KLCI opens at fresh new high

KUALA LUMPUR (April4): The FBM opened at a fresh new all-time high on Wednesday, with its momentum still intact despite the retreat at most key regional markets following the weaker overnight close at Wall Street after the after the U.S. Federal Reserve said it was less inclined to provide more economic stimulus.

The FBMKLCI was up 0.91 of a point to 1,607.54 at 9am, lifted by gains at blue chips including Genting, Maybank and IOI Corp.

Gainersled losers by 17 to 11, while 38 counters traded unchanged. Volume was 4.09 million shares valued at RM2.74 million.

Meanwhile, Asian shares eased on Wednesday after the minutes from the U.S. Federal Reserve's March meeting suggested the bank was less likely to take further stimulus measures, leaving investors looking for more clues over global growth outlook, according to Reuters.

The minutes showed Fed policymakers, while noting signs of slightly stronger growth, remained focused on a still elevated jobless rate. But the minutes suggested the appetite for further quantitative easing, so-called QE3, has waned significantly in light of improving U.S. economy, it said.

Among the early gainers were BAT that rose 32 sen to RM56.54, Genting up four sen to RM11.08, Boustead two sen to RM5.48, while IOI Corp, Maybank, Telekom, Leader, MBSB, Muhibbah and Mudajaya added one sen each to RM5.37, RM8.96, RM5.39, RM1.07, RM2.29, RM1.35 and RM2.91, respectively.

Iris Corp was the most actively traded counter with 1.4 million shares done. The stock shed half a sen to 18 sen.

Other actives included Ariantec, TMS, IFCA MSC, Hubline, Voir and Telekom.



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Iris rises on buying stake in Neuralogy

Iris Corp, a technology-consulting company, rose 5.7 per cent to 18.5 sen in Kuala Lumpur trading at 9.37am, bound for its steepest gain since March 8.

The company agreed to buy a 20 per cent stake in Neuralogy Sdn Bhd, a researcher and developer of telecommunications products, for RM500,000, it said in a statement. -- Bloomberg



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Iris rises on housing job in PNG

Iris Corp, a technology-consulting company, rose 2.7 percent to 19 sen in Kuala Lumpur trading at 10.15am, set for its highest close since Feb. 17.

The company signed an agreement to develop a housing project in Papua New Guinea, according to an exchange filing. -- Bloomberg



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Harvest Court plunges limit down

Harvest Court Industries Bhd shares slumped to the 30 per cent limit-down level yesterday, but in a sign of the changing times, there was no selldown on other penny stocks.

Most penny stocks rose in the early hours of trade. For example, Tricubes Bhd rose as much as 87 per cent, or 13.5 sen, to 29 sen and Fitters Diversified Bhd’s warrants increased by as much as 13.5 per cent, or 6.5 sen, to 54.5 sen each, before giving up some gains due to weakness in the Hong Kong stock market.

Tricubes ended the day at 26 sen, while Fitters warrants closed unchanged at 48 sen.

“There was no panic selldown in other stocks, with sentiment being affected by outside factors,”said a dealer.

Five years ago, it was a different story when a fellow ACE Market (then Mesdaq) counter was designated.


When Iris Corp Bhd was declared as a designated stock, it had caused a ripple effect on the broader market. The then benchmark Kuala Lumpur Composite Index (KLCI) fell by 0.15 per cent, while the Mesdaq and Second Board indices were down by 3.45 per cent and 4.63 per cent respectively.

The next day, when Iris resumed trading after suspension due to a material announcement, the KLCI fell by another 0.49 per cent, while that of Mesdaq and Second Board fell by another 3.45 per cent and 0.21 per cent respectively.

Iris shares had declined 26 per cent on its first day as a designated stock.

On Tuesday, Harvest Court was slapped by Bursa Malaysia Bhd and declared as “designated securities”. This means any investors who wants to buy the stock must pay cash upfront.

Harvest Court shares eased to RM1.49 yesterday and it appears that the announcement that the company had won a RM70 million contract failed to do much damage control or stop investors from dumping the shares.

"There were not many buyers willing to buy even at the RM1.50 level. The anticipation is that the stock may face another session of dumping tomorrow (on Thursday)," said a research head from a local brokerage.

Analysts also pointed out that retail investors today are more savvy. Therefore, their investment decisions are also based on a stock's fundamentals as well as local and foreign news flow.

"I think retailers have somewhat learnt their lessons, where they put their money on companies that are profitable, fundamentally sound, and so forth. It's a good change," the research head said.



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All eyes on Harvest Court

KUALA LUMPUR: With newly imposed trading curbs, investors will be closely watching the price performance of Harvest Court Industries Bhd today, the high flying former penny stock which has surged nearly 30 times in under two months.

Harvest Court shares and warrants have been declared “designated securities” from 9am this morning, which requires buyers to make upfront payments for purchases and have a free balance of securities before selling.

Announcing the decision in a statement late Monday night, Bursa Malaysia ordered a one-day trading suspension yesterday for the news to sink in, and again advised investors to assess the company’s fundamentals.

Harvest Court joins a very small group of companies, including Iris Corp Bhd in 2006 and Union Paper Holdings Bhd in 1993, that have earned the designation.

Iris is the most recent high-profile case. Trading curbs on the company, which manufactures electronic security cards and passports, were imposed in mid-2006 after the stock jumped 3.5 times over two months and charted a gain of over 580% for the year at one point.

When trading curbs were imposed, the stock tumbled as much as 52% to 65.5 sen from RM1.36 when trading resumed on May 16, 2006, before ending the day with a 26.5% loss to close at RM1.

Iris asked the exchange to lift the trading curbs and its stock price climbed in the run-up to the lifting of the restrictions on June 22, 2006. Its shares continued to stay high for at least one more month before tumbling to where they were before the action began.

At the time, fears that trading restrictions would be imposed on more companies nudged the then Mesdaq Index lower.

Today, Iris shares are trading at 16.5 sen, a fraction of what they were more than five years ago. Its shares have fluctuated within a range of 13 sen to 26 sen over the past year.

In Harvest Court’s case, the rare move by the front-line regulator followed two unusual market activity (UMA) queries in three weeks (Oct 17 and Nov 4), and comes one market day after investors were told to exercise caution when trading the company’s shares and warrants.

Still, the stock continued its spectacular price ascent. Harvest Court, which last traded at RM2.13 on Monday, was still a penny stock fetching 7.5 sen apiece on Sept 27 but had seen its value skyrocket 28 times over seven weeks.

That translates to a whopping RM371.2 million gain in market capitalisation from a company whose market capitalisation stood at little over RM13.5 million seven weeks ago.

Similarly, its warrants, Harvest-WA, which have a 25 sen strike price, went from three sen to RM1.81 over the same seven-week period.

Trading interest in Harvest Court stocks spiked a month ago on Oct 14. Soon after, news got out that managing director Ng Swee Kiat had pared his holdings in the company, and had entered into a put option to buy a block of shares from Affin Bank Bhd. Stoking more interest was the emergence of a new shareholder and director, Datuk Raymond Chan, the controlling shareholder of property developer Sagajuta (Sabah) Sdn Bhd, which has since awarded contracts to the company.

Chan was appointed to Harvest’s board on Oct 28, the same day as 28-year-old Mohd Nazifuddin Najib, the prime minister’s second son.

At Monday’s closing price of RM2.13 and with a 180.65 million share base, Harvest Court would have to deliver RM11 million to RM26 million in net profit for this year or next year, if one were to assume the current average price-earnings ratio of between 15 and 35 times for the FBM Emas Index and the ACE Market (formerly Mesdaq), respectively.

That may be a tall order, considering the company posted net losses of RM678,000 for 1HFY11, and RM2.82 million for FY10.

That said, in a statement yesterday evening, Harvest Court said it intends to accept a job worth about RM70 million to build a pulp and paper plant to process oil palm fibre in Negri Sembilan. On Nov 14, its unit accepted a non-binding letter of intent to enter into a related party transaction (RPT) with 1Green Enviro Sdn Bhd, a company linked to Mohd Nazifuddin and Chan. It needs RM6 million capital for the three-year project, to be funded from proceeds of a proposed new rights issue, placement exercise and borrowings.

Whether or not Harvest Court’s share price tumbles today, as in the case of Iris then, what is certain is that the entire market will be watching.


This article appeared in The Edge Financial Daily, November 16, 2011.



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Market Commentary

The FBM KLCI index lost 16.99 points or 1.14% on Thursday. The Finance Index fell 0.74% to 13183.47 points, the Properties Index dropped 1.52% to 945 points and the Plantation Index down 1.31% to 7486.92 points. The market traded within a range of 8.48 points between an intra-day high of 1474.73 and a low of 1466.25 during the session.

Actively traded stocks include PATIMAS, ESCERAM, SUMATEC, SAAG, SUMATEC-WA, TRINITY, TIGER, HUBLINE, DATAPRP and IRIS. Trading volume decreased to 2644.11 mil shares worth RM1462.10 mil as compared to Wednesday’s 2677.72 mil shares worth RM1818.10 mil.

Leading Movers were MAYBANK (+2 sen to RM8.24) and MAXIS (+1 sen to RM5.27). Lagging Movers were GENTING (-32 sen to RM10.68), IOICORP (-12 sen to RM5.05), CIMB (-10 sen to RM7.26), TENAGA (-13 sen to RM5.79) and AXIATA (-6 sen to RM4.90). Market breadth was negative with 227 gainers as compared to 568 losers.-- JF Apex Securities Bhd

KL shares sharply lower at midday

Share prices on Bursa Malaysia extended the downtrend at midday today on continued selling pressure in heavyweights, dealers said.

The dealers also said the market moved in tandem with the overnight losses on Wall Street and renewed fears over unresolved debt problems in Italy, which is pressuring the country to seek a bailout.

At midday, the FTSE Bursa Malaysia KLCI (FBM KLCI) declined 17.73 points to 1,471.91 after opening 20.41 points lower at 1,469.23.

The Finance Index fell 118.31 points to 13,163.51, the Plantation Index declined 107.74 points to 7,478.30 and the Industrial Index eased 31.46 points to 2,694.78.

The FBM Emas Index slid 116.08 points to 10,037.39, the FBM Mid 70 Index eased 125.23 points to 10,785.80 and the FBM ACE Index shed 13.24 points to 4,263.65.

Losers led gainers 525 to 169 with 173 counters unchanged, 608 counters untraded and 22 others suspended. Turnover stood at 1.618 billion shares worth RM710.229 million.

For the actives, Patimas Computers gained 2.5 sen to eight sen, SAAG Consolidated increased half-a-sen to eight sen, ES Ceramics Technology rose one sen to 13.5 sen and Iris Corporation gained half-a-sen to 17.5 sen.

Among heavyweights, Maybank fell two sen to RM8.20, CIMB declined seven sen to RM7.29, Sime Darby slipped nine sen to RM8.83 and Petronas Chemicals eased 13 sen to RM6.35. -- Bernama

Iris in talks with Chinese partners

KUALA LUMPUR: ACE Market-listed Iris Corp Bhd is engaging in preliminary discussions with its Chinese partners with regard to a food waster to fertiliser technology project.

In a reply to a query by Bursa Malaysia on an article in a Chinese daily that the group had formed a consortium to invest in a wastewater treatment plant in China, Iris denied having formed any such consortium nor signed any MoU with regard to the reported project.

“Iris wishes to clarify that it is currently engaging in preliminary discussions with its Chinese partners with regard to a “Food Waste to Fertiliser Technology” project.

“As at the date of this announcement, Iris has not signed any MoU in relation to the said project and will make the appropriate announcement to Bursa on its further development,” said the statement.

The Chinese daily in its article reported Iris had formed a consortium with 65% stake holding in a wastewater treatment plant in China with a 30-year concession and an NPV up to 150 million yuan (approximately RM72.44 million).

It was also reported that Iris Envirowerkz Consortium has signed an MoU with Zizhao Environment Protecting Industry Development Company last week which was witnessed by the Prime Minister Datuk Seri Najib Razak and Deputy International Trade and Industry Minister Datuk Mukhriz Mahathir.


This article appeared in The Edge Financial Daily, November 4, 2011.

Market Commentary

The FBM KLCI index lost 8.58 points or 0.58% on Thursday. The Finance Index fell 0.93% to 13151.05 points, the Properties Index dropped 1.36% to 941.04 points and the Plantation Index down 0.63% to 7471.31 points. The market traded within a range of 20.81 points between an intra-day high of 1473.45 and a low of 1452.64 during the session.

Actively traded stocks include KBUNAI, HARVEST-WA, TEJARI, HARVEST, IRIS, COMPUGT, TEJARI-WA, INGENS, SAAG and PATIMAS. Trading volume increased to 1755.13 mil shares worth RM1140.07 mil as compared to Wednesday’s 1564.93 mil shares worth RM1693.74 mil.

Leading Movers were GENTING (+10 sen to RM10.36), DIGI (+18 sen to RM32.48), UMW (+7 sen to RM6.82), YTL (+1 sen to RM1.50) and BAT (+20 sen to RM46.20). Lagging Movers were CIMB (-12 sen to RM7.19), TENAGA (-14 sen to RM5.72), AXIATA (-6 sen to RM4.80), MAYBANK (-6 sen to RM8.22) and IOICORP (-6 sen to RM5.08). Market breadth was negative with 226 gainers as compared to 524 losers.-- JF Apex Securities Bhd