Stocks to watch: Sin Heng Chan, Ramunia, MMC, asiaEP

KUALA LUMPUR (March 13) : Malaysian stocks could encounter downward pressure on Wednesday as investors turned cautious on the technical dynamics of the local market. Analysts believe any gains on the FBM KLCI could be stifled by profit taking amid a downside bias perception on the local benchmark.

In a note on Tuesday, Hong Leong Investment Bank Bhd research head Low Yee Huap said the research firm had changed its stance from positive to cautious as it foresees more profit taking consolidation in the local stock market.

Low said “the bears look stronger now” against a backdrop of weaker technical readings in the FBM KLCI.

On Tuesday, anticipation of better US retail sales numbers had spurred Asian stock markets and crude oil prices. Notable gainers include Hong Kong’s Hang Seng which rose 0.97% to close at 21,339.7 points and Australia’s S&P / ASX 200 which climbed 1.21% to 4247.62 while Taiwan’s Taiex was up 1.31% to 8031.51.

Malaysia’s FBM KLCI of 30 blue chip stocks which rose as much as 0.3% to an intraday high of 1569.15 points, however pared earlier gains to settle with a 0.73 point loss to 1564.02 points.

Stocks to watch on Wednesday include Sin Heng Chan (M) Bhd, RAMUNIA HOLDINGS BHD [], MMC CORPORATION BHD [],asiaEP Resources Bhd, Lafarge Malayan Cement Bhd , GEFUNG HOLDINGS BHD [] and YTL Corp Bhd.

Shares of Sin Heng Chan surged on Tuesday, prompting a query from Bursa Malaysia securities over the unusual market activity.

Its share price closed up 29.5 sen to RM1.10 with 8.48 million units done. However, the company said it was unaware of any reason for the unusual market activity.

Ramunia’s unit has secured a RM23.62 million contract from Aquaterra Energy Ltd to fabricate two wellhead support structures.

Gas Malaysia Bhd is seeking a further extension of six months until Oct 6 from the Securities Commission to complete the proposed listing exercise. MMC Corporation said Gas Malaysia had applied to the SC for its approval for the six-month extension.

West River Capital Sdn Bhd (WRC) has rejected TSM GLOBAL BHD []’s request for better offer terms including the price and this has seen the latter resolving to consider other offers.

TSM said WRC’s offer price would remain at RM1.25 per share.

asiaEP’s major shareholder Tian Ee Intertrade Sdn Bhd has made a requisition for an EGM following the company’s decision to terminate its planned private placement, the firm said in statement to Bursa Malaysia on Tuesday. asiaEP shares rose 0.5 sen to close at nine sen.

RHB Research Institute has upgraded LAFARGE MALAYAN CEMENT BHD [] from an underperform to market perform and revised upwards its fair value by 25% from RM5.94 to RM7.43. The research house has also raised its earnings forecast for the cement producer by between 3% and 21% for FY12 to FY14 period. Lafarge shares rose five sen to RM7.26.

Bahamas-based Golden Knights International Ltd emerged a a major shareholder in marble products manufacturer Gefung Holdings Bhd with a 5.11% stake. This follows Golden Knights’ acceptance of its entitlement from Gefung’s rights issue. Gefung shares added one sen to 17.5 sen

YTL Corp Bhd saw heavy trading after its unit YTL Communications Sdn Bhd was reported to be in the midst of implementing the 1Bestarinet project in government schools. The initiative involves the setting up of Internet access to enable virtual learning environment in public schools. Shares of YTL Corp were up two sen to RM1.68 with some 21 million shares done.



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Golden Knights Intl emerges as Gefung substantial shareholder

KUALA LUMPUR (March 13): Bahamas-registered Golden Knights International Ltd has emerged as a substantial shareholder in GEFUNG HOLDINGS BHD [] with a 5.11% stake or 13.50 million shares.

A filing with Bursa Malaysia showed that it accepted its entitlement of 7.5 million shares under a rights issue on Jan 20, 2012.

Gefung processes marble and granite products.



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Stocks to watch: HWGB, SKP, MSC, Gefung

KUALA LUMPUR (March 10): After a bumpy ride over the past week, which saw the FBM KLCI retracing the most in 2012, the market could receive a boost from firmer external developments, especially from the US markets.

Affin Investment Bank head of retail research, Dr Nazri Khan expected the KLCI to advance, underpinned by local projects newsflow, stronger US jobs data and rising optimism that Greece would avoid a disorderly default.

“Despite the last three days broad sell-off (Tuesday-Thursday), we generally view the distribution as a healthy correction to neutralise the overbought market condition (five months of KLCI uptrend with 12.5% gains since October 2011),” he said.

Nazri said based on his technical analysis, since the KLCI is holding above the 20, 50 and 200-day moving average is an indication the longer-term trend is still positive with KLCI aiming for 1,600 level as the ultimate near term target.

On Wall Street, for the week ahead, Reuters reported that US stocks may still sell off in the near term, but it's not likely to be a drastic decline.

Reuters said much of the optimism has come from signs of further improvement in the US economy. Friday's stronger-than-expected jobs report - the most widely watched U.S. economic indicator - gave the stock market more wind in its sails.

The S&P 500 ended the week with a gain of 0.1%, even though on Tuesday, it marked its weakest day so far in 2012 on concerns about a default by Greece on its country's debt.

Investors had also brushed aside Friday's news of a technical default by the country was mostly brushed aside by investors.

Reuters reported that while concerns about Greece aren't going away, the worst-case scenario has been averted, and the payroll report is another reason for investors to be confident.

As for Malaysia, among the stocks to watch on Monday are HO WAH GENTING BHD [] [] (HWGB), SKP RESOURCES BHD [], Malaysia Smelting Corp Bhd (MSC), GEFUNG HOLDINGS BHD [] and DIJAYA CORPORATION BHD [].

HWGB, whose shares had seen very active trade, said it is not in talks to sell its tin mining business for US$75 million (RM227 million) to Yunnan Tin Group.

HWGB said it was not negotiating with Yunnan Tin’s subsidiary Sino-Platinum Metals Co. Ltd to dispose of the business at this point in time.

A news report said Yunnan Tin had plans to buy HWGB’s tin mining business for US$75 million.

Meanwhile, The Edge weekly reported that the emergence of Dyson, the British innovative designer of electrical appliances, as a major new customer has launched a strong stream of earnings for SKP Resources.

MSC will rope in Optima Synergy Resources Ltd as a joint venture partner to undertake tin mining operations in Indonesia.

MSC signed a strategic alliance agreement with Optima Synergy, which is owned by Indonesian shareholders.

The deal will allow Optima Synergy to acquire up to 23% of MSC’s unit Bemban Corp Ltd for US$1.38 million, according to MSC. Bemban in turn has a 75% stake in PT Koba Tin which has secured a mining contract from the Indonesian government.

Gefung will not go ahead with the proposed joint venture for a mixed development project on 50.74 acres of land in east of Jakarta.

Gefung said the company and PT Greenworld Development “could not reach an agreement on the terms and conditions for the proposed project, the parties have mutually agreed to terminate the MoU with immediate effect”.

The Edge weekly reported that judging from the present share price movement, investors seem cautious about Dijaya’s proposal to acquire 73 PROPERTIES [] from major shareholder Tan Sri Danny Tan and family for an indicative consideration of RM948.7 million, mostly via the issuance of loan stocks.

BOUSTEAD HOLDINGS BHD [] sees its profit breaching the RM1 billion level within the next two years.

Deputy chairman/group managing director Tan Sri Lodin Wok Kamaruddin was quoted saying by Bernama that 2011 was a record year for the group.

“My personal target is that we’ll breach the RM1 billion profit level within the next two years. It could be this year or next year,” he said.

Lodin said Boustead would remain focused on PLANTATION []s, financial services, property, manufacturing and trading, pharmaceuticals and heavy industries.

In FY Dec 31, 2011, Boustead posted a pre-tax profit of RM831 million, up 14.43% from the RM726.2 million in FY10.



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Gefung cancels MoU for Jakarta property development

KUALA LUMPUR (March 9): GEFUNG HOLDINGS BHD [] will not go ahead with the proposed joint venture for a mixed development project on 50.74 acres of land in east of Jakarta.

According to Gefung, the company and PT Greenworld Development “could not reach an agreement on the terms and conditions for the proposed project, the parties have mutually agreed to terminate the MoU with immediate effect”.

To recap, both parties had on Dec 9, 2011 signed the MoU to undertake the mixed development project.



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Stocks to watch: DiGi, Oldtown, DBE Gurney, 1 Utopia, HWGB

KUALA LUMPUR (Jan 20): Trading on Bursa Malaysia is expected to taper off in a more cautious mood on Friday, ahead of the four-day trading break due to the weekend and two days for the Chinese New Year holidays.

Reuters reported European stocks rose on Thursday in brisk volume, as strong demand and falling yields at Spanish and French debt sales soothed worries over the euro zone debt crisis and triggered sector rotation out of defensives and into banks.

The euro zone banking index, which plummeted 38% last year, was up nearly 5% on Thursday, with Societe Generale ahead 8% and UniCredit 10.5% better. European banks are major holders of euro zone sovereign debt.

At Bursa Malaysia, among the stocks which could see trading interest included DIGI.COM BHD [], Oldtown Bhd, DBE Gurney Resources Bhd, 1 Utopia Bhd (formerly TEJARI TECHNOLOGIES BHD []) and HO WAH GENTING BHD [] [] (HWGB).

DiGi.com earnings rose 18.7% to RM394.22 million in the fourth quarter ended Dec 31, 2011 compared with RM332.02 million a year ago, boosted by tax incentives.

Its net profit rose 34.9% to RM394 million mainly due to tax incentives related to mobile broadband network facilities. Its revenue increased 8.1% to RM1.545 billion from RM1.429 billion, with mobile data revenue exceeding 30% of the group revenue.

For the financial year ended Dec 31, 2011, its earnings rose 6.5% to RM1.254 billion from RM1.178 billion.

Oldtown’s unit White Cafe Sdn Bhd is investing RM36.65 million in a new factory in Tasek Industrial Estate, Perak to expand its beverage manufacturing operations. The expansion would enable it to increase the capacity by 500%.

DBE Gurney confirmed that it is in talks with a shareholder of CI Holding Bhd which includes a private placement exercise. The poultry-based company said it had plans for a private placement to raise funds for its working capital requirement.

1 Utopia posted net losses of RM412,000 in the fourth quarter ended Nov 30, 2011 (4Q11) from a net profit of RM218,000 a year ago due to higher taxation.

It paid RM942,000 in taxes in 4Q11 compared with only RM103,000 a year ago. ts revenue increased by 33.6% at RM129.26 million from RM85.83 million.

HWGB proposed a private placement of up to 48.72 million new shares, or 10% of its paid-up, to raise up to RM17.54 million.

Based on an indicative issue price of 36 sen per placement share, the company is expected to raise up to RM17.54 million.

GEFUNG HOLDINGS BHD []’s issuance of 109.09 million rights shares with 21.82 million warrants was undersubscribed by 43.62%.

At the close of acceptance and payment for the rights shares at 15 sen each with warrants on Jan 12, the total acceptances and excess applications received was about 56.38% of the rights shares with warrants.



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Gefung rights issue undersubscribed by 43.62%

KUALA LUMPUR (Jan 19): GEFUNG HOLDINGS BHD []’s issuance of 109.09 million rights shares with 21.82 million warrants was undersubscribed by 43.62%.

It said on Thursday that at the close of acceptance and payment for the rights shares at 15 sen each with warrants on Jan 12, the total acceptances and excess applications received was about 56.38% of the rights shares with warrants.

“Notwithstanding the above under-subscription, the minimum subscription level amounting to RM14.51 million had been achieved. Therefore, Datuk Lim Kim Huat will not be required to honour his undertaking to subscribe for additional rights shares up to the minimum subscription level,” it said.

Gefung said due to the under-subscription, the board allocated the rights shares with warrants to all applicants who applied for the excess rights shares with warrants. They are expected to be listed on Jan 27.

The corporate exercise involved the renounceable rights issue of up to 193.50 million new shares of 15 sen each together with 38.70 million free detachable warrants on the basis of five rights shares with one warrant for every four shares held as at Dec 27, 2011.



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Gefung rights issue undersubscribed by 43.62%

KUALA LUMPUR (Jan 19): GEFUNG HOLDINGS BHD []’s issuance of 109.09 million rights shares with 21.82 million warrants was undersubscribed by 43.62%.

It said on Thursday that at the close of acceptance and payment for the rights shares at 15 sen each with warrants on Jan 12, the total acceptances and excess applications received was about 56.38% of the rights shares with warrants.

“Notwithstanding the above under-subscription, the minimum subscription level amounting to RM14.51 million had been achieved. Therefore, Datuk Lim Kim Huat will not be required to honour his undertaking to subscribe for additional rights shares up to the minimum subscription level,” it said.

Gefung said due to the under-subscription, the board allocated the rights shares with warrants to all applicants who applied for the excess rights shares with warrants. They are expected to be listed on Jan 27.

The corporate exercise involved the renounceable rights issue of up to 193.50 million new shares of 15 sen each together with 38.70 million free detachable warrants on the basis of five rights shares with one warrant for every four shares held as at Dec 27, 2011.



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Gefung Hldgs falls most in a month

Gefung Holdings Bhd, a Malaysian marble and granite products maker, declined the most in almost a month after pricing its rights shares at a 12 per cent discount to its recent average market price. The stock lost 11 per cent to 15.5 sen at 10:05 a.m. local time, set for its steepest fall since Nov. 18. -- Bloomberg



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