Al-Hadharah Boustead REIT 1Q net profit up 4.38% to RM20.97m

KUALA LUMPUR (May 8): AL-HADHARAH BOUSTEAD REIT []'s profits rose 4.38% to RM20.97 million for its first quarter ended Mar 31, from RM20.09 million driven by higher fixed rental income.

Revenue for the quarter rose 9.2% to RM24.2 million from RM22.16 million in 2011.

Earnings per unit was 3.34 sen compared to 3.61 sen a year earlier.

Al-Hadharah Boustead REIT chairman Tan Sri Lodin Wok Kamaruddin in a statement Tuesday said that with increased contribution from fixed rental income due to the additional PLANTATION [] assets that were acquired last year, the group was confident of holding steady its earnings for the next three quarters.

"Given the REIT's unique positioning as the only Islamic plantation REIT in the market, coupled with improving market conditions and steady demand for commodities, we believe our unit holders will benefit from their investment in the REIT both from potential dividend earnings and the stable price range of the units," he said.



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InsiderAsia’s model portfolio - 468

Asian stocks traded broadly higher last week, buoyed by the sustained rally in US markets. US stocks continued with their steady climb since the start of the new year, gaining slowly but surely. The Dow Jones Industrial Average closed at its highest level since mid-2008 last Thursday (at the end of the Asian trading week) and is now just about 10% off its all-time high.

So far this year, global equities have certainly performed far better than most had initially expected. Investors started off with great caution and higher than average holdings in cash. But it appears they are slowly being lured back into the fray.

Thus far, improvement to the underlying US economy has been the strongest confidence booster. Even though growth is still tepid by most measures, there is growing evidence that the economy is gaining traction over the past few months.

One of the key drivers was the slow but steady strengthening in the job market. The US economy added 243,000 jobs in January, the most since mid-2010, while unemployment dipped to a three-year low of 8.3%. Improved employment prospects are expected to underpin consumer spending, the primary growth driver for the world’s largest economy.

Equally important, US corporate earnings are still growing, which in turn are driving stock prices higher while keeping valuations modest. Company balance sheets are strong, many are flush with cash, and operations lean following rounds of cost saving exercises implemented since the recession.

The improving outlook for the US has so far outweighed lingering concerns in Europe. Indeed, it appears that some investors may have been persuaded that even the worst-case scenario of a Greece exit from the eurozone will not be as disastrous as initially feared, and that measures such as the fiscal compact, establishment of the permanent rescue fund ahead of schedule and unlimited, long-term European Central Bank refinancing operations for banks may have built a sufficient firewall around the crisis.



In short, even though it may still be too early to say that market turbulence is a thing of the past, investor confidence has undoubtedly gained ground over the last few weeks. A steadier global market will be positive for the local bourse, and in particular, higher risks but more attractively valued medium and smaller capitalised stocks.

Interest in lower liner stocks too has been quite robust of late. Trading volume on the local bourse surged to a record 4.39 billion shares last Wednesday, with the bulk of the activities focused on penny stocks.

Among the most actively traded was Naim Indah Corp Bhd. In view of the sharp rise in price and volume for the stock, Bursa Malaysia issued a cautionary note to investors last Thursday. Following this, the company requested a one-day suspension in trading pending a material announcement.

The benchmark index added almost 23 points to finish at 1,561.7 last Friday. Market sentiment appears likely to stay firm in the near term. While smaller cap stocks are attracting renewed interest, gains for big cap blue chips may lag on the back of relatively rich valuations. Indeed, unless earnings results for 4QFY11, to be released over the next two weeks, register significant surprises on the upside, the FBM KLCI may continue to lag the regional turnaround.

Portfolio review
Note that this review is for a four-week period from Jan 16.

Stocks in our model portfolio outperformed the benchmark index over the past month. Total market value for our basket of 20 stocks was up by 3.84% to RM439,850, compared with the KLCI’s 2.53% gain.

Fourteen stocks in our portfolio closed higher while five ended in the red and one traded unchanged. Some of our notable gainers include Pantech Group Holdings Bhd (17.3%), Al-Hadharah Boustead REIT (BSDREIT) (9.9%), MyEG Services Bhd (6.3%) and DiGi.Com Bhd (5.9%). At the other end, Al-Aqar Healthcare REIT (-2.5%), Bumi Armada Bhd (-1.7%) and Bonia Corp Bhd (-4.8%) were among the bigger losers for the period under review.

Pantech shares did well after the company reported stronger earnings in its latest 3QFY12 ending February results. We expect earnings will continue to improve, underpinned by higher spending in the oil and gas sector. Pantech’s valuations remain attractive relative to both the industry and broader market.

Prices for BSDREIT also surged. We attribute this to the sharp rise in the real estate investment trust’s net assets following a revaluation of its properties. Net assets per unit rose to RM1.81 as at end-2011, up from RM1.43 at end-September.

Including our cash holdings, for which no interest income is imputed, our total portfolio value was up by a lower 2.38% to RM698,535. Our total profit is very substantial at RM538,535, of which RM400,948 has already been realised from previous shares sales.

Last week’s gain lifted our model portfolio’s cumulative returns since inception to 336.6% on our initial capital of just RM160,000. We continue to outperform the KLCI, which was up by about 141.4% over the same period, by some distance.

We acquired an additional 5,000 shares in Benalec Sdn Bhd, 10,000 shares in United Malayan Land Bhd (UM Land) and 3,000 shares in Alliance Financial Group Bhd (AFG) for a combined RM34,140. UM Land shares are currently trading at just about 0.5 times net assets of RM3 per share and could be up for a re-rating while AFG is trading at a reasonable price-to-net assets ratio, of 1.7 times, relative to the banking sector.

Our cash holdings were pared to RM224,545, following the acquisitions but continue to account for 32% of our total portfolio value. The relatively high percentage is, primarily, for prudence’s sake.


Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.


This article appeared in The Edge Financial Daily, February 13, 2012.



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KLCI stays cautious in line with the retreat at key regional markets

KUALA LUMPUR (Jan 30): Trading on the FBM KLCI remained cautious at mid-morning on Monday, in line with the subdued sentiment at key regional markets ahead of key economic data from the US as well as developments in Europe in relation to the Greece debt issues.

At mid-morning, the 30-stock index edged up 0.56 of a point to 1,521.46.

Gainers led losers by 279 to 199, while 263 counters traded unchanged. Volume was 582.43 million shares valued at RM239.19 million.

Asian shares inched lower and the euro eased from its highest in more than six weeks on Monday, as markets cautiously tuned in to a likely debt swap deal for Greece that is crucial to avoiding a messy default and eyed another European summit meeting, according to Reuters.

World stocks fell on Friday on a slower-than-expected annualised 2.8 percent growth in the U.S. economy in the last quarter of 2011, the fastest quarterly rate in 1-1/2 years, while U.S. stocks were also weighed down by disappointing corporate results, it said.

At the regional markets, Japan’s Nikkei 225 fell 0.64% to 8,784.31, Hong Kong’s Hang Seng Index was down 0.55% to 29,388.50, the Shanghai Composite Index lost 0.91% to 2,297.96, Taiwan’s Taiex rose 2.86% to 7,440.49, South Korea’s Kospi fell 0.68% to 1,951.45 while Singapore’s Straits Time Index lost 0.91% to 2,889.79.

BIMB Securities Research in a note Monday said that a slew of developments both in the US and Europe could chart the direction of global equity markets this week.

Impending economic data plus more corporate results from the US and the European Summit may well see investors stay sidelined, it said.

As such, there were some profits taking activities ahead of this week’s events with the Dow Jones Industrial Average losing 74 points last Friday, it said.

The research house said that as for Europe, most major indices ended up in the negative territory after an across the board technical rebound on Thursday.

Regionally, most major bourses continued with their uptrend buoyed possibly by prospects of more monetary easing within the region, it said.

Nonetheless, latest move by China to maintain its SRR would disappoint some market observers and trigger some profit taking today, it said.

“Domestically, the FBM KLCI maintained its range trading activities without any headway from the lack of fresh catalysts and may test the immediate support of 1,515 today.

“Nonetheless, the stronger ringgit at RM3.04 per US$1 may be a precursor of foreign funds trickling in,” it said.

On Bursa Malaysia, privatisation targets Glenealy and Lingui were among the top gainers. Glenealy jumped 65 sen to RM7.20 while Lingui added 17 sen to RM1.53.

Other gainers included GFB that added 26 sen to RM1.47, Hartalega up 25 sen to RM7.15, Malayan Flour Mills 16 sen to RM4.13, Tradewinds PLANTATION []s 14 sen to RM4.82, Pos Malaysia 13 sen to RM2.88, Sunchirin 12 sen to RM1.77 while MBM Resources and Boustead REIT added nine sen each to RM3.78 and RM1.80.

The actives included DBE Gurney, DRB-Hicom, Hubline, Privasia, Utopia while the decliners included Nestle, Maybulk, JobStreet, KLK< Boxpak, Chin Teck, Unisem and Genting.



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Fair value gains, rental income boost Al-Hadharah Boustead REIT 4Q earnings

KUALA LUMPUR (Jan 27): AL-HADHARAH BOUSTEAD REIT [] (Al-Hadharah REIT) net profit for the fourth quarter ended Dec 31, 2011 surged to RM239 million from RM32 million a year earlier, due mainly to fair value gains and an increase in rental income.

In a statement Friday, its chairman Tan Sri Lodin Wok Kamaruddin said that for the financial year ended Dec 31, Al-Hadharah REIT posted a 273% jump in net profit to RM306 million from RM82 million a year earlier.

This was achieved on the back of higher revenue of RM100 million compared with RM75 million in 2010 registering a 33% increase on a year-on-year basis, he said.

He said the realised operating profit for the year was RM93 million, a substantial jump of 37% from RM68 million last year, adding that the remaining profit was derived from fair value gains.

“Despite the uncertain global economic climate, by building on our established track record and exploring further opportunities in the market, we were able to continue to deliver greater value to our unitholders with improved earnings.

“In line with our accounting policy, we also undertook a revaluation of our assets, recording a fair value gain of RM213 million. This contributed to our total profit for the year and resulted in an increase in the closing net book value of our investment PROPERTIES [] to RM1.3 billion,” he said.

Al-Hadharah REIT declared a final dividend of 8 sen, bringing the total dividend for the year to 12 sen, representing a yield of 8% based on the closing unit price of RM1.54 for the year.

Lodin said that at the close of the financial year, the fund’s market capitalisation grew to RM965.4 million, a significant jump compared with RM802.1 million in the previous year.

“Moving forward, we look forward to further cultivating our portfolio of assets and enhancing our earnings potential.

"Given our unique position as Malaysia’s only PLANTATION []-based REIT coupled with the steady demand for commodities, we are confident that we are poised for greater growth in the year ahead,” he said.



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Boustead expects record profit for FY11

KUALA LUMPUR: Boustead Holdings Bhd expects its highest profit this year as earnings are backed by strong crude palm oil (CPO) prices.

“We are looking at a record profit for this year,” said deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin after the company EGM yesterday.

He said palm oil contributes about 40% of the company’s bottom line earnings.

Lodin added that CPO prices had remained strong in the past few years though they recently moderated to a level below RM3,000 per tonne.

For the nine months ended Sept 30, Boustead’s plantation segment contributed 12.6% or RM754.1 million of the company’s total revenue.

This was an improvement of 26% year-on-year for the segment as the average CPO price rose 33% to RM3,350 from RM2,514 per tonne a year ago.

For the 9MFY11, net profit rose 27.3% to RM418.3 million from RM328.6 million a year ago, while revenue increased 33.6% to RM6 billion from RM4.49 billion.

Boustead achieved its best performance in FY08 with net profit and revenue at RM579 million and RM7.03 billion respectively.

Lodin says presently Boustead has no intention to take BHIC private.

The company will spend a third of its RM1.4 billion capital expenditure next year on its plantation segment. It will also spend about RM32 million to expand its pharmaceutical segment, which is expected to contribute up to 15% in the next two to three years following the 10% expected in 2012.

Although a relatively recent addition to Boustead, the pharmaceutical division, now in its inaugural nine months, is a major contributor to the group’s top line growth.

The company is present in six key areas, which are plantation, heavy industries, property, finance and investment, trading and manufacturing, and pharmaceutical.

For its third quarter ended Sept 30, Boustead’s net profit increased 31.6% to RM120.9 million from RM91.9 million in the previous corresponding quarter mainly due to higher sales volume and firmer palm product prices. Revenue rose 44.6% to RM2.19 billion from RM1.51 billion a year ago.

On a separate note, Boustead once again refuted a news report that it was proposing to take its 65%-unit Boustead Heavy Industries Corp Bhd (BHIC) private.

“As we have announced before, we have no intention presently to take BHIC private,” said Lodin.

It was previously reported by a local media that Boustead was considering taking BHIC private, as earnings from a RM9 billion project from the ministry of defence were expected to come earlier.

To recap, BHIC’s associate Boustead Naval Shipyard was awarded a contract with a ceiling amount of RM9 billion to design and construct six combat ships for the defence ministry.

“We would like to clarify that Boustead is currently not considering any proposal to privatise BHIC,” the company had earlier said to Bursa Malaysia.

Boustead is the largest shareholder of BHIC, followed by Lembaga Tabung Angkatan Tentera (LTAT) with a 8.15% stake.


This article appeared in The Edge Financial Daily, December 23, 2011.



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'No plans to sell Boustead Heavy'

Boustead Holdings Bhd is currently not considering any proposal to privatise its subsidiary, Boustead Heavy Industries Corp Bhd.

In a filing to Bursa Malaysia, Boustead said the clarification was in respect to the article that appeared in The Star today entitled "Boustead to take unit private?". -- Bernama



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InsiderAsia’s Model Portfolio - 460

Sentiment for global equities remained ambivalent last week. Investors continue to trade cautiously on the back of persistent uncertainties over the eurozone sovereign debt crisis. But confidence was bolstered somewhat by stronger than expected US economic data.

Even as we approach the end of the year, the market outlook going into 2012 remains clouded. Trading activities may also start to wind down towards the year-end. Thinner trading volume could exacerbate price movements. As such, we expect investors to stay on the defensive pending greater clarity and unlikely to take up any major fresh positions in the coming days.

A big part of the uncertain outlook has to do with the eurozone debt crisis. In the past few weeks, confidence in the market has been shored up by stronger than expected US economic data. Following the mid-year slowdown, the world’s largest economy appeared to have regained some positive momentum.

For instance, the last labour market report painted a better than expected picture with some 120,000 new jobs created in November while the figures for September and October also saw upward revisions. The unemployment rate fell to 8.6%, the lowest level since the onset of the global financial crisis. Last week, claims for unemployment benefits fell to a 3½-year low. Manufacturing activities are gaining some traction while retails sales for the holiday season are looking fairly upbeat.

European growth will slow in 2012, possible even dipping into recession. Aside from the ongoing financial turmoil and credit crunch, broadening of austerity measures will damp economic growth. The big question is whether the US economy can continue to strengthen if the crisis in Europe takes a turn for the worse.

Talks of a breakup of the eurozone are now cropping up more regularly in mainstream discussions. This could be the worst-case scenario and it may result in chaos in the financial world.


The most recent summit among European leaders, again, failed to present the world with any comprehensive solution. Most of the countries have agreed to a new fiscal compact, designed to address flaws for the single currency’s current framework. But details are still lacking. German Chancellor Merkel has cautioned that there will be no quick fix for the crisis, which will take years to mend. In the meantime, Italy remains very much in the eye of the storm.

Asian stock markets did finish the week on a broadly positive footing last Friday, recouping some lost ground from the preceding few days. However, relevant bellwether indices for key markets still ended the week in the red.

On the local bourse, the benchmark FBM KLCI bucked the region’s downtrend. The benchmark index ended six points higher, at 1,466.2, for the week. However, much of the gains come from select index-heavyweights that were relatively thinly traded. Performance for the broader market was decidedly more ambivalent.

Trading volume fell back slightly with less than 1.66 billion shares traded daily, on average, compared with the daily average of almost 1.92 billion shares traded in the previous week. Trading interest remains focused on lower liner stocks.

Portfolio review
Stocks in our model portfolio underperformed the benchmark index last week. Total market value for our basket of 18 stocks was up by 0.03% to RM390,420, compared with the KLCI’s 0.42% gain.

Ten stocks in our portfolio closed with gains while five ended lower and three others traded unchanged. Bumi Armada (+3.8%), CIMB (+1.6%) and MyEG Services (+2.2%) were some of the notable gainers last week. At the other end, Benalec (-3%), DiGi (-1.9%) and BSDREIT (-1.3%) were among the big losers for the week.

Including our cash holdings, for which no interest income is imputed, our total portfolio value was up by a lesser 0.02% to RM666,085. Our total profits are very substantial at RM506,085, of which RM400,948 has already been realised from previous shares sales.

Last week’s gains lifted our model portfolio’s cumulative returns since inception to 316.3% on our initial capital of just RM160,000. We continue to outperform the KLCI, which was up by about 126.7% over the same period, by some distance.

Our cash holdings remain substantial at RM275,665, accounting for 41% of our total portfolio value. The relatively high percentage is, primarily, for prudence’s sake. We remain very cautious given the uncertain outlook. We kept our portfolio unchanged.

Note that this will be our last Portfolio review for this year. InsiderAsia wishes readers Merry Christmas and Happy New Year.


Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.


This article appeared in The Edge Financial Daily, December 19, 2011.



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Boustead REIT NAV rises on revaluation

KUALA LUMPUR: Al-Hadharah Boustead Real Estate Investment Trust’s (Boustead REIT) 15 plantation assets gained a 20.4% or RM215.85 million net surplus after a revaluation exercise to reflect market conditions as required under the fair value model of Financial Reporting Standard 140.

In a filing with Bursa yesterday, Boustead REIT said the carrying value of its plantation assets had increased to RM1.27 billion compared to its net book value of RM1.06 billion as at Sept 30.

“Under the fair value model of FRS 140, the fair value of the plantation assets shall reflect market conditions as at the balance sheet date (that is, the plantation assets are revalued every year. As the fund has adopted the fair value model stipulated in FRS 140, the fund will be required to conduct a yearly revaluation of all its real estate properties,” it said.

The valuations were undertaken by independent professional valuers C H Williams Talhar & Wong Sdn Bhd.

“Based on the unaudited financial statements of the fund as at 30 Sept, the net asset value per unit of the fund of RM1.43 will increase to RM1.77 upon incorporation of the revaluation surplus,” it said.

Boustead REIT fell four sen to RM1.55 yesterday with 4,000 shares traded.


This article appeared in The Edge Financial Daily, December 1, 2011.



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InsiderAsia’s model portfolio - 456

Last week was another bad one for global equities as developments in Europe continued to dominate headlines despite better-than-expected economic numbers in the US. On the local front, Bursa Malaysia’s designation of Harvest Court Industries Bhd also affected sentiment for retail and penny stocks.

Concerns over the widening eurozone debt crisis — which is stalking one country after another — remained pivotal, with attention shifting from Greece to Italy and now to Spain.

Bond yields in Italy and Spain rose last week as worries grew over the ability of eurozone leaders to contain the crisis. A Spanish government bond auction ended with a euro era high average yield just under 7%. US officials have also started warning that the debt crisis could affect US economic growth.

Indeed, the selloff came despite a number of better-than-expected economic reports from the US last week, including data on retail sales, industrial production, manufacturing activity and jobless claims. The latter showed the number of people applying for unemployment benefits dropped to a seven-month low. US home building also fell less than expected in October.

However, investor attention remained firmly set on the other side of the Atlantic.

On the local front, Bursa Malaysia’s classification of Harvest Court knocked the wind not only out of the sails of the former high-flying stock, but also penny and retail stocks in general. It was a move lauded to prevent excessive speculation, but some would argue that it was a little late in coming.

Harvest Court’s shares had surged some 30 times in the space of just about a month — hitting a high of RM2.14 on Nov 14, before trading restrictions were imposed. Its shares have hit limit down twice after being re-listed from a one-day suspension, but resumed its rally on Friday, rising 31% to RM1.36, still a third down from its peak.

Over the past week, the FBM KLCI lost 14.4 points or 1% to close at 1,454.4.

Portfolio review
Stocks in our model portfolio outperformed the benchmark index substantially in the past week. Total market value for our basket of 17 stocks was up by 0.71% to RM379,850, compared with the FBM KLCI’s 1% loss. Eight stocks in our portfolio chalked up gains, seven had losses while two were unchanged.

Bumi Armada Bhd was our top gainer for the week, rising 5.6%. This followed the announcement that the oil and gas player will be added to the MSCI Malaysia Index effective end-November.

DiGi.Com Bhd continued to chalk up good gains, rising 4.6% last week, ahead of its share split exercise. The stock will trade ex today for a subdivision of one ordinary share of 10 sen into 10 ordinary shares of 1 sen each. DiGi’s shares also traded ex last week for a 37 sen dividend, which we have added to our pool of realised profits.

Other notable gainers include two of our REITs — Al-’Alqar KPJ REIT (up 3.5%) and Al-Hadharah Boustead REIT (up 3.4%). The losers were led by Pantech Group Holdings Bhd warrants (down 8.3%) and CIMB Group Holdings Bhd (down 4.8%).

Including our cash holdings, for which no interest income is imputed, our total portfolio value was up by a lesser 0.41% to RM659,803.

Last week’s gains boosted our model portfolio’s cumulative returns since inception to 312.4% on our initial capital of just RM160,000. We continue to outperform the FBM KLCI, which was up by about 124.9% over the same period, by some distance.

Our total profits are very substantial at RM499,803, of which RM399,793 has already been realised from previous shares sales.

We kept our portfolio unchanged last week.


Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.


This article appeared in The Edge Financial Daily, November 21, 2011.



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Al-Hadharah Boustead REIT sees 44% rise in 3Q net profit

KUALA LUMPUR: Al-Hadharah Boustead REIT, the country’s only Islamic plantation-based real estate investment trust, continued to see gains from recent acquisitions as its 3QFY11 net profit rose 44.7% to RM27.2 million from RM18.8 million last year.

It said additional rental from the newly acquired Taiping Rubber Plantations and Sutera Estates contributed to an increase in its fixed rental income, which rose 12% year-on-year to RM49.1 million from RM43.6 million.

Additionally, its performance-based profit sharing more than doubled to RM28.1 million from RM11.6 million in the previous year.

“We are pleased with the results for the year to date. Clearly there is a greater usage of palm oil particularly among established markets in Asia. The REIT is expected to benefit from this strong demand given that crude palm oil prices should remain within a favorable pricing range,” said chairman Tan Sri Lodin Wok Kamaruddin in a media statement.

The company expects a satisfactory performance for the remainder of the year as its performance-based profit sharing remains at healthy levels and crude palm oil (CPO) prices stay strong.

Overall rental income in the quarter rose 44.7% to RM27.2 million from RM18.8 million last year.

Net asset value per unit remained at RM1.42.

For 1HFY11, the company distributed RM25.07 million or 4 sen per unit.

It earlier distributed RM34.5 million, or 6.8 sen per unit, for FY10.

“With our strong dividend payout track record and the healthy movement of our unit price, we are confident investors will benefit from their investments in the REIT despite current capital market conditions,” said Lodin.

The REIT ended 1 sen higher at RM1.48 yesterday on a thin volume of 3,000 units traded.


This article appeared in The Edge Financial Daily, November 17, 2011.



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Al-Hadharah Boustead REIT 3Q net profit up 33% to RM22.9m

KUALA LUMPUR (Nov 16): AL-HADHARAH BOUSTEAD REIT [] net profit for the third quarter ended Sept 30, 2011 rose 33% to RM22.9 million from RM17.17 million a year earlier, due to the injection of new PLANTATION [] assets namely TRP Estate, Sutera Estate and Trong Mill.

Revenue for the quarter rose to RM27.29 million from RM18.86 million in 2010.

Earnings per share was 3.65 sen compared to 3.08 sen in 2010, while net assets per share was RM1.42.

For the nine months ended Sept 30, Al-Hadharah Boustead REIT’s net profit rose to RM66.91 million from RM49.76 million in 2010, on the back of revenue RM77.16 million.

In a statement Wednesday, Nov 16, Al-Hadharah Boustead REIT chairman Tan Sri Lodin Wok Kamaruddin said there was clearly a greater usage of palm oil particularly among established markets in Asia.

“The REIT is expected to benefit from this strong demand given that crude palm oil prices should remain within a favourable pricing range.

“With our strong dividend payout track record and the healthy movement of our unit price, we are confident investors will benefit from their investments in the REIT despite current capital market conditions,” he said.



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Al-Hadharah Boustead posts higher Q3 pre-tax profit

Al-Hadharah Boustead Real Estate Investment Trust (REIT) posted an unaudited pre-tax profit of RM22.90 million for the third quarter ended Sept 30, 2011, a 33 per cent increase from RM17.17 million in the same quarter in 2010. Revenue was at RM27.30 million, up from RM18.86 million previously.

In a statement to Bursa Malaysia, the Fund said it recorded a higher revenue of RM77.16 million for the nine-month period, up from RM55.17 million in the same period in 2010.

"Additional rental from the newly acquired Taiping Rubber Plantation and Sutera Estates contributed to the increase in fixed rental income to RM49.1 million from RM43.6 million in 2010.

"Performance-based profit sharing meanwhile was more than double at RM28.1 million from last year's RM11.6 million," it said.

As a result, profit after tax grew 34 per cent to RM66.9 million from last year's RM49.8 million, it added. -- Bernama



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InsiderAsia’s model portfolio

Global stock rebounded strongly last week on the back of positive developments in the eurozone and better- than-expected economic data in the US. The closely monitored Dow Jones Industrial Average added almost 400 points in the first four trading days of the week.

Bellwether indices in key Asian markets too closed sharply higher. The Hang Seng Index surged 11.1% while benchmark indices in Singapore and Japan closed 7.1% and 4.3% higher, respectively.

Reflecting the renewed investor confidence in riskier assets, stocks on the local bourse too traded on a stronger footing. The FBM KLCI finished in positive territory for four straight trading days. The benchmark index ended 43 points higher for the week at 1,481.8.

Trading volume also inched slightly higher, picking up strongly in the last two trading days for the week. The daily trading volume on the local bourse rose to nearly 1.49 billion shares, on average, up from the daily average of just under 1.48 billion shares in the immediate preceding week.
Positive momentum from last week may spill over into this week.

The rescue plan agreed by the eurozone members last week may not carry much details but it is widely seen as a step in the right direction — and will provide the framework for officials to work on in the comings weeks and, likely, months.

Representatives of the private bondholders have agreed to a voluntary 50% haircut, much deeper than the earlier proposed 21% reduction. This is projected to cut Greece’s debt to GDP ratio to about 120% by 2020, instead of more than 160% under the July proposal. The lower debt service costs will alleviate some of the country’s financial strain and buy more time for the government to implement the necessary structural reforms.

Investors also cheered plans to leverage on the remaining funds available in the European Financial Stability Facility (EFSF). Officials estimate that the firepower of the EFSF can be boosted up to €1 trillion (RM4.3 trillion) under the two suggested options. The first will see a first-loss guarantee on new bonds issued and under the second option, its resources will be used to seed special purpose vehicles that will attract private and sovereign wealth funds.

Lastly, European banks are required to boost their holdings of safe assets to 9% of total capital, to buffer against debt provisions and losses in the debt crisis fallout. It is estimated that some €106 billion will be needed for the recapitalisation exercise, although details are sketchy as to where the money will come from.

Indeed, leaders of the eurozone have put no additional money on the table. The proposed boost to the EFSF depends on the region’s ability to attract private investors and sovereign wealth funds, of which there is currently no indication of success. It also remains to be seen if the initial loss insurance will be sufficient to bring down borrowing costs for troubled countries like Italy and Spain.

Even if all goes to plan, it will take years to pare debt levels and repair government fiscal positions. Meanwhile, economic activities in the eurozone have slowed considerably in recent months and will likely stay weak for sometime with the ongoing austerity programmes.

In the other key development, US’ GDP grew 2.5% in 3Q11, much better than the anemic 0.4% in 1Q11 and 1.3% in 2Q11. The improved figure allayed concerns that the world’s largest economy will fall back into recession, at the least for now.

The biggest question is whether the growth is sustainable amid high unemployment and stagnate income growth. Market observers remain divided on the issue.

For the moment, stock markets are rallying on the premise that the global situation is not as bad as it could be. Nevertheless, with the outlook still hazy, a healthy dose of caution is warranted. There is a good chance that we may not have seen the last of market volatility.

Portfolio review
Stocks in our model portfolio underperformed the benchmark index last week. Total market value for our basket of 17 stocks was up by 2.11% to RM376,310, compared with the FBM KLCI’s 2.99% gain.

Fifteen stocks in our portfolio closed with gains last week while two ended lower and one traded unchanged. Some of the notable gainers include Media Chinese International (+8%), Genting (+8.7%), Pantech (+4.3%) and Quill Capita Trust (+3.9%). At the other end, DiGi (-0.3%) and BSDREIT (-1.4%) were the only two losers for the week.

Including our cash holdings, for which no interest income is imputed, our total portfolio value was up by a lesser 1.2% to RM655,523. Last week’s gains boosted our model portfolio’s cumulative returns since inception to 309.7% on our initial capital of just RM160,000. We continue to outperform the FBM KLCI, which was up by about 129.1% over the same period, by some distance.

Our cash holdings remain substantial, accounting for 43% of our total portfolio value. The relatively high percentage is, primarily, for prudence sake. Despite the strong rebound so far this month, we are still cautious on the market outlook.

Our total profits are very substantial at RM495,523, of which RM399,053 has already been realised from previous shares sales. We kept our portfolio unchanged last week.


Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.


This article appeared in The Edge Financial Daily, October 31, 2011.