Adventa 1Q earnings fall on margin squeeze, forex loss

KUALA LUMPUR (March 26): ADVENTA BHD [] posted a weaker set of financial results for the first quarter ended Jan 31, 2012 with net profit falling 33% to RM2.71 million from RM4.05 million as it was impacted by margin squeeze, foreign exchange loss and higher finance cost.

It said on Monday its revenue slipped 2.2% to RM103.81 million from RM106.19 million while earnings per share were 1.77 sen compared with 2.65 sen.

“The group’s revenue dropped 2% over corresponding quarter due to a reduction in orders for latex examination gloves as many markets are switching to synthetic nitrile material.

“Although the group has new nitrile exam gloves manufacturing capacity, it is insufficient to meet the change in demand,” it explained in the notes to the accounts.

Adventa said the examination gloves segment performed well in comparison with the other segment as nitrile gloves offset the loss in latex examination gloves orders.

“Nitrile gloves continue to increase in usage in developed countries, replacing natural latex gloves. This phenomenon is expected to continue. The surgical gloves segment lagged more than expected, with lower operating margin in comparison. This segment, ever sensitive to currency fluctuation and material cost will improve with more stable latex prices,” it said.

Adventa was more upbeat about the next three quarters as it expected an improvement in sales compared to the first quarter, with more nitrile glove capacity coming on stream.

While it said latex gloves remain weak, it expected the dental gloves segment to maintain its contribution. As for raw materials, it expected prices to stabilise in the third quarter.



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Mah Sing in RM830m property project in KK

KUALA LUMPUR (March 26): MAH SING GROUP BHD [] has proposed a commercial property project in Kota Kinabalu’s central business district with a combined gross development value of RM830 million.

It said on Monday its unit Capitol Avenue Development Sdn Bhd had signed a joint development agreement with Paduan Hebat Sdn Bhd to jointly develop a 4.26 acres of prime leaseholde commercial land.

“Under the terms of the agreement, Paduan Hebat agrees with Capitol Avenue to jointly develop the land for an entitlement of RM39 million or approximately RM210 per square foot,” it said.

Mah Sing said Capital Avenue also had the exclusive option to jointly develop with Paduan Hebat another two parcels of adjacent commercial land, measuring 4.408 acres at an entitlement price of RM216.00 per sq foot or RM41.5 million.

It said based on preliminary plans, the proposal was a niche development with an estimated gross development value of approximately RM360 million for the 4.26 acres land and RM470 million for the 4.408 acres option Land.

“Tentatively called Sutera Avenue, the proposed joint development comprises multi-storey shop offices fronting the coastal highway and complemented by street mall retail lots as well as serviced apartments.



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Amanah Raya Devt sells 22% of Lakehill Resort to MPCorp for RM110m

KUALA LUMPUR (March 26): Amanah Raya Development Sdn Bhd is selling its entire 22% stake of Lakehill Resort Development Sdn Bhd to MALAYSIA PACIFIC CORP BHD [] (MPCorp) for RM100.88 million.

MPCorp said on Monday that Amanah Raya Development had exercised its put option to sell the stake to MPCorp’s unit Oriental Pearl City PROPERTIES [] Sdn Bhd. The payment would be made in 60 days.

“Under the circumstances the company and/or Oriental is now at liberty and sole discretion to negotiate with other new strategic partner(s) of their choice,” saud MPCorp.



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BLand 3Q profit down 93% on-year to RM2.52m

KUALA LUMPUR (March 26) : BERJAYA LAND BHD []’s (BLand) net profit fell 93% to RM2.52 million in the third quarter ended Jan 31, 2012 from RM34.91 million a year ago, as lower real estate sales offset higher income from its gaming and hospitality operations.

BLand said on Monday its total group revenue rose 13% to RM1.12 billion from RM990.6 million.

“Given the uncertain economic outlook, the directors are of the view that the group's performance for the remaining quarter of the financial year ending April 30, 2012 will be challenging,” BLand said.

Its cumulative nine-month net profit fell 97% to RM2.92 million against RM85.13 million in the previous corresponding period although revenue was up 4% to RM3.11 billion from RM2.99 billion, the company said.



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CBIP secures RM44.66m palm oil refinery project

KUALA LUMPUR (March 26): CB INDUSTRIAL PRODUCT HOLDING [] Bhd has secured a RM44.66 million contract from Kumpulan Perladangan PKINK Bhd to build a palm oil mill.

CBIP said on Monday its unit Modipalm Engineering Sdn Bhd was awarded a contract by PKINK’s unit Syarikat Ladang Sungai Terah Sdn Bhd to design and build a mill with a capacity of 30 tonnes per hour at a cost of RM42.61 million.

It said the contact included the extension of another 15 tonnes per hour capacity valued at RM2.05 million.

It added the extension had to be undertaken within two years after the 30 tonnes per mill had been handed over.



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KLCI reverses gains, slips into negative territory

KUALA LUMPUR (March 26): The FBM KLCI slipped and closed in negative territory on Monday in line with most of the key regional markets that reversed their earlier gains and fell in later trade, extending losses after weak PMI reports last week stoked fears that China's economy was slowing and the euro zone is sliding into recession.

The FBM KLCI fell 2.85 points to close at 1,582.98, weighed by losses at index-linked PLANTATION [] stocks and select blue chips including Tenaga and MISC.

At the regional markets, Taiwan’s Taiex lost 1.35% to 7,967.62, South Korea’s Kospi fell 0.38% to 2,019.19, Singapore’s Straits Times Index xx, while Japan’s Nikkei 225 gained 0.07% to 10,018.24, the Shanghai Composite Index added 0.05% to 2,350.690 and Hong Kong’s Hang Seng index closed flat at 20,0668.86.

Meanwhile, European shares rose on Monday in a technical bounce, after recording their steepest weekly loss since the start of the year, as investors searched for bargains and positioned themselves for a potential strong German Ifo figure.

On Bursa Malaysia, Carlsberg was the top loser and fell 26 sen to RM10.20, Jaya Tiasa 22 seen to RM8.08, Chin teck Plantations fell 20 sen to RM9.10, Warisan down 19 sen to RM2.41, Tenaga lost 18 sen to RM6.50, JT International and Litrak lost 16 sen each to RM6.60 and RM3.94, Far East 15 sen to RM7.40 while AirAsia fell 13 sen to RM3.46.

Among plantations, Genting Plantations lost 22 sen to RM9.25, while KLK and IOI Corp fell four sen each to RM23.86 and RM5.34.

Among the gainers, Dutch Lady added 42 sen to RM31.40, SMPC up 28 sen to RM1.84, Aeon 25 sen to RM9.40, BAT 20 sen to RM54, Supercomnet added 19.5 sen to 49.5 sen, PUC and Hartalega 14 sen each to 29 sen and RM8.09, Unisem 13 sen to RM1.46, HLFG 12 sen to RM12.12 while Malayan Flour Mills was up 11 sen to RM4.44.

The actives included Focus, metronic, Supercomnet, Ariantec, Naim Indah Corp, Flonic and Karambunai.



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TM targets 400,000th customer for HSBB by year-end

KUALA LUMPUR (March 26): TELEKOM MALAYSIA BHD [] (TM) aims to hit the 400,000th customer base mark for its high-speed broadband service, UniFi, by year-end.

In a statement, its executive vice president, consumer, Imri Mokthar, said UniFi's customer base has been growing rapidly, surpassing the 300,000 mark on Monday, which was its second anniversary of the launch.

"UniFi is now enjoying a take-up rate of over 20 per cent of the premises passed, surpassing our initial estimates and expectations of eight to 10 per cent.

"The service is currently available at 79 exchanges areas covering over 1.18 million premises. The areas include 62 in Klang Valley, Penang (3), Kedah (2), Johor (9), Melaka (1), Negeri Sembilan (1) and Perak (1)," he said.

Imri said TM expected the UniFi's take-up rate to continue to increase to 50 per cent of premises passed in the next three to five years.



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Unisem, MPI rally on rating, target price upgrades

KUALA LUMPUR (March 26) : Shares of semiconductor manufacturers UNISEM (M) BHD [] and MALAYSIAN PACIFIC INDUSTRIES [] Bhd (MPI) rallied on Monday after CIMB Investment Bank Bhd Research upgraded its recommendation and fair values for both stocks.

This is in anticipation of a recovery in the global semiconductor industry, according to CIMB Research.

Unisem rose 11% or 15 sen to RM1.48 at 3.26pm on Monday while MPI gained 3% or 10 sen to RM3.17 to be among the top gainers across the local bourse.

CIMB Research, in a note on Monday, said it had upgraded Unisem from “underperform” to “outperform” and raised its fair value by 87% from RM1 to RM1.87 for the stock. The research house also increased its FY12 to FY14 earnings forecasts for the semiconductor manufacturer by 7% to 19%.

Similarly, the research firm also upgraded MPI from “underperform” to “outperform” and raised its target price for the stock from RM2.79 to RM4.08, up 46%.



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mTouche’s 15.9% stake done off-market sharply below Friday close

KUALA LUMUR (March 26): ACE Market listed MTOUCHE TECHNOLOGY [] BHD [] saw 15.9% of its shares transacted in several off-market deals on Monday at an average price of 31.5 sen.

Stock market data showed the last block of 9.3 million shares were crossed at 31.5 sen, which was 15 sen or 32.2% below last Friday’s closing price of 46.5 sen.

At 3.14pm, mTouche was down two sen to 44.5 sen.

The paid-up of mTouche, which is currently below the investors’ radar screen, is 228.56 million shares.



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KLCI marginally in the black, regional markets struggle

KUALA LUMPUR (March 26): The FBM KLCI managed to remain in positive territory at mid-day on Monday, while its regional peers struggled to sustain gains and were traded mixed.

At the mid-day break, the FBM KLCI edged up 0.91 of a point to 1,586.74. Gainers trailed losers by 210 to 425, while 299 counters were unchanged. Volume was 731.25 million shares valued at RM515.39 million.

The ringgit strengthened 0.08% to 3.0730 versus the US dollar; crude palm oil futures for the third month delivery rose RM28 per tonne to RM3,455, crude oil fell 27 cents per barrel to US$106.60 while gold shed 35 cents an ounce to US$1,661.55.

Meanwhile, Asian shares struggled on Monday, with materials and TECHNOLOGY [] stocks losing ground amid concerns about the impact on profits of a slowdown in the global economy, according to Reuters.

Commodity-linked currencies such as the Australian dollar steadied after a hammering last week on worries of easing demand for resources from China, while the euro held near a three-week high, it said.

At the regional markets, Japan’s Nikkei 225 was up 0.25% to 10,036.60, Hong Kong’s Hang Seng Index edged up 0.02% to 20,673.40, the Shanghai Composite Index gained 0.10% to 2,351.87 while South Korea’s Kospi fell 0.52% to 2,016.27, Singapore’s Straits Times Index shed 0.21% to 2,983.87 and Taiwan’s Taiex was down 1.34% to 7,968.33.

On Bursa Malaysia, Dutch lady was the top gainer and rose 32 sen to RM31.30.

Supercomnet, which rose 18.5 sen to 48.5 sen with 226.6 million shares done, was earlier queried by Bursa Malaysia Securities Bhd over the sharp price rise and high volume in its shares.

Other gainers included SMPC that rose 18 sen to RM1.74, HLFG up 16 sen to RM12.16, PPB 12 sen to RM16.76, BAT 10 sen to RM53.90, MajuPerak 9.5 sen to 38 sen, Unisem nine sen to RM1.42 and Nestle eight sen to RM55.98.

Decliners included Chin Teck PLANTATION []s, Far East, Carlsberg, Aeon Credit, Manulife, Tenaga, WCT and Tradewinds.

Meanwhile, the actively traded stocks included metronic, Karambunai, Focus, Ariantec, Supercomnet, Ingenuity Solutions, Trinity and DPS.



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EITA to use IPO proceeds for new plant

KUALA LUMPUR (March 26): EITA Resources Bhd (EITA) is planning to use most of its proceeds from its April initial public offering (IPO) for a new factory in Bandar Bukit Raja, Selangor.

The group, which manufactures elevators and distributes electrical and electronics components, will raise a total of RM17.5 million from its listing exercise, of which RM12.3 million would be used for the new plant, according to its statement on Monday. The listing is scheduled for April 9.

Eita group managing director Fu Wing Hoong said "the upcoming listing on Bursa will go a long way toward boosting our profile and enhancing both our technical and production capabilities".

The group's IPO consists of 23 million public issue shares, and 17 million offer-for-sale shares.



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Bursa queries Supercomnet

KUALA LUMPUR (March 26): Bursa Malaysia Securities Bhd has issued an unusual market activity (UMA) query to Supercomnet Technologies Bhd over the sharp rise in the price and high volume in the company’s shares recently.

At 11.33am, Supercomnet was among the most actively traded stocks on Bursa Malaysia with 170.5 million shares done.

The stock rose 15.5 sen to 45.5 sen.



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Bank Rakyat posts record RM 2bn net profit

KUALA LUMPUR (March 26): Bank Rakyat Malaysia Bhd recorded its highest ever net profit of RM2 billion for the financial year ended Dec 31, 2011, compared to RM1.34 billion on the previous year, an increase of 49.5% or RM663.8 million

The bank had on Monday also announced a dividend payment rate of 20% to all its 926,578 members nationwide.

As much as RM330 million, or 15% of the total dividend payment will be paid in cash, while another RM105 million will be paid in the form of bonus share dividend, the bank said.



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KLCI trends marginally higher at mid-morning

KUALA LUMPUR (March 26): The FBM KLCI trended marginally higher on Monday, in line with the moderate gains at the regional markets, following the rise pf US stocks in light volume last Friday, buoyed by rising energy and basic materials shares, as the S&P 500 kept showing resilience even as it posted its second negative week so far this year.

At 10am, the FBM KLCI gained 0.91 of a point to 1,586.74.

Gainers trailed losers by 172 to 197, while 254 counters traded unchanged. Volume was 338.36 million shares valued at RM147.06 million.

Asian shares edged up on Monday, finding some support after losing ground last week on fears of the impact of an economic slowdown in China, and the euro held near a three-week high, according to Reuters.

Equity markets had got off to a flying start in 2012, but have been wobbling since China lowered its growth forecast for the year to 7.5 percent in mid-March, with concerns exacerbated by weak factory data from China and Europe last week, it said.

At the regional markets, the ShangHai Compoite Index gained 0.24% to 2,355.07, Hong Kong’s Hang Seng Index was up 0.15% to 20,700.50, and Singapore’s Sraits Times Index edged up 0.10% to 2,987.1.

Meanwhile, japan’s Nikkei 225 fell 0.11% to 10,022.90, Taiwan’s Taiwex lost 0.92% to 8,001.94 and South korea’s Kospi fell 0.38% to 2,019.12.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on March 26 said the FBM KLCI gained 14.43 points to close at 1,585.83 last Friday.

“The local market rose in small daily spurts, with buying on some selective blue chips as well as obvious penny stock plays. The obvious areas for the FBM KLCI are in the 1,549 to 1,585 zone.

“The next resistance levels of 1,587 and 1,597 may see heavy liquidation activities,” he said.

Meanwhile, ECM Libra research in its Market outlook and strategy for 2Q2012 said that Overall, its 2Q2012 outlook was that the FBM KLCI was toppish at 1,600

The research house said upside was limited based on the FBMKLCI’s relatively high PER, but downside was also limited in the run-up to General Elections.

“In 2H2012, we expect the FBMKLCI to trade in a range of 1500-1600. If the General Election is held in June 2012, whatever outcome we think will lead to a market correction in 3Q2012.

“4Q2012 could see the FBMKLCI recovering to end the year at 1600 as the market looks forward to 2013,” it said.

“We are thus Neutral on all sectors except for an Overweight on CONSTRUCTION [] and Building Materials. Buy IJM, WCT, Lafarge, Lion Industries. In PLANTATION []s, switch from IOI to KLK,” it said on Monday.

CIMB chief economist Lee Heng Guie in his regional ccompass report released on March 26 said global growth risks appeared to be easing, going by 1) the encouraging global indicators, 2) ebbing funding pressure in the financial markets, and 3) receding Greece debt default risks, at least for now.

“While the threat of a financial catastrophe has been averted, stronger financial firewalls are needed to safeguard against the risk of contagion in the eurozone.

“We remain wary of an escalation of geopolitical tension in the Middle East that could trigger a global oil price shock. Emerging markets may also have to contend with volatile capital flows,” he said.

ON Bursa MalaySia, the top gainer at mid-morning was SuperComnet that added 13.5 sen to 43.5 sen, MajuPerak 11.5 sen to 40 sen, Maybank up nine sen to RM8.84, Nestle, Shell, Yinson and Genting up eight sen each to RM55.98, RM10.10, RM1.81 and RM11.08 respectively, while Tradewinds Plantations gained seven sen to RM4.87.

Among the decliners, Petronas Dagangan fell 18 sen to RM18.30, Far East down 15 asen to RM7.40, Tenaga and Tradewinds fell nine sen each to R6/59 and RM9.70, Aeon Credit, Deleum, WCT and KESM fell seven sen each to RM8.60, RM2.51, RM2 respective, while Kein Hin and LPI lost six sen each tp RM45 sen and RM13.94.

The actives included Karambunai, Metronic, Trinity, Ariantec, SAAG, Supercomnet and MaujuPerak.



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CIMB Research keeps Wah Seong an Outperform, ups TP to RM2.35

KUALA LUMPUR (March 26): CIMB Equities Research is maintaining an Outperform on Wah Seong Corporation at a higher target price of RM2.35 from RM2.28.

It said on Monday its order book replenishment was the main talking point at its recent meeting with management.

“Up for grabs is Petronas’s Turkmenistan pipe coating contract for which Wah Seong is believed to be a strong contender. Expect upside to its current order book of RM1.2 billion,” it said.

CIMB Research said its target price rises as it now value the stock at its revised CY13 target market price-to-earnings of 13 times instead of 12.6 times. Wah Seong remains an Outperform due to its bright order book prospects, it said.



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Perak Corp up on Ipoh Theme park collaboration

KUALA LUMPUR (March 26): PERAK CORPORATION BHD [] (PCB) shares edged up in early trade on Monday on news it was working with Sanderson Project Development (M) Sdn Bhd to develop and operate an animation theme park in Ipoh. The project includes hotel and high-rise residential portions.

At 9.18am, PCB was up eight sen to RM1.47 with 401,900 shares traded.

Perak Corp said last Friday, the gross development value was estimated at RM506.7 million approximately to develop the project.

Its unit, PCB Development Sdn Bhd had entered into a heads of agreement with Sanderson to set up a joint venture company in which PCB would hold 20% and SPDM 80%.

SPDM will negotiate with third parties in relation to raising funds for the JV to develop the project.


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OSK Research: JCY’s share price may rise further

KUALA LUMPUR (March 26): OSK Research said JCY’s share price may rise further if it can close above the 50-day MAV line.

In its technical outlook, it said on Monday the stock has been correcting the sharp rise of the October-January rally for two months now.

However, the research house said this could be over following the consecutive price increase in the past three days. There were signs of strength after it failed to close below RM1.07 last week, despite testing it three days in a row.

“The level also happens to be the 38% retracement of the Oct 2011-Jan 2012 rally. Buying was confirmed on March 21 when it closed the highest in seven days, on a “Long White” candle. Volume has been consistently higher, suggesting the return of buying interest. Therefore, purchases can be made possibly on pullback toward the stop-loss level of RM1.07,” it said.

OSK Research said a more conservative trade may even wait until the December-high of RM1.26 is broken, which will erase the dampening effect at the March 22 “Shooting Star”. The research house added the target is the early-January high of RM1.50 and a strong move could see the test of RM1.60, the high of June 2010.

“However, a failure to break above RM1.26 could see the return of selling, with a close below RM1.07 as the confirmation. Look for further support at 94 sen and 80 sen,” it said.



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RHB Research has fair value of RM3 for CBIP ex-bonus

KUALA LUMPUR (March 27): RHB Research Institute is maintaining its outperform recommendation on CBIP with an ex-bonus fair value of RM3 (from RM5.95 pre-bonus issue).

CBIP had received a letter of award from Syarikat Ladang Sungai Terah Sdn Bhd for a contract to design and build a 30 tonne per hour (extendable to 45 tonnes per hr) CPO mill for RM44.67 million.

RHB Research said on Tuesday there was no timeframe given for the completion of this project, but it assumed, as with most of CBIP’s other projects that the contract would be fulfilled in one to two years.

“As CBIP no longer consistently declares new contract awards, it is difficult for us to estimate total new contract wins this year. At last count (end-December 2011), CBIP had RM371 million unbilled sales, which would be recognised over a 15 to 24 month period.

“Assuming only this contract has been obtained since end-December, unbilled sales would likely increase to about RM400 million by now. No change to forecasts, as we have already assumed CBIP to obtain RM250 million to RM300 million of new modipalm contracts per annum in FY12-14. Note that CBIP’s share price went ex from a one-for-one bonus issue on March 8,” it said.



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RHB Research ups KPJ fair value to RM5.69

KUALA LUMPUR (March 26): RHB Research Institute is positive on KPJ Healthcare’s move to accept an offer to acquire an 80% stake in PT KPJ Medika, which owns and operates a 92-bed private specialist hospital in Jakarta, for RM15.8 million.

The research house said on Monday it believes the acquisition price is attractive as the purchase consideration of RM15.8 million implies a historical FY11 price-to-earnings ratio (PER) of about 8.7 times and a target FY12 PER of 7.6 times to 7.9 times, assuming FY12 earnings growth of 10%-15% for the hospital. This would be near the lower-end of its previous average acquisition PER range was 8 times to 12 times.

“FY12-14 EPS forecasts increased by 1.8%-3.1% after factoring in a higher number of patients arising from the new capacity. Fair value raised to RM5.69 (from RM5.59), based on unchanged FY12 PER of 22.5 times (in line with peers’ average),” said RHB Research.



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HDBSVR: FBM KLCI remains in vulnerable position

KUALA LUMPUR (March 26): Hwang DBS Vickers Research said although Wall Street was up slightly last Friday with its key equity indices rising between 0.2% and 0.3% at the closing bell, it expects limited spillover effects on Bursa Malaysia on Monday.

“Technically speaking, the FBM KLCI remains in a vulnerable position. Facing profit-taking pressures at the moment, the benchmark index could slip below its immediate support level of 1,580 ahead,” it said.

HDBSVR said against the slow market backdrop, following news reports in a business weekly, there could share price actions in: (a) Wah Seong, which is believed to have clinched a pipe-coating contract in Turkmenistan; (b) Deleum, as it may partner Petronas Carigali to form a global patent for a product that could increase oil extraction rates significantly; and (c) D’nonce TECHNOLOGY [], given that one of its subsidiary is in advanced talks to supply halal food products to Kazakhstan.



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CIMB Research has technical buy on KLK at RM23.90

KUALA LUMPUR (March 26): CIMB Equities Research has a technical buy on Kuala Lumpur Kepong at RM23.90, at which it is trading at a FY13 price-to-earnings of 17.3 times and price-to-book value of 0.2 times

It said on Monday the recent consolidation dragged KLK towards its 50% Fibonacci Retracement level. However, the correction was well-contained and prices are now backed above its 30-day SMA.

“We may see stronger rebound ahead. If the stock can swing back above its 50-day SMA (now at RM23.97), there is a good chance that prices may edge closer towards RM25.40 and RM26.00,” it said.

CIMB Research said aggressive traders may start to nibble now while others should wait for a push above the 50-day SMA before going long. Put a stop at below RM23.



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CIMB Research has technical sell on Key West Global at 23.5 sen

KUALA LUMPUR (March 26): CIMB Equities Research has a technical sell on KEY WEST GLOBAL TELECOMM []unications at 23.5 sen.

It said on Monday the stock is trading in a rising wedge pattern, which is bearish in nature.

“We caution traders to be alert here. If the candles violate the wedge support trend line (now at RM0.23), the next downswing would likely drag prices back towards 21.5 sen and 20 sen,” it said.

CIMB Research said the MACD histogram bars are losing pace, suggesting that momentum is slowly weakening. RSI too has hooked downward.

“Traders should wait for a slip below 23 sen before joining the sellers’ camp. Put a buy stop at 25 sen,” it said.



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CIMB Research has technical sell on Rimbunan Sawit at RM1.06

KUALA LUMPUR (March 26): CIMB Equities Research has a technical sell on Rimbunan Sawit at RM1.06 at which it is trading at a price-to-book value of 1.2 times.

It said on Monday Rimbunan Sawit violated its medium term uptrend channel few weeks ago. Since then, prices have been dwindling towards the 50-day SMA.

“Looking at the chart, the bears have been flexing their muscles after the candles slipped below its 30-day SMA,” it said.

CIMB Research said in the near term, it thinks the stock will challenge the 50-day SMA (now at RM1.05). Once this level is breached, the stock will likely de-rate towards 98.5 sen and 91.5 sen. The 200-day SMA is also a magnet for prices.

“Unload on strength looks like a good option here, especially near the RM1.11-RM1.15 resistances. Put a buy stop at RM1.17, just in case,” it said.

Rimbunan Sawit cultivates oil palms and process palm oil and it owns about 13,500ha of PLANTATION [] land and operates its palm oil mill.



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Stocks to watch Subur Tiasa, Amway, Poh Kong, Genetec , Perak Corp, Kein Hing

KUALA LUMPUR (March 24): The FBM KLCI is expected to trend higher in the weekbegining March 26, supported by local market defensiveness election hyped trading sentiment and bullish quartr-end window dressing.

World stocks rebounded on Friday, lifted by shares in energy and basic materials, as concerns about global growth were set aside by investors who saw further gains in this year's rally, according to Reuters.

Meanwhil, US stocks rose in light volume on Friday, boosted by rising energy and basic materials shares, and the S&P 500 continued to show resilience even as it posted its second negative week so far this year, it said.

Affin Investment Bank vice president and head of retail research Dr Nazri Khan said that despite the global weakness on negative manufacturing data from China, French and Germany, he expects the FBMKLCI to trend moderately higher next week, supported by local market defensiveness; election hyped trading sentiment and bullish quarter-end window dressing.

“We note that although most global indices trended lower late last week, the local benchmark closed higher and managed to stay resilient (KLCI up 0.6%, FTSE All World down 0.8% w-o-w) despite negative ideas of China economic contraction and rising recession concerns in the Europe.

“We believe such ideas are not new as market may have factored in eurozone recession and China slow down since late last year,” he said.

Nazri said that the overall feel was that the global market had rallied a long way and was now overbought –he said the FTSE All-World index sits less than 2% below last week’s near eight-month peak, when it had surged almost 13% year to date – hence it needs a breather to neutralize its overboughtness as well as new positive catalysts to propel it higher.

He said cheap liquidity would be the biggest catalyst in the near term, including Ben Bernanke‘s Fed promises to keep interest rates low until 2014 and the ECB decision to lend over $1 trillion (at 1% rates for a three year duration) to under-capitalized European banks will be the primary cushion for the market against unexpected distribution.

“Despite rising inflation risk due to higher oil price, there are rumours that several central banks such as Bank Of England, Swiss National Bank and Bank of Canada and even Bank Of India to play catch up with Fed and ECB (in pumping liquidity) which we think will be supportive for the local market,” he said.

As for the local front, we expect the quarterly portfolio rebalancing as the most important bullish drivers with a combination of premium investors, high end retail and institutional making large bets ahead of the anticipated stronger second half (which include the upcoming mega IPO such as Felda and anticipated election in the second quarter).

The fact that the local benchmark index has already inched up 3% year-to-date and 18% since the September 2011 low is a testimony of the local market defensiveness (in terms of shallower correction, low beta due to slim MSCI weightage, low foreign shareholding and resilient domestic earning driver) especially during global volatility.

“Further, we see most regional bourses have successfully breached the pre-Lehman crisis’ high (Jakarta Composite Index, Philippines Composite Index and Thailand SET Index at three year high) which in turn can be supportive momentum for FBM KLCI.

“On the technical front, momentum studies continue to trend higher despite entering overbought levels, suggesting more positive bias. Uptrend so far remains intact with FBMKLCI still holding above the 20, 50 and 200 moving average near 1,580-1,565 support level. The next area of resistance are pegged at 1,590 and 1,600 while support should come at 1,580 and 1,565 levels,” he said.

Among the stocks that could be in focus are SUBUR TIASA HOLDINGS BHD [], AMWAY (M) HOLDINGS BHD [], POH KONG HOLDINGS BHD [], Genetec TECHNOLOGY [] Bhd, Perak Corp Bhd, KEIN HING INTERNATIONAL BHD [].

Subur Tiasa’s earnings rose 10.5% to RM6 million in the second quarter ended Jan 31, 2012 from RM5.43 million a year ago, boosted by the stronger manufacturing sector.

Kenanga Investment Bank Bhd has initiated coverage on Amway with an “outperform” call and target price of RM10.94.

Poh Kong said the jeweler has fully settled its outstanding debt under a RM200 million Islamic bond scheme. The stock was down 0.5 sen to 56 sen.

Genetec, a contract manufacturer of industrial equipment, has secured RM27.9 million worth of jobs, of which, orders from the hard disk drive sector account for 90% or RM25 million of the total amount.

Meanwhile, Perak Corp is collaborating with Sanderson Project Development (M) Sdn Bhd to develop and operate an animation theme park in Ipoh. The project includes hotel and high-rise residential portions. Shares of Perak Corp fell one sen to RM1.39 on Friday.

Finally, industrial component assembler Kein Hing reported a net loss of RM292,000 in the third quarter ended Jan 31, 2012 from a net profit of RM1.55 million a year earlier as revenue was down 8% to RM37.99 million. Kein Hing closed unchanged at 51 sen last Friday.



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