CCM embarks on internal restructuring

KUALA LUMPUR: Chemical Company of Malaysia Bhd (CCM) will undergo an internal restructuring in order to streamline its operations and reduce the level of inter-company borrowings.

According to an announcement to Bursa Malaysia, CCM’s wholly-owned subsidiary Usaha Pharma (M) Sdn Bhd will acquire the entire equity interest of Innovative Polymer Systems Sdn Bhd, Innovative Resins Sdn Bhd and Delta Polymer Systems Sdn Bhd, which are also subsidiaries of the parent company.

The three companies will be acquired from CCM and CCM Usaha Kimia (M) Sdn Bhd for a total consideration of around RM126.4 million. Usaha Pharma will also acquire the businesses and assets of Innovative Polymer and Delta Polymer.
To reduce the inter-company borrowings of CCM, Usaha Kimia, CCM Agriculture Sdn Bhd, CCM Agriculture (Sabah) Sdn Bhd and CCM International Sdn Bhd will issue new shares to its parent.

According to the announcement, the rationale behind the acquisition is to streamline and realign the businesses and business units of Innovative Polymer, Delta Polymer and Innovative Resins.

“The proposed businesses and assets acquisitions of Innovative Polymer and Delta Polymer are expected to promote synergy within the Innovative group through the consolidation of the polymer businesses into a single entity,” stated CCM.

Innovative Polymer is in the business of manufacturing and selling hydrogel coating products, while Delta Polymer deals in industrial cleaner and coating products.

Usaha Pharma was formerly CCM’s pharmacy arm, having operated a chain of pharmaceutical retail outlets and traded in pharmaceutical and healthcare products. Usaha Pharma closed down all its pharmacy outlets in 2007 and was dormant.

The proposed internal restructuring is not expected to have any material effect on CCM’s share capital, shareholding structure, earnings per share, net assets per share and gearing of the company for the current financial year.



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FBM KLCI up at mid-morning, but stays shy of 1,500-level

KUALA LUMPUR (Dec 23): The FBM KLCI rose on Friday and stayed in positive territory in line with regional markets and the overnight gains at Wall Street, but stayed shy of the crucial 1,500-level in thin trade.

The FBM KLCI was up 2.77 points to 1,494.23 at 10am, lifted by gains at select blue chips.

Gainers led losers by 223 to 126, while 213 counters traded unchanged. Volume was 198.4 million shares valued at RM105.92 million.

Asian stocks edged up on Friday, as signs of a strengthening economy in the United States encouraged a modest year-end rally in riskier assets, according to Reuters.

Wall Street stocks had risen for a third straight day on Thursday, leaving the S&P 500 index virtually flat for the year, after data showed new claims for unemployment benefit dropped to their lowest in 3-1/2 years, it said.

At the regional markets, Hong Kong’s Hang Seng Index rose 1.11% to 18,582.37, Taiwan’s Taiex gained 1.62% to 7,079.36, South Korea’s Kospi added 1.15% to 1,868.69, Singapore’s Straits Times Index was up 0.38% to 2,674.83 and the Shanghai Composite Index edged up 0.14% to 2,189.33.

Meanwhile, Japan’s stock markets were closed for a national holiday.

BIMB Securities Research in a note Dec 22 said better than expected job data in the US and higher than expected injection of funds by the ECB had positive cumulative impact on the equity markets all round.

Consequently European bourses registered an all round gain of around 1% whilst the Dow Jones Industrial Average climbed 62 points to remain above the 12,000 mark, it said.

The research house said it looked like focus on the Eurozone had been diverted temporarily in light of the tension in the middle-east where crude prices were again pushed nearer to the US$100/barrel again.

In Asia, regional markets closed on a mixed note from the lack of fresh leads, it said.

“As for Malaysia, the FBM KLCI is inching ever closer to the psychological 1,500 mark with a 6.5 point gain. Although we believe selective buying on blue chips to continue, the extended weekend may thwart any aggressive push on the upside.

“Nonetheless, we remain sanguine that the index to breach the 1,500 level,” it said.

Among the gainers, Nestle was up 30 sen to RM56.90, BAT added 26 sen to RM48.14, AIC 15 sen to RM1.30, Dutch Lady and CIMB 10 sen each to RM23.40 and RM7.10, KLK and Hai-O up eight sen each to RM22.08 and RM1.90, while CCM and Muhibbah rose seven sen each to RM1.49 and RM1.15.

Perisai was the most actively traded counter with 9.53 million shares done. The stock added 4.5 sen to 73 sen.

Other actives included Astral Supreme, Sanichi, Envair, Utopia, UEM Land, LFE Corp and KNM.

Decliners included Y&G, Bina Goodyear, HELP, Kretam, Scomi Engineering, MESB, WCT and Bernas.



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Asian markets fall on Eurozone fears, KLCI snaps winning streak

KUALA LUMPUR (Dec 19): The FBM KLCI snapped its positive run on Monday, in line with the fall at key regional markets, on worries that credit ratings downgrades of some European countries could hamper any progress towards resolving the region’s debt crisis.

At mid-morning, the FBM KLCI fell 0.60 point to 1,465.62.

Losers edged gainers by 194 to 170, while 196 counters traded unchanged. Volume was 402.72 million shares valued at RM185.43 million.

Asian stocks fell on Monday on fears possible credit ratings downgrades of several European countries could derail progress towards resolving the euro zone's debt crisis, while the euro steadied after its worst weekly performance in three months, according to Reuters.

At the regional markets, Japan’s Nikkei 225 fell 0.83% to 8,332.07, Hong Kong’s Hang Seng Index lost 1.63% to 17,986.54, the Shanghai Composite Index was down 1.53% to 2,190.89, Taiwan’s Taiex fell 1.74% to 6,667.36, Singapore’s Straits Times Index was down 1.54% 2,618.31 and South Korea’s Kospi lost 2.42% to 1,795.35.

Fitch Ratings had warned on Friday it may downgrade France and six other euro zone countries, saying a comprehensive solution to the region's debt crisis was "technically and politically beyond reach".

Fitch also revised the outlook on France's top-notch rating to negative, saying the downgrade was not imminent but could come in two years.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Monday said the local market remained mildly positive despite the volatile global markets last week.

Some local institutional blue chip buying on Thursday and Friday led the index up in fairly lack lustre trading, he said.

The weaker support areas for the FBM KLCI are in the 1,424 to 1,460-zone. The next resistance levels of 1,466 and 1,511 will see heavy liquidation activities, he said.

Lee said the tone of the global indices was still unstable and that Eurozone worries on how to tame their debt crisis persisted, with Fitch stating that a comprehensive deal was “beyond reach”.

“There could still be inherent price volatility in the next week before the global markets wind-down for the Christmas and New Year holidays in late December,” he said.

Among the decliners at mid-morning, Carlsberg fell 20 sen to RM8.46, JT International lost 18 sen to RM6.76, JobStreet was down 15 sen to RM2.35, LPI Capital and F&N down 10 sen each to RM13.30 and RM18.26, Hartalega lost nine sen to RM5.52, while CCM, Keck Seng and Batu Kawan lost eight sen each to RM1.57, RM4 and RM17.28 respectively.

Meanwhile, gainers included BAT, Nestle, Amway, Bosutead, BHIC, Far East, SOP, Pintaras and Gamuda.

The actives included Wijaya, Boustead, Versatile, JCY and Utopia.



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CIMB Research has technical sell on CCM at RM1.62

KUALA LUMPUR (Dec 13): CIMB Equities Research has a technical sell on CHEMICAL COMPANY OF MALAYSIA [] at RM1.62 at which it is trading at a price-to-book value of 0.9 times.

It said on Tuesday the stock was in a sideways consolidation mode for the past few days. Prices hit its 50-day SMA before buyers re-surfaced.

“However, we think that this 50-day SMA support is weak as prices may still succumb to one more downleg, which could potentially drag prices towards RM1.54 and RM1.40,” it said.

CIMB Research said the indicators continued to show lacklustre trends. MACD histogram bars were hovering in the negative territory while RSI was below the 50 pts mark.

“Unless prices climb back above the RM1.71 level, we would rather stick with the bear’s camp,” it said.



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