Stocks to watch: Kimlun, PFCE, SIG Gases, Gamuda

KUALA LUMPUR (March 13) : The Malaysian stock market which saw a downward correction on Monday, is likely to find support on Tuesday from a still-liquid market amid positive domestic news flow ahead of the country’s impending general election .

Analysts said the existing uptrend in the FBM KLCI was still intact as the domestic backdrop is still flush with liquidity and foreign funds are still pouring into the local market.

“The FBM KLCI still has more legs” TA Securities Holdings Bhd head of research Kaladher Govindan wrote in a note on Monday.

On Monday, news of China’s economic slowdown dragged Asian stock markets lower. These include updates that the world’s second largest economy’s exports growth coming in at 18.4% in February, way below street estimates of a 31.1% expansion, according to Bloomberg.

A slowdown in China does not bode well for Asian exporting countries where stock indices had reacted negatively to the updates.

Japan’s Nikkei 225 which fell 0.4% to 9,889.86 and Taiwan’s Taiex which was down 1.1% to 7927.55 and Singapore’s Straits Times Index retreated 0.03% to 2962.18. The FBM KLCI of 30 blue chip stocks fell 0.9% or 14.25 points to close at 1,564.75.

Stocks to watch on Tuesday include Kimlun Corp Bhd, PFCE Bhd, SIG Gases Bhd, GAMUDA BHD [], MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and AIRASIA BHD [].

Kimlun Corporation Bhd has secured two contracts worth RM151.61 million for housing projects in Johor Bahru.

It had accepted a RM114.70 million contract from S P Setia Bhd’s unit Bukit Indah (Johor) Sdn Bhd for the CONSTRUCTION [] of service apartments and ancillary buildings.

It also secured a RM36.90 million contract from Keck Seng (Malaysia) Bhd to build 244 houses in Johor Bahru, Johor. The estimated date of completion is September 2013.

Ceramic products maker PFCE is acquiring the entire equity interest in its single largest shareholder PFC Engineering Sdn Bhd for RM300 million under an all share deal which will transform the acquirer into an oil and gas support services provider. PFC Engineering owns 40% of PFCE.

Shares of PFCE last closed at 70 sen on Friday, prior to the suspension of the stock’s trading on Monday. PCFE will resume trading on Tuesday.

SIG Gases Bhd is teaming up with a unit of Iwatani Corporation, Japan to set up a joint venture company to set up facilities in Samalaju Industrial Park, Bintulu, Sarawak.

The JV would pave the way for SIG Gases and Iwatani to be strategic business partners to set up the facilities in Samalaju to produce and supply of liquid products and compressed gases to customers in Sarawak.

RHB Research Institute Sdn Bhd had reduced its fair value for Gamuda shares by 2.8% from RM3.89 to RM3.78. The downward revision factors in potential earnings from the Klang Valley Mass Rapid Transit project into the research firm’s valuation for Gamuda’s construction business, RHB said. Gamuda shares, however, rose three sen to RM3.70.

The Edge weekly, quoting sources, reported that the share swap between the major shareholders of MAS and AirAsia could be unraveled following resistance from the Malaysian Airline System Employees’ Union. MAS shares declined two sen to RM1.36 on Monday while AirAsia fell four sen to RM3.59.



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Kimlun gets 2 contracts valued at RM151m for JB housing projects

KUALA LUMPUR (March 12): Kimlun Corporation Bhd has secured two contracts worth RM151.61 million for housing projects in Johor Bahru.

It said on Monday it had accepted a RM114.70 million contract from S P Setia Bhd’s unit Bukit Indah (Johor) Sdn Bhd for the CONSTRUCTION [] of service apartments and ancillary buildings.

It also secured a RM36.90 million contract from Keck Seng (Malaysia) Bhd to build 244 houses in Johor Bahru, Johor. The estimated date of completion is September 2013.

“The projects are expected to contribute positively to the earnings and net assets of Kimlun Group for the financial years during the contract period,” it said.



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Stocks to watch: SapuraCrest, Dijaya, HSL, Kimlun

KUALA LUMPUR (March 7): Stocks on Bursa Malaysia may slip on Wednesday in line with the cautious global and regional markets as worries about slower growth cast a pall of gloom over investors’ sentiment.

Key regional markets posted losses of between 0.63% and 2.16% as riskier assets bore the brunt of fears that the global growth outlook is darkening and that Greece may not be able to complete a major debt restructuring deal.

Reuters reported China's lowering of its economic growth target and data pointing to Europe possibly slipping back into recession have slowly eroded the optimism on global markets generated by the European Central Bank's huge injection of loans to banks since December.

On Bursa Malaysia, late buying helped the FBM KLCI extend its gains but whether it can be sustained on Wednesday remains to be seen due to external worries.

On Tuesday, the KLCI closed 0.69 of a point higher to 1,589.91. Turnover was 1.29 billion shares valued at RM1.73 billion. The broader market reflected the cautious sentiment, with 519 decliners to 257 advancers while 315 stocks were unchanged.

Among the stocks to watch on Wednesday are SAPURACREST PETROLEUM BHD [], DIJAYA CORPORATION BHD [], HOCK SENG LEE BHD [], Kimlun Corp Bhd and Malaysia Airports Holdings Bhd (MAHB).

SapuraCrest Petroleum secured a US$54 million contract from Petronas Carigali Sdn Bhd to provide a tender rig including a mobilisation fee.

The contract was for 12 months starting April 1 with an option to extend for another 12 months.

Dijaya resumes trading after a two-day suspension for a corporate exercise. Dijaya is acquiring 40 PROPERTIES [] owned by its single-largest shareholder Tan Sri Danny Tan for RM948.7 million.

The purchase will be funded with a cash portion of RM250 million and the balance via the issuance of redeemable convertible unsecured loan stock (RCULS), with a staggered conversion price range of RM1.30 to RM2.50 over a 10-year period.

Upon completion of the proposed amalgamation exercise, the land bank will increase to 870 acres and the gross development value will increase to RM37 billion.

Hock Seng Lee Bhd plans to undertake a mixed commercial and residential property project in Bandar Samariang, Kuching with an estimated gross development value of RM700 million.

Hock Seng Lee said the project would be on 275.5 acres of land which it was acquiring from Projek Bandar Samariang Sdn Bhd for RM25.54 million.

RHB Research Institute said it was less enthusiastic on CONSTRUCTION [] stocks as it believed their share price performance is likely to be muted over the next six to 12 months as the market begins to price in a higher risk premium for construction stocks ahead of the nation’s general election that will have to be held by March 2013.

However, the research house said Hock Seng Lee would be buoyed by: (1) Projects under Sarawak Corridor of Renewable Energy (SCORE); (2) Sustained high margins given limited competition from only a small pool of Sarawak-based Unit Pendaftaran Kontraktor Negeri Sarawak (UPK) registered contractors for most public jobs in Sarawak; (3) An outstanding construction orderbook of RM1.1 billion; and (4) An added downside protection to its share price by virtue of a strong balance sheet with a net cash of RM183.7 million or 31.5sen a share as at Dec 31, 2011.

“Indicative fair value is RM1.90 based on 12 times FY12/12 EPS, in line with our one-year forward target PER for the construction sector of 10-14 times,” RHB Research.

Kimlun’s estimated outstanding book order has increased to about RM1.50 billion after it secured a RM68.29 million housing project in Johor Baru.

Its unit Kimlun Sdn Bhd had accepted a letter of award from UNITED MALAYAN LAND BHD []’s subsidiary Dynasty View Sdn Bhd to construct apartments and ancillary buildings in Johor Baru.

Meanwhile, MAHB’s franked dividend of up to 14.14 sen per ordinary share less income tax of 25% amounting to RM116.64 million will go ex on April 9 and the entitlement date is April 12.



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Kimlun book order at RM1.5b with RM68m housing project

KUALA LUMPUR (March 6): Kimlun Corporation Bhd’s estimated outstanding book order has increased to about RM1.50 billion after it secured a RM68.29 million housing project in Johor Baru.

It said on Tuesday its unit Kimlun Sdn Bhd had accepted a letter of award from UNITED MALAYAN LAND BHD []’s subsidiary Dynasty View Sdn Bhd to construct apartments and ancillary buildings in Johor Baru.

“With the award, the group’s estimated outstanding book order is approximately RM1.5 billion,” it said, adding that work was expected to be completed by December 2014.



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Stocks to watch: CIMB, Cocoaland, TDM, Kimlun

KUALA LUMPUR (Feb 27): Market sentiment is expected to stay cautious on Tuesday as global equities pull back on concerns of strong oil prices’ weighing down already fragile economies in Europe.

At Bursa Malaysia, the corporate results should provide leads for investors as the reporting season draws almost to a close.

Among the stocks to watch are CIMB Group Holdings Bhd, COCOALAND HOLDINGS BHD [], TDM BHD [], Kimlun Corporation Bhd, Eastern & Oriental Bhd (E&O), Petronas Chemicals Bhd, HONG LEONG BANK BHD [], DRB-HICOM BHD [] and BOUSTEAD HOLDINGS BHD [].

CIMB posted net profit of RM1.132 billion in the fourth quarter ended Dec 31, 2011, up 29.8% from RM872.61 million a year ago. Its revenue was 6.1% higher at RM3.381 billion compared with RM3.185 billion. It announced a second interim dividend of 10.0 sen amounting to a net payment of RM743 million.

For FY11, it posted a record net profit of RM4.031 billion for 2011, or up 15.1% when compared with RM3.500 billion in FY10. The FY11 net return on equity (ROE) was also a record high 16.4%, but below the group’s full-year target of 17%.

Cocoaland’s earnings soared 103.2% to RM8.72 million for the fourth quarter ended Dec 31, 2011, from RM4.29 million a year ago, due to an increased selling price and higher trading volume of its products. It announced a second interim dividend of 6% per share.

TDM's earnings jumped 44.5% to RM44.34 million in the fourth quarter ended Dec 31, 2011, from RM30.68 million a year ago, on the back of higher crude palm oil (CPO) production and CPO prices.

Kimlun’s order book has increased to RM1.45 billion with the latest contract to build an extension to a shopping mall in Johor Baru for RM71.99 million. Its unit accepted the letter of award from Taman Sutera Development Sdn Bhd for the project.

E&O posted a strong set of results for the third quarter ended Dec 31, 2011 with earnings up 385% to RM15.36 million from RM3.16 million a year ago boosted by stronger property’s sales. Its revenue jumped 221% to RM123.12 million from RM41.08 million.

Petronas Chemicals Bhd posted total comprehensive income of RM735 million in the third quarter ended Dec 31, 2011, down 17.4% from RM890 million a year ago. Profit for the quarter was lower by RM172 million or 17% at RM826 million.

For the nine-month period, its net profit was RM2.62 billion while revenue was RM11.88 billion due to higher prices for olefins and derivatives and fertilisers and methanol.

Hong Leong Bank Bhd’s earnings rose 30.8% to RM381.37 million in the second quarter ended Dec 31, 2011 from RM291.43 million. Its revenue surged 66.1% to RM1.003 billion from RM603.96 million. Its earnings per share were 24.22 sen compared with 20.07 sen. It declared an interim dividend of 11 sen compared with nine sen.

Malaysian Rating Corp Bhd (MARC)has has revised the outlook on DRB-HICOM Bhd's (DRB-Hicom) AA-IS sukuk rating on its RM1.8 billion Islamic Medium Term Notes (IMTN) programme to negative from stable.

It said on Monday the outlook revision recognises the potential weakening of DRB-Hicom's near-to-intermediate term financial profile due to its debt-funded acquisition of PROTON HOLDINGS BHD [] (Proton).

Boustead Holdings Bhd’s net profit fell 8.6% to RM192.30 million in the fourth quarter ended Dec 31, 2011 from RM208.90 million a year ago.

Its revenue jumped 51% to RM2.554 billion from RM1.689 billion. Earnings per share were 18.59 sen compared with 20.20 sen. It proposed dividend of 9.0 sen.

For FY11, its earnings rose 13.6% to RM610.60 million from RM537.50 million in FY10. Its revenue increased 38.4% to RM8.55 billion from RM6.18 billion.



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Kimlun awarded RM72m job

Kimlun Corporation Bhd's unit, Kimlun Sdn Bhd, has secured a RM71.991 million contract from Tanah Sutera Development Sdn Bhd to undertake the construction of an extension building, ancillary building and alteration of an existing shopping mall in Johor Bahru.

In a filing to Bursa Malaysia today, the company said the project was expected to be completed by end-November and contribute positively to the earnings and net assets of the group for this year.

With the award, the group's estimated outstanding order book stood at approximately RM1.45 billion. -- Bernama



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Kimlun’s order book at RM1.45 bn with RM72m Johor mall project

KUALA LUMPUR (Feb 27): Kimlun Corporation Bhd’s order book has increased to RM1.45 billion with the latest contract to build an extension to a shopping mall in Johor Baru for RM71.99 million.

It said on Monday its unit Kimlun Sdn Bhd had accepted the letter of award from Taman Sutera Development Sdn Bhd to construct the extension building and ancillary building and alter the existing building. Work is expected to be completed by end November 2012.

“With the award, the group’s estimated outstanding book order is approximately RM1.45 billion,” said Kimlun.



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Stocks to watch: Kimlun, WCT, JCY, MRCB, Naim Indah

KUALA LUMPUR (Feb 9): With the trading volume surging to fresh highs and the FBM KLCI at a six month high on Wednesday, investors should be ready to take some profit.

Key regional markets had also a strong run on Wednesday and whether the rally can be sustained on Thursday hinges on Greece as its leaders seem nearing a deal to secure a second bailout and avoid a messy default.

Trading volume on Bursa Malaysia surged to a record 4.39 billion units on Wednesday, driven by strong speculative trading in penny stocks while the FBM KLCI hit a six-month high of 1,553 as it played catch-up with regional peers.

Stocks to watch are Kimlun Corporation Bhd, WCT BHD [], JCY International Bhd, MALAYSIAN RESOURCES CORPORATION BHD (MRCB) and NAIM INDAH CORPORATION BHD [].

Kimlun’s unit SPC Industries Sdn Bhd has secured a RM223.18-million contract from Mass Rapid Transit Corporation Sdn. Bhd to supply segmental box girders for the Sungai Buloh to Kajang stretch of the Klang Valley MRT.

WCT secured a RM300.52 million contract for the headquarters of the Ministry of International Trade and Industry from Putrajaya Management Sdn Bhd.

Hard-disk drive manufacturer JCY International Bhd’s earnings surged to a record RM162.45 million in the first quarter ended Dec 31, 2011 from only RM7.51 million a year ago. Its revenue rose 27.3% to RM559.03 million from RM438.90 million a year ago.

MRCB’s net profit fell 37% to RM26.11 million in the fourth quarter ended Dec 31, 2011 (4Q 2011) from RM41.50 million a year ago. It recorded a slightly lower profit before taxation amounting to RM42.5 million for 4Q 2011 compared to RM49.3 million in 4Q 2010.

Its revenue rose 8.6% to RM470.38 million from RM433.12 million. Its earnings per share were 1.88 sen compared with 3.01 sen. It proposed dividend of 2.0 sen a share compared with 1.50 sen a year ago.

For the financial year ended Dec 31, 2011, its net profit rose 15.1% to RM77.46 million from RM67.27 million. Its revenue increased by 13.6% to RM1.213 billion from RM1.067 billion.

Naim Indah Corporation Bhd’s major shareholder Crest Energy Sdn. Bhd had disposed of all its 22.80% stake comprising of 160.06 million shares in the company. The counter hit limit-up and was the second most active on expectations of a turnaround for the company with the entry of new shareholders.

The shares were chased up on expectations of another bout of buying by speculators. However, it remains to be seen if the upward trend and high volume can be sustained.

Bursa Malaysia Securities issued an unusual market activity (UMA) query to COMPUGATES HOLDINGS BHD [] on Wednesday. The query was due to the sharp rise in price and high volume in the company’s shares. Compugates rose 3.5 sen to 12.5 sen with 451.47 million shares done.



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Kimlun gets RM223.18m MRT contract

KUALA LUMPUR: Kimlun Corporation Bhd’s unit has secured a RM223.18-million contract from Mass Rapid Transit Corporation Sdn. Bhd to supply segmental box girders.

The company said on Wednesday its unit SPC Industries Sdn Bhd was appointed designated supplier for the box girders to certain packages of the Klang valley MRT for the Sungai Buloh to Kajang stretch.

“The supply of the segmental box girders is expected to spread over a period of approximately 40 months,” it said.



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Kimlun proposes private placement to raise RM27.94m

KUALA LUMPUR (Jan 27): Kimlun Corporation Bhd has proposed to raise RM27.94 million from the private placement of new shares.

It said on Friday the private placement would entail the issuance of up to 22.90 million new shares, or up to 10% of the issued and paid-up share capital of RM114.50 million, comprising of 229 million shares.

“Assuming the placement shares are issued at an indicative issue price of RM1.22 per placement share based on a discount of approximately 10% to the WAMP up to Jan 26, 2012 of RM1.36, the proposed private placement is expected to raise gross proceeds of up to approximately RM27.94 million,” it said.

Kimlun said the shares would be placed to third party investor or investors to be identified at a later stage.

Of the RM27.94 million, it said that the bulk of it or RM13 million would be used for development and incidental expenditure of Kimlun Group’s existing land bank. Another RM9.64 million would be used for working capital and RM2.80 million to purchase a parcel of industrial land.



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Kimlun plans pre-cast concrete products factory in Seremban

KUALA LUMPUR (Jan 27): Kimlun Corporation Bhd, which is actively bidding for CONSTRUCTION [] jobs in the Klang Valley, plans to set up a factory in Seremban to manufacture pre-cast concrete products to support its demand for the products to be used in the projects.

Kimlun said on Friday its unit SPC Industries Sdn Bhd had entered into a conditional sale and purchase agreement with CIMB Bank Bhd to acquire a piece of leasehold land in Mukim Rantau, Seremban for RM15.50 million cash.

Kimlun said the land was near established industrial developments, such as Sungai Gadut Industrial Park, Taman Tuanku Jaafar Industrial Park and Senawang Industrial Estate and about 7km from the Senawang Toll Plaza of North-South Expressway.

It added a factory would be built on the site for the fabrication of pre-cast concrete products to cater for the anticipated demand for the products in the Klang Valley.

SPCI’s core business is manufacturing and supply of concrete products. The purchase consideration was based on the price tendered by SPCI which took part in a bidding exercise to purchase the land from the vendor.

“The group has been bidding and will continue to actively bid for construction projects as well as orders for pre-cast concrete products arising from projects including those to be awarded under the Greater Kuala Lumpur/Klang Valley National Key Economic Area of the Economic Transformation Programme (which includes the proposed mass rapid transit system for Greater KL/KV),” it said.

Kimlun said the new factory would begin with the production of IBS components such as floor slab, column and beam.

It added the group would include more pre-cast products, particularly those manufactured by its existing plant in Ulu Choh, Johor such as tunnel lining segment in the product range of the new factory when sales opportunities arise.

Kimlun said the purchase consideration would be via proceeds from the proposed private placement, its own funds and bank borrowings.



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Kimlun rises on building contract

Kimlun Corp, a Malaysian builder, rose the most in more than two months in Kuala Lumpur trading after winning a RM82.1 million contract to build serviced apartment in the southern Johor state.

The stock climbed 3 percent to RM1.36 at 9:03 a.m. local time, set for the steepest increase since Nov. 14. -- Bloomberg



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Kimlun edges up in early trade on landing new job

KUALA LUMPUR (Jan 17): Kimlun Corporation Bhd shares advanced on Tuesday after it landed a contract worth RM82.1 million to build two blocks of service apartment and ancillary buildings in Johor Bahru.

At 9.16am, Kimlun added four sen to RM1.36 with 117,000 shares traded.

The company said its unit Kimlun Sdn Bhd had accepted the letter of award from Ikatan Flora Sdn. Bhd, a sub-subsidiary of IJM Land Bhd for the contract.



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HwangDBSV Research sees KLCI staging technical rebound

KUALA LUMPUR (Jan 17): Hwang DBS Vickers Research said the selling momentum across Asia could ease off on Tuesday.

It said the major factors for the more positive outlook was due to the market reactions in Europe, which were mostly up on Monday; and the lower borrowing cost seen at France’s bonds auction yesterday.

“Hence, our Malaysian bourse will likely stage a technical rebound ahead. After losing 14.0-point or 0.9% yesterday, the benchmark FBM KLCI may rise towards the support-turned-resistance level of 1,515,” it said.

HDBSVR said there were plenty of corporate developments awaiting local investors which include:

(a) DRB-Hicom taking over Proton at RM5.50 a share. With Proton’s share price already trading at a slight discount to the offer price, it remains to be seen what would be the share price implications for DRB-Hicom;

(b) a slew of contract wins by Bumi Armada (RM155 million), Sunway (RM42 million), Dayang (RM85 million), Kim Lun (RM82 million) and Heitech Padu (RM64 million); and (c) the upliftment of PN17 status for Hovid.



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Stocks to watch: Proton, DRB-Hicom, Hovid, Bumi Armada, HeiTech Padu, Kimlun

KUALA LUMPUR (Jan 17): The strong corporate newsflow would provide excitement to the markets on Tuesday, despite the cloud of uncertainties from the eurozone.

Reuters reported European stocks were slightly higher in a choppy session on Monday, with weakness in banks after a mass credit downgrade of euro zone countries offset by a rise in defensives, such as pharmaceuticals.

Late on Friday, Standard & Poor's cut the ratings of Italy, Spain, Portugal and Cyprus by two notches and France, Austria, Malta, Slovakia and Slovenia by one notch each.

At Bursa Malaysia, the FBM KLCI fell below the 1,510- level in line with the overall weaker investor sentiment at key regional markets following Standard & Poor’s cutting the sovereign credit rating of nine of the euro zone's 17 countries.

The FBM KLCI fell 14.01 points to 1,509.06 in a broadly weaker market.

Stocks which could see trading interest area PROTON HOLDINGS BHD [], DRB-HICOM BHD [], HOVID BHD [], Bumi Armada Bhd, HEITECH PADU BHD [] and Kimlun Corp Bhd.

Proton and DRB-Hicom resume trading after a one-day suspension. As expected, Khazanah Nasional Bhd announced it was divesting its 42.72% Proton stake to DRB-Hicom for RM5.50 per share or RM1.291 billion cash.

Upon completion of the sale and purchase agreement, DRB-Hicom will be obliged to undertake a mandatory general offer on the remaining Proton shares.

Bursa Malaysia Securities has lifted Hovid Bhd from the Practice Note 17 status with effect from Tuesday.

Bumi Armada Bhd’s subsidiary, Bumi Armada Navigation Sdn Bhd has secured a RM155 million contract from Petróleo Brasileiro S.A. The contract was to provide one anchor handling towing support (AHTS) vessel to Petrobras in its hydrocarbon and mining activities in the Brazilian continental shelf.

HeiTech Padu has secured a RM63.60 million contract from Bank Simpanan Nasional for the latter’s proposed core banking system.

Kimlun Corporation Bhd has landed a contract worth RM82.1 million to build two blocks of service apartment and ancillary buildings in Johor Bahru. The company said its unit Kimlun Sdn Bhd had accepted the letter of award from Ikatan Flora Sdn. Bhd, a sub-subsidiary of IJM Land Bhd for the contract.

DAYANG ENTERPRISE HOLDINGS BHD [] has received an extension of its workboat contract valued at RM85 million from Nautika Sdn Bhd.



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Kimlun unit gets construction job worth RM82.1m

KUALA LUMPUR (Jan 16): Kimlun Corporation Bhd has landed a contract worth RM82.1 million for the CONSTRUCTION [] of two blocks of service apartment and ancillary buildings in Johor Bahru.

The company said on Monday that its wholly-owned subsidiary Kimlun Sdn Bhd had accepted the letter of award from Ikatan Flora Sdn. Bhd, a sub-subsidiary of IJM LAND BERHAD [] for the contract.

It said that the construction work was expected to be completed by May 2014.

Kimlun said the project was expected to contribute positively to its earnings for the current financial year ending Dec 31, 2012 and the subsequent financial years during the contract period.



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Market to trend higher, but sentiment to remain cautious

KUALA LUMPUR: The FBM KLCI is expected to trend moderately higher today in line with the positive close on Wall Street last Friday. The statement by Prime Minister Datuk Seri Najib Razak that the general election would not be held this year put an end to weeks of speculation, which was described by analysts as providing some clarity to a nervy local market.

US stocks rose, ending higher for the week after the Italian Senate’s approval of economic reforms gave investors some relief from worries about the eurozone’s debt crisis.

The Dow Jones Industrial Average was up 2.19% to 12,153.68, the Standard & Poor’s 500 Index rose 1.95% to 1,263.85 and the Nasdaq Composite Index added 2.04% to 2,678.75.

Affin Investment Bank Bhd head of retail research Dr Mohd Nazri Khan said Najib’s statement is to be taken as positive for the market as it provides for more clarity and less volatility.

“Sometimes an election can heighten market fluctuation as was seen in the run-up to the Sarawak election in April this year,” he said.

He said the FBM KLCI is likely to trend moderately higher towards the 1,500 level this week on more European economic optimism, adding that he sees positive market breadth with important local sectoral indices such as financials, trading services, technology and small caps making a firmer comeback.

“As long as the FBM KLCI stays above the 1,460 level, the short-term uptrend remains intact, favouring more upside to follow,” he said.

Nazri said given the strength seen in warrants and small-cap stocks, the local market is to be less concerned over the European debt crisis but more inclined towards the bullish local year-end festive mood all the way towards Chinese New Year.

While the threat of an economic slowdown is real, recent speculative plays and good market volume confirm that local sentiment will be resilient during volatile times, he said.

Traders should therefore use temporary weakness to ride the potential year-end rally, he said.

“As for the moment, we are pegging 1,500 and 1,530 as the major resistance while 1,460 and 1,430 as the major support for the local benchmark.

“As for the downside risk, we believe any new talk of radical overhaul and breakup of the European Union may unsettle investors and create a fresh wave of volatility in global financial markets,” he said.

On the strategy this week, Nazri recommended that traders accumulate high-yield and defensive small-cap stocks in the telco and utilities sectors (such as Yi Lai, Signature, NCB Holdings and Century Logistics) which may rebound further after a deep correction in the previous months.

MIDF Research head Zulkifli Hamzah said the local equity market is currently in a period of uneasy equilibrium, but added that foreign investors appear to be keeping faith in the Malaysian market and have been gradually accumulating since early October.

“There were net buyers again last week. Yet, local investors are circumspect of the fact that remains a large overhang of foreign liquidity in the system that can decide to eject overnight,” he said.

Among the stocks that could be in focus today are Dijaya Corp Bhd, Ivory Properties Group Bhd, Kimlun Corp Bhd, KPJ Healthcare Bhd and oil and gas-related counters.

Dijaya and Ivory inked a joint-venture agreement to develop mixed residential and commercial properties in Penang with a gross development value of RM10 billion.

The two companies said the development will be completed over the next eight years and will comprise residential, shopping mall, hotel, office suites, office towers, retail spaces and an open mall with a boulevard.

Construction of the first phase is scheduled to begin next year, they said last Friday.

Kimlun secured a contract worth RM68 million to build serviced apartments in Iskandar Malaysia in Johor. It said last week that its wholly-owned subsidiary Kimlun Sdn Bhd had accepted the letter of award for the contract from Grand Action Sdn Bhd.

KPJ is buying four plots of land in Klang, Selangor for RM23.76 million cash as part of its plans to build a specialist hospital.

It said last Friday the four plots are situated within a mixed development undertaken by Sazean known as “Sazean Business Park”, and that Sazean will make an application to convert the category of the land it is buying from agricultural to building/commercial.

Petroliam Nasional Bhd and Shell Malaysia last week signed heads of agreement for new enhanced oil recovery projects offshore Sabah and Sarawak, a development which may boost the oil and gas support services-related counters.


This article appeared in The Edge Financial Daily, November 14, 2011.



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Kimlun advances on building contract

Kimlun Corp, a Malaysian construction company, rose the most in ten days in Kuala Lumpur trading after it won a RM68 million building contract.

The stock climbed 2 percent to RM1.55 at 9:10 a.m. local time, set for its steepest increase since Nov. 4. -- Bloomberg



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Kimlun rises on new Iskandar Malaysia contract

KUALA LUMPUR (Nov 14): Kimlun Corporation Bhd shares advanced in early trade on Monday, Nov 14 after it secured a contract worth RM68 million to build a service apartment in Iskandar Malaysia in Johor.

At 9.11am, Kimlun was up three sen to RM1.55 with 3,900 shares traded.

In a filing Friday, Nov 11, Kimlun said its wholly-owned subsidiary Kimlun Sdn Bhd had accepted the letter of award for the contract from Grand Action Sdn Bhd.



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Bursa likely to see edgy trading

Should speculation of an early general election continue to be in play, the news could help put some excitement in the market and keep Bursa Malaysia on its toes.

STOCKS on Bursa Malaysia are likely to be treading within a moderate band, but on a mild downward bias this week, pending the emergence of a clearer picture in the global scene.

The market is expected to remain edgy on developments in Europe, especially pertaining to the Italian government's bond auction last Monday.

Volatility had also spiked up recently and the consensus was that global equity markets remain vulnerable to a sharp selloff.

Malaysia's third quarter gross domestic product growth that is slated to be unveiled on Friday is not expected to be a major push factor in the market.

However, despite these news, the local market will remain resilient this week and investors are expected to take advantage of the temporary weakness in the local market to ride out potential year-end rally.

Second liners and penny stocks are expected to remain on the good side for the second consecutive week as blue-chip counters paused for a breather.

Analysts said it was clear that market players have shifted their focus on cheaper stocks.

Should speculation of an early general election continue to be in play, the news could help put some excitement in the market and keep Bursa Malaysia on its toes.

However, investors are advised to trade cautiously, as the pullback in this basket of "high risk" stocks would usually be sharper than expected once the music stops. This is simply because most, but not all, are running on empty, and not forgetting the European debt crisis is still shadowing equities.

Major resistance level is pegged at between 1,500 and 1,530 points, while support level for the local benchmark at 1,460 points.

On a Friday-to-Friday, the benchmark FBM KLCI declined 8.76 points to 1,468.75.

Other news that could be positive for the local market this week is Bank Negara Malaysia's decision to maintain the Overnight Policy Rate unchanged at three per cent amid a moderate global growth momentum.

Among stocks that could be in focus this week include Dijaya Corp Bhd, Kimlun Corp Bhd, KPJ Healthcare Bhd and oil and gas-related counters.

Total volume on Bursa Malaysia increased to 9.203 billion shares valued at RM6.049 billion from 8.15 billion shares valued at RM7.22 billion last week.

Bursa Malaysia's main market turnover rose to 6.784 billion shares worth RM5.72 billion, from 5.76 billion shares worth RM6.91 billion previously.



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