to a local news article speculating that a corporate exercise might be brewing following recent boardroom and shareholding changes; (c) Uzma, after winning an oil & gas contract worth RM350 million; and (d) Dataprep, as one media report said it is close to securing a IT contract in China valued at RM600 million,” it said.



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CIMB Research has technical buy on Mitrajaya at 61.5 sen

KUALA LUMPUR (Feb 17): CIMB Equities Research has a technical buy on Mitrajaya Holdings at 61.5 sen at which it trading at a price-to-book value of 0.8 times.

It said on Friday that Mitrajaya has been trending sideways for the past few days.

“We think a short term base is formed above its 200-day SMA. If the candles can continue to hold on above this moving average, there is a good chance that prices may re-rate towards 67.5 sen and 74 sen,” it said.

CIMB Research said the technical landscape remains positive. MACD signal line is still rising while RSI is above the 50pts mark.

“Any pullback towards 57.5 sen is an opportunity to accumulate. However, always place a stop at below 57 sen to limit downside risk,” it said.



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CIMB Research has technical sell on Petronas Chemicals at RM6.88

KUALA LUMPUR (Feb 17): CIMB Equities Research has a technical sell on Petronas Chemicals Group at RM6.88 at which it is trading at a FY13P/E of 11.5 times and price-to-book value of 2.8 times.

It said on Friday that the uptrend channel from September 2011 low may have exhausted.

“If the candles fail to swing back above its recent high of RM7.03 soon, we expect selling pressure to intensify. The next support levels are RM6.55 and RM6.19,” it said.

CIMB Research said the MACD signal line is losing pace, suggesting that follow-through momentum is weakening. RSI has also hooked downward.

“Use any rebound towards RM6.91-7.03 to unload on strength. However, always put a buy stop at RM7.05 in case the uptrend is not over yet,” it said.



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CIMB Research has technical sell on 3A at RM1.30

KUALA LUMPUR (Feb 17): CIMB Equities Research has a technical sell on Three-A Resources at RM1.30 at which it trading at a price-to-book value of 2.6 times.

It said on Friday that Three-A violated the wedge support few days. On Thursday, the stock also breached the 200-day SMA.

“If the candles continue to remain below this moving average, we anticipate selling pressure to pick up strongly. The next downleg is likely to push prices lower towards RM1.22 and RM1.14,” it said.

CIMB Research said the indicators are showing signs of exhaustion. MACD signal line is poised for a negative crossover while RSI has hooked downward. The 30-day and 50-day SMAs will also be magnet for prices.

“Unload on strength looks like a good option here, especially near the RM1.32-RM1.35 resistances. Unless prices swing back above the RM1.38 level, we would rather stick with the bear’s camp for now,” it said.



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Stocks to watch: Uzma, Tradewinds Plantations, Hibiscus, Tasek

KUALA LUMPUR (Feb 17): The pullback on Bursa Malaysia and key regional markets could see investors remaining on the sidelines until and unless the bailout for Greece is implemented and completed.

The warning by Moody’s Investors Service’s announcement threatening to lower the ratings of 17 banks and securities firms with global capital markets operations also unnerved the markets.

On Thursday, the FBM KLCI fell 10.81 points or 0.69% to 1,550.49, the lowest since Feb 2. Turnover was 2.19 billion shares valued at RM1.97 billion.

It should be noted the weakening in the broader market where declining counters beat advancers 668 to 239, the largest margin in recent days, and putting a halt in the recent rally.

However, despite the cloud of uncertainty, there were several positive corporate developments on the local front which could lure some mild buying interest.

Among the stocks to watch are UZMA BHD [], Tradewinds PLANTATION []s Bhd, Hibiscus Petroleum Bhd, TASEK CORPORATION BHD [], CI Holdings Bhd and Maxis Bhd.

Uzma secured a RM350 million contract from Petronas Carigali Sdn Bhd to provide well testing equipment and services for Petroliam Nasional Bhd’s drilling projects in the west region. The contract is for a period of five years effective from April 1, 2012 to March 31, 2017.

Tradewinds Plantations’ indirect unit Mardec International Sdn Bhd is selling its 45% stake in R1 International Pte Ltd for US$25.86 million.

R1’s core activities are trading of natural rubber, latex concentrate and synthetic rubber. R1 is a global rubber trading company specialising in rubber commodity which operates in Malaysia, Thailand, Japan, China and India.

Hibiscus Petroleum has received the Securities Commission’s approval for its qualifying acquisition of a 35% stake in Lime Petroleum Plc for US$55 million.

Tasek's earnings fell 57.1% to RM33.44 million in the fourth quarter ended Dec 31, 2011 from RM78.00 million a year ago, as a result of higher production costs.

Despite the lower earnings, it declared dividends totaling 86%. They comprised of a special ordinary dividend of 50% less income tax of 25%; preference dividend of 6% single tier and final ordinary dividend of 30% single tier.

Revenue rose 25.11% to RM167.24 million from RM133.67 million. Earnings per share were 26.98 sen compared to 48.88 sen.

CI Holdings Bhd posted net profit of RM650.39 million in the second quarter ended Dec 31, 2011 from RM11.17 million a year ago, boosted by the disposal of its Permanis Group to Asahi for RM820.0 million cash.

Its revenue declined slightly to RM11.35 million from RM11.96 million a year ago due to a slowdown in the CONSTRUCTION [] sector. The improvement in profit before tax was due largely to income received from the disposal of Permanis of RM688.43 million. It declared a dividend of RM4.60 per share totaling RM653.20 million.

Maxis Bhd has proposed to undertake a RM2.45 billion unrated Sukuk Musharakah programme with a 10-year maturity. Of the proceeds, RM1.45 billion would be used for refinancing of existing loans and RM1.0 billion for the capital expenditure and/or working capital and/or general funding requirements.



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