Monday 19 March 2012

Offer price for Eng Teknologi revised lower

KUALA LUMPUR (March 19 : The founders and major shareholders of ENG TEKNOLOGI HOLDINGS BHD [] who are in the midst of privatising the hard disk drive component maker, said the takeover offer price has been revised downwards from RM2.50 to RM2.

In a statement to the exchange on Monday, Eng Teknologi said its founders Datuk Teh Yong Khoon and Low Yeow Siang via private vehicle TYK Capital Sdn Bhd, has proposed to lower the offer price as their financiers were unable to justify the funding for the takeover at RM2.50.

The financiers were unable to justify the funding after taking into account Eng Teknologi’s financials considering that its business was affected by the floods in Thailand, according to the company.

Eng Teknologi said it will deliberate on TYK’s revised offer. Shares of Eng Teknologi closed unchanged at RM1.77 on Monday.



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DRB-Hicom group MD Mohd Khamil appointed Proton chairman

KUALA LUMPUR (March 19): DRB-HICOM BHD [] group managing director Datuk Seri Mohd Khamil Jamil has been appointed chairman of PROTON HOLDINGS BHD [] with effect from Monday.

Proton said in a statement that Mohd Khamil was also appointed executive director upon completion of the acquisition of a 42.7% stake in Proton by DRB-Hicom on March 16.

He takes over from Datuk Seri Mohd Nadzmi Mohd Salleh, who resigned as Proton chairman and director of Proton last Friday.

Mohd Nadzmi’s resignation followed the approval by shareholders of DRB-Hicom Bhd on March 14 for the acquisition of the remaining equity interest in Poton after DRB-Hicom had increased its stake in Proton to about 50.01%.

He was a director nominated by Khazanah Nasional Bhd to the national carmaker’s board.



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Iskandar Regional Devt Authority targets RM20 bn investments a yr

KUALA LUMPUR: The Iskandar Regional Development Authority (IRDA) has targeted to achieve at least RM20 billion in committed investments annually in the Iskandar Malaysia special economic region until 2018.

The annual target is part of its overall objective to achieve a cumulative RM383 billion in committed investments by 2025.

IRDA chief executive Ismail Ibrahim said on Monday that the IRDA would need to attract at least RM25 billion of committed investments annually from 2019 until 2025 under the last stage, if it is to achieve the cumulative target of committed investments in Iskandar Malaysia.

Since the inception of the economic zone in 2006, the region has received RM84.9 billion worth of committed investments, mainly from the tourism, education and healthcare services sector.

About RM70 billion of the committed investments are forecast to be spent by 2016, Ismail said at a press conference for the Global Sepcial Economic Zone Summit.



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Boustead Naval Shipyard gets RM2.06 bn financing facilities

KUALA LUMPUR (March 19): Boustead Naval Shipyard Sdn Bhd (BNS) has obtained facilities of up to RM2.06 billion, which is part of the overall syndicated facilities of up to RM5.56 billion.

The facilities would be used for by BNS, a subsidiary of BOUSTEAD HOLDINGS BHD [], which was awarded a contract by the Malaysian navy for the CONSTRUCTION [] of six second-generation patrol vehicles with combatant capabilities.

Boustead Holdings Bhd said on Monday that the RM2.06 billion facilities obtained by BNS, a subsidiary of the group, was under phase one.

"The tenure of phase one facilities ranges from four years to eight years eight months. In this respect, the facilities amount under Phase 1 facilities will be reduced in accordance with the tenure. Payments from the government on completion basis will be utilised to settle the phase one facilities," it said.

Phase two of the facilities of up to RM3.505 billion which formed part of the remaining syndicated facilities were still on-going.

The joint mandated lead arrangers for phase one were Affin Investment Bank Bhd, Maybank Investment Bank Bhd and AmInvestment Bank Bhd.

The co-arrangers were Affin Bank Bhd, MALAYAN BANKING BHD [] and Maybank Islamic Bhd.

The co-managers were Bank Pembangunan Malaysia Bhd, Bank Muamalat Malaysia Bhd and Bank Kerjasama Rakyat Malaysia Bhd.

The lenders were Affin Bank Bhd, Malayan Banking Bhd, Bank Pembangunan Malaysia Bhd, Affin Investment Bank Bhd, Bank Kerjasama Rakyat Malaysia Bhd, Maybank Islamic Bhd and Bank Muamalat Malaysia Bhd.



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Plantation-based BJ Corp plans RM255m debt notes, rated AAA

KUALA LUMPUR (March 19): PLANTATION [] based BJ Corporation Sdn Bhd has proposed to issue 10-year debt bank-guaranteed medium-term notes (MTN) programme of up to RM255 million.

RAM Rating Services Bhd said on Monday it had assigned a preliminary AAA(bg) rating to the MTN and accorded a stable outlook for the rating.

It said the enhanced rating reflected the unconditional and irrevocable bank guarantee extended by MALAYAN BANKING BHD [] which it had rated AAA/Stable/P1.

“The backing of the bank guarantee enhances the credit profile of the proposed debt facility beyond BJ Corp’s inherent credit strength,” it said.

RAM Ratings said BJ Corp’s core activity is cultivating of oil palm plantations and it is an indirect unit of Asian Plantations Ltd -- a plantation group listed on the Alternative Investment Market of the London Stock Exchange since November 2009.

The group’s oil palm plantations are spread across three estates, all of which are in Sarawak. BJ Corp’s 4,795-ha plantation is the smallest.

Proceeds from the proposed debt facility will be used to refinance existing bank loans, partially finance the CONSTRUCTION [] of a vertical steriliser mill and fund development expenditure.

RAM Ratings’ head of real estate and construction ratings, Shahina Azura Halip described BJ Corp as a debutant in the plantation sector and lacked an operating track record.

“As plantings only began in 1Q 2009, its trees are primarily in the immature category (up to three years). We envisage that the company will only be able to demonstrate meaningful production and yield records after four years,” she said.

“However, the limited operating track record is partly mitigated by the Company’s experienced management team. BJ Corp’s estate is led and managed by a group of experienced planters, who bring with them 15 to 33 years’ experience each from their previous stints with reputable plantation groups in the country,” she adds.

Shahina said additionally, BJ Corp’s stand-alone credit strength reflected the company’s heavy expenses, a result of the significant costs involved in developing and nurturing its young estate. This is compounded by the challenge of the estate’s undulating terrain.

Due to the greenfield nature of its estate as well as its hefty costs and fixed overheads, the company’s financial position is rather weak.

“BJ Corp is highly dependent on equity injections from its parent; APL had extended financial support to the Company during its formative years. We expect this firm support to continue,” she said.

As at end-October 2011, advances from the group amounted to RM17.9 million; these are unsecured, interest-free and have no fixed repayment terms.

The solid support is further underlined by the availability of a corporate guarantee from APL to the guarantor.

Nonetheless, the ratings agency said APL’s cashflow-generating aptitude is deemed weak due to its young estates. Consequently, the group also has to rely on financial support from its major shareholder, Keresa Plantations Sdn Bhd.

“Due to lack of information, however, RAM Ratings is unable to ascertain the extent of such support or the ability of Keresa Plantations to extend such backing, should the group’s future funding needs substantially exceed what has been required to date.

“Meanwhile, BJ Corp’s financial performance will remain vulnerable to the vagaries of the oil-palm industry, chief of which is the volatile price swings for crude palm oil. Nevertheless, demand for CPO will remain supported by increasing food consumption and the world’s expanding population,” said the ratings agency.



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KLCI starts week on positive tone, select blue chips support

KUALA LUMPUR (March 19): The FBM KLCI started the week on a positive tone and closed slightly higher on Monday, lifted by gains of select blue chips including Petronas Gas, Tenaga and MISC.

The FBM KLCI closed 2.2 points up at 1,573.60. Turnover was 1.80 billion shares valued at RM1.51 billion. Declining stocks led advancers 434 to 319 while 329 counters were unchanged.

Asian shares edged higher and the dollar was steady against the yen on Monday after the U.S. market hit an almost four-year high last week and with higher European stocks reflecting signs of growing stability in the euro zone, according to Reuters.

The Shanghai Composite Index rose 0.23% to 2,410.18, Japan’s Nikkei 225 edged up 0.12% to 10,141.99, South Korea’s Kospi was up 0.62% to 2,0467.00. However, Hong Kong’s Hang Seng Index fell 0.92% to 21,121.67, and Taiwan’s Taiex shed 0.14% to 8,043.92 and Singapore’s Straits Times Index was down 0.68% to 2,990.09.

Ariantec Global was the most actively traded counter with 235.2 million shares done. The stock gained four sen to 13.5 sen.

Other actives included Metronic Global, Pan Malaysian Industries, Naim Indah Corp, IFCA MSC, Focus Point, Asia-Bio, Carotech and Hibiscus warrants.

Among the gainers were Dutch Lady, up 52 sen to RM30.50, Petronas Gas 40 sen to RM16.40, MISC 21 sen to RM5.36, HL Bank 18 sen to RM12 and Bumi Armada 16 sen to RM4.28.

Rock Chemical Industries rose 31 sen to RM2.06 or four sen below the RM2.10 takeover offer by Mega First Corp Bhd.

Bumi Armada added 16 sen to RM4.28. CIMB Equities Research raised the target price for Bumi Armada to RM4.80 from RM4.12.

It valued Bumi Armada at 18.2 times CY13 price-to-earnings, which is a 40% premium over its target market price range which was recently raised from 12.6 times to 13 times.

However, EPMB fell the most as investors were disappointed over its proposed acquisition of the 26km Maju Expressway (MEX) from Maju Holdings Sdn Bhd which was viewed as pricey.

Under the deal, the auto parts maker will pay RM1.7 billion for the highway concessionaire which included the debts. The MEX links the city centre in Jalan Tun Razak here to Putrajaya. OSK Research said the acquisition at RM1.7 billion would include assuming debts totaling RM550 million.

“Besides, the high interest cost will erode earnings in the immediate term. Given its excellent run but this pricey acquisition, we downgrade EPMB to a Neutral from a Buy, slashing its fair value from RM1.38 to RM1.15,” it said.

Other decliners were Cybertowers, down 14 sen to 31.5 sen, Top Glove 13 sen to RM4.83 while MAHB, Maybank and Mudajaya shed nine sen each to RM5.53, RM8.72 and RM3.01.



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ConnectCounty sees 5.1% stake crossed

KUALA LUMPUR (March 19): CONNECTCOUNTY HOLDINGS BHD [] saw eight million shares crossed at 11.5 sen in an off-market deal in the afternoon session on Monday.

According to stock market data, the shares represented a 5.1% stake.

The shares were crossed at 2.5 sen below the current market price of 14 sen.

ConnectCounty’s core activities are designing, manufacturing and trading of cables, connectors and related products.



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KL shares mixed at midafternoon

Share prices on Bursa Malaysia were mixed at mid-afternoon today but at 3.01pm the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was 1.56 points better at 1,572.96, dealers said.

Sentiment remained cautious over the weaker-than-expected US economic data recently.

The US bourses were mixed but little changed and the Asian markets were expected to follow the latter's lead, a dealer said.

The Finance Index eased 17.32 points to 14,175.33 but the Plantation Index rose 20.62 points to 8,596.81 and the Industrial Index added 22.68 points to 2,838.41.

The FBM Emas Index advanced 6.03 points to 10,851.86, while the FBM Mid 70 Index shed 9.96 points to 12,135.65 and the FBM ACE Index slipped 23.75 points to 4,641.01.

Losers led gainers 380 to 279 while 311 counters were unchanged and 19 untraded.

Trading volume stood at 1.16 billion shares valued at RM794.375 million.

Among active stocks, Ariantec Global added 2.5 sen to 12 sen, Pan Malaysian earned half a sen to 5.5 sen, IFCA MSC advanced one sen to 12.5 sen while Metronic Global was flat at 12.5 sen.

Among heavyweights, Maybank lost eight sen to RM8.73, CIMB eased two sen to RM7.64, Petronas Chemicals shed four sen to RM6.72 while Sime Darby was flat at RM9.75. -- Bernama



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Rock Chemical share price surges close to offer price

KUALA LUMPUR (March 19): Shares of ROCK CHEMICAL INDUSTRIES (M) [] Bhd (RCI) jumped in late afternoon on Monday after a hesitant start and was close to the takeover offer price of RM2.10.

At 4.03pm, it was up 31 sen to RM2.06. There were 142,200 shares done.

The FBM KLCI was up 1.44 points to 1,572.84. Turnover was 1.47 billion shares valued at RM1.08 billion. There were 278 gainers, 460 losers and 313 stocks unchanged.

Mega First Corp Bhd has served a takeover notice on its 60.43% subsidiary RCI to acquire the remaining shares it does not own at RM2.10 each.

Mega First, a power plant builder and property developer, said the takeover offer will give the acquirer full control of Rock Chemical, building materials entity, hence greater flexibility to dictate the subsidiary’s business direction.

RCI’s board of directors said it had received a notice of conditional take-over offer for the shares.

“The board does not intend to seek any other person to make a competing or alternative take-over offer for the offer shares,” it said.



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Public Bank to pay 48 sen dividend for 2011

Public Bank Bhd (PBB) has declared a cash dividend of 48 sen per share for financial year ended Dec 31, 2011, up from 45.5 sen per apiece in the previous financial year, attributed to the strong performance during the financial year.

The total dividend amounted to RM1.68 billion, representing a total payout of 48 per cent of the group's net profit last year.

Chairman Tan Sri Teh Hong Piow said the banking group was expected to maintain its earning momentum and continue to record satisfactory performance this year, supported by growth in home mortgages, passenger vehicle hire purchase financing and retail customer loans.

"The group's solid performance in 2011 reaffirms the continued soundness of its proven business strategies.

"The bank will continue to sustain its market leadership position in domestic lending for residential mortgages, -- Bernama



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Public Bank to maintain about 50% of earnings as dividends

KUALA LUMPUR: PUBLIC BANK BHD [] will maintain paying out about half of its earnings as dividends and retaining the remainder for its capital requirements.

The group’s chief operating officer Leong Kok Nyem said on Monday: “As far as the group policy on dividend is concerned, 48.3 % is still approximately half of what the bank earns”.

“And the intention is to broadly maintain the half payout of earnings which will allow the bank to retain the other half which is adequate to sustain the growth capital requirements of the public bank group."

In answering questions from the shareholders at the AGM on Monday, Leong also said Public Bank remains the largest in market capitalisation among the non-government owned company on Bursa Malaysia.

“As far as the treasury shares are concerned, we do have 29.8 million treasury shares. That accounts for less than 1% of the share capital of the bank. It would be impractical to do a distribution as dividend because it will be less than one share per 100 shares held by shareholders.

“So the bank is in a position, should the market be appropriate, to realise the RM420 million of values of shares which will enhance the share capital through an open market sale,” said Leong.



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Lipo Corp, Kobay shares trading halted pending announcement

KUALA LUMPUR (March 19): Trading in the shares of LIPO CORPORATION BHD [] and KOBAY TECHNOLOGY [] BHD [] shares have been suspended from 3.05pm on Monday until further notice.

In separate filings to Bursa Malaysia Securities Bhd on Monday, Lipo Corp said the trading halt in its shares was pending an announcement.

Meanwhile, KObay Tech said the trading suspension was until further notice.



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Rock Chemicals Industry untraded as buy, sell bids unmatched

KUALA LUMPUR (March 19): Shares of ROCK CHEMICAL INDUSTRIES (M) [] Bhd (RCI) were untraded when they resumed trading in the afternoon session on Monday after the company received a notice of conditional take-over offer at RM2.10 per share.

At 2.38pm, there were buy bids for 1,000 shares at RM1.97 while there were sell bids for 31,100 shares at RM2.10.

Mega First Corp Bhd has served a takeover notice on its 60.43% subsidiary RCI to acquire the remaining shares it does not own at RM2.10 each.

Mega First, a power plant builder and property developer, said the takeover offer will give the acquirer full control of Rock Chemical, building materials entity, hence greater flexibility to dictate the subsidiary’s business direction.

RCI’s board of directors said it had received a notice of conditional take-over offer for the shares.

“The board does not intend to seek any other person to make a competing or alternative take-over offer for the offer shares,” it said.



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Forbes, Bumi Armada ink US$100m loan

Armada D1 Pte, a venture between Forbes & Co, controlled by billionaire Pallonji Shapoorji Mistry, and Kuala Lumpur-based Bumi Armada Bhd signed a US$100 million loan, according to a person with direct knowledge of the matter.

The so-called bridge loan has a maturity of nine-months, the person said, asking not to be identified because the details are private.

SBI Capital Markets Ltd, the investment banking unit of the nation’s largest lender, State Bank of India, arranged the facility, the person said. The venture is still working on a separate loan of about US$280 million which will mature in eight years, the person said. -- Bloomberg



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KL shares mixed at mid-day

Share prices on Bursa Malaysia trended mixed at midday today in line with the uncertain movement in regional markets, dealers said.

At 12.30pm, the FBM KLCI was 2.32 points higher at 1,573.72, after opening 2.9 points higher at 1,574.3. A dealer said investors were cautious after the weaker-than-expected US economic data recently.

"Unexpected weakness in consumer sentiment adds to the overall caution," he said.

The Finance Index eased 2.47 points to 14,190.18 but the Plantation Index rose 20.42 points to 8,596.61 and the Industrial Index added 16.72 points to 2,832.45.

The FBM Emas Index advanced 12.55 points to 10,858.38, the FBM Mid 70 Index earned 4.86 points to 12,150.47 while the FBM ACE Index slipped 15.76 points to 4,649.

Losers led gainers 363 to 265 while 287 counters were unchanged and 21 untraded. Trading volume stood at 1.05 billion shares valued at RM658.48 million.

Among active stocks, Ariantec Global added 2.5 sen to 12 sen while Pan Malaysian, Metronic Global and IFCA MSC earned half a sen each to 5.5 sen, 13 sen and 12 sen respectively.

Among heavyweights, Maybank lost seven sen to RM8.74, CIMB eased two sen to RM7.64, Petronas Chemicals shed four sen to RM6.72 while Sime Darby was flat at RM9.75. -- Bernama



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FBM KLCI slips into the red, rebounds towards midday

KUALA LUMPUR (March 19) : Malaysian equities briefly slipped into the red before rebounding into positive territory towards midday. Analysts have a downside bias perception on the technical dynamics of the FBM KLCI until more domestic catalysts emerge to arrest the weakness in the local market.

For now, they said external news flow, especially, more positive economic data from the US should give a boost to Asian equities. These include the anticipation of better housing market figures from the world’s largest economy this week.

At 12.30pm, the 30-stock-FBM KLCI rose 2.25 points to 1,573.65 with some 1.05 billion shares worth RM658 million traded. The index which had reached an intraday high of 1,574.3 points earlier had declined to an intraday low of 1,570.88 points.

Across the exchange, there were 265 gainers versus 363 decliners while 287 stocks were unchanged.

Top gainers include PETRONAS GAS BHD [] which added 38 sen to RM16.38 followed by EKOVEST BHD [] which gained 16 sen to RM2.75.

Decliners include NESTLE (M) BHD [] which fell 20 sen to RM55.80 while AEON CREDIT SERVICE (M) BHD [] was also down by a similar quantum to RM9.20.

Most active was Ariantec Global Bhd which added 2.5 sen to 12 sen with some 133 million shares done.

Comments from International Monetary Fund managing director Christine Lagarde over the weekend had offered support to Asian equities on Monday morning. Lagarde said the world economy has stepped back from the brink of danger and signs of stabilisation are emerging from the euro zone and the US.

She, however, warned that high debt levels in developed economies and rising crude oil prices are still crucial risks for the global backdrop.

Major Asian stock indices saw gains towards midday. Japan’s Nikkei 225 climbed 0.26% to 10,156.1 points , Hong Kong’s Hang Seng was up 0.27% to 21,375.6 while Australia’s S&P/ASX 200 gained 0.51% to 4,298.1



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EPMB dn 12.5% midday, OSK cuts FV to RM1.15

KUALA LUMPUR (March 19): Shares of EP MANUFACTURING BHD [] (EPMB) fell 12.5% by noon on Monday as investors viewed its proposed acquisition of the 26km Maju Expressway (MEX) from Maju Holdings Sdn Bhd as pricey.

At midday, EPMB was down 14 sen to 98 sen.

Under the deal, the auto parts maker will pay RM1.7 billion for the highway concessionaire, according to sources. The RM1.7 billion price tag includes debts. The MEX links the city centre in Jalan Tun Razak here to Putrajaya.

The Edge Financial Daily said a EPMB would finance the acquisition by issuing RM1.2 billion in sukuk while the remaining amount will be raised through bank borrowings.

OSK Research said the acquisition at RM1.7 billion would include assuming debts totaling RM550 million.

“Although traffic growth is expected to be resilient, from a valuation standpoint, the deal looks pricey and raises our concern that it may cause EPMB’s net gearing to to 457% this year.

“Besides, the high interest cost will erode earnings in the immediate term. Given its excellent run but this pricey acquisition, we downgrade EPMB to a NEUTRAL from a BUY, slashing our fair value from RM1.38 to RM1.15,” it said.



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EP Mfg slides on highway buy proposal

EP Manufacturing Bhd, a maker of automotive parts, slid 9.8 per cent to RM1.01 as of 9:32 a.m. in Kuala Lumpur, bound for its steepest decline since July 13, 2009. The stock jumped 14 per cent to an eight-year high on March 14 before a trading suspension to announce the company’s proposal to buy highway concessionaire Maju Expressway Sdn Bhd for RM1.15 billion. -- Bloomberg



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OSK Prop rises, plans bonus share issue

OSK Property Holdings Bhd advanced 9 per cent to RM1.33 as of 9:32 a.m. in Kuala Lumpur, set for its biggest gain since May 27. The property developer plans a bonus share issue and a rights offer with free warrants, it said in a statement. -- Bloomberg



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Bumi Armada rises on report

Bumi Armada Bhd climbed 3.4 per cent to RM4.26, headed for its biggest gain since Nov. 16. The company is vying for a contract to build a floating production, storage and offloading vessel for Hess Corp, the Edge newspaper reported, citing unnamed people familiar with the matter. Bumi Armada Chief Executive Officer Hassan Basma is overseas and couldn’t immediately comment when phoned at his office today. -- Bloomberg



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HDBSVR: Malaysian equities could be losing steam

KUALA LUMPUR (March 19): Hwang DBS Vickers Research said technically speaking, Malaysian equities could be losing steam after slipping slightly below an uptrend line.

In its traders spectrum outlook issued on Monday, it said from a psychological perspective, signs of fatigue are starting to be visible on the local bourse judging by its subdued reactions to positive overseas leads of late.

“This may signal a downward bias with the KLCI probably sliding towards the bottom end of its 1,555-1,600 trading range going forward,” it said.

HDBSVR said after tumbling to an intra-week trough of 1,562.97, the KLCI barely recovered to finish at 1,571.40 on Friday, down 7.6-point or 0.5% week-on-week.

“Nevertheless, in the small-mid cap space, the FBM 70 Index (-0.4%) and the FBM ACE Index (+0.1%) saw mixed weekly changes,” it said.

HDBSVR said trading activity, meanwhile, matched the preceding week’s daily average volume of 1.5 billion shares valued at RM1.8 billion.

The research house said that in contrast, the bulls continue their reign in other parts of the region.

Last week, the indices staged a strong rally, the Philippines index was up 3.3% week-on-week, Thailand (+2.7%) and Japan (+2.0%) as eight of the 11 Asian stock exchanges tracked by HDBSVR ended in the positive territory.

With the eurozone’s sovereign debt strains being put on the backburner for the moment, key U.S. barometers also saw weekly gains of between 2.2% and 2.4%.

“On a year-to-date basis, Malaysia will likely finish the first quarter of the year with the smallest stock market return (of +2.7%) among the 11 regional bourses,” it said.

HDBSVR said with only two more weeks to end-1Q12, the current three best performers across Asia are Japan (up 19.8% so far this year), Philippines (+17.7%) and Thailand (+16.0%) while Wall Street indices were up between 8.3% and 17.3%.

“The relative underperformance of our local bourse – coming on the back of its resilient performance last year – could be partly attributable to a dearth of fresh re-rating catalysts, as well as possible jitters on the impending general election that is likely to be called in a matter of months,” it pointed out.

HDBSVR said the dry spell of market-moving news may drag on this week. The pipeline is expected to be fairly quiet except for: (a) Bank Negara Malaysia’s release of the 2011 Annual Report (which would reveal forward looking economic indicators like the central bank’s projections on GDP growth rate and inflation) on Wednesday; and (b) several listed companies – such as Berjaya Sports Toto (on Wednesday) and SP Setia (Thursday) – announcing their latest quarterly financial report cards.

“On the chart, a cut beneath (albeit just marginally) an uptrend line last week has raised the probability that the FBM KLCI would see weaknesses ahead.

“Unless the index climbs above the positive sloping trend line any time soon – which has been in existence since late Sep last year (chart overleaf) – a deeper market pullback may be on the cards,” it said.

HDBSVR said if so, then a double-top trend reversal pattern could be evolving. The research house said in particular, a negative technical outlook will be probable should the bellwether – after hitting a recent high of 1,595 to test its historical peak of 1,597 – drop below the support thresholds of 1,555 and 1,530 going forward.

However, on the upside, the resistance levels of 1,580 (immediate) and 1,600 (next) remain the stumbling blocks for the FBM KLCI to overcome.



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FBM KLCI rises in morning trade

KUALA LUMPUR (March 19) : Malaysian stocks rose in morning trade on Monday in tandem with Asian markets as investors digested positive updates on the world economy.

International Monetary Fund managing director Christine Lagarde had said the world economy has stepped back from the brink of danger and signs of stabilisation are emerging from the euro zone and the US. Lagarde, however, warned that high debt levels in developed economies and rising crude oil prices are still crucial risks for the global backdrop.

In Malaysia, the FBM KLCI was up 3.5 points to 1,574.9 at 9.38am with some 434 million shares worth RM155 million traded. There were 201 gainers versus 119 decliners while 214 stocks were unchanged.

Top gainers across Bursa Malaysia include Hibiscus Petroleum Bhd which rose 20 sen to RM1.83 followed by PPB Group Bhd which was up 16 sen to RM16.66.

Decliners include EP MANUFACTURING BHD [] which fell 12 sen to RM1 while AEON CREDIT SERVICE (M) BHD [] was down 10 sen to RM8.90.

Most active was Ariantec Global Bhd which added two sen to 11.5 sen with some 72 million shares done.

In a note on Monday, TA Securities Holdings Bhd said technical trading dynamics of the FBM KLCI could see a downside bias this week until bearish momentum has been neutralised. Last Friday, the FBM KLCI fell 0.5% or 7.98 points to close at 1,571.4.

“The weak market breadth and trading momentum could persist this week, pending more local market catalysts to boost trading momentum.

“Nonetheless, the better-than-expected US economic data last week should offset concern over China's economic slowdown in the region,” TA said.

Asian stock indices rose. Japan’s Nikkei 225 climbed 0.35% to 10,165.7 points , Australia’s S&P/ASX 200 was up 0.64% to 4,303.6, while South Korea’s Kospi rose 0.71% to 2,048.79.



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KL shares open higher on technical rebound

Share prices on Bursa Malaysia opened firmer today on technical rebound after tumbling in the final few minutes of trading on Friday for a daily loss of eight points.

Nineteen minutes after the opening bell, the FBM KLCI stood at 1,577.32, up 5.92 points. It had opened 2.9 points higher at 1,574.3. HwangDBS Vickers Research said there was no strong market lead coming in from abroad last week.

"Major US equity indices were little changed on Friday as Wall Street was in a consolidation mode," it said in a research note.

The global forecast for the Asian markets is flat with a hint of negativity in response to weaker-than-expected economic data from the US.

On Bursa Malaysia, the Finance Index advanced 47.53 points to 14,240.18, the Plantation Index added 6.24 points to 8,582.43 and the Industrial Index up 15.24 points to 2,830.97.

The FBM Emas Index climbed 37.6 points to 10,883.43, the FBM Mid 70 Index surged 35.79 points to 12,181.4 and the FBM ACE Index edged up 20.48 points to 4,685.24.

Gainers outnumbered losers 162 to 59, while 134 counters were unchanged, 1,138 untraded and 21 suspended. Volume stood at 213.596 million worth RM55.49 million.

Among active counters, Ariantec Global earned two sen to 11.5 sen, Pan Malaysia added half a sen to 5.5 sen while Metronic Global eased half a sen to 12 sen.

For heavyweights, Maybank unchanged at RM8.81, Sime Darby earned four sen to RM9.79, CIMB rose three sen to RM7.69 and Petronas Chemicals increased two sen to RM6.78. -- Bernama



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Mega First serves takeover notice on Rock Chemical

KUALA LUMPUR (March 19) : Mega First Corp Bhd has served a takeover notice on its 60.43% subsidiary ROCK CHEMICAL INDUSTRIES (M) [] Bhd to acquire the remaining shares it does not own at RM2.10 each.

In a statement to the exchange on Monday, Mega First, a power plant builder and property developer, said the takeover offer will give the acquirer full control of Rock Chemical, building materials entity, hence greater flexibility to dictate the subsidiary’s business direction.

At RM2.10 per Rock Chemical share, Mega First will have to spend RM35.2 million to acquire the remaining 39.57% or 16.76 million shares in the subsidiary.

Trading of shares in Mega First and Rock Chemical has been suspended since last Friday for the announcement. Mega First was last traded at RM1.70 on Thursday while Rock Chemical closed at RM1.75.



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Mega First offers to buy out Rock Chems

Mega First Corp, a Malaysian heavy-equipment manufacturer, made a buyout offer for Rock Chemicals Industries (Malaysia) Bhd at RM2.10 per share, according to a Kuala Lumpur exchange filing today.

Mega First already owns 60.4 per cent of Rock Chemical’s shares, it said. -- Bloomberg



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HDBSVR: KLCI may see mild technical rebound

KUALA LUMPUR (March 19): Hwang DBS Vickers Research said the key FBM KLCI may see a mild technical rebound on Monday after tumbling in the final few minutes of trading on Friday for a daily loss of 8.0 points.

“On the chart, the immediate support and resistance levels for the benchmark index are currently seen at 1,555 and 1,580, respectively,” it said.

HDBSVR said among the stocks that could attract added interest include Bumi Armada and MISC after a business weekly report that said the two companies (with their respective partners) are the front runners to bag a FPSO vessel contract to be awarded by an US-based oil & gas entity.

Another stock to watch are EP Manufacturing, in response to its proposed acquisition of an expressway concessionaire for RM1.2 billion.

Also in focus would be CCM Duopharma, which has announced a net dividend per share of 10.9 sen, translating to a net yield of 4.6%.



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CIMB Research ups Bumi Armada target price to RM4.80

KUALA LUMPUR (March 19): CIMB Equities Research has raised the target price for Bumi Armada to RM4.80 from RM4.12.

It said on Monday that it was now valuing Bumi Armada at 18.2 times CY13 price-to-earnings, which is a 40% premium over its target market price range which was recently raised from 12.6 times to 13 times.

“Bumi Armada’s RM7 billion order book supports our 32.5% 3-year EPS CAGR. Maintain Outperform,” it said.

CIMB Research said the race for regional FPSO contracts is hotter than ever. Armed with five FPSO contracts, Bumi is reported to have made good progress in its bid to supply a FPSO unit at Indonesia’s Madura field.

The research house said Bumi Armada was also tipped as the potential frontrunner for India’s Cluster 7 contract.



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CIMB Research has technical buy on KPJ Healthcare at RM5.12

KUALA LUMPUR (March 19): CIMB Equities Research has a technical buy on KPJ Healthcare at RM5.12 at which it is trading at a price-to-book value of 3.4 times.

It said on Monday that the uptrend from its September 2011 low does not look complete.

“Recent consolidation stopped at the 23.8% FR level and the bulls have since taken the lead,” it said.

CIMB Research said that on Friday, the stock hit a new all time high of RM5.15, reflecting the bullishness of the stock.

“Indicators are showing sign of improvement. MACD signal line has staged a positive crossover while RSI has also hooked upward. Hence, we think the uptrend could last a while longer,” it said.

The research house said that aggressive traders may take some position here. The next upleg will likely lift prices towards RM5.40 and RM5.80.

However, always place a stop at below RM5.04 to RM5.00 in case the trend reverses.



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CIMB Research has technical sell on IOI Corp

KUALA LUMPUR (March 19): CIMB Equities Research has a technical sell on IOI Corporation at RM5.24 at which it is trading at a FY13 price-to-earnings of 15 times and price-to-book value of 2.8 times.

It said on Monday that IOI violated its wedge support last week and it said the stock was due for a correction.

“If we are right, the next downswing will likely push prices lower towards RM5.00 and RM4.84,” it said.

CIMB Research said as long as the candles stay below its key moving averages, the bears have the upper hand here. Indicators too point to more downside ahead, it added.

The research house said unloading on strength looks like a good option here. Only a rise above RM5.55 would prompt it to review its call.



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CIMB Research has technical buy on MUI Properties at 18 sen

KUALA LUMPUR (March 19): CIMB Equities Research has a technical buy on MUI PROPERTIES [] at 18 sen at which it is trading at a price-to-book value of 0.6 times.

It said on Monday that MUI Properties broke out of its short term downtrend channel on Friday.

“We think buying interest should pick up in days to come. If we are right, the next upswing will likely lift prices towards RM0.195 and RM0.21. However, only risk takers should look at this stock due to the volatility of the stock,” the research house said.

The research house said the indicators are improving. MACD histogram bars are falling at a slower pace while RSI has also hooked upward.

CIMB Research said as long as the candles hold above Friday's low of 17 sen, the odds still favour the bulls. However, a fall below 16 sen would negate this bullish count.



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Stocks to watch EP Manufacturing, Pharmaniaga, telcommunications, OSK Property

KUALA LUMPUR (March 17): Shares at the local stock market are expected to trend higher next week in line with the improved sentiment at global markets,

Global stocks advanced on Friday, with a benchmark U.S. equity index trading above an important level reached earlier this week, after news of subdued inflation bolstered investment sentiment and helped fuel a retreat in government debt markets, according to Reuters.

A report on U.S. consumer prices in February eased a hawkish view on interest rates, leading the dollar to fall and helping spur the sell-off in bonds. Improving U.S. economic data had recently sparked speculation the Federal Reserve would raise rates sooner than its time frame of late 2014, it said.

The Dow Jones industrial average was down 5.34 points, or 0.04 percent, at 13,247.42. The Standard & Poor's 500 Index was up 1.24 points, or 0.09 percent, at 1,403.84. The Nasdaq Composite Index was down 1.60 points, or 0.05 percent, at 3,054.77.

Affin Investment Bank vice president and head of retail research Dr Nazri Khan said the FBM KLCI was likely to trend higher on global equity upside momentum (FTSE All-World index at best level since August 2011), drop in oil price and strength in Wall Street (Dow Jones at best level since January 2008 following four year low weekly jobless claims, positive FOMC meeting comments and favorable bank stress test results).

Meanwhile, MIDF Research head of equity Syed Muhammed Kifni said foreign buying of Bursa-listed shares continued unrelenting this past week.

“Bursa data shows that foreign investors had been net buyers for 20 consecutive trading days until last Thursday, and we expect a continuation of the “risk-on” mood in the coming week,” he said.

Syed Muhammed said that in the US, a spate of housing numbers were scheduled to be announced next week and consensus expectations were pointing towards further improvements in the housing sector.

On the domestic front, the CPI number due for release in the middle of next week might also potentially be a key market mover, he said

He said the local inflation barometer was expected to further decline from the 2.7% year-on-year recorded in the earlier month.

“Hence barring ominous developments either internally or from the external front, we are sanguine on the ability of the KLCI to retest its all-time high of 1,597 points.

“Technically, we pegged the resistance and support levels for KLCI next week at 1,600 points and 1,560 points respectively,” he said.

Among the stocks that could be in focus on Bursa Malayssia are EP MANUFACTURING BHD [], PHARMANIAGA BHD [], telecommunications, OSK PROPERTY HOLDINGS BHD [].

EPMB is acquiring highway concession owner Maju Expressway Sdn Bhd for RM1.15 billion as part of its plan tp expand its highway concession business.

The move will see EPMB, an automotive parts manufacturer making a foray into the toll road business, and roping in new shareholders into the company.

The firm will acquire Maju Expressway from Bright Focus Sdn Bhd and Ulimas Sdn Bhd under a cash and stock deal. Bright Focus is a unit under the Maju Group of Companies.

Telcos could be infocus after the Malaysian Communications and Multimedia Commission (MCMC) said that it has not issued a memo to telecommunication industry players instructing them to be prepared for a proposed six per cent tax on prepaid phone subsribers.

The telecommunications regulator issued this clarification la Friday following a news report on a Hong Leong Investment Bank Research note on prospects for the local telecommunications industry.

Pharmananiaga plans to expand its market in the Middle East and Southeast Asia, particularly, Saudi Arabia, Indonesia, Myanmar and Vietnam.

Its chairman Tan Sri Lodin Wok Kamaruddin said the company was looking for growth opportunities in these countries including through mergers and acquisitions.

“We are exploring opportunities in Saudi Arabia as it is a growing market,” he sid last week.

OSK Property will raise some RM 24 million from a proposed rights issue which comes with free detachable warrants to finance its capital needs. Subscribers of the rights shares will also be entitled to bonus units from the company.



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