LPI 1Q profit down 19% year-on-year

KUALA LUMPUR (April 9) : LPI CAPITAL BHD []’s net profit fell 19% in the first quarter ended March 31, 2012 from a year earlier, as the general insurer’s contractual liabilities, lower investment income and higher operating expenses offset a higher revenue.

In a statement to the exchange on Monday, LPI said its net profit during the quarter came to RM31.48 million against RM38.63 million previously. Revenue rose 15% to RM246.06 million from RM213.33 million.

“The challenges facing the global developed economies are growing rapidly with very little evidence to suggest that there will be an imminent solution to address these concerns.

“This in turn may affect the investment segment of the Ggoup. The group views the dividend income from this segment with caution. However, the group does not foresee it has any big impact to the overall profit as the investment segment only formed about 13% of the group‟s total profit in the financial year 2011,” LPI said.



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SILK unit gets contract extension worth RM10.77m

KUALA LUMPUR (APRIL 9): SILK Holdings Bhd’s unit has secured a contract extension worth RM10.77 million from Petrofac Malaysia Ltd.

The company said on Monday that its unit Jasa Merin (Malaysia) Sdn Bhd had accepted the award from Petrofac for the contract extension of Jasa Merin’s anchor handling tug supply vessel JM Intan to Petrofac.

SILK said the contract which commenced on July 23, 2009, had a primary period of two years with the extension options of 1+1+1 year, is to be extended for the second extension commencing July 23, 2012 until 22 July 2013.

The company said the contract extension was expected to contribute positively to its earnings for the financial years ending 31 July 2012 and 2013.



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SC approves Hong Leong Bank’s US$1.5 billion bonds

KUALA LUMPUR (April 9) : The Securities Commission has approved HONG LEONG BANK BHD []’s plan to issue up to US$1.5 billion (RM4.61 billion) worth of bonds to finance its working capital needs.

In a statement to the exchange on Monday, Hong Leong said the fund raising instrument comes in the form of euro-denominated medium term notes.

Citigroup Global Markets Ltd, HL Bank, Mitsubishi UFJ Securities International plc and The Royal Bank of Scotland plc are arrangers and dealers for the scheme, according to Hong Leong.



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KLCI falls in tandem with regional markets

KUALA LUMPUR (April 9): A slew of negative external developments weighed down investor sentiment at the local bourse, and the FBM KLCI closed in the red on Monday.

Asian shares fell on Monday as a sharp slowdown in U.S. jobs growth raised concerns about the strength of the world's largest economy, prompting investors to curb risk exposure ahead of more U.S. data and earnings as well as figures from China this week, according to Reuters.

China stocks fell 0.9 percent on Monday, led by property firms, after data showed the inflation rate rose more than expected last month, prompting speculation that Beijing may delay further easing of monetary policy, it said.

The FBM KLCI closed 7.59 points lower at 1,591.28.

Market breadth was negative with 468 losers, 238 gainers and 322 counters trading unchanged. Volume was 1.08 billion shares valued at RM1.08 billion.

At the regional markets, Japan’s Nikkei 225 fell 1.47% to 9.546.26, the Shanghai Composite index was down 0.90% to 2,285.78, south Korea’a Kospi fell 1.57% to 1,997.08, Taiwan’s Taiex was fell 1.27% to 7,600.87 and Singapore’ Straits Times Index shed 0.87% to 2,960.10.

On Bursa Malaysia, BAT was the top loser and fell 74 sen to RM54.72, KrisAssets down 21 sen to RM6.67, BLD PLANTATION []s and Toyo Ink fell 20 sen each to RM9.20 and RM1.47, Panasonic and Petronas Dagangan down 18 sen each to RM21.70 and RM18.66, TDM and KLK lost 14 sen each to RM4.81 and RM24.50, while GAB and Petronas Gas were down 12 sen each to RM12.96 and RM16.66.

Naim Indah Corp was the most actively traded counter with 113.6 million shares done. The stock fell four sen to 53 sen.

Other actives included Metronic, DVM, EITA, Managed Pay, SuperComNet, Tiger Synergy and Focus.

Gainers included Aeon, SMPC, Milux, Kluang, Hong Leong Industries, Nationwide, Tanjung Offshore, Parkson, UMS and Nestle.



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Guan Chong targets secondary listing in Singapore

KUALA LUMPUR (APRIL 9); GUAN CHONG BHD [] is seeking secondary listing on the Main Board of the Singapore Exchange Securities Trading Ltd (SGX).

In a a statement Monday, Guan Chong managing director and chief executive officer Brandon Tay Hoe Lian said the company was aiming for the dual-listing on SGX-ST to facilitate its access to the capital market in Singapore, and giving it the flexibility to tap into additional sources of equity funding for its expansion.

“Aside from improving our market liquidity, the proposed secondary listing will enable the Group to expand and diversify GCB’s shareholder base and improve our market visibility, specifically to the retail and institutional investors in the region.

“As we seek to export more cocoa products through Singapore, this exercise will raise our profile even more in the international market,” said Tay.

Tay said the proposed corporate exercise would entail two parts: firstly, a Public Offering of up to 62 million ordinary shares of 25 sen par, or 19.4% of total existing share capital of 319.7 million shares, comprising 31 million new shares and 31 million vendor shares to be offered by key substantial shareholders; secondly, a 1-for-2 Bonus Issue of up to 205.3 million new shares to the enlarged base of shareholders, subsequent to the Public Offering.

The issue and offer price to the investors in Singapore will be determined at a later date by Guan Chong, he said.

He said the proceeds raised from the planned secondary listing would be used for the expansion of the Group’s existing operations, product development activities, and general working capital requirements, as well as to defray expenses related to the proposal.

The proposed dual-listing exercise was expected to be completed by second half of 2012, said Tay.



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Malaysia Smelting Corp announces key appointments

KUALA LUMPUR (APRIL 9): MALAYSIA SMELTING CORPORATION [] Bhd (MSC) has promoted Chua Cheong Yong as its deputy group chief executive officer and has appointed Ir. Mohamed Yakub bin Ismail as the group chief operating officer of mining with effect from 1 April 2012.

MSC said on Monday that Chua would continue to helm the international tin smelting operations of the MSC Group of companies as well as the company’s African tin projects.

In this context, he would continue to play a pivotal role in creating new strategic business relationships for the Group as well as expanding established major accounts, it said.

“He is part of the business development team responsible for identifying viable resource projects and businesses for the Group. In addition, he also oversees the day to day commercial, marketing and trading activities of the various local and overseas business units of the Group,” it said.

MSC said Chua held a BSc (Hons) in Business Studies from the City University of London as well as a Diploma in Market Research.

Mr. Chua is a director to the Board of ITRI Ltd, the global R&D arm of the tin industry based in London. He also sits on the Board of KLTM (Kuala Lumpur Tin Market) and is a member of the Chamber of Mines, Malaysia, said MSC.

Meanwhile the company said Mohamed Yakub had a total of 37 years of experience in the tin mining industry of which the last 10 years were spent within the MSC Group of Companies.

MSC said Mohamed Yakub was well-positioned to lead all the group’s mining operations in Malaysia, Indonesia and overseas, adding that he would also continue to hold the position of Senior General Manager of RHT.

It said Mohamed Yakub graduated in mining engineering from the Camborne School of Mines (ACSM), England and is a Registered Professional Engineer in mining, with the Board of Engineers Malaysia since 1984.

He is also a member of the Institution of Engineers, Malaysia and a member of the Malaysian Chamber of Mines, it said.



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FBM KLCI slips at mid-day break, but hovers above 1,590-level

KUALA LUMPUR (April 9): The FBM KLCI slipped into negative territory on Monday, in line with the waning sentiment at key regional markets, following a drop in US jobs growth that was reported last week.

Among the better performers on Bursa Malaysia in the morning session was newly-listed EITA Resources Bhd.

The FBM KLCI lost 4.66 points to 1,594.21 at 12.30pm.

Market breadth was weaker with 378 losers and 185 gainers, while 264 counters traded unchanged. Volume was 578.5 million shares valued at RM420.14 million.

The ringgit weakened 0.29% to 3,0728 versus the US dollar; crude palm oil futures for the third month delivery rose M13 per tonne to RM3,590, crude oil fell US$1.19 per barrel to US$101.12 while gold added US$2.05 an ounce to US$1,638.47.

Asian shares fell on Monday as a sharp slowdown in U.S. jobs growth raised concerns about the strength of the world's largest economy, prompting investors to curb risk exposure ahead of more U.S. data and earnings as well as figures from China this week, according to Reuters.

BIMB Securities Research in a note Monday said it would be a stop start scenario for equities this week following a weaker than expected job data for March in the US.

Therefore, investors and traders alike will reassess their risk/reward propositions before making more commitments, it said.

As of now, the lack of fresh catalysts will be the main excuse as well as the resurrection of Eurozone’s debt situation to be road bumps ahead for equity markets.

Then again, if both the US and China are to lean towards monetary easing, these may set the markets abuzz again.

For now, we can expect loads of fence sitters.

“Locally, the FBM KLCI failed to breach the 1,600 mark despite adding another 5 points to end the week at almost 1,599.

“For now, the lack of direction with some regional markets closed, we would expect a lacklustre market today with the immediate support seen at 1,590,” it said.

ON Bursa Malaysia, BAT fell 74 sen to RM54.72, Petronas Dagangan 30 sen to RM18.54, BLD PLANTATION []s fell 19 sen to RM9.21, KLK down 14 sen to RM24.50, GAB and Public Bank lost 12 sen each to RM12.96 and RM13.68, Chin Teck lost nine sen to RM9.06 while TDM was down eight sen to RM4.87.

Naim Indah Corp was the most actively traded counter with 81.28 million shares done. The stock fell three sen to 54 sen.

Other actives included EITA that rose 10.5 sen to 86.5 sen wth 30 millin shares traded.

Other actively traded stocks included DVM, Tiger Synergy, Time, SuperComNet, Metronic, Karambunai and Focus.

Gainers included Aeon, SMPC, KLuang, Dutch Lady, Eita, Hartalega, Nationwide, Parkson, Johore Tin and Nestle.



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Hartalega up on expansion plans

KUALA LUMPUR (APRIL 9): HARTALEGA HOLDINGS BHD [] shares advanced on Monday after the company said it was setting up a RM1.5 billion “next generation integrated glove manufacturing complex” (NGC) comprising 70 new high tech production lines.

At 11.32am, Hartealega gained 10 sen to RM8 with 292,600 shares done.

The company last Friday said that its wholly owned subsidiary Hartalega NGC Sdn Bhd that was incorporated on March 29 is the designated corporate vehicle for the setting up of the NGC project, that is mainly involved in the production of rubber gloves to cater to fast rising global demand.

Meanwhile, CIMB Research maintained its Outperform rating on Hartelega Holdings Bhd at RM7.91 with a target price of RM9.98 and said the company’s 28.4 billion-pieces-of-gloves expansion by FY22 was a strong signal that it remains focused on growth.

The research house in a note April 9said the project enables Hartalega to defend its dominant position and add market share.



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Ingress up 8% on Tenaga contract

KUALA LUMPUR (April 9) : Ingress Corp Bhd rose as much as 8% on Monday morning following updates that the company had secured a RM26.6 million switching station job from TENAGA NASIONAL BHD [] (TNB).

Shares of Ingress gained eight sen to an intraday high of RM1.09 before trading lower at RM1.06 at 11.27am.

In a statement to the exchange on Friday, Ingresss said it will establish a 275-kilovolt station for TNB at Pantai Remis, Selangor.Ingress said TNB has issued a letter of intent for the project to a joint venture between two subsidiaries of Ingress, namely, Multi Discovery Sdn Bhd and Ramusa Engineering Sdn Bhd.



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KLCI down on weaker global economic data

KUALA LUMPUR (April 9) : Malaysian stocks fell on Monday morning in tandem with Asian market as less-optimistic economic data from the US, and anticipation of more updates from China weakened sentiment.

Analyst said the FBM KLCI is exhibiting weaker technical dynamics, despite gains last week. This could point to a decline in the index this week, they said.

“A market pullback may be in the horizon, with the FBM KLCI possibly making its way towards the first two support levels of 1,580 and 1,555, respectively, “ HwangDBS Vickers Research Sdn Bhd wrote in a note.

At 10.01am, the FBM KLCI fell 7.07 points to 1,591.8. Across the exchange, some 268 million shares worth RM148 million were traded, leading to 115 gainers versus 235 decliners.

Top gainers DUTCH LADY MILK INDUSTRIES BHD [] added 68 sen to RM36.48 while newly-listed EITA Resources Bhd rose 11.5 sen to RM87.5 sen.

Decliners BRITISH AMERICAN TOBACCO (M) [] Bhd fell 74 sen to RM54.72 while KUALA LUMPUR KEPONG BHD [] lost 28 sen to RM24.36.

Most active was Naim Indah Corp Bhd which declined two sen to 55 sen with some 63 million shares done

Among Asian equity benchmarks, Japan’s Nikkei 225 fell 1.51% to 9,541.71 points while South Korea’s Kospi declined 1.45% to 1,999.59.

The Hong Kong and Australian bourses are closed on Monday for the Good Friday and Easter holiday season.



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EITA debuts on Bursa with 22% premium

KUALA LUMPUR (April 9) : EITA Resources Bhd rose as much as 22% on Monday early trade during the elevator system provider’s debut on Bursa Malaysia.

The stock added 17 sen to an intraday high of 93 sen before trading lower at 88.5 sen with some 19 milllon shares done as at 9.17am. EITA was among the top gainers and most-actively traded entites across the exchange.

In a note, RHB Research Institute Sdn Bhd said it expects EITA to register an earnings compound annual growth rate of 14.4% between FY12 and FY14, helped by its new product development and higher demand for elevator systems.

“EITA’s dividend policy is to pay out at least 30% of its annual earnings. Therefore, we have forecast FY12 to FY14 annual net dividend per share of 3.6 sen and 4.4 sen. This translates to net yield of 4.3% to 5.3% based on our estimated fair value,” said RHB which has a target price of 83 sen for EITA shares.



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KLCI slips in early trade

KUALA LUMPUR (April 9): The FBM KLCI slipped into negative territory in early trade on Monday, in line with its regional peers that mostly fell.

Asian shares fell on Monday as a sharp slowdown in U.S. jobs growth raised concerns about the strength of the world's largest economy, making investors cautious ahead of more U.S. data and earnings as well as figures from China due this week, according to Reuters.

At 9.06am, the FBM KLCI shed 0.79 of point to ,598.08.

Gainers edged losers by 82 to 59, while 100 counters traded unchanged. Volume was 75.68 million shares valued at RM37.42 million.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on April 9 said The FBM KLCI gained 2.54 points to close at 1,598.87 last Friday.

“The obvious areas for the FBM KLCI are in the 1,562 to 1,590 zone.

“The next resistance levels of 1,598 and 1,609 may see heavy liquidation activities,” he said.

Among the early decliners on Bursa Malaysia were GAB,BHIC, Unisem, BIMB, DRB-Hicom, IOI Corp, Deleum and CSL.

The actives included Naim Indah Corp, Time, SuperComNet SCN< SAAG, Ariantec and Trinity.

Menwhile, the gainers included Dutch Lady, EITA,, HLFG, Parkson, AIRB, Guan Chong, HartaLega , SEGi and RPB.



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Maybank IB Research maintains Buy on Yinson, Target price RM2.20

KUALA LUMPUR (April 9): Maybank Investment Bank Bhd Research has maintained its Buy recommendation on YINSON HOLDINGS BHD [] at RM1.77 with a target price of RM2.20 and said Yinson’s proposal of a 6% placement new shares was to fund upcoming projects planned for the next 12 months,

However, the research house said on April 9 that Yinson’s management remains mindful of limiting dilution to shareholders.

“No change to our target price pending completion of the exercise but we are positive as it will lower Yinson’s gearing (1.8x to 1.6x), putting it on a better footing to secure new jobs,” it said.



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CIMB Research maintains Outperform call on Hartalega

KUALA LUMPUR (April 9): CIMB Research has maintained its Outperform rating on Hartelega Holdings Bhd at RM7.91 with a target price of RM9.98 and said the company’s 28.4 billion-pieces-of-gloves expansion by FY22 was a strong signal that it remains focused on growth.

The research house ina note April said the project enables Hartalega to defend its dominant position and add market share.

“We believe backing by the government mitigates risks and raises the probability of success,” it said.

Also, the Kuan family remains invested in the project as they could contribute RM172 million of equity or 41.7% of the external funding via warrant conversion.

“Maintain Outperform and target, still based on 13.05x forward P/E, in line with Top Glove’s 2-year historical average,” said CIMB Research.

The research house said investors should accumulate the shares, adding that Hartalega had overtaken Top Glove as the world’s most valuable glovemaker.

“Soon it may exceed Top Glove’s capacity as well. Yields remain tops in the sector. Re-rating catalysts would be i) strong 4Q results, ii) acquisition of the 100-acre site, and iii) securing of gas supply,” it said.



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CIMB Research maintains Overweight on power sector

KUALA LUMPUR (April 9): CIMB Research has maintained its Overweight recommendation on Malaysia’s power sector and said the sector could be on the cusp of a transformation

In a note April 9, the research house said that overall, investors were optimistic about Tenaga’s prospects and believe the company will benefit from sector reforms.

“However, some funds are taking a more cautious approach due to the proximity of the 13th general elections.

“We believe Malaysia’s power sector could be on the cusp of a transformation. Post elections, sentiment is likely to improve and reform initiatives gain traction with the uncertainty removed. Maintain Overweight. Petronas Gas is our top pick,” it said. - Reuters



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Stocks to watch Hartalega, Ingress Corp, EITA, and oil gas-related

KUALA LUMPUR (April 7): The FBM KLCI could experience some pullback in the week beginning April 9, as the rally over the past two weeks may not be sustainable given overriding external factors.

World stock markets look poised to fall early next week and safe-haven government debt prices could rally after U.S. employment figures fell short of expectations on Friday, according to Reuters.

U.S. stock futures fell more than 1% and Treasuries prices rallied after U.S. payrolls grew by 120,000 in March, far below the expected gain of 203,000 jobs, it said.

MIDF Research head of equity Syed Muhammed Kifni said that although the FBM KLCI recorded a fresh all-time high of 1,609.33 points last week, the joy was short-lived as the local market was not spared by the global market sell-off.

He said the pullback in global risk assets was triggered by the release of the minutes of recent US Fed meeting, which were interpreted by many as the central bank signaling its hesitation on launching a fresh round of monetary stimulus as the economy improves.

“Additionally, the poor Spanish government bond auction only added fuel to proverbial fire.

“We view the pullback as a clear manifestation that the recent market rally was underpinned mainly by liquidity, rather than valuations,” he said

Syed Muhammad said that nonetheless the streak of net foreign buying of Bursa-listed shares continued unbroken this past week.

Bursa data shows that foreign investors had been net buyers for 35 consecutive trading days until last Thursday, he said.

“We thus see no reason to not to expect a continuation of the streak this week. Hence the underlying market sentiment should remain healthy so long as the liquidity flow into the market remains positive and we are confident that the FBM KLCI will regain the 1,600s level perhaps towards the later part of this week.

“Moreover, our external trade as well as industrial production figures due for release this week might potentially be key market movers. The consensus expectations are pointing towards all-around sequential improvements in the numbers,” he said.

Syed Muhammed said the immediate resistance and support levels for FBM KLCI were pegged at 1,610 points and 1,590 points respectively.

Meanwhile, Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said the FBM KLCI was now ripe for a pullback towards a lower sideways range of 1580-1600 level.

“We reckon the equity optimism will take a mild negative turn following a surprised absence of USA stimulus and Spanish revived fiscal concerns with the bond yields climbing to their highest level in five month (Spanish 10-Year bond rose to 5.8%).

“This has stoked concerns regarding the European debt crisis, boosted safe-haven appeal of the USA dollar and weighed on local risk-taking sentiment,” he said.

Among the stocks that could be in focus are HARTALEGA HOLDINGS BHD [], INGRESS CORPORATION BHD [], EITA Reources Bhd, and oil gas-related counters.

Hartalega is setting up a RM1.5 billion“next generation integrated glove manufacturing complex” (NGC) comprising 70 new high tech production lines.

The company said last Friday that its wholly owned subsidiary Hartalega NGC Sdn Bhd that was incorporated on March 29 is the designated corporate vehicle for the setting up of the NGC project, that is mainly involved in the production of rubber gloves to cater to fast rising global demand.

Ingress Corp Bhd will establish a switching station for TENAGA NASIONAL BHD [] (Tenaga) in a deal worth RM26.6 million. The 275-kilovolt station will be set up at Pantai Remis, Selangor.

In a filing to Bursa Malaysia Securities last Friday, Ingress said Tenaga had issued a letter of intent for the project to a joint venture between two subsidiaries of Ingress, namely, Multi Discovery Sdn Bhd and Ramusa Engineering Sdn Bhd.

Elevator manufacturer and distributor of electrical and electronics equipment EITA Resources Bhd, will be listed on Monday on the Main Board of Bursa Malaysia.

The group’s IPO entails a public issue of 23 million new ordinary shares and an offer for sale of 17 million ordinary shares, at an IPO price of RM0.76 per share.

Of the 23 million new shares, 6.5 million were allocated for public balloting and 3.5 million shares for eligible directors, employees and business associates of the Group.

Oil and gas stocks could attract some investor interest after RHB Research Institute Sdn Bhd on April 6 said it has an Overweight rating on the oil and gas sector and said it was positive on the sector following Petroliam Nasional Bhd’s (Petronas) statement on April 5 that the proposed Refinery and Petrochemical Integrated Development (RAPID) project, to be located in Pengerang, Johor, was progressing as scheduled.

The research house said on Friday that the statement was the closest indication yet that the RAPID would proceed as planned.



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