Xian Leng strengthens corporate governance

KUALA LUMPUR (April 10) : The board of XIAN LENG HOLDINGS BHD [] will improve the company’s corporate governance following a special audit which revealed financial irregularities in the commercial breeder of ornamental fish.

In a statement to the exchange on Tuesday, Xian Leng said its directors will consider and implement preemptive and corrective measures including the appointments of key personnel to oversee its business. These include a legal advisor and monitoring accountant, apart from an officer in charge of the daily operations of the firm.

According to Xian Leng, the firm will undertake a thorough review of its internal control to prevent the occurrence of financial irregularities.

The special audit on Xian Leng by PricewaterhouseCoopers Advisory Services Sdn Bhd revealed financial irregularities in its fish farm development capital expenditure amounting to RM90.7 million of which a total of RM85.7 million was disbursed under “questionable circumstances”, according to Xian Leng.



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SC approves RM505 million bond by S P Setia

KUALA LUMPUR (April 10) : The Securities Commission has approved a proposed RM505 million bond scheme by Setia Ecohill Sdn Bhd, wholly-owned subsidiary of property developer S P Setia Bhd.

In a statement to the exchange on Tuesday, S P Setia said the scheme involves commercial papers and medium-term notes.

The firm initially announced the seven-year fund raising programme in March this year. According to the developer, the scheme will be guaranteed by the parent company, and is secured by its land in Semenyih, Selangor.

Proceeds from the exercise will finance the acquisition and development of the tract, S P Setia said.



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BAT names new chairman

KUALA LUMPUR (APRIL 10): British American Tobacco (Malaysia) Bhd has appointed Datuk Mohamad Salim Fateh Din as its new chairman and non executive director.

In a filing to Bursa Malaysia Securities on Tuesday, BAT said Mohamad Salim owns and manages CONSTRUCTION [], property, investment and property development businesses through Gapurna and its group of companies.

It said he was known as a pioneer who customised and built ‘Super Store’ concept petrol stations for leading oil companies in Malaysia.

The company said he also successfully re-engineered and consulted on the design of the Sepang distribution centre for a well-known hypermarket in Malaysia which modernizes and improves its food-processing systems, reducing logistics costs and delivery turnaround time.

Mohamad Salim is a long serving member of the Board of Trustees at the Yayasan Pendidikan Cheras, said BAT.



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KLCI closes higher, but stays shy of 1,600-mark

KUALA LUMPUR (APRIL 10): The FBM KLCI closed higher on Tuesday, but stayed shy of the 1600-point mark as investor sentiment appeared to be cautious given the concerns over data that came from the US and China.

Regional markets were mostly mixed on Tuesday, as investors remained cautious after Chinese trade data showed the world's second largest economy may be able to achieve a soft landing but global growth concerns lingered given the sharp slowdown in U.S. job creation, according to Reuters.

Meanwhile, European stocks posted sharp early losses on Tuesday and German government bond yields hit their lowest levels since September, as investors returning from a holiday weekend cut their exposure to risky assets after surprisingly weak March U.S. jobs data, it said.

The FBM KLCI rose 5.89 points to 1,597.17. It had earlier risen to its intra-day high of 1,598.53.

Gainers overtook losers by 365 to 332, while 33 counters traded unchanged. Volume was 1.11 billion shares valued at RM1.58 billion.

The worries about the health of the giant U.S. economy overshadowed positive trade numbers from Germany and China, with both nations enjoying strong export growth, although weak Chinese import numbers took some of the gloss off the data, said Reuters.

At the regional markets, Hong Kong’s Hang Seng Index fell 1.15% to 20,356.24, Japan’s Nikkei 225 shed 0.09% to 9,538.02, and South Korea’s Kospi was down 0.13% to 1,994.41.

The Shanghai Composite Index rose 0.88% to 2,305.86, Taiwan’s Taiex gained 0.52% to 7,640.68 and Singapore’s Straits Times Index up 0.59% to 2,977.70.

On Bursa Malaysia, Country View was the top gainer and rose 29.5 sen to 95.5 sen, Tradewinds PLANTATION []s added 26 sen to RM5.71, Genting rose 24 sen to RM11.08, Tradewinds added 24 sen to RM10.16, Batu Kawan 20 sen to RM18.74, BLD Plantations 19 sen to RM9.39, Chin Teck 14 sen to RM9.20, KPJ and SMPC up 13 sen each to RM5.29 and RM2.49, while Carlsberg added 12 sen to RM10.86.

Naim Indah Corp was the most actively traded counter with 69.82 million shares done. The stock gained one sen to 54 sen.

Other actives included DiGi, Metronic, KBES, Tiger Synergy, CSL, DPS, Ariantec and Managed Pay.

Meanwhile, decliners included Aeon, Sarawak Oil Palms, GBH, Advanced Packaging, GAB, Amtek, Malpac, Panasonic, UAC and Inno.



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Feb industrial output up 7.5% year-on-year

KUALA LUMPUR (April 10) : Malaysia’s industrial output, as measured by the industrial production index (IPI), rose 7.5% in February from a year earlier, as all three components of the gauge registered increases.

In a statement on Tuesday, the Statistics Department said the manufacturing and mining components grew 9.4% and 1.9% respectively, while the electricity portion was up 11.3%.

In monthly terms, the IPI rose 9.1% from January this year. The manufacturing and mining components climbed 11% and 5.1% respectively while electricity output was up 8.5%.



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Syed Zainal still MD, says Proton

KUALA LUMPUR (April 10): PROTON HOLDINGS BHD [] has said Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir is still holding the position of group managing director of the national carmaker, and that his services are still required in the company.

Responding to a report in the Edge Financial Daily on Tuesday citing sources that Syed Zainal had resigned from the company, Proton in a statement on Tuesday said it was not aware of the source of the speculation.

The Edge Financial Daily, citing close associates of Syed Zainal and industry executives, said the resignation was due to differences with the new owners of Proton, namely conglomerate DRB-HICOM BHD [] that took over the national carmaker.

"The post-acquisition exercise is still proceeding smoothly — and upon the completion of the same, Proton is expected to have a strong synergy of current and new management team members that will provide Proton with the necessary impetus to lead the company in its aspiration to become a globally-successful automotive player," said the national carmaker.



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KLCI edges up at mid-day break, crosses 1,590-mark

KUALA LUMPUR (APRIL 9): The FBM KLCI ticked upward at the mid-day break on Tuesday and moved above the 1,590-point mark, while investors at the regional markets took a cautious stance.

Asian shares struggled on Tuesday as investors remained cautious after Chinese trade data showed the world's second largest economy may be able to achieve a soft landing but global growth concerns lingered given the sharp slowdown in U.S. job creation, according to Reuters.

The FBM KLCI added 4.38 points to 1,595.66 at the mid-day break.

Losers edged gainers by 257 to 297, while 295 counters traded unchanged. Volume was 471.75 million shares valued at RM531.72 million.

At the regional markets, Japan’s Nikkei 225 fell 0.20% to 9.565.81, Hong Kong’s hang Seng Index lost 1.11% to 20,365.10, the Shanghai Composite Index wa down 0.96% to 2,263.78, and South Korea’s Kopsi shed 0.03% to 1,996.55, while Singapore’s Straits Times Index added 0.23% to 2,967.04 and Taiwan’s Taiex gained 0.18% to 7,614.54.

BIMB Securities Research in a note Tuesday said that as expected, sellers overwhelmed Wall Street following the weak job data last week.

The Dow Jones Industrial Average consequently declined 130 points to 12,929 as funds flowed back to the US Treasuries as depicted by a dip in the 10 year Treasury yield to 2.04% (-0.14%), it said.

The research house said investors would pay heed to some of the upcoming corporate earnings due this week.

With European markets closed for Easter, regional markets have had a rather traumatic Monday with almost all ending up in a sea of red taking cue the weak job data, it said.

“As for the local bourse, its performance was in synch with the regional decline as the FBMKLCI lost 7.6 points to 1,591 just above the support level of 1,590.

“We expect the market to be lacklustre today with the index to see further decline albeit marginally as China continues to be plagued by the fine art of balancing between growth and inflation. We see current developments as excellent windows of opportunities to accumulate and expect the index to hover between 1,585-90,” it said.

ON Bursa Malaysia, Tradewinds PLANTATION []s was the top gainer in the morning session and added 28 sen to RM5.73, Tradewinds up 23 sen to RM10.18, Bonia 17 sen to RM2.60, KPJ 15 sen to RM5.31, Batu Kawan and SMPC up 14 sen each to RM18.68 and RM2.50, Genting 12 sen to RM10.96, YHS 11 sen to RM2.75 and Carlsberg added 10 sen to RM10.84.

Tiger Synergy was the most actively traded counter with 24.8 million shares done. The stock was unchanged at 15.5 sen.

Other actives included KBES, Digi, Naim Indah Corp, CSL, KTB, Managed Pay and Asia Media.

Meanwhile, the decliners included Nestle, Aeon, Lafarge Malayan Cement, Panasonic, UAC, Parkson, Amtek, Shangri-La, LPI and Milux.



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Malaysian Feb exports up 14.5% year-on-year

KUALA LUMPUR (April 10) : Malaysian exports grew 14.5% to RM56.87 billion in February this year from RM49.65 billion a year earlier, as the country sold more electrical and electronic goods, besides palm and crude oil.

In a statement on Tuesday, the Statistics Department said exports to major markets including the US, Europe, China and Japan rose during the month. February imports rose 18% to RM46.29 billion from a year earlier, according to the statement.

Cumulative two-month exports rose 7.1% to RM111.94 billion while imports climbed 10.2% to RM92.61 billion, according to the Statistics Department.

The International Trade and Industry Ministry expects the country’s exports to grow between 5% and 6% this year, slower than the 8.7% growth in 2011. The forecast takes into account a weaker global economic landscape in 2012.



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Boustead edges up on positive outlook

KUALA LUMPUR (APRIL 10): BOUSTEAD HOLDINGS BHD [] shares advanced on Tuesday after its group managing director Tan Sri Lodin Wok Kamaruddin said the company aims to grow the diversified group’s profit before tax (PBT) to RM1 billion and net profit to RM750 million in the next two years amid the expected improving prospects in all divisions.

At 12.14pm, Boustead added three sen to RM5.47 with 410,500 shares traded.

“Personally, I would like to see the group breach the RM1 billion mark for PBT within the next two years,” he said after the company AGM’s on April 9.

“If we can move revenue towards the RM10 billion mark this year, that will be a good achievement,” he said, adding that based on the first three months of 2012, the group’s prospects were looking very healthy.

For FY11 ended Dec 31, Boustead recorded a 14% increase in PBT to RM831 million from RM726 million a year ago. Its revenue rose 38% to RM8.6 billion from RM6.2 billion.

Lodin said the group was allocating some RM1.3 billion for its capital expenditure this year. The largest portion of RM400 million will be for the property division, RM300 million for PLANTATION [], RM200 million for shipbuilding, RM100 million for pharmaceuticals and the balance for other operating units.

Lodin expects the plantation division, which contributed 41% to the group’s bottom line last year, to exceed the RM300 million achieved in 2011 if the price of crude palm oil continues to be as strong at between RM3,000 and RM3,500.



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SMPC up 7%, goes ex-rights on Thursday

KUALA LUMPUR (April 10) : SMPC Corp Bhd shares rose as much as 7% on Tuesday morning as investors chased the stock before it goes ex-rights this Thursday. The final day of lodgement is on April 16.

The steel manufacturer climbed 17 sen to reach an intraday high of RM2.53 before trading lower at RM2.50 at 11.56am. Some 251,000 shares changed hands. At RM2.50, the stock had gained 24% from a week earlier when it closed at RM2.01.

SMPC is undertaking a renounceable rights issue of up to 19.39 million new shares with 9.7 million free warrants on the basis of six rights units and three warrants for every two existing shares held.

The company is also implementing a renounceable rights issue of up to RM19.39 million worth of zero-coupon, 10-year irredeemable convertible unsecured loan stocks (ICULS) with 9.7 million free warrants on the basis of RM6 worth of ICULS and three warrants for every two existing shares held.



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LPI down 1.3% on weaker quarterly financials

KUALA LUMPUR (April 10) : LPI CAPITAL BHD [] shares fell as much as 1.3% on Tuesday morning after the general insurer reported weaker first quarter financials.

The stock, among the top decliners, was down 18 sen to an intraday low of RM13.70 before trading higher at RM13.90 at 11.36am.

LPI’s net profit fell 19% in the first quarter ended March 31, 2012 from a year earlier, as higher claims and operating expenses, besides lower investment income offset a higher revenue.

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.



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KLCI down in early trade, slips below 1,590-level

KUALA LUMPUR (April 10): Shares on Bursa Malaysia fell in early trade on Tuesday with most investors staying on the side-lines given the weaker regional sentiment and a holiday-shortened trading week in Malaysia.

The FBM KLCI fell 2.84 points to 1,588.44 at 9.03am, weighed by losses at select blue chips.

Losers edged gainers by 59 to 47, while 100 counters traded unchanged. Volume was 27.05 million shares valued at RM13.07 million.

Wednesday is a public holiday in Malaysia in conjunction with the installation ceremony of the Yang DiPertuan Agong.

Meanwhile, Global stocks and crude oil fell on Monday as investors reacted to the surprisingly sharp slowdown in U.S. jobs growth reported last week, which raised concerns about the strength of the world's largest economy, according to Reuters.

Stocks on Wall Street and crude oil futures prices slid about 1% on the first trading day after the U.S. Labor Department reported the March jobs data. U.S. equity markets were closed on Friday for the Good Friday holiday, it said.

Among the aly decliners on Bursa Malaysia were Genting PLANTATION []s, Petronas Gas, Lafarge Malayan Cement, HLFG, Hong Leong Bank, Astino, Petronas Dagangan, Public Bank and Parkson.



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RHB Research upgrades Tenaga to Outperform, ups fair value to RM7.60

KUALA LUMPUR (April 10): RHB Research Institute Sdn Bhd has upgraded TENAGA NASIONAL BHD [] to Outperform and raised its fair value for to RM7.60 (from RM6.50 previously) and said it was turning more positive on Tenaga given better visibility of its earnings outlook with the improved gas supply.

In a results preview on Tuesday, RHB Researh said given that the gas supply situation had improved significantly to 1,100-1,150 mmscfd in 2Q (1Q: 1,050 mmscfd), it expectes earnings to jump quareter-on-quarter.

“We estimate 2Q core net profit of RM500 million-RM600 million (1QFY12: RM196 million, 2QFY11: RM442 million),” it said.

RHB Research said it gathered that Tenaga would write back the RM2.05 billionn compensation in 2Q.

It said this opened the possibility for Tenaga to resume paying dividends. For 1HFY12, we estimate electricity unit sales growth of 4.6%. This is within management’s guidance and our forecast of 4-5% and 4% respectively.

“We are turning more positive on Tenaga given better visibility of its earnings outlook with the improved gas supply. Fair value raised from RM6.50 to RM7.60 based on unchanged target FY13 PER of 15x and EPS of 50.8 sen after rolling over the valuation base year to 2013,” it said.



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RHB Research upgrades Aeon to market perform, raises FV to RM10.40

KUALA LUMPUR (April 10): RHB Research Institute Sdn Bhd has upgraded Aeon Co (M) Bhd to Market Perform and raised its fair value to RM10.40(from RM8.90 previously) and said Aeon expects to open another outlet in Dec 2012 in Sri Manjung.

In a note Tuesday, RHB Research said the mall would be leased from the developer and have total net lettable area of 400k sq ft.

“Further ahead, we understand that Aeon has plans to open one mall in 2013, although no details on location were given. In 2014, Aeon expects to open three new malls, i.e. Kulai, Sg. Petani and Bukit Mertajam.

“For its retail operations, which include department store and supermarket sales, AEON expects its Same Store Sales (SSS) growth to be approximately 4% for FY12, higher than our estimates of 2-3% for FY12-14,” it said.

The research house said that moving forward, Aeon’s management expects profit before tax for its property management service to be sustained at FY11 levels of RM120 milion-RM130 million, which RHB Research said was slightly higher than its current estimates of RM110 million-RM120 million for FY12-14.

“We raise our fair value to RM10.40 (from RM8.90) based on a new target PER of 16x FY12 EPS (from 14x FY12 EPS previously). We upgrade our call on the stock to Market Perform,” it said.



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Stocks to Watch LPI, Hong Leong, Guan Chong, Silk

KUALA LUMPUR (April 9): Malaysian shares could see further correction on Tuesday against a backdrop of less-optimistic global economic data. Crucial highlights include the still-weak job market in the US, besides China's inflation growth of 3.6% in March.

China's latest inflation numbers, which came in higher than street estimates, have prompted the anticipation that policymakers will delay monetary loosening to spur the world's second largest economy.

Analysts said Malaysia's FBM KLCI may see sideway consolidation with downward bias, due to global economic concerns.

"Domestically, any correction in the benchmark index is expected to be shallow, with domestic factors holding up the market until the dissolution of the parliament paves way for the next general election," TA Securities Holdings Bhd wrote in a note.

On Monday, the FBM KLCI fell 7.59 points to close at 1,591.28, while US equity futures declined on global economic growth concerns. The S&P 500 futures fell some 1% while the Dow Jones Industrial Average futures was down 0.9%, an indication that US stock markets could decline when markets open.

Stocks to watch on Tuesday include LPI CAPITAL BHD [], HONG LEONG BANK BHD [], GUAN CHONG BHD [], HUA YANG BHD [], Silk Holdings Bhd.

LPI'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 Securities Commission has approved Hong Leong's plan to issue up to US$1.5 billion (RM4.61 billion) worth of bonds to finance its working capital needs.

Cocoa processor Guan Chong plans to undertake a secondary listing on the Singapore bourse. The firm also plans to reward shareholders with a bonus issue of new shares.

TA Securities has upgraded Hua Yang, a property developer, to a "buy" from "hold" with a target price of RM1.68.

PETROFAC (M) Ltd has extended its anchor handling tug supply vessel contract with Silk in a deal worth RM10.77 million. The company said the contract extension was expected to contribute positively to its earnings for the financial years ending July 31, 2012 and 2013.



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