Mainly Ananda Krishnan owned Bumi Armada to be taken private again?

PETALING JAYA: Bumi Armada Bhd’s tumbling share price and the sudden departure of its chief executive officer on Dec 5 is fuelling talk that the company could be taken private again. 

The oil and gas services company’s main shareholder T Ananda Krishnan has a track record of de-listing companies when times are bad and taking it back to the market when conditions and valuations improve.

Ananda’s chief corporate lieutenant Ralph Marshall declined to comment on the matter when contacted by StarBiz.
“Sorry, I cannot comment. I don’t know anything about Bumi Armada,” he said.

But the prospect of a fresh corporate exercise is keeping its share price afloat above the RM1 level.
Maybank IB Research, in a recent report, did not rule out a potential privatisation for the stock, as it was trading at around one time book value.

Operationally, it said it liked Bumi Armada’s floating production, storage and offloading (FPSO) business model in light of the current weak/volatile oil market environment while valuation-wise, it was inexpensive to growth.

Another analyst agreed that the company’s fundamentals were doing well and that he also would not be surprised by a move to privatise the company.
“There is value in it, just that the share price is down for now,” he said.
Ananda had previously delisted and relisted companies under his stable including Astro Malaysia Holdings Bhd, Maxis Bhd and Bumi Armada.
“It has happened before and I don’t think anyone will be surprised if it happens again,” said an analyst, who declined to be quoted.
She noted that the company’s fundamentals seemed to be intact, with the recent hit to its share price most likely to be due to poor market conditions.

She said that Bumi Armada had a strong order book with quite a lot of new contracts as well as work-in-progress contracts.
“Everyone knows the earnings will not be immediate but the fundamentals are quite sound. Beside this, FPSO contracts are quite resilient,” she said.

She said another factor that could have affected the stock was CEO Hassan Basma’s resignation.

“We have also seen supposedly substantial shareholders actively selling over the past few months. But again, they seem to be nibbling back their stake,” she observed.

One of Bumi Armada’s shareholders, Ombak Damai Sdn Bhd, had a 7.17% stake on Sept 9 after disposing of 15 million Bumi Armada shares. It continued to pare its stake down to 6.97% in October via three transactions on Oct 1, 3, and 7 that saw it dispose of a total of 297,500 shares.

However, it then bought back some shares on Oct 9, raising its stake to 7.07% currently.

Bumi Armada was taken private by Ananda in 2003. The company, however, was re-listed on Bursa Malaysia in 2011 at an initial public offer price of RM3.03. The stock was last traded at RM1.01 yesterday.

Bumi Armada edges up on unit’s Mexican contract

KUALA LUMPUR (May 8): Bumi Armada Bhd shares edged up on Tuesday after its unit secured a five-year contract worth US$65 million (RM198.9 million) to provide an accommodation workboat.

At9.13am, Bumi Armada added two sen to RM4.02 with 11,400 shares done.

The company said on Monday that its subsidiary, Bumi Armada Navigation Sdn Bhd ("BAN") had been awarded the contract by Tecnologías Relacionadas con Energía y Servicios Especializados, SA de CV (TRESE).

"The Vessel will be providing accommodation and offshore support services in the Mexican territorial waters,” it said.

BIMB SEcurities Research has upgraded Bumi Armada from Neutral to Buy and said the recent share price retracement offered a good accumulation opportunity for investors.

"We made no changes to our forecast and target price of RM4.65," it said in a note Tuesday.



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Stocks to Watch F&N, Bumi Armada Bhd, PerMaju Industries Bhd and MSM Holdings Bhd

KUALA LUMPUR (May 7): The FBM KLCI may extend its losses on Tuesday, in line with the tepid investor sentiment at most global markets, after most Asian and European equities were mired in the red following several electoral results in the troubled eurozone area.

Greek and French election results rattled investors on Monday by undermining confidence in the region's plans to cut spending and tackle its debt crisis, sending the euro to a three-month low, according to Reuters.

European shares also initially traded lower, with Greek stocks down 6.4 percent, but reaction was muted with the UK market closed for a holiday. Wall Street stocks were expected to reflect the weaker tone when they were being trading, it said.

Among the stocks that could be in focus on Bursa Malaysia on Tuesday are Fraser & Neave Holdings Bhd (F&N), Bumi Armada Bhd, PERMAJU INDUSTRIES BHD [] and MSM Holdings Bhd.

F&N declared an interim single tier dividend of 20 sen per share for the financial year ending Sept 30, 2012 amounting to RM73 million to be paid on Aug 1. Its net profit fell 18.93% to RM107.01 million in its second quarter ended Mar 31,2012 from RM131.99 million a year earlier as a result of the cessation of its Coca-Cola business and flood disruptions in Thailand.

Bumi Armada Bhd’s unit has secured a five-year contract worth US$65 million (RM198.9 million) to provide an accommodation workboat. The company said on Monday that its subsidiary, Bumi Armada Navigation Sdn Bhd ("BAN") had been awarded the contract by Tecnologías Relacionadas con Energía y Servicios Especializados, SA de CV (TRESE). "The Vessel will be providing accommodation and offshore support services in the Mexican territorial waters."

Meanwhile, Bursa Malaysia Securities Bhd issued an unusual market activity (UMA) query to Permaju Industries Bhd over the sharp rise in the price and high volume in the company’s shares recently.

MSM Malaysia Holdings Bhd profits rose 7.05% in its first quarter ended Mar 31, 2012 to RM66.39 million from RM62.02 million a year ago, due to higher sales volume and average selling prices. It said on Monday that its revenue for the quarter increased 5.68% to RM531.76 million from RM503.17 million a year earlier.



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Bumi Armada unit gets RM198.9m contract

KUALA LUMPUR (May 7): Bumi Armada Bhd’s unit has secured a five-year contract worth US$65 million (RM198.9 million) to provide an accommodation workboat.

The company said on Monday that its subsidiary, Bumi Armada Navigation Sdn Bhd ("BAN") had been awarded the contract by Tecnologías Relacionadas con Energía y Servicios Especializados, S.A. de C.V. (TRESE).

“The Vessel will be providing accommodation and offshore support services in the Mexican territorial waters.

“TRESE is a Mexican Oil & Gas services company with interests in drilling, vessel chartering and accommodation services in Mexico,” said Bumi Armada.

The company said the Contract was for a period of five (5) years with an extension option of an additional five (5) years, and was expected to be effective from May 7, 2012.

Bumi Armada said the contract was expected to contribute positively to its earnings for the financial year ending Dec 31, 2012 and the financial periods thereafter for the duration of the contract.



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Bumi Armada shares retreat at mid-morning

KUALA LUMPUR (APRIL 30): Bumi Armada Bhd shares retreated on Monday after some shareholders holding 293 million shares, representing almost 10% of the company, disposed their interest via a book building exercise last Thursday. The exercise was reportedly done at an average price of RM3.95.

At 10.30am, Bumi Armada, a company that is controlled by low profile T. Ananda Krishnan, was down six sen to RM4 with 2.63 million shares traded.

Ananda himself did not dispose any of his interest in Bumi Armada, indicating that there is still much upside for the company.

Bumi Armada Bhd in response to news reports that Ananda was paring down his stake said that enquiries with its major shareholders and directors, it clarified that Ombak Damai Sdn Bhd, Wijaya Sinar Sdn Bhd and Karisma Mesra Sdn Bhd had participated in a book-building exercise conducted by CIMB Investment Bank Bhd, accounting for a total of 293 million Bumi Armada shares.

The Edge Financial Daily last Friday reported that Ananda and his bumiputera partners will sell roughly 15% of offshore services provider Bumi Armada Bhd in private placements to local and foreign institutional investors in a deal that will raise close to RM2 billion.



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Stocks to watch WZ Steel, Pensonic, Bumi Armada, Chin Teck

KUALA LUMPUR (APRIL 28): The FBM KLCI is expected to trend lower next week in response to rising solvency risk and borrowing cost in Europe (Spain & Italy) and rising local political uncertainties.

On the local scene, the outcome of the Bersiih 3.0 rally, and how the ruling Barisan Nasonal government handles the issue will also play heavily on investor sentiment.

U.S. stocks advanced on Friday and posted their best weekly gains in a month as stronger-than-expected earnings from Amazon.com and Expedia Inc reinforced confidence in corporate performance, according to Reuters.

Wall Street managed a fourth day of gains as the strong earnings season outweighed a surprisingly weak reading on first-quarter economic growth, it said.

Next week's release of a slew of economic data on the U.S. labor market and the beginning of the latter half of corporate earnings will be keenly watched to see if they are enough to allow stocks to break above the recent trading range, it said.

Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said he expects the FBM KLCI to trend lower in response to rising solvency risk and borrowing cost in Europe (Spain & Italy) and rising local political uncertainties.

“Despite positive comments from the USA Fed on possible monetary stimulus, a weaker than expected read on April Euro zone sentiment and rising European bond yield seemed to bring struggling European growth and debt concerns back into focus.

“Following Standard & Poor's downgrade of Spain's long-term sovereign credit rating by two notches (from A to BBB+ with a negative outlook), we expect more selling to weigh on European equities and increase the risk-off appetite for German Bunds and USA Treasuries,” he said.

Among the stocks that could be in focus are WZ Steel Bhd, PENSONIC HOLDINGS BHD [], Bumi Armada Bh and CHIN TECK PLANTATION []S BHD [].

WZ Steel Bhd is acquiring an industrial land in Indonesia’s West Java province for IDR 14.58 billion (RM5.02 million) to build a new factory in the neighbouring country.

In a statement Friday, WZ Steel said it is buying the leasehold tract within the Delta Silicon industrial area in the Lippo Cikarang enclave, from Indonesia-based property developer PT Lippo Cikarang Tbk.

Pensonic Holdings Bhd posted a third quarter net loss on higher as higher revenue failed to mitigate the impact of rising operating cost for the electrical and electronic appliances manufacturer.

Pensonic said net loss came to RM1.14 million in the quarter ended February 29, 2012 against RM896,000 a year earlier. Revenue grew 7% to RM85.08 million from RM79.65 million.

“The decrease was mainly due to lower margin recorded as a result of active promotional activities carried out and also the increases in administration, selling and distribution expenses in current quarter for future expansion,” it said.Bumi Armada Bhd in response to news reports that Ananda was paring down his stake said that enquiries with its major shareholders and directors, it clarified that Ombak Damai Sdn Bhd, Wijaya Sinar Sdn Bhd and Karisma Mesra Sdn Bhd had participated in a book-building exercise conducted by CIMB Investment Bank Bhd .

It said Ombak Damai had participated with 9 million, while Ombak Damai and Karisma Mesra with a joint 284 million shares respectively, accounting for a total of 293 million Bumi Armada shares.

The Edge Financial Daily on Friday reported that Tycoon Ananda Krishnan and his bumiputera partners will sell roughly 15% of offshore services provider Bumi Armada Bhd in private placements to local and foreign institutional investors in a deal that will raise close to RM2 billion.

Financial executives involved in the placement told The Edge Financial Daily that the sale of roughly 440 million shares in Bumi Armada would cut the joint holdings of Ananda and his bumiputera partners to 55% in the company.

Chin Teck net profit for the second quarter ended Feb 29 2012 fell 33.58% to RM9.19 million from RM13.83 million a year earlier due mainly to substantial decrease in profit contribution from its associates.

The company said on Friday that its revenue for the quarter fell 2.44% to RM28.22 million from RM28.93 million in 2011 due to lower average selling prices of FFB, crude palm oil and palm kernel.

For the six moths ended Feb 29, Chin Teck’s net profit fell to RM24.48 million from RM2998 million on the back of revenue of RM60.69 million.



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Bumi Armada clears air on reports Ananda Krishnan paring down stake

KUALA LUMPUR (April 28): Bumi Armada Bhd in response to news reports that Ananda was paring down his stake said that enquiries with its major shareholders and directors, it clarified that Ombak Damai Sdn Bhd, Wijaya Sinar Sdn Bhd and Karisma Mesra Sdn Bhd had participated in abook-building exercise conducted by CIMB Investment Bank Bhd .

It said Ombak Damai had participated with 9 million, while Ombak Damai and Karisma Mesra with a joint 284 million shares respectively, accounting for a total of 293 million Bumi Armada shares.

The Edge Financial Daily on Friday reported that Tycoon Ananda Krishnan and his bumiputera partners will sell roughly 15% of offshore services provider Bumi Armada Bhd in private placements to local and foreign institutional investors in a deal that will raise close to RM2 billion.

Financial executives involved in the placement told The Edge Financial Daily that the sale of roughly 440 million shares in Bumi Armada would cut the joint holdings of Ananda and his bumiputera partners to 55% in the company.



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Bumi Armada down 5% on stake sale

KUALA LUMPUR (April 27) : Shares of Bumi Armada Bhd fell as much as 5% on updates that tycoon T. Ananda Krishnan is disposing of US$825 million (RM2.52 billion) worth of shares in the oil and gas support services provider.

The stock declined 23 sen to RM3.99 before trading higher at RM4 at 10.28am with some three million shares done.



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Malaysian stocks weighed down by pre-election sentiment

KUALA LUMPUR (April 27) : Malaysian stocks traded in negative territory on Friday morning as domestic pre-election sentiment gains an upper hand in dictating the direction of the FBM KLCI.

The local market may take the cue from domestic concerns ahead of the coming general election as investors assess the impact of the much-anticipated Bersih 3.0 rally on Saturday. Analysts said while US equities registered a stronger close in overnight trade, Asian stock markets could trade in an opposite direction on Friday.

“This is because sentiment will likely be affected by the negative vibes arising from S&P’s downgrade of Spain’s sovereign credit rating yesterday.

“Reflecting investors’ adverse reaction, the DJIA June futures contract tumbled this morning to hover at a 91-point discount to the spot rate,” HwangDBS Vickers Research Sdn Bhd wrote in a note.

At 9.59am, the FBM KLCI fell 9.28 points to 1,570.41. Across the exchange, some 455 million shares worth RM195 million were traded, leading to 163 gainers versus 208 decliners.

Top gainers NCB HOLDINGS BHD [] was up 45 sen to RM4.35 while PARKSON HOLDINGS BHD [] gained seven sen to RM5.29.

Among decliners, BRITISH AMERICAN TOBACCO (M) [] Bhd lost 76 sen to RM54.74, while Bumi Armada Bhd fell 18 sen to RM4.04.

Among actively-traded stocks, Ariantec Global Bhd gained two sen to RM25.5 sen with some 222 million shares done.

Across Asia, Japan’s Nikkei 225 rose 0.15% to 9,575.82, Australia’s S&P/ASX 200 climbed 0.08% to 4,378.8, while South Korea’s Kospi was up 0.78% to 1,979.43.



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KLCI struggles but stays above 1,580-level

KUALA LUMPUR (APRIL 23): The FBM KLCI struggled to remain above the important 1,580-level on Monday after having succumbed more than 8 points to fall below the 1,590-level.

Asian shares trended lower as political developments in France and the Netherlands raised fears about the region's commitment to tackle its ongoing debt crisis, according to Reuters.

The FBM KLCI lost 8.05 points to close at 1,583.80, weighed by losses including at CIMB, Genting, BAT, Tenaga, Telekom and RHB Capital.

Europe's top shares opened lower on Monday on the political concerns, but attention was expected to switch to the economy, with euro zone manufacturing activity indicators due out later after data from China showed some signs of recovery in factory output but not enough to prevent the sector contracting, said Reuters.

At the regional markets, Hong Kong’s hang Seng Index lost 1.84% to 20,634.39, Singapore’s Straits Times Index lost 1.11% to 2,961.18, the Shanghai Composite Index fell 0.76% to 2,388.59, Taiwan’s Taiex was down 0.35% to 7,481.09, and Japan’s Nikkei 225 shed 0.20% to 9,542.17, whiel South Korea’s Kospi edged down 0.10% to 1,972.63.

Among the major losers on Monday, BAT fell 98 sen to RM55.540, Aeon and Jaya Tiasa fell 21 sen each to RM9.20 and RM9.76, Genting 18 sen to RM10.62, Boustead 17 sen to RM5.28, Bumi Armada and CSL 16 sen each to RM4.31 and RM1.49, Warisan and Nestle down 14 sen each to RM2.34 and RM55.84, while Subur Tiasa fell 13 sen to RM2.95.

Other decliners included CIMB and Telekom that fell five sen each to RM7.50 and RM5/37, whiel RHB Capital and Tenaga lost four sen each to RM7.39 and RM6.48.

Araiantec was the most actively traded counter with 396.6 million shares done. The stock gained two sen to 24 sen.

Other actives included Metronic, Asral Supreme, Focus, Naim Indah Corp, JCY and Jotech.

Advancing stocks included Petronas Dagangan, Aeon Credit, United PLANTATION []s, Dutch Lady, Kencana, SapuraCrest, Manulife, Litrak and BIntulu Port.



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Bumi Armada up on Lukoil deal

KUALA LUMPUR (April 17): Bumi Armada Bhd shares rose on Tuesday after the company said it would offer oil and gas support services to Russia-based OAO Lukoil in deal worth an estimated U$200 million (RM614 million).

At 9.25am, Bumi Armada was up seven sen to RM452 with 311,300 shares traded.

CIMB Research has maintained it Outperform rating on Bumi Armada Bhd at RM4.45 with a target price of RM4.80 and said things were going swimmingly for Bumi in Russia where it has clinched a US$200m pipe installation contract from Lukoil.

In a note April 17, the research house said the contract would maximise the utilisation of its Armada Installer derrick pipelay barge, which is servicing a Petronas contract, also in the Caspian Sea.

“We continue to value the stock at 18.2x CY13 P/E, 40% premium over our target market P/E.

“Bumi’s RM7.6 billion order book and four anticipated FPSO contract wins support our forecast of record net profits in FY12-14 and 31.7% 3-year EPS CAGR. Maintain Outperform.



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CIMB Research maintains Outperform on Bumi Armada

KUALALUMPUR (April 17): CIMB Research has maintained it Outperform rating on Bumi Armada Bhd at RM4.45 with a target price of RM4.80 and said things were going swimmingly for Bumi in Russia where it has clinched a US$200m pipe installation contract from Lukoil.

In a note April 17, the research house said the contract would maximise the utilisation of its Armada Installer derrick pipelay barge, which is servicing a Petronas contract, also in the Caspian Sea.

“We continue to value the stock at 18.2x CY13 P/E, 40% premium over our target market P/E.

“Bumi’s RM7.6 billion order book and four anticipated FPSO contract wins support our forecast of record net profits in FY12-14 and 31.7% 3-year EPS CAGR. Maintain Outperform.



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Stocks to Watch Axis REIT, Chin Well, Bumi Armada, CIMB, Hartalega

KUALA LUMPUR (April 16): Malaysia's stock market benchmark could take the cue from external factors on Tuesday as global economic headwinds take centre stage in a still-fragile macro landscape.

Analysts said dynamics across the US, China and European countries will be closely watched as investors assess the impact from these major importing nations on world financial markets.

In Malaysia, it will be interesting to see whether domestic funds could offer adequate support to the FBM KLCI against a still-volatile global backdrop which have thrown most Asian indices into the red.

The FBM KLCI of 30 stocks fell 5.61 points to close at 1,597.51 on Monday.

Stocks to watch on Tuesday include Axis Real Estate Investment Trust (Axis REIT), Bumi Armada Bhd, CHIN WELL HOLDINGS BHD [], CIMB Group Holdings Bhd, and HARTALEGA HOLDINGS BHD [].

Axis REIT's first quarter net profit rose 27% from a year earlier, as a higher top line and a revaluation surplus mitigated the impact of higher expenses. In a statement to the exchange on Monday, Axis REIT said its net profit came to RM20.96 million in the quarter ended March 31, 2012 versus RM16.49 million previously while revenue was up 18% to RM32.29 million from RM27.25 million.

Bumi Armada will offer oil and gas support services to Russia-based OAO Lukoil in a deal worth an estimated U$200 million (RM614 million). In a statement to Bursa Malaysia on Monday, Bumi Armada said the job includes engineering, procurement, installation and pre-commissioning of subsea in-field and inter-field pipelines for the Filanovsky field in the Caspian Sea.

Chin Well, a screw and bolt manufacturer, plans to pay a tax-exempt interim dividend of 2% for the financial year ending June 30, 2012.

Reuters reported that CIMB will enter into an agreement to acquire a controlling 60% stake in the Philippines-based conglomerate San Miguel Corp's unlisted banking arm "soon", quoting a senior board member. The deal will allow San Miguel — the Philippines's most diverse conglomerate — to keep a minority stake in the unlisted bank while focusing on its new ventures such as power, mining, telecoms, infrastructure, and more recently, airlines.

RHB Research Institute Sdn Bhd has slashed its net profit forecast for Hartalega, a nitrile glove manufacturer, by between 6.1% and 18.5% for financial years 2012 till 2014. The research house said it has taken into account the glove manufacturer's lower capacity utilisation, and average selling prices apart for costlier raw material and higher net interest expenses.



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Bumi Armada secures RM614m contract from Lukoil

KUALA LUMPUR (April 16) : Bumi Armada Bhd will offer oil and gas support services to Russia-based OAO Lukoil in deal worth an estimated U$200 million (RM614 million)

In a statement to Bursa Malaysia on Monday, Bumi Armada said the offshore job includes engineering, procurement, installation and pre-commissioning of subsea in-field and inter-field pipelines for the Filanovsky field in the Caspian Sea.

“The contract valued at approximately US$200 million is expected to contribute positively to the revenue and earnings of Bumi Armada group for the financial year ending December 31, 2012 and the financial periods thereafter for the duration of the contract.

“The risks associated with the contract are normal operational risks which can be mitigated through Bumi Armada’s system of project management and internal business controls,” Bumi Armada said. A major portion of the 32 month-contract is due for completion by end 2014, according to the firm.



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Bumi Armada edges up on news of Caspian Sea contract

KUALA LUMPUR (April 13): Bumi Armada Bhd shares rose on Friday on reports that it had secured a pipeline contract in the Caspian Sea.

At 10.17am, Bumi Armada gained four sen to RM4.49 with 241,000 shares done.

A Kyiv Post article said Bumi Armada together with Lukoil-Niznyevolzhskneft LLC, a subsidiary of Lukoil has signed a contract to lay both underwater oil and gas pipelines for the Vladimir Filanovskoye deposits in the northern Caspian Sea.

Meanwhile, Maybank Investment Bank Bhd maintained its Buy rating on Bumi Armada Bhd at RM4.45 with a target price of RM4.88.

“While management has yet to confirm this (reported contract), we anticipate a marginal 1% enhancement to 2014 earnings,” said Maybank IB Research on Friday.

“Overall, we are marginally positive on this newsflow and it ties in with our expectation of the prospect of what the Caspian region can offer. Our unchanged RM4.88 TP is based on sum-of-parts (SOP) valuations,” it said.

The research house, citing the news artice, said the length would be around 40km for each pipeline.

“The completion of the first stage pipeline CONSTRUCTION [] is planned for end-2014 and the second stage the following summer. The Filanovskoye deposit project involves the laying of more than 330km of underwater and 350km of onshore pipelines,” it said.



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Maybank IB Research maintains Buy on Bumi Armada

KUALA LUMPUR (April 13): Maybank Investment Bank Bhd has maintained its Buy rating on Bumi Armada Bhd at RM4.45 with a target price of RM4.88 following a Kyiv Post article that said Bumi Armada together with Lukoil-Niznyevolzhskneft LLC, a subsidiary of Lukoil has signed a contract to lay both underwater oil and gas pipelines for the Vladimir Filanovskoye deposits in the northern Caspian Sea.

“While management has yet to confirm this, we anticipate a marginal 1% enhancement to 2014 earnings,” said Maybank IB Research on Friday.

“Overall, we are marginally positive on this newsflow and it ties in with our expectation of the prospect of what the Caspian region can offer. Our unchanged RM4.88 TP is based on sum-of-parts (SOP) valuations,” it said.

The research house, citing the news artice, said the length would be around 40km for each pipeline.

“The completion of the first stage pipeline CONSTRUCTION [] is planned for end-2014 and the second stage the following summer. The Filanovskoye deposit project involves the laying of more than 330km of underwater and 350km of onshore pipelines,” it said.



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Bumi Armada unit forms US-based subsidiary

KUALA LUMPUR (April 6): Bumi Armada Bhd’s wholly owned unit Bumi Armada Offshore Holdings Ltd, has formed a wholly-owned subsidiary in the United States to be principally involved in the offshore oil and gas marine services.

Bumi Armada said on Friday that the company known as Armada Blue had been formed on April 2, 2012 as a limited liability company in accordance with the laws of the State of Texas.



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Maybank IB Research maintains Buy on Bumi Armada

KUALA LUMPUR (March 22): Maybank Investment Bank Research is maintaining a Buy on Bumi Armada and RM4.88 target price.

It said on Thursday’s Bumi Armada's latest platform supply vessel (PSV) charter win from Petróleo Brasileiro S.A. (Petrobras), on a long-term contract from 2Q12, is earnings positive and testament to its well-positioned push for new contracts locally and globally.

“Overall, we like its niche exposure in thriving O&G markets worldwide, strong earnings visibility (three-year net profit CAGR of 25%) and balance sheet strength in powering up its growth and aspirations. Our target price is based on sum-of-parts (SOP) valuations,” said Maybank Research.



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HDBSVR sees KLCI struggling after crossing 1,580

KUALA LUMPUR (March 22): Hwang DBS Vickers Research said the FBM KLCI, after crossing slightly above the resistance hurdle of 1,580 on Wednesday, could struggle to maintain its position ahead.

It said on Thursday that from a technical perspective, the key market barometer is expected to show a downward bias in the near term.

“This follows a lackluster overnight performance on Wall Street. Major U.S. equity bellwethers ended between -0.3% and flat in the absence of fresh catalysts last night,” it said.

HDBSVR said hoping to catch investors’ attention on the local bourse on Thursday are stocks like: (a) Texchem Resources, after disposing of a 70% stake in two subsidiaries that are involved in the business of manufacturing and trading of insecticide products for RM129 million; (b) Bumi Armada, which has signed a contract worth RM115 million to provide oil & gas platform supply vessel; and (c) Mitrajaya, following the acceptance of letters of award for two CONSTRUCTION [] jobs totaling RM103 million.



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Stocks to watch: BToto, Lysaght, Bumi Armada, MHC Plantations

KUALA LUMPUR (March 21) : As the FBM KLCI rebounded from the red to close in positive territory on Wednesday, it will be interesting to watch if the index will be able to sustain its gains on Thursday.

The KLCI rose 0.31% or 4.91 points to close at 1,582.53 points on Wednesday.

Analysts said they remain cautious on the trading dynamics of the KLCI following gains from its low last September. This has prompted anticipation of profit-taking by institutional and retail investors ahead of the country’s general election against a lack of domestic catalyst.

The expectation is that the KLCI may consolidate in the near term and the spotlight will now be directed at companies with smaller market capitalisation.

Stocks to watch on Thursday include BERJAYA SPORTS TOTO BHD [] Lysaght Galvanised Steel Bhd, TEXCHEM RESOURCES BHD [], Bumi Armada Bhd, MHC PLANTATION []S BHD [] and DAYA MATERIALS BHD [].

BToto posted net profit of RM112.74 million in the third quarter ended Jan 31, 2012, a slight decline of 1.8% from the RM114.87 million a year ago. Its revenue rose 15.5% to RM983.46 million from RM851.16 million. Earnings per share were 8.44 sen compared with 8.59 sen. It declared a third interim single tier exempt dividend of 6.0 sen per share which will go ex on April 9.

For the nine-month period ended Jan 31, 2012, its earnings rose 27.3% to RM310.52 million from RM243.91 million in the previous corresponding period. Revenue rose at a slower pace of 6.3% to RM2.691 billion from RM2.532 billion.

Lysaght clinched four subcontracts with a collective value of RM22.75 million from Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd, The contracts involve the supply, fabrication, delivery and installation of antenna poles, Lysaght said.

Shares of Lysaght which was untraded on Wednesday, last closed at RM2.08 last Friday (March 16).

Oil and gas support services firm Daya Materials and Italy-based joint venture partner Magneti Marelli which is a part of the Fiat Group, has secured a RM62 million contract from the Penang Development Corp to build a factory and offices at Penang’s Batu Kawan Industrial Park.

Daya Materials rose one sen to 19.5 sen on Wednesday.

Diversified entity Texchem Resources Bhd is selling a controlling 70% stake in two units to Japan-based Fumakilla Ltd for US$42.4 million. The subsidiaries are Technopia Sdn Bhd, a manufacturer of insecticides, and PT Technopia Jakarta, a mosquito coil producer.

Trading of Texchem shares which was suspended on Wednesday will resume trading on Thursday. The stock was last traded at 59 sen on Tuesday (March 20)

Oil and gas support services firm Bumi Armada has secured a RM115 million contract from Brazil national oil company Petróleo Brasileiro S.A. for the supply of a platform supply vessel to the South American entity. Bumi Armada added three sen to RM4.32 on Wednesday.

MHC plans to undertake a bonus issue 56.16 million new shares and a similar number of warrants. Both exercises will undertakenon the basis two bonus units (new shares and warrants) for every five existing shares held.

MHC shares was down one sen to RM1.60.



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