Tuesday 6 March 2012

SapuraCrest Petroleum secures US$54m contract from Petronas Carigali

KUALA LUMPUR (March 6): SAPURACREST PETROLEUM BHD [] has secured a US$54 million contract from Petronas Carigali Sdn Bhd to provide a tender rig including a mobilisation fee.

The company said on Tuesday the contract was for 12 months starting April 1 with an option to extend for another 12 months.

“The award of the contract will have no effect on the issued and paid-up capital of the company and is expected to contribute positively to the group earnings and net tangible assets for the financial year ending 2013,” it said.



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TC Subaru picks Tan Chong Motors to assemble vehicles

KUALA LUMPUR (March 6): Tan Chong Motor Assemblies Sdn Bhd has been appointed by TC Subaru Sdn Bhd as its contract assembler to assemble passenger vehicles.

The agreement is effective Tuesday until Dec 31, 2013, TAN CHONG MOTOR HOLDINGS BHD [] said in a statement.

Tan Chong Motor Assemblies is a 70 per cent-owned subsidiary of Tan Chong Motor Holdings while TC Subaru is a subsidiary of Tan Chong International.

"The appointment would enable Tan Chong Motor Assemblies to utilise the production capacity of its assembly plants at an optimum level.

"Based on the forecast assembly units during the term, the expected total assembly charges and related localisation fees payable by TC Subaru to Tan Chong Motor Assemblies is estimated at RM30.22 million," it said. - Bernama



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Market Commentary

The FBM KLCI index gained 0.69 points or 0.04% on Tuesday. The Finance Index increased 0.01% to 14206.39 points, the Properties Index dropped 0.71% to 1057.79 points and the Plantation Index down 0.20% to 8644.77 points. The market traded within a range of 9.44 points between an intra-day high of 1589.95 and a low of 1580.51 during the session.

Actively traded stocks include WINSUN, CSL, ENVAIR, IFCAMSC, HWGB, HWGB-WB, NICORP, GOCEAN, KBUNAI and AXIATA. Trading volume decreased to 1288.12 mil shares worth RM1792.17 mil as compared to Monday’s 1448.66 mil shares worth RM1760.84 mil.

Leading Movers were GENTING (+16 sen to RM10.92), TM (+8 sen to RM5.25), MAYBANK (+2 sen to RM8.79), PETCHEM (+3 sen to RM6.92) and HLBANK (+10 sen to RM12.40). Lagging Movers were CIMB (-6 sen to RM7.42), TENAGA (-7 sen to RM6.24), BAT (-32 sen to RM52.52), DIGI (-2 sen to RM4.11) and IOICORP (-2 sen to RM5.40). Market breadth was negative with 257 gainers as compared to 519 losers. -- JF Apex Securities Bhd



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Elevator manufacturer EITA seeks listing on Main Board

KUALA LUMPUR (March 6): Elevator manufacturer and distributor of electrical and electronics equipment EITA Resources Bhd is seeking a listing on the Main Board of Bursa Malaysia.

The company had on Tuesday signed an underwriting agreement with sole underwriter AmInvestment Bank Bhd in conjunction with its initial public offer. AmInvestment Bank is also the adviser and sole placement agent.

EITA said it plans to venture into high-speed passenger elevator systems to boost its competitive edge in bidding for more projects in Malaysia and overseas.

Currently, EITA’s elevators, marketed under the EITA-Schneider brand, are installed in buildings ranging from three storeys to more than 30 storeys high.

The company plans to use part of its IPO proceeds for research and development, including development of high-speed passenger elevator systems, and expand its R&D Centre in Penang.



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KLCI closes slightly higher on late buying, broader market cautious

KUALA LUMPUR (March): Late buying of selected index-linked stocks pushed the FBM KLCI, which as in the red all Tuesday, back into positive territory, with GENTING BHD [] emerging as the bigger index mover.

The FBM KLCI closed 0.69 of a point higher to 1,589.91. Turnover was 1.29 billion shares valued at RM1.73 billion. The broader market reflected the cautious sentiment, with 519 decliners to 257 advancers while 315 stocks were unchanged.

Key regional markets posted losses between 0.63% and 2%. Hong Kong’s Hang Seng Index fared the worst, down 2.16% to 20,806.20, Singapore’s Straits Times Index fell 2% to 2,932.01, Shanghai Composite Index 1.41% to 2,410.45, Taiwan’s Taiex 0.83% to 7,937.97 while South Korea’s Kospi fell 0.78% to 2,000.36.

European shares extended losses in morning trade on Tuesday on fresh concerns about economic growth in Europe and uncertainties regarding a bond swap deal between Greece and its private creditors.

Britain's FTSE 100 extended its losing streak into a third session on Tuesday, as concern about the health of the global economy hit heavyweight oils and miners, pushing the index towards the bottom of its recent range and darkening the technical outlook, Reuters reported.

At Bursa Malaysia, Genting rose 16 sen to RM10.92, pushing the KLCI up by 1.4 points while Tenaga added eight sen to RM5.25 and Petronas Chemicals three sen to RM6.92.

There was some nibbling on banking stocks, with Maybank and Public Bank up two sen each to RM8.79 and RM13.78, Hong Leong Bank 10 sen to RM12.40 and AMMB three sen to RM6.30.

Dutch Lady rose the most, adding 40 sen to RM29.90 with 6,100 shares done. Genting PLANTATION []s rose 25 sen to RM9.49 and Petronas Dagangan 18 sen to RM18.46.

CI Holdings added 13 sen to RM1.48 after the company announced its capital repayment of 50 sen per ordinary share would go ex on March 16.

Winsun was the most active with 47.67 million shares done, down two sen to 16.5 sen.

CIMB declined six sen to RM7.42, dragging the KLCI down 1.06 points. Tenaga shed seven sen to RM6.24 while BAT lost 32 sen to RM52.52 and KLK 12 sen to RM23.28.



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PPB Group’s Golden Screen Cinemas sets RM130m capex for 11 new cinemas

KUALA LUMPUR (March 6): PPB GROUP BHD []’s unit Golden Screen Cinemas Sdn Bhd (GSC) has allocated RM130 million to finance the setting up of 11 cinemas with 100 new screens within the next three years.

GSC chief executive officer Koh Mei Lee said on Tuesday the cinemas would be in Selangor, Pahang, Negri Sembilan and Sarawak.

“The growth in cinemas will be in tandem with shopping malls,” Koh told reporters at PPB’s press and analyst briefing here .

Of the RM130 million, a total RM70 million will be spent this year, she said.

According to PPB’s website, GSC has 180 screens across 22 locations nationwide.



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Petronas says won't pay any more compensation to Tenaga

KUALA LUMPUR (March 6): Petroliam Nasional Bhd (Petronas) has clarified that it will not be paying any more compensation to Tenaga Nasional Bhd (TNB) for the cost of alternative fuel used by the national power utility.

Its president and chief executive officer, Datuk Shamsul Azhar Abbas said the payment (RM1 billion) was supposed to be a "one-off" affair.

"Never had we mentioned in the past that it is going to be a continuous handout to TNB...It was supposed to be one-off, because we pity them as they don't have enough cash at that time," he said.

Petronas was clarifying a Bernama report on Monday which stated that it will not continue selling subsidised gas to TNB for electricity generation this year.

On the new pricing mechanism for gas once Petronas' re-gasification terminal comes on stream, Shamsul said, "We sat down with three ministers three weeks ago and we've basically proposed a formula, which takes into account domestic sensitivities.

"So, now it's up to them to bring it up to the Economic Council," he said. - Bernama



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Hock Seng Lee plans mixed devt near Kuching, GDV RM700m

KUALA LUMPUR (March 6): HOCK SENG LEE BHD [] plans to undertake a mixed commercial and residential property project in Bandar Samariang, Kuching with an estimated gross development value of RM700 million.

It said on Tuesday the project would involve 1,500 houses comprising of semi-detached, quadruplex and terraced houses, 2,000 units of affordable housing units and 40 shophouses.

“This is expected to generate an estimated GDV of approximately RM700 million. Samariang Aman 3 is expected to commence in 2013 and will span a development period of six to eight years,” it said.

Hock Seng Lee said the project would on 275.5 acres of land which it was acquiring from Projek Bandar Samariang Sdn Bhd for RM25.54 million.



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Investors take profit, KLCI down more than 8 pts

KUALA LUMPUR : The FBM KLCI fell in the morning session on Tuesday as investors locked in profits from a liquidity driven rally which saw the 30-stock index nearing the all-time high of 1,597 in July 2011.

At 12.30pm, the FBM KLCI was down 0.52% or 8.34 points to 1,580.88, dragged down mainly by telecommunication and banking stocks. The KLCI had briefly touched 1,594.72 on Monday. Turnover was 598 million shares worth RM621 million. Losers beat gainers 488 to 155 while 313 counters were unchanged.

Key regional markets fell with Hong Kong’s Hang Seng Index down 1.5% to 20,947.9 and Australia’s S&P / ASX 200 which was down 1.22% to 4,210.8. South Korea’s Kospi 1.17% lower at 1992.53 while Singapore’s Straits Times lost 1.12% to 2,958.23.

At Bursa Malaysia, top gainers include Asia File which added 15 sen to RM3.90, C.I. HOLDINGS BHD [] 14 sen to RM1.49 while CHIN TECK PLANTATION []S BHD [] was up 10 sen to RM9.10.

Decliners included BAT, which lost 48 sen to RM52.36, PPB 30 sen to RM16.64 while Nestle was down 20 sen to RM55.70.

Most active was China Stationery Ltd which traded unchanged at RM1.08 with some 34 million shares done.

OSK Research director Chris Eng said the new target for the KLCI was 1,620 towards the end of this year. This was derived from the average 2012 and 2013 fair values at 1,466 and 1,775 respectively.

“While we remain unconvinced of the current rally’s fundamentals and still see a risk of market correction, news flow with regards to large infrastructure investments should help the KLCI post a stronger 2H2012,” Eng said.



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Kimlun book order at RM1.5b with RM68m housing project

KUALA LUMPUR (March 6): Kimlun Corporation Bhd’s estimated outstanding book order has increased to about RM1.50 billion after it secured a RM68.29 million housing project in Johor Baru.

It said on Tuesday its unit Kimlun Sdn Bhd had accepted a letter of award from UNITED MALAYAN LAND BHD []’s subsidiary Dynasty View Sdn Bhd to construct apartments and ancillary buildings in Johor Baru.

“With the award, the group’s estimated outstanding book order is approximately RM1.5 billion,” it said, adding that work was expected to be completed by December 2014.



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Dijaya to acquire Danny Tan's properties for RM948m

KUALA LUMPUR (March 6): Real estate developer Dijaya Corp Bhd plans to acquire PROPERTIES [] owned by its single-largest shareholder Tan Sri Danny Tan for RM948.7 million.

The purchase will be funded with a cash portion of RM250 million and irredeemable convertible unsecured loan stocks, Dijaya said in a statement on Tuesday.

Dijaya also proposed to a rights issue to raise about RM250 million and debt funding of RM500 million in commercial papers and medium term notes.



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KLCI takes a breather, Tenaga, Genting weigh

KUALA LUMPUR (March 6): Stocks on Bursa Malaysia took a breather on Tuesday as investors locked in recent gains, with profit taking seen in heavyweight Tenaga and Genting while key regional markets put on a lackluster performance after the weaker close on Wall Street.

At 10.04am, the FBM KLCI was down 2.79 points to 1,586.43. Turnover was 284.50 million shares valued at RM202.80 million. Losers led gainers 245 to 152 while 276 stocks were unchanged.

Reuters reported Asian shares and growth-linked currencies were under pressure on Tuesday as slowing economies in China and Europe and tension over Iran dampened sentiment, prompting investors to take profits from recent rallies that had been driven by ample liquidity.

CIMB Equities Research said that while the KLCI close to testing its all-time high of 1,597 in July 2011, it expected the index to face resistance.

“Only a successful close above the 1,600 psychological level could further lift prices towards a new heights at 1,620. Otherwise, we expect some consolidation to take place. On the downside, the 1,550 key support level is still a level to keep watch as it would eliminate all bullish potential if it is breached. There is also a minor support at 1,570,” it said.

Among the decliners were Tenaga and Genting, down six sen each to RM6.25 and RM10.70. Shell was the top loser, down 26 sen to RM10.12 but in very thin volume of 200 shares done.

PBB lost 26 sen to RM16.68, Oriental Holdings 13 sen to RM6.52, Can-One six sen to RM1.83, MBM Resources five sen to RM4.58 and Batu Kawan four sen to RM18.90.



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Maybank IB Research initiates coverage of Bumi Armada

KUALA LUMPUR (March 6): Maybank Investment Bank Research is initiating coverage of Bumi Armada with a Buy and RM4.88 target price.

It said on Tuesday that Bumi Armada offers a niche exposure to the floating production, storage and offloading (FPSO) market.

“As one of the fastest growing FPSO operators in the world, it has set its sights on being the Top 4 player in terms of FPSO fleet size by 2013.

“It is also poised to gain traction in Malaysia’s O&G sector, as it leverages on Petronas’ capex programme. BA, which is steadfastly building up franchise values, is a steady growth stock with a three-year net profit CAGR of 25%,” it said.



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CI Holdings top gainer in early trade

KUALA LUMPUR (March 6): Shares of CI Holdings Bhd advanced in early trade on Tuesday after the company announced its capital repayment of 50 sen per ordinary share would go ex on March 16.

At 9.06am, it was up 13 sen to RM1.48. There were 1.18 million shares done.

The FBM KLCI slipped 0.46 of a point to 1,588.76. There were 48.66 million shares valued at RM27.29 million. There were 84 gainers, 67 losers and 148 stocks unchanged.

CI Holdings said on Monday the capital repayment of 50 sen per share was pursuant to the reduction of the issued and paid-up share capital under Section 64 of the Companies Act, 1965.



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HDBSVR maintains Buy on Perisai, TP RM1.20

KUALA LUMPUR (March 6): HwangDBS Vickers Research said Perisai Petroleum Bhd’s share price has risen 27% year-to-date and 38% since its August 2011 update.

“But it is still trading at only 9 times FY12F EPS, which is undemanding compared to the O&G small-cap average of 13 times,” it said on Tuesday.

HDBSVR said it continues to like Perisai for its clear earnings visibility (anchored by MOPU and E3) and potential earnings enhancement from asset acquisition.

“We raised TP to RM1.20, pegged to 12 times FY12F EPS (from 8.5 times previously), after taking into account better earnings visibility with the completion of the MOPU acquisition,” it said.



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HDBSVR sees KLCI moving sideways, expects profit taking

KUALA LUMPUR (March 6): HwangDBS Vickers Research said the key FBM KLCI, which has displayed resilience, is expected to gyrate sideways ahead amid profit-taking activity.

It said on Tuesday the immediate support and resistance levels for the benchmark FBM KLCI are presently pegged at 1,580 and 1,600, respectively.

Meanwhile, Asian equities will likely take a breather too after China guided for slower economic growth expectations this year. This also caused major U.S. stock indices to drop between 0.1% and 0.9% at the closing bell last night.

Against a fairly steady backdrop, stocks that may attract interest on Bursa Malaysia include: (a) Jaks Resources, which has accepted a letter of award for a building CONSTRUCTION [] contract valued at RM252m; (b) Media Shoppe, after announcing that it has decided not to accept the letter of award in relation to its subcontractor role to participate in certain portions of KTM’s automatic fare collection system project; and (c) Envair Holdings, following a news article saying that its new major shareholder would be injecting an oil & gas project worth RM1.5b into the company.



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CIMB Research has technical sell on Parkson Holdings at RM5.59

KUALA LUMPUR (March 6): CIMB Equities Research has a technical sell on Parkson Holdings at RM5.59 at which it is trading at a price-to-book value of 2.3 times.

It said on Tuesday that Parkson has been gyrating in a huge ascending wedge pattern for the past few weeks but recent setback dragged prices below the support trend line. Currently, the stock is hovering just a tad above its 200-day SMA.

“The biggest concern now is the potential fall below the 200-day SMA. If this happens, we expect selling to be steep. Next downleg is likely to drag prices back towards the RM5.22 and RM5.00 levels,” it said.

CIMB Research said indicators remain weak. MACD signal line has slipped into the negative territory while RSI is below the 50pts mark. Put a buy stop at RM5.70, just in case,” it said.



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CIMB Research has technical buy on Latexx Partners at RM1.58

KUALA LUMPUR (March 6): CIMB Equities Research has a technical buy on Latexx Partners at RM1.58 at which it is trading at a FY13 price-to-earnings of 5.6 times and is trading at a price-to-book value of 1.3 times.

It said on Tuesday that the correction from its Nov-11 was sharp. Prices fell to its 61.8% Fibonacci Retracement level before a base was formed.

“Looking at the chart, we think a short term support was found at the RM1.50 level. Indicators are showing signs of improvement. MACD histogram bars are falling at a slower pace, suggesting that selling pressure has tapered off. Meanwhile, RSI has also hooked upward,” it said.

CIMB Research said as long as the RM1.50 level holds steady, any pullback is an opportunity to accumulate. Next resistance levels are RM1.73 and RM1.87. Be quick to cut loss if the RM1.50 level is breached as next support is at RM1.40.



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CIMB Research has technical buy on TDM at RM4.95

KUALA LUMPUR (March 6): CIMB Equities Research has a technical buy on TDM at RM4.95 at which it is trading at a price-to-book value of 1.0 times.

It said on Tuesday that TDM has been trending sideways for the past few weeks but prices broke out of its resistance trend line on Monday.

“We think that the stock could still make one more push higher from here, possibly towards a new high at RM5.30 after the candles swing above its yesterday’s high of RM5.05,” it said.

CIMB Research said that the selling pressure has tapered off, evident from the improving technical landscape. MACD signal line is poised for a positive crossover while RSI has also hooked upward.

“Put a stop at below the RM4.85 level. A slip below RM4.50 would indicate that the uptrend has exhausted. Next downleg will then drag prices back towards RM4.22 and RM4.10,” it said.



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Stocks to watch: Tenaga, Affin, Ivory and TMS

KUALA LUMPUR (March 6): Stocks could retreat on Tuesday as investors take profit after the recent run-up in selected blue chips -- which pushed the FBM KLCI near the all-time high of1,594 -- as sentiment could take a dent following the weaker regional markets and decline on Wall Street.

Stocks on Bursa Malaysia staged a strong performance in February, underpinned by foreign institutional funds, who were net buyers of Malaysian equities. Foreign investors bought RM9.2 billion and sold RM7.9 billion worth of shares in the local market. This translated into a net purchase of RM1.3 billion.

However, local institutional investors were net sellers during the month. They bought RM14.2 billion of equities and sold RM14.7 billion, resulting in a net sale of RM500 million.

On Wall Street, U.S. stocks fell on Monday for the second straight session and the third in the last four trading days, led lower by basic materials shares after China trimmed its growth target for 2012.

The Dow Jones industrial average shed 14.76 points, or 0.11 percent, to 12,962.81 at the close. The Standard & Poor's 500 Index dipped 5.30 points, or 0.39 percent, to 1,364.33. The Nasdaq Composite Index lost 25.71 points, or 0.86 percent, to close at 2,950.48.

At Bursa Malaysia, mong the stocks to watch are TENAGA NASIONAL BHD [] (TNB), AFFIN HOLDINGS BHD [], Ivory PROPERTIES [] Group Bhd, THE MEDIA SHOPPE BHD [] (TMS), ALAM MARITIM RESOURCES BHD [] and C.I. HOLDINGS BHD [].

Petroliam Nasional Bhd (Petronas) has reiterated that it will not continue selling subsidised gas to TNB for electricity generation this year.

Petronas currently provides subsidies of up to RM20 billion per year to the power industry in the form of natural gas at rates below market prices. It had paid RM108.5 billion in subsidies for TNB since 1997, including RM3.9 billion for the three quarters ended Dec 31, 2011.

Affin expects its plan to set up Islamic banking operations in China to materialise in the second half (2H) of this year. It is also revisiting its plan to acquire an 80% stake in an Islamic bank in Indonesia, P.T. Bank Ina Perdana.

Ivory Properties plans to roll out residential and commercial projects on Penang island with a total gross development value of RM1.4 billion this year. It is targeting some RM800 million of sales in 2012, including on-going projects.

The Media Shoppe Bhd, whose shares were actively traded, said it had declined to take part in the project involving the automatic fare collection system for Keretapi Tanah Melayu Bhd’s commuter stations.

The company said it was not feasible for it to undertake the project which was awarded by Hopetech Sdn Bhd mainly “due to funding is not available within the required time frame of delivery”.

Malaysian Rating Corporation (MARC) has revised the outlook on Alam Maritim Resources Bhd’s Islamic notes from stable to negative following the company’s weaker credit profile.

The ratings agency had affirmed its ratings at AA-IS and MARC-1ID/AA-ID on Alam Maritim’s RM500 million Sukuk Ijarah medium term notes and RM100 million Murabahah commercial papers/Murabahah medium term notes programmes respectively.

MARC said the revised outlook reflected the pressure on Alam Maritim's credit profile arising from significantly weaker earnings and cash flow generation in 2010 and 2011.

In CI Holdings Bhd, the company said its capital repayment of 50 sen per ordinary share would go ex on March 16.



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