WCT acquires property developer for RM450 million

KUALA LUMPUR (March 14) : Builder WCT BHD [] is acquiring the entire stake in a privately-owned property development company for RM450 million, an all-cash deal which will give the buyer access to strategic tracts in the Klang Valley.

In a statement to the exchange on Wednesday, WCT said it has signed a conditional share sale agreement with Eng Lian Enterprise Sdn Bhd, Shen & Sons Sdn Bhd, and AMC Sdn Bhd to acquire Timor Barat PROPERTIES [] Sdn Bhd.

“The proposed acquisition is expected to contribute positively to the future earnings and thereby improve shareholders’ value over the medium to long-term,” WCT said.

Timor Barat owns three parcels of land with a combined area of 2.5 million sq ft along Jalan Awan China within the Taman Yarl enclave here, according to WCT. The acquirer said it will finance the purchase with its internally generated funds and bank loans.

WCT shares closed unchanged at RM2.61 on Wednesday.



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Najib to review MAS-AirAsia deal-MAS union official

KUALA LUMPUR (March 14) : Prime Minister Datuk Seri Najib Tun Razak has promised to review a share-swap deal between Malaysian Airline System (MAS) and AirAsia, a MAS employees union official said on Wednesday, signalling a tie-up may be scrapped after MAS posted record losses.

The 20,000 strong union MASEU is opposed to the $364 million deal that has brought AirAsia founder Tony Fernandes and his brand of aggressive cost cutting into the MAS boardroom, which they say resembles a take-over by the budget carrier.

Senior officials from the two airlines were not immediately available for comment. A government spokesman confirmed that union officials had met the prime minister but he declined to comment on details of the meeting.

The deal, formulated by Najib, was to help both carriers compete effectively against competitors like Tiger Airways and Singapore Airlines once the Southeast Asian open sky policy comes into effect in 2015.

MASEU officials met Najib in February to protest against the deal that would lead to restructuring MAS into short-haul and long-haul operations and could lead to job cuts, said MASEU Secretary General Abdul Malek Ariff.

That month, MAS reported its worst ever losses of 2.5 billion ringgit ($823.86 million) for 2011, eight months after the share swap deal was signed in August, shocking analysts who expected the restructuring to limit losses.

Failing to placate the union could turn into a political hot potato for Najib as MAS operations are centered in Selangor, an important industrial state Najib wants to wrest back from the opposition in elections that could be held within months.

"The prime minister has promised to look into the matter but we've heard nothing from him," Abdul Malek told Reuters, adding the government was losing the support of union members.

"Sentiment among the unions used to be 50:50 for the government and the opposition. Now after this, 90 percent will opt for the opposition," he said.

Under the deal announced in August, Tune Air, which is controlled by AirAsia's Fernandes and Kamarudin Meranun, would take a 20.5 percent stake in MAS and two board seats.

In exchange, state investment arm Khazanah Nasional, the majority shareholder in MAS, would hold 10 percent in AirAsia.

CIMB is the adviser for both companies on the deal, which is almost completed with the exchange of warrants ongoing, said a banking source.

Khazanah also declined to comment. A government spokesman said MASEU officials met the prime minister "some time back" but declined to comment further.

SAVING MAS?

Analysts say the new structure was supposed to help MAS, which has had a tumultuous history stretching back to 1997, when unprofitable routes pushed it into the red.

It notched its worst ever financial year in 2011 because of surging fuel costs and one-off provisions for impairment of aircraft, excess capacity and redelivery of aircraft.

In total, the provisions stood at 1.1 billion ringgit for the fourth quarter alone. Following the losses, MAS said it would do fundraising to strengthen its balance sheet.

In contrast, AirAsia has posted profits over the last four quarters, tapping strong demand for air travel in Southeast Asia. It is also planning IPOs in Bangkok and Indonesia to expand in the region where carriers like Lion Air and JetStar are seeking to dominate.

Analysts said at the moment there was no meaningful partnership between AirAsia and MAS, except for the joint procurement of jet fuel cargoes.

"They are welcome to unwind the deal. But what's key is, would this save MAS? Would previously terminated routes be restated?," said Ahmad Maghfur Usman, a transport analyst with OSK Investment Bank.

"Definitely, AirAsia benefits in the near term because of the route cuts. It is tough to say what exactly benefits MAS because the detail of the collaboration has yet to be announced. But over the longer term, through shared resources, both carriers will benefit." - Reuters



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Trading of EP Manufacturing shares to be suspended

KUALA LUMPUR (March 14) : Trading of shares in EP MANUFACTURING BHD [] (EPMB) will be suspended from 9am on Thursday pending an announcement by the automotive component manufacturer, the company told the exchange on Wednesday.

EPMB shares rose 14% or 14 sen to finish at RM1.12.



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Everest Champion becomes substantial shareholder in Ipmuda

KUALA LUMPUR (March 14) : Everest Champion Sdn Bhd emerged a major shareholder in IPMUDA BHD [] after acquiring 5.7 million shares or 7.87% in the building materials trading firm via an off-market deal.

According to filings to the bourse on Wednesday, Everest Champion had acquired the stake via a married transaction on January 19 this year. Ipmuda shares were not traded on the bourse that day.

Based on the stock’s latest closing price of 68.5 sen on January 16, prior to the off-market transaction, Everest Champion could have paid RM3.9 million for the stake.

Ipmuda shares closed unchanged at 72 sen on Wednesday.



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Market Commentary

The FBM KLCI index gained 11.69 points or 0.75% on Wednesday. The Finance Index increased 0.53% to 14082.29 points, the Properties Index up 0.18% to 1039.21 points and the Plantation Index rose 0.18% to 8611.44 points. The market traded within a range of 7.30 points between an intra-day high of 1575.71 and a low of 1568.41 during the session.

Actively traded stocks include NICORP, CSL, YTL, TIGER, HWGB, EURO, AXIATA, SIME, ASUPREM and SILVER. Trading volume increased to 1273.33 mil shares worth RM1844.76 mil as compared to Tuesday’s 1163.12 mil shares worth RM1471.04 mil.

Leading Movers were CIMB (+14 sen to RM7.40), TENAGA (+15 sen to RM6.47), AXIATA (+6 sen to RM5.12), PETGAS (+48 sen to RM16.98) and PETCHEM (+8 sen to RM6.78). Lagging Movers were DIGI (-5 sen to RM3.95), YTLPOWR (-2 sen to RM1.77), HLBANK (-4 sen to RM12.06) and MMHE (-1 sen to RM5.35). Market breadth was positive with 444 gainers as compared to 334 losers. -- JF Apex Securities Bhd



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Milux to raise RM5.87 million from private placement

KUALA LUMPUR (March 14) : Milux Corp Bhd may raise up to RM5.87 million from a planned private placement of new shares in the electrical appliances manufacturer to finance the firm’s working capital needs.

In a statement to the exchange on Wednesday, Milux said it plans to place out up to 4.66 million shares at an indicative price of RM1.26 each to third party investors.

“General working capital requirements may include financing of existing business operations, amongst others, the payment of general expenses, payment of staff related expenses, and other operating and marketing expenses,” Milux said.

Milux shares fell eight sen to close at RM1.28.



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Telekom Malaysia to rollout 2nd phase of high speed broadband

KUALA LUMPUR (March 14): TELEKOM MALAYSIA BHD [] (TM) plans to roll out the second phase of its high speed broad band (HSBB) services in smaller industrial areas and state capitals where it is economically viable says TM group CEO Datuk Zamzamzairani Mohd Isa.

"We are looking at economically viable areas like second tier industrial areas and state capitals after phase one under the public-private partnership agreement for HSBB ends at the end of the year," he said after the signing ceremony between REDtone and TM on Wednesday.

At present, Zamzamzairani said that the group had no specific plans in which states to roll out its HSBB services.

However, he added that the group was compiling demand data from across the nation so it can start identifying suitable locations.

HSBB services are currently available in the Klang Valley, Johor, Negeri Sembilan, Melaka, Perak and Kedah.



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Meda Inc plans integrated township in Sg Siput

KUALA LUMPUR (March 14): Meda Inc plans to undertake an integrated township in Sungai Siput, Perak with the proposed purchase of 256.04 acres of land from RM13 million.

The company said its unit Nandex Land Sdn Bhd has signed a sale and purchase agreement with Majuperak Energy Resources Sdn. Bhd to purchase the leasehold land.

Meda said the proposed acquisition, which was was part of its plan to acquire prime land for development. was expected to be completed by March 31, 2013.

“The proposed acquisition would allow Meda Inc to lock in large tract of development land at attractive prices for township development,” it said.

The company said it planned to build two-storey link houses which were within the reach of first-time house buyers. The township would also have two and three storey shops, semi-detaches houses, bungalows and facilities.

“The proposed acquisition is aligned with the group’s view that demand for mass housing targeting first time and younger middle-class home buyers over the next few years will increase,” it said.



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DRB-Hicom extends mandatory take-over offer for remaining Proton shares

KUALA LUMPUR (March 14): DRB-Hicom Holdings Bhd’s stake in PROTON HOLDINGS BHD [] has increased to about 50.01% and it is extending a mandatory take-over offer for all the remaining shares in the carmaker which it does not own.

DRB-Hicom said the acquisition of the 42.7% stake in Proton had become unconditional on Wednesday after shareholders approved the purchase of the stake from Khazanah Nasional Bhd.

It said the offer for all the remaining Proton shares would remain at RM5.50 per share.

It had also served the notice of the offer on the board of directors of Proton.



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Rubberex redeems RM1m debt notes ahead of deadline

KUALA LUMPUR (March 14): RUBBEREX CORPORATION (M) BHD [] made an early redemption on the RM1 million of outstanding notes under its RM50 million medium-term notes programme (2006/2013).

RAM Rating Services Bhd said on Wednesday the debt facility had consequently been cancelled.

“Following this, RAM Ratings no longer has any rating obligation on the facility, which had been previously rated A2, with a negative outlook,” it said.



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KLCI closes sharply higher as regional markets end mixed

KUALA LUMPUR (March 14): the FBM KLCI rose sharply higher in late trade on Wednesday to stay firmly above the 1,570-point level, lifted by gains at select bue chips including Sime Darby, Axiata, Petronas Gas, PPB and BAT.

The 30-stock index closed 11.69 points higher at 1,575.71.

Meanwhile, Shanghai and Hong Kong shares reversed early gains to snap a four-session winning streak on Wednesday, dragged by China plays after Premier Wen Jiabao doused expectations for easing in the property sector at the close of China's annual parliamentary meeting, according to Reuters.

At the regional markets, the Shanghai Composite Index fell 2.63% to 2,391.23 and Hong kOng’s Hang Seng Index lost 0.15% to 21,307.89.

Meanwhile, Japan’s Nikkei 225 closed 1.53% higher at 10.050.52, South Korea’s Kospi added 0.99% to 2,045.08, and Taiwan’s Taiex gained 1.17% to 8,125.26 and Singapore’s Straits Times Index

CIMB Research in its Alpha Edge report on March 14 covering regional markets said last week’s resurgence of US and regional equity markets indicated that it was still not time for a major correction though markets should be close to one.

“Last night, the VIX (Chicago Board Options Exchange (CBOE) Volatility Index) fell to a four-year low, showing signs of complacency among investors. We remain bearish on prospects for this year,” it said.

The research house said that over the past week, the KLCI had been drifting downwards. It is now holding just above the support trendline at 1,568 points.

“A sharp breakdown of this support would convince us that the uptrend since last November has already ended.

“Until that happens, we cannot discount another short upleg towards the 1,580-1,600 levels,” it said.

On Bursa Malaysia, the top gainer was BAT that rose RM1.18 to RM53.98, Petronas Gas gained 48 sen to RM16.98, Far East up 35 sen to RM7.60, Aeon 29 een to RM9.40, PPB 28 wen to RM16.98, Aeon Credit up 25 sen to RM8.35, GAB 24 sen to RM13.48, Shell 22 sen to RM10.22 while Sarawak Oil Palm added 20 sen to RM6.23, while Axiata added six sen to RM5.12 and Sime Darby gaind two sen to RM9.71.

Naim Indah Corp was the most actively traded counter with 117.8 million shares done. The stock fell 2.5 sen to 66 sen.

Other actives included CSL, YTL, Tiger Synergy, HWGB, Euro Holdings, Axiata, Sime Darby, Astral Supreme and Silber Bird.



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Sin Heng Chan climbs to RM1.28, ignores Bursa query

KUALA LUMPUR (March 14): Shares of SIN HENG CHAN (MALAYA) BHD [] climbed to an intra-day high of RM1.28 on Wednesday, ignoring the caution expressed by Bursa Malaysia Securities over the price surge on Tuesday.

At 3.52pm, it was up five sen to RM1.15. There were 11.60 million shares done at prices ranging from RM1.02 and RM1.28.

The FBM KLCI rose 5.38 points to 1,569.40. Turnover was 947.58 million shares valued at RM1.21 billion. There were 379 gainers, 350 losers and 363 stocks unchanged.

On Tuesday, Sin Heng Chan’s share price surged 29.5 sen to close at RM1.10, prompting a query from Bursa Malaysia securities over the unusual market activity.

Bursa Securities had queried the company over the sharp increase in price and high volume in the shares on Tuesday.

The regulator also queried the company whether there was any corporate development relating to the group’s business and affairs that has not been previously announced that may account for the unusual market activity.



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Sunway REIT plans RM200m capex to refurbish Sunway Putra Place

KUALA LUMPUR (March 14): Sunway REIT Management Sdn Bhd has earmarked RM200 million as capital expenditure to transform Sunway Putra Place.

Sunway REIT Management, which is the manager for Sunway Real Estate Investment (SunREIT) said “The preliminary capital expenditure (capex) for the refurbishment of the mall is estimated at RM200 million. The refurbishment exercise is expected to take about 15-18 months with a projected return on investment (ROI) of 12.5% to 15.0%,” it said.

To recap, after the Federal Court dismissed the application for leave to appeal by Metroplex Holdings Sdn Bhd on Feb 20, Sunway REIT Management decided to refurbish Sunway Putra Place.

The strategy was to rejuvenate and reposition the mall as the preferred shopping destination for local visitors and tourists.

“The refurbishment for Sunway Putra Mall will be undertaken to refresh the architecture of the mall to appeal to the current retail trends. The refurbishment exercise is also expected to see total gross floor area increasing from 860,000 sq. ft. to 952,000 sq. ft.,” it said.

It plans to position the shopping mall as a“Lifestyle Urban-Chic” shopping mall targeting at mid income level to mid-upper income level shoppers and both domestic and foreign tourists.



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Axiata’s Indonesian unit sees subscriber base growing 10%

KUALA LUMPUR (March 14) : Axiata Group Bhd’s Indonesian unit PT XL Axiata Tbk is expected to register a 10% growth in its subscriber base to 51 million this year from 46.4 million in 2011, according to wire reports quoting XL Axiata’s president director Hasnul Suhaimi in Jakarta.

Hasnul was also quoted as saying on Wednesday that XL Axiata plans to spend as much as eight trillion rupiah (1 rupiah = RM0.033) as capital expenditure this year. He also said the company expects to secure a loan from Bank Mandiri to refinance 1.5 trillion worth of debt which is due next month, according to the report.

Shares of parent company Axiata Group rose three sen to RM5.09.



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AirAsia X ups flight frequency to Australia, Taiwan

SEPANG (March 14): AirAsia X, the long-haul and low-fare unit of AIRASIA BHD [], will increase its flight frequency from Kuala Lumpur to Taipei and Perth as part of its network realignment strategy announced earlier this year.

It said the additional frequencies would see current daily flights to Taipei increasing to 11 a week from June 22 and to Perth to nine flights a week effective June 24.

"AirAsia X remains focused in strengthening its core market network in Australia, Japan, South Korea, China, Taiwan and Iran where it can build a leadership position in the long-haul and low-cost aviation sector this year," it said in a statement.

AirAsia X Chief Executive Officer Azran Osman-Rani said they are responding to the strong and growing travel demand to and from Australia and Taiwan.

"The demand for travel to Perth and Taipei recorded strong average passenger loads in excess of 85 per cent last year," he said.

Azran said the additional flights would open up new horizons for commercial activities and boost tourism in the Asean region, Australia and Taiwan.



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KLCI stays above 1,570-level at mid-day

KUALA LUMPUR (March 14): The FBM KLCI remained in positive territory at the mid-day break on Wednesday and stayed above the 1,570 level in line with the positive sentiment at key regional markets.

Asian markets extended their gains from the morning on the back of a firmer overnight close at Wall Street and were given an added impetus after most of the largest U.S. banks passed their annual stress test, according to the Federal Reserve, in a conservative report card that underscored the recovery of the financial sector but called out a few laggards, including Citigroup.

The Fed announced the results in an earlier-than-expected release on Tuesday. JPMorgan Chase pulled the trigger on announcing its own glowing marks before the Fed's release, and helped lift the stock market, according to Reuters.

At 12.30pm, the KLCI was up 9.20 points to 1,573.22. Gainers led losers by 427 to 221, while 318 counters traded unchanged. Volume was 630.98 million shares valued at RM701.74 million.

The ringgit weakened 0.20% to 3.0044 versus the US dollar; crude palm oil futures for the third month delivery rose RM45 per tonne to RM3,337, crude oil added 32 cents per barrel to US$107.90 while gold rose US$5.18 an ounce to US$1,704.95.

At the regional markets, Japan's Nikkei 225 rose 1.74% to 10,071.70, Hong Kong’s Hong Seng Index rose 1.28% to 21,613.40, the shanghai Composite Index added 0.74% to 2,474.07, South Korea’s Kospi gained 1.34% to 2,052.22 and Singapore’s Straits Times Index was up 1.14% to 3,023.10.

At Bursa Malaysia, BAT added RM1.18 to RM53.98, Aeon 39 sen to RM9.50, GAB 20 sen to RM13.44, Toyo Ink 19 wen to RM1.63, United PLANTATION []s and Shell 18 sen each to RM25 and RM10.18, Jaya Tiasa 14 sen to RM7.60, UMW 12 sen to RM7.24, Panasonic and Johore Tin 12 sen each to RM22.20 and RM1.33.

Naim Indah Corp was the most actively traded counter with 99.9 million shares done. The stock fell 1.5 sen to 67 sen.

Other actives included astral Supreme, Euro Holdings, YTL, Sing Heng Chan, Tiger Synergy, Hwatai and Camres.

Meanwhile, decliners in the morning session included Tahps, Sunchirin, Warisan, Scientex, BOnia, MIlux, APB and Batu Kawan.



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TRC Synergy gets RM36m contract for Dayabumi complex

KUALA LUMPUR (March 14): TRC SYNERGY BHD [] has secured a RM36 million contract for the proposed alteration and additional works to the Dayabumi Complex in Kuala Lumpur.

The company said on Wednesday, its unit Trans Resources Corporation Sdn Bhd had received the letter of award from Kompleks Dayabumi Sdn Bhd to undertake the project on Tuesday.

“The board, after having considered all aspects of the letter of award is of the opinion that the letter of award is in the best interest of the TRC Group,” it said.

TRC said the project would contribute positively to the earnings and earnings per share of the TRC group in the future.



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Flash: DRB-Hicom mulls selling Lotus if does not meet performance target

KUALA LUMPUR (March 14): DRB-HICOM BHD [] mulls selling Lotus Group International if it does not meet the performance objectives, wire reports said.

The reports said other options included a potential change in the management of Lotus, which is owned by Proton.

DRB-Hicom had on Wednesday received its shareholders’ approval to buy the 42.7% stake in PROTON HOLDINGS BHD [] for RM1.29 billion.

The purchase of Proton is expected to be completed in seven days.



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KLCI up 0.6% at mid-morning

KUALA LUMPUR (March 14): The FBM KLCI rose at mid-morning on Wednesday, in line with the improved sentiment at key regional markets following the firmer overnight close at Wall Street.

At 10am, the 30-stock index was up 9.18 points to 1,573.20. Gainers led losers by 326 to 106, while 223 counters were traded unchanged. Volume was 246.15 million shares valued at RM221.51 million.

Asian shares rose on Wednesday as upbeat US economic data boosted investors' risk appetite, while reduced expectations for further monetary easing from the Federal Reserve underpinned the dollar, according to Reuters.

At the regional markets, Japan’s Nikkei 225 rose 1.92% to 10,089.60, Hong Kong's Hang Seng Index gained 0.96% to 21,544.50, the Shanghai Composite Index edged up 0.18% to 2,460.12, Taiwan’s Taiex rose 0.60% to 10,489.60, South Korea’s Kopsi rose 1.28% to 2,051.03 and Singapore’s Straits Times Index added 0.95% to 3,017.49.

BIMB Securities Research said US stocks climbed sharply overnight, pushing the major averages to multi-year highs since 2007 backed by stronger US economy; improved retail sales and recovering banking sector.

The S&P 500 rose 1.8 percent to 1,395.95 while the Dow added 217.97 points to 13,177.68. The rally picked up speed in the final hour after JPMorgan Chase boosted its dividend and announced a US$15 billion buyback, said the research house.

Over in Europe, shares climbed to their highest in more than seven months boosted by encouraging economic data from Germany and the US.

“Domestically, the FBM KLCI closed flat (on Tuesday) just below the 1,565 support level; nonetheless net foreign trading participation remains positive at RM77.7 billion," it said.

BIMB Research said the strong rally over in US and Europe might boost sentiment on the local market and it expected the KLCI might test the immediate 1,570.

On Bursa Malaysia, BAT was the top gainer, up RM1.48 to 54.28, Hwatai 19.5 sen to 74 sen, Toyo Ink 19 sen to RM1.63, Genting PLANTATION []s 17 sen to RM9.40, UMW 16 sen to RM7.27.

Shell and Tasek gained 10 sen each to RM10.10 and RM8.70, while Ta Ann and AirAsia added nine sen each to RM5.69 and RM3.63.

Sin Heng Chan, which fell earlier following a query by Bursa Malaysia Securities over its unusual market activity on Tuesday, rose 16 sen to RM1.25,

Naim Indah Corp was the most active counter with 43.99 million shares done. The stock fell three sen to 65.5 sen.

Other actives included Euro Holdings, FFHB, Sinh Heng Chan, Winsun, Silver Bird, Hwatai, YTL and CAM Resources.

Decliners included Quality Concrete, Sunchirin, MISC, LTKM, Gadang, PFCE, UPA Corp and Selangor Dredging.



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KLCI jumps in early trade, boost from Wall St, regional mkts

KUALA LUMPUR (March 14): Stocks on Bursa Malaysia advanced in early trade as investors’ appetite for equities perked up following the strong overnight close on Wall Street and firmer regional markets.

Reuters reported that Asian shares rose, as upbeat US economic data boosted investors' risk appetite, while reduced expectations for further monetary easing from the Federal Reserve underpinned the dollar.

U.S. stocks rallied on Tuesday as stronger-than-expected retail sales and signs of easing in the euro zone were signals the global economy was gaining momentum. The Dow Jones industrial average was up 104.08 points, or 0.80 percent, at 13,063.74. The Standard & Poor's 500 Index was up 11.10 points, or 0.81 percent, at 1,382.19. The Nasdaq Composite Index was up 29.63 points, or 0.99 percent, at 3,013.29.

At Bursa Malaysia, the FBM KLCI was up 8.95 points to 1,572.97. Turnover was 94.76 million shares valued at RM72.11 million. There were 235 gainers, 41 losers and 123 stocks unchanged.

Among the gainers were Nestle, up 70 sen to RM57 while BAT added 58 sen to RM53.38, UMW 19 sen to RM7.30 while Public Bank and Genting advanced 10 sen each to RM13.76 and RM10.88. KLK rose eight sen to RM23.34 and Maxis seven sen to RM5.97.



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Sin Heng Chan falls in early trade after price surge

KUALA LUMPUR (March 14): Shares of Sin Heng Chan (M) Bhd fell in early trade on Wednesday, as speculators took profit after the price surge on Tuesday which prompted a query from the stock exchange.

At 9.08am, it fell five sen to RM1.05. There were 1.07 million shares done.

The FBM KLCI rose 7.93 points to 1,571.95. Turnover was 58 million shares valued at RM41.59 million. There were 179 gainers, 31 losers and 95 stocks unchanged.

On Tuesday, the shares of Sin Heng Chan surged on Tuesday, prompting a query from Bursa Malaysia securities over the unusual market activity.

Its share price closed up 29.5 sen to RM1.10 with 8.48 million units done. However, the company said it was unaware of any reason for the unusual market activity.



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RHB Research sees consumer spending growth remaining resilient

KUALA LUMPUR (March 14): RHB Research Institute forecasts consumer spending growth would remain resilient at 5.8% for 2012, albeit at a slower pace as compared to 2011.

It said on Wednesday that in 2011, domestic consumer spending grew by 6.9% on-year, the fastest in three years and stronger than the 6.5% on-year growth in 2010.

“We believe the rate of growth of consumer spending would slow in 2012 (vs. 2011) as the high levels of household debt has prompted Bank Negara (BNM) to further tighten its grip on consumer lending by imposing more stringent measures on consumer credit and this could have an impact on consumer spending,” it said.

Nevertheless, despite the credit tightening, RHB Research believes consumer spending would still remain relatively resilient for FY12, underpinned by the high savings rate, rising consumerism and favourable labour market conditions.

Furthermore, it believes that the impact of the tighter credit would mainly affect big ticket items such as property and vehicle sales and to a certain extent, electrical goods, as the banks now have more stringent criterion for approving housing loans and hire purchase loans.

“Underpinned by the resilient consumer spending outlook and despite the external headwinds, we remain positive on the topline growth outlook of the consumer sector (for all retail, F&B and sin stocks),” it said.

RHB Research reiterated its Overweight stance on the sector. Its top picks are QL Resources for the F&B segment and Parkson for the retail segment.



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CIMB Research has technical buy on Sanichi at 12.5 sen

KUALA LUMPUR (March 14): CIMB Equities Research has a technical buy on Sanichi TECHNOLOGY [] at 12.5 sen at which it is trading at a price-to-book value of 2.6 times.

The research house said on Wednesday Sanichi Technology is consolidating in a bullish wedge pattern.

“We are waiting for a breakout above its wedge resistance before going long. However, only risk takers should look at this stock due to its volatility,” it said.

CIMB Research said that as long as the candles hold above the 12 sen level, it thinks the odds still favour the bulls.

The research house said traders should be quick to cut loss if this level is breached. The next resistance levels are 15 sen and 16.5 sen.

“Technical landscape remains conducive. MACD signal line is poised for a positive crossover while RSI has bounced back from its lows,” it said.



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CIMB Research has technical sell on Silk Holdings at 45 sen

KUALA LUMPUR (March 14): CIMB Equities Research has a technical sell on Silk Holdings at 45 sen at which it is trading at a price-to-book value of 1.4 times.

The research house said on Wednesday the black marubozu pattern formed on Monday was confirmed by yesterday’s slip. It appears that the candles are likely to derail towards 42 sen, 39 sen and 36.5 sen soon.

“If the medium term uptrend channel is breached, we expect the bears to take lead. Indicators also look exhausted at the moment. MACD histogram bars are losing pace while RSI has hooked downward,” it said.

CIMB Research said any rebound is an opportunity to unload. It added that it would only review its call if the candles swing past the 50.5 sen level.



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CIMB Research has technical sell on Dayang Enterprise at RM2.10

KUALA LUMPUR (March 14): CIMB Equities Research has a technical sell on Dayang Enterprise Holdings at RM2.10 at which it is trading at a price-to-book value of 2.2 times.

The research house said on Wednesday the uptrend from its September 2011 low may have exhausted. Selling pressure began to accelerate after prices hit a snag at the RM2.20 level.

“Looking at the chart, we think that the next downleg would likely drag prices back towards RM1.97 and RM1.87,” it said.

CIMB Research said the indicators are showing signs of exhaustion. MACD signal line is poised for a negative crossover while the RSI has also hooked downward.

“Unload on strength looks like a good option here, especially near the RM2.14-RM2.20. Put a buy stop at RM2.25, just in case,” it said.



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CIMB Research keeps Axiata target price unchanged at RM5.48

KUALA LUMPUR (March 14): CIMB Equities Research raised its FY13-14 dividend assumptions for Axiata following our non-deal roadshow as capex post FY12 should fall faster than its expectations.

“This should push ROIC from about 11% this year to the high teens over the next three to five years. Axiata intends to up its stakes in Idea and M1, failing which it will sell out. The key risks are regulations in Bangladesh and India,” it said.

CIMB Research said Axiata remains a Buy and one of its regional top telco picks. It trimmed its EPS estimates on the higher dividends but no change to its DCF-based target price of RM5.48.



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Stocks to watch: Sin Heng Chan, Ramunia, MMC, asiaEP

KUALA LUMPUR (March 13) : Malaysian stocks could encounter downward pressure on Wednesday as investors turned cautious on the technical dynamics of the local market. Analysts believe any gains on the FBM KLCI could be stifled by profit taking amid a downside bias perception on the local benchmark.

In a note on Tuesday, Hong Leong Investment Bank Bhd research head Low Yee Huap said the research firm had changed its stance from positive to cautious as it foresees more profit taking consolidation in the local stock market.

Low said “the bears look stronger now” against a backdrop of weaker technical readings in the FBM KLCI.

On Tuesday, anticipation of better US retail sales numbers had spurred Asian stock markets and crude oil prices. Notable gainers include Hong Kong’s Hang Seng which rose 0.97% to close at 21,339.7 points and Australia’s S&P / ASX 200 which climbed 1.21% to 4247.62 while Taiwan’s Taiex was up 1.31% to 8031.51.

Malaysia’s FBM KLCI of 30 blue chip stocks which rose as much as 0.3% to an intraday high of 1569.15 points, however pared earlier gains to settle with a 0.73 point loss to 1564.02 points.

Stocks to watch on Wednesday include Sin Heng Chan (M) Bhd, RAMUNIA HOLDINGS BHD [], MMC CORPORATION BHD [],asiaEP Resources Bhd, Lafarge Malayan Cement Bhd , GEFUNG HOLDINGS BHD [] and YTL Corp Bhd.

Shares of Sin Heng Chan surged on Tuesday, prompting a query from Bursa Malaysia securities over the unusual market activity.

Its share price closed up 29.5 sen to RM1.10 with 8.48 million units done. However, the company said it was unaware of any reason for the unusual market activity.

Ramunia’s unit has secured a RM23.62 million contract from Aquaterra Energy Ltd to fabricate two wellhead support structures.

Gas Malaysia Bhd is seeking a further extension of six months until Oct 6 from the Securities Commission to complete the proposed listing exercise. MMC Corporation said Gas Malaysia had applied to the SC for its approval for the six-month extension.

West River Capital Sdn Bhd (WRC) has rejected TSM GLOBAL BHD []’s request for better offer terms including the price and this has seen the latter resolving to consider other offers.

TSM said WRC’s offer price would remain at RM1.25 per share.

asiaEP’s major shareholder Tian Ee Intertrade Sdn Bhd has made a requisition for an EGM following the company’s decision to terminate its planned private placement, the firm said in statement to Bursa Malaysia on Tuesday. asiaEP shares rose 0.5 sen to close at nine sen.

RHB Research Institute has upgraded LAFARGE MALAYAN CEMENT BHD [] from an underperform to market perform and revised upwards its fair value by 25% from RM5.94 to RM7.43. The research house has also raised its earnings forecast for the cement producer by between 3% and 21% for FY12 to FY14 period. Lafarge shares rose five sen to RM7.26.

Bahamas-based Golden Knights International Ltd emerged a a major shareholder in marble products manufacturer Gefung Holdings Bhd with a 5.11% stake. This follows Golden Knights’ acceptance of its entitlement from Gefung’s rights issue. Gefung shares added one sen to 17.5 sen

YTL Corp Bhd saw heavy trading after its unit YTL Communications Sdn Bhd was reported to be in the midst of implementing the 1Bestarinet project in government schools. The initiative involves the setting up of Internet access to enable virtual learning environment in public schools. Shares of YTL Corp were up two sen to RM1.68 with some 21 million shares done.



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