Stocks to watch Kencana, Pantech, Spritzer, KNM, Silver Bird

KUALA LUMPUR (May 1): The FBM KLCI could be range bound when trading resumes on Wednesday after May Day holiday on May 1, given the absence of fresh catalysts.

The FBM KLCI fell some 25.72 points in April, as investor sentiment took a beating given rising external and domestic uncertainties.

Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said he expects the FBM KLCI to trend lower in response to rising solvency risk and borrowing cost in Europe (Spain & Italy) and rising local political uncertainties.

“Despite positive comments from the USA Fed on possible monetary stimulus, a weaker than expected read on April Euro zone sentiment and rising European bond yield seemed to bring struggling European growth and debt concerns back into focus.

Most markets in Asia and Europe were closed on Tuesday to mark the May Day holidays and the Monday close at Wall Street was less then encouraging as The S&P 500 posted its first monthly decline since November on Monday, as stocks slipped in one of the lightest trading days of the year on signs the U.S. economy may be slowing and as a recession in Spain highlighted risks in the euro zone.

The Dow Jones industrial average dropped 14.68 points, or 0.11 percent, to 13,213.63. The Standard & Poor's 500 Index fell 5.45 points, or 0.39 percent, to 1,397.91. The Nasdaq Composite Index lost 22.84 points, or 0.74 percent, to 3,046.36.

Among the stocks that could be in focus on Bursa Malaysia are KENCANA PETROLEUM BHD [], PANTECH GROUP HOLDINGS BHD [], SPRITZER BHD [], KNM GROUP BHD [] and SILVER BIRD GROUP BHD [].

Kencana Petroleum Bhd’s wholly owned subsidiary, Kencana HL Sdn. Bhd. ("Kencana HL") in consortium with Shinryo (M) Sdn Bhd has secured an engineering, procurement, CONSTRUCTION [] and commissioning (“EPCC”) from PETRONAS GAS BHD [].

Kencana said on Monday that the contract was for the EPCC of two cogeneration plants, having combined capacity of 50MW of electrical power and steam capacity of 120 ton per hour.

The company said the portion of the contract value for Kencana HL was estimated at RM35 million.

Pantech Group Holdings Bhd Net profit for the fourth quarter ended Feb 29, 2012 surged 90% to RM10.68 million from RM5.11 million a year earlier, due mainly to an increase in revenue.

The company said on Monday that its revenue for the quarter jumped 76.2% to RM128.45 million from RM72.9 million in 2011 due to improved sales demand from oil and gas sector with the on-going new projects.

Earnings per share rose to 2.37 sen from 1.14 sen, whiel net assets per share was 75 sen.

Pantech proposed a final single tier dividend of 1.3 sen per share 20 sen each amounting to RM5.84 million for the financial year ended Feb 29, 2012, subject to shareholders' approval.

Spritzer Bhd net profit for the third quarter ended Feb 29, 2012 jumped 69.4% to RM3.66 million from RM2.16 million a year earlier, due mainly to higher sales of more profitable carbonated and flavoured drinks and natural mineral water products.

The company said on Monday that its revenue for the quarter rose 33% to RM45.22 million from RM34.09 million in 2011 on higher sales volume.

KNM Group Bhd (KNM) has proposed to undertake a fund raising exercise involving a Rights Issuance of RM200 million.

In a filing to Bursa Malaysia Securities Bhd on Monday, KNM said the definitive terms for the Rights Issue would be determined by the Board of the Company subject to the advice of the Company’s Corporate Advisors to be appointed in due course.

Silver Bird Group Bhd’s proposed group restructuring scheme is expected to be finalised by the middle of May 2012 said Silver Bird Group’s chairman of audit committee, Richard Azlan Abas after the company’s AGM on Monday.

“The group restructuring plan will include, but not limited to, capital reduction, share consolidation, rights issue and debt restructuring. However, it is still in its preliminary stage and very fluid. We hope to finalise the proposed plan once we get an agreement from the major stakeholders by the middle of May.” he added.

When asked about the amount of rights issue which the company intends to raise for its restructuring plan, Richard said it would amount to RM60 million.



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KNM proposes fund raising exercise involving rights issuance of RM200 million

KUALA LUMPUR (April 30): KNM GROUP BHD [] (KNM) has proposed to undertake a fund raising exercise involving a Rights Issuance of RM200 million.

In a filing to Bursa Malaysia Securities Bhd on Monday, KNM said the definitive terms for the Rights Issue would be determined by the Board of the Company subject to the advice of the Company’s Corporate Advisors to be appointed in due course.

“The Company will be seeking its shareholders' approval for the Proposed Rights Issue at a general meeting to be convened at an appropriate date once the definitive terms of the Proposed Rights Issue has been approved by the Board and the relevant authorities,” it said.

KNM said further announcement(s) on the corporate proposal in respect of the proposed rights issue would be made in due course.



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MARC downgrades KNM, KNM Capital long-term ratings

KUALA LUMPUR (March 21): Malaysian Rating Corporation Bhd (MARC) has downgraded the long-term ratings of KNM GROUP BHD [] and KNM Capital Sdn Bhd to A+ID from AA-ID, and revised the outlook of the ratings to developing from stable.

It said on Wednesday that it had concurrently affirmed the short-term ratings at MARC-1ID for the following rated programmes/issuers:

1) RM300.0 million Murabahah Underwritten Notes Issuance Facility (MUNIF)/Islamic Medium Term Notes (IMTN) Programme of KNM Capital Sdn Bhd (KNM Capital); and

2) RM400.0 million Islamic Commercial Paper (ICP) Programme/RM1.1 billion Islamic Medium Term Notes (IMTN) Programme of KNM Group Berhad (KNM).

The rating action affected RM190.0 million of outstanding notes issued by only KNM Capital as there had not been any issuance by KNM.

“The downgrade of the long-term rating reflects KNM’s weak results in recent periods and continued challenging market conditions for the process equipment market,” it said in a statement.

Below is the text of the statement

MARC said the developing outlook that it had attached to the ratings recognises the potential for KNM to stabilise and restore its financial position through rationalisation of its capacity and product portfolio as well as the possibility of negative rating action if the gains from rationalisation are insufficient to stabilise and improve KNM’s credit metrics.

The affirmation of the short-term ratings is based on its satisfactory liquidity position vis-a-vis ongoing short-term debt obligations.

KNM’s weak results in recent periods reflect increased competition in the lower-to-middle range process equipment segment and reduced demand for process equipment due to economic cyclical factors.

In the high-end process equipment segment, KNM also saw modest increase in new contracts secured due to a general slowdown in capital expenditure by oil and gas majors.

Delays in financial close for energy renewal projects which KNM had earlier depended upon to turn around its declining profitability significantly impacted its 2011 results and financial profile.

From a geographical viewpoint, the group is exposed to potential macro-economic difficulties in Europe, given the rather high revenue contribution from its European business. The group’s European operations generated 68% of revenue for financial year ended December 31, 2011 (FY2011).

The company has alluded to an expected rebound in 2012, which is expected to be driven by the rationalisation of its plant capacity and product portfolio. In response to the challenges posed by increased competitive intensity in the lower-to-middle range product segment, KNM intends to focus on the high-end segment and diversify into new end markets. On a related note, MARC observes that wholly-owned process equipment manufacturer BORSIG GmbH has defended its niche position well and has significant recurring maintenance and spare parts business.

MARC believes that the group’s strategic focus on high-end offerings and cost efficiencies should benefit its consolidated gross margins.

At the same time, the agency is mindful of the incremental risks posed by KNM’s decision to market its services as an engineering, procurement, CONSTRUCTION [] and commissioning (EPCC) contractor and facility operator for renewable energy projects notwithstanding the potential benefits to be gained in terms of margin enhancement and recurring income generation.

Apart from the group’s lack of sufficient track record as an EPCC contractor, the execution and sovereign risks exposure inherent in such projects could weigh on its consolidated business risk profile.

Based on unaudited results, the group posted a pre-tax loss of RM147.5 million (FY2010: pre-tax profit of RM46.5 million) on revenues of RM1,982.3 million.

The full-year loss was mainly attributable to provisions for foreseeable losses and credit impairment which collectively totalled RM140.0 million for the quarter ended Sept 30, 2011 (3QFY2011). MARC’s rating concern is the continuing trend of declining margins compared to the strong historical double-digit margins experienced prior to FY2009.

Partially offsetting the pressure on the group’s financial profile is the increase in cash flow from operations (CFO) to RM165.6 million (FY2010: RM53.7 million), presumably due to working capital reductions. Consequently, CFO interest cover increased to 3.3 times (FY2010: 1.1 times) while free cash flow reverted to a positive RM90.6 million (FY2010: -RM2.1 million). The group’s liquidity position is strong, backed by cash and bank balances of RM416.4 million (FY2010: RM296.2 million) vis-a-vis the forthcoming notes redemption of RM90.0 million in 2012.

Downward rating pressure would be exerted on the ratings following slower-than-anticipated progress in the group’s financial turnaround and/or a weakening in its business risk profile.

While MARC believes that KNM has the potential to restore its financial health to previous levels in the medium term, the meaningful challenges that management will face in achieving this are also acknowledged.



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RHB Research maintains Underperform on KNM Group, FV 68 sen

KUALA LUMPUR (Feb 29): RHB Research Institute is maintaining its Underperform on KNM GROUP BHD [] at 94 sen and accorded a fair value of 68 sen.

It said on Wednesday there could be more downside risks for earnings in the near term.

“As such, we continue to be cautious on the stock. Rerating catalysts will be when it starts to show sustainable earnings and operational improvement. We maintain our fair value estimate of 68 sen a share based on unchanged 0.4 times FY12 price-to-book value,” RHB Research said.

The research house said KNM Group’s FY2011’s loss before tax of RM147.5 million was better than its expectations of RM187.7 million, but worse than consensus full-year loss before tax estimate of RM93.6 million.

“The variance to our estimate was largely due to lower-than-expected interest costs. We have opted to look at the profit before tax of the company as it is a better measure of KNM’s operational earnings and excludes the effect of the tax incentive,” RHB Research said.



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Affin Research maintains sell on KNM Group at RM1.04, TP 84 sen

KUALA LUMPUR (Feb 14):Affin Investment Bank Research is maintaining its sell call on KNM GROUP BHD [] at RM1.04 and lowered the target price to 84 sen.

The research house said on Tuesday it was not optimistic about KNM’s proposed GBP450 million (approximately RM2.2 billion) Peterborough Energy Park (PEP) project in the UK.

On Feb 8, KNM, the contractor turned owner for the PEP signed a conditional sale and purchase agreement with the PEP project site owner to purchase the project land (approximately 55 acres) for GBP25 million (RM120 million).

“In view of the ongoing global economic uncertainties, cautious market sentiment (especially in Europe), KNM’s weak earnings track record and its lack of track record in renewable project ownership, we are not optimistic on the PEP project and we believe securing the project funding will be challenging.

“Besides, the previous project owner had failed to achieve financial close after negotiating with bankers for over a year,” said Affin Research.



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RHB Research cautious on outlook for KNM, keeps underperform call

KUALA LUMPUR (Feb 10): RHB Research Institute is maintaining its underperform call on KNM GROUP BHD [] at lower fair value of 68 sen a share based on unchanged 0.4 times price-to-book value.

It said on Friday the rerating catalysts will be when it starts to show sustainable earnings and operational improvement.

“We came away from our visit remaining quite cautious on the company’s outlook. Management guided that 2012 will be a year of cost, operation and plant rationalisation.

“Besides that we are concerned that a couple of its’ large contracts will continue to be deferred despite management’s best efforts. The company is tentatively looking to release its 4QFY11 results on Feb 28, but we are not too optimistic on it reporting better numbers,” said RHB Research.



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CIMB Research has technical buy on KNM at RM1.10

KUALA LUMPUR (Jan 27): CIMB Equities Research has a technical buy on KNM GROUP BHD [] at RM1.10 at which it is trading at a price-to-book value of 0.6 times.

It said on Friday that KNM rallied strongly on Thursday on high volume after forming a base above its 30-day SMA for almost the whole of January.

“We believe that yesterday’s run is the beginning of a stronger rebound,” it said.

CIMB Research said that the MACD signal line has staged a positive crossover while RSI is also rising.

“The positive technical readings reinforce our short term bullish stance,” it said.

The research house said aggressive traders should buy now with a stop placed below 97.5 sen. This run has the potential to take prices up to RM1.35 and even RM1.50-RM1.55 as there is no strong resistance in sight.



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KNM edges up in early trade on plans to buy UK firm

KUALA LUMPUR (Jan 26): KNM GROUP BHD [] shares rose on Thursday after it proposed to acquire a company owning 55 acres of land at Storey's Bar Road, Peterborough, England for 25 million pound sterling or RM120 million.

At 9.05am, KNM added 3.5 sen to RM1.03 with 892,200 shares traded.

It had signed an exclusivity agreement with Poplar Holdings Ltd for the grant of exclusivity to acquire the latter’s unit Poplar Investments Ltd which owns the 55 acres of vacant land.

KNM said the agreement was to secure exclusive rights to purchase the sale shares and indirectly own the land to build an 80 MW waste to energy plant.



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HDBSVR: Heavyweights to see fresh buying interest

KUALA LUMPUR (Jan 26): Hwang DBS Vickers Research expects the Malaysian market to get a slight lift on Thursday with index heavyweights such as Maybank, CIMB and Genting possibly attracting fresh buying interest.

It said KNM may be of interest too after entering into an exclusivity agreement to conclude the proposed acquisition of an UK-based company for about RM120 million (which will then pave the way for the development of an 80MWe waste-to-energy plant).

As for the US Federal Open Market Committee (FOMC) meeting held Wednesday night, the policymakers decided to keep the federal funds rate at low levels at least through late 2014 after trimming the official economic growth projections. In reaction, major U.S. equity indices jumped between 0.6% and 1.1% at the closing bell.

“The outcome of the FOMC meeting suggests that the US dollar – which has been weakening lately – would come under persisting pressures ahead. This may prompt a shift in fund flows to Asia, where economic growth prospects remain relatively stable,” HDBSVR said.



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Stocks to watch: Can-One, Kian Joo, Hibiscus, KNM

KUALA LUMPUR (Jan 26): Markets would be on the lookout for signals from the Federal Reserve about its monetary policy on Thursday morning while the eurozone is still mired in crisis.

Concern over how Greece's debt talks will develop trumped any appetite for riskier assets on Wednesday, despite good economic data from Germany and a widely held view that the Federal Reserve is set to signal an extended period of ultra-low rates.

Reuters reported Wednesday that the Fed looked set to keep monetary policy on hold, even as it releases forecasts expected to show interest rates will be near zero for at least two more years.

It said given recent improvement in the U.S. economy, the central bank will probably remain non-committal regarding the prospect for additional bond purchases, but will leave the door open to further action if Europe's banking problems spill over into the United States.

At Bursa Malaysia, the broader market closed higher in late trade, despite the decline in the FBM KLCI due to losses in banking stocks.

Stocks which could see trading interest following the latest corporate news are CAN-ONE BHD [], KIAN JOO CAN FACTORY BHD [] (KJCF), Hibiscus Petroleum Bhd and KNM GROUP BHD [].

Can-One said on Wednesday it had completed the acquisition of the 32.9% stake in KJCF for RM241.11 million cash consideration.

Analysts are expecting Can-One to make a general offer after securing the 32.9% block of KJCF.

Hibiscus Petroleum, which was queried by Bursa Malaysia Securities Bhd after its securities jumped in very active trade on Wednesday, replied it was unaware of the reasons for the unusual market activity.

The shares closed 32 sen higher at RM1.52 with 53.58 million shares done while the warrants climbed 14.5 sen to 85 sen with 176.11 million units done.

KNM has proposed to acquire a company owning 55 acres of land at Storey's Bar Road, Peterborough, England for 25 million pound sterling or RM120 million.

It had signed an exclusivity agreement with Poplar Holdings Ltd for the grant of exclusivity to acquire the latter’s unit Poplar Investments Ltd which owns the 55 acres of vacant land.

KNM said the agreement was to secure exclusive rights to purchase the sale shares and indirectly own the land to build an 80 MW waste to energy plant.



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KNM proposes to buy company, with 55 acres of land in England, for RM120m

KUALA LUMPUR (Jan 25): KNM GROUP BHD [] has proposed to acquire a company owning 55 acres of land at Storey's Bar Road, Peterborough, England for 25 million pound sterling or RM120 million.

It said on Wednesday it had signed an exclusivity agreement with Poplar Holdings Ltd for the grant of exclusivity to acquire the latter’s unit Poplar Investments Ltd which owns the 55 acres of vacant land.

KNM also said the exclusivity period started on Monday and until and including April 25, 2012.

“The rationale for this agreement is to secure exclusive rights during the exclusivity period, to purchase the sale shares and indirectly own the land for the development of the 80 MW waste to energy plant,” it said.

KNM said the land was vacant with no building or structures attached and the proposed transaction would be fully settled in cash through internally generated funds and/or bank borrowings.



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Maybank IB Research cuts KNM target price to 88 sen

KUALA LUMPUR (Jan 13): Maybank Investment Bank Research has reduced the target price of KNM GROUP BHD [] to 88 sen following a 10%-19% downgrade in FY12-13F earnings forecasts on lower revenue recognition.

It said on Friday that while margin pressure has abated on improving order flows, it is cautious of KNM's cost management abilities and so retain a conservative stance on its estimates.

“KNM needs to deliver a consistent set of quarterly results to warrant a re-rating. Sell maintained,” it said.



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OSK Research: KNM share price may trade higher

KUALA LUMPUR (Dec 29): OSK Retail Research said KNM’s share price may trade higher after closing higher for three days in a row.

It said on Thursday KNM’s share price downtrend that resumed in January continued into December, bucking the trend of the broader market.

“But things may take a turn for the better after posting strong closes in the past three days,” it said.

OSK Research said the “Bullish Engulfing” candle of last Thursday was confirmed by higher closes in the past two days, completing the formation of at least a short-term low at 83 sen.

“The high volume in the past week also suggests possible accumulation activities. Thus, a rebound from the November-December down-leg has started. Purchase can be made at the current level with a stop loss on close below 83 sen,” it said.

OSK Research said a more aggressive trade may opt for the two-day low of 88 sen as a stop loss.

Given the downtrend, the rebound is expected to regain no more than 62% of the decline. A strong move could see the covering of the gap of Nov 23 of RM1.22. The research house said the resistance was also expected at RM1.12, the gap of Nov 24, where the 50-day MAV will be at in the next few days.

OSK Research said a close below 83 sen should see the continuation of the downtrend, with the next support at the psychological 75 sen.



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O&G-related counters advance, RHB Research upgrades sector to Overweight

KUALA LUMPUR (Dec 12): Stocks in the oil and gas industry advanced on Monday after RHB Research upgraded the sector to Overweight, given its positive long-term view of the industry.

At 9.35am, Petronas Gas rose 26 sen to RM14.10, MMHE eight sen to RM5.53, Petronas Chemicals seven sen to RM6.07, Kencana three sen to RM2.79, Wah Seong Corp one sen to RM1.93 and KNM half a sen to 99 sen.

RHB Research in a note Dec 12 said that the excess liquidity flows had resulted in crude oil prices holding up (vs. plunge in the 2008 global financial crisis).

This was despite the persistent global economic uncertainties, it said.

“We revise our average crude oil price assumptions to US$95/bbl for FY12 and US$99.8/bbl for FY13 (from US$80/bbl and US$89/bbl previously) and upgrade our benchmark sector PER to 15x (from 13x).

“We upgrade our call on the sector to Overweight, as we take into account the positive long-term view.

RHB Research said its top picks were Petronas Gas and Dialog, given their long-term fundamentals.

The research house said it was also positive on the the merger of SapuraCrest and Kencana as it would emerge as a formidable non-Petronas oil & gas company.



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KNM falls below psychological level of RM1

PETALING JAYA: Investors may want to monitor the movement of KNM Group Bhd shares this week after they fell below the crisis level of RM1.28 and psychological level of RM1 last Friday.

The oil and gas counter ended at 97 sen last Friday, which was the lowest since March 2006, with 20.86 million shares changing hands.

OSK Research in a recent technical analysis said the next strong support level could be seen at 85 sen.

“The RM1.28 low in 2009 is a crucial level for KNM. First of all, it was the bottom for KNM’s share price during the global financial crisis.


“Second, the price was again supported by the RM1.28 level in September 2010, which provided the base to eventually propel it to the RM3.28 level. When the bottom for a major previous bear market is violated, this implies significant weakness,” it added.

KNM shares took a beating last week after the company announced a net loss of RM116.29 million in the third quarter ended Sept 30 versus a net profit of RM56.09 million in the previous corresponding quarter.

The worse earnings were due to a one-off provision for foreseeable losses of about RM90 million and over RM50 million in credit impairments. Revenue for the quarter rose 6% to RM445.18 million from RM418.36 million.

For the nine-month period ended Sept 30, KNM recorded a net loss of RM86.42 million from a net profit of RM110.57 million a year ago. Revenue increased by 19% to RM1.4 billion from RM1.17 billion.

KNM had announced a dividend policy to distribute at least 50% of its net profit, with effect from financial year ending Dec 31, 2012.

Based on its segmental analysis, KNM derived most revenue and profits from Europe over the nine-month period. In fact, only operations in Europe were profitable while the company incurred losses in Asia and the Americas.

KNM was recently put under the spotlight after Bursa Malaysia slapped eight of its directors with fines of RM25,000 each for breaching the Main Market listing requirements in relation to a proposed takeover exercise made on Feb 4, 2010.

On that date, KNM had received a takeover offer from BlueFire Capital Group Ltd, an entity controlled by KNM managing director and major shareholder Lee Swee Eng, and two foreign partners GS Capital Partners VI Fund LP and Mettiz Capital Ltd.

The offer was for KNM’s entire business and undertakings for RM3.5 billion or 90 sen per share. But the company failed to disclose certain material conditions in the offer, including the issuance of redeemable convertible preference shares (RCPS) to satisfy the takeover.

Most recently, KNM tied up with Lukoil Uzbekistan for a US$72 million (RM230 million) contract to construct a booster compressor station on the Khauzak-Shady plot.

However, even this latest contract failed to excite analysts.

HwangDBS Research said the contract is still at the early stages. While KNM’s outstanding order book remains at RM5.5 billion, the financial close for its Peterborough project (RM2.2 billion) and Octagon project (RM700 million) has not been secured yet.

Excluding these contracts, KNM’s order book of RM2.6 billion does not provide good earnings visibility, according to HwangDBS.

It downgraded KNM to fully valued and cut its target price to 70 sen, based on 10 times FY12 ending Dec 31 earnings per share.


This article appeared in The Edge Financial Daily, November 29, 2011.



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OSK Research: Strong support for KNM at 85 sen

KUALA LUMPUR (Nov 25): OSK Research said KNM faced immense selling pressure after releasing its 3QFY11 financial results which showed a net loss of RM116 million.

“Yesterday’s price action resulted in the violation of the major lower support level of RM1.28,” it said on Friday.

OSK Research said unless the price stabilizes in the vicinity of the RM1.28 level, it may retrace further in the near future after violating this critical support level.

The next strong support level, though not as crucial as the RM1.28 level, could be seen at RM0.85.

The research house said the RM1.28 low created in 2009 is a crucial level for KNM. First of all, it was the bottom for KNM’s share price during the Global Financial Crisis. Secondly, the price was again supported by the RM1.28 level in September 2010, which provided the base to eventually propel it to the RM3.28 level.

“When the bottom for a major previous bear market is violated, this implies significant weakness,” it cautioned.

OSK Research said as Thursday was only the first day that the RM1.28 level is violated, it would need to observe if KNM could start stabilising in the vicinity of this level.

If the RM1.28 level is decisively violated, this simply means that the stock will likely face further selling pressure in the near future. Moreover, its monthly RSI is now trading at the 34-pt level, which means that the door is still open for additional losses before reaching the standard 20-pt oversold level.

The research house said the RM1.00 mark now represents the psychological support level for the stock.

“We would need to look back as far as 2006 to search for the next stronger support, which could be detected at the RM0.85 level.

To the upside, now expect the RM1.28 level to be a formidable resistance, with the next major resistance situated at the RM1.56 level,” it said.



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Banks, blue chips lift KLCI by 1.03%

KUALA LUMPUR (Nov 24): The FBM KLCI rose 1.03% on Thursday, as most key regional markets staged a mild recovery on bargain hunting activities.

However, European shares pared gains in early trade on Thursday in a choppy session, with volumes expected to be light throughout the day as the U.S. markets are closed for the Thanksgiving holiday, according to Reuters.

The FBM KLCI jumped 14.82 points to 1,447.99, lifted by gains at banking and blue chip stocks.

Gainers led losers by 440 to 277, while 289 counters traded unchanged. Volume was 1.5 billion shares valued at RM1.08 billion.

At the regional markets, Hong Kong’s Hang Seng Index rose 0.40% to 17,935.10, Taiwan’s Taiex gained 0.85% to 6,864.39, South Korea’s Kospi added 0.67% to 1,795.06, the Shanghai Composite Index was up 0.10% to 2,397.55 and Singapore’s Straits Times Index edged up 0.02% to 2,677.15.

Meanwhile, Japan’s Nikkei 225 fell 1.8% to 8,165.18.

On Bursa Malaysia, HLFG rose 32 sen to RM11.32, CIMB up 11 sen to RM6.79, RHB Capital seven sen to RM7.49, AMMB five sen to RM5.56, Public Bank four sen to RM12.40 and Maybank rose two sen to RM8.19.

Other gainers included Telekom and Axiata that rose 22 sen each to RM4.44 and RM4.96, Genting 16 sen to RM10.28, Sime Darby 15 sen to RM8.88, Batu Kawan 32 sen to RM16.52, KrisAssets 28 sen to RM5.30, CI Holdings and Proton 23 sen each to 90 sen and RM3.18, while MAHB and Nestle gained 20 sen each to RM6.20 and RM50.60.

Among the decliners, BAT fell 26 sen to RM47.24, Dutch Lady 20 sen to RM23.40, Tahps 14 sen to RM4.16, Petrol One 13 sen to RM1.02, KNM 10 sen to RM1.02, while Magni and BRDB fell nine sen each to RM1.14 and RM2.11.

The actives included MBF Holdings warrants, Compugates, JCY, Sumatec, DPS Resources, Emico, Karambunai and KNM.



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KNM falls below RM1 after 3Q net losses, downgrades

KUALA LUMPUR (Nov 24): KNM GROUP BHD []’s share price fell to below RM1 briefly on Thursday after it posted net losses of RM116 million net loss in the third quarter ended Sept 30.

At 3.28pm, it was down 10 sen to RM1.02. There were 21.88 million shares transacted at prices ranging from 99.5 sen to 1.07 sen.

The FBM KLCI rose 4.72 points to 1,437.89. There were 997.58 million shares done valued at RM629.23 million. There were 343 gainers, 313 losers and 259 stocks unchanged.

On Wednesday, Maybank Investment Bank Research maintained its sell call on KNM with a lower target price of RM1.08 after the latter’s RM116 million net loss in 3Q11, which was due to operating impairments and provisions totaling RM150 million. The losses had wiped out KNM’s 1H net profit of RM30 million.

“We now expect 2011 to be in the red, on expectation that losses should extend into 4Q. We also cut 2012-13 net profit forecasts by 33%-54% on lower EBIT margin assumptions.

“Following this, we downgrade target price to RM1.08 (-9%) based on a lower PER multiple of 8 times as we roll over our valuations to 2013 (previously 10x 2012 earnings),” said Maybank Research.



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KNM Group dives to 5-year low

KNM Group, an engineering, specialist and solutions provider in the oil and gas sector, plunged to a near five-year low following losses sustained in the third quarter due to a one-off provision for forseeable losses and credit impairment.

At mid-day, KNM Group fell nine sen to RM1.03, its lowest since April 18, 2006. -- Bernama



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KL shares higher at mid-day

Share prices on Bursa Malaysia staged a recovery from recent losses at mid-day today, led by gains in banking stocks and selected bluechips, dealers said.

The FTSE Bursa Malaysia KLCI (FBM KLCI) rose 5.67 points to 1,438.84, after opening 1.26 points lower at 1,431.91.

Asian markets put on a mixed performance on some mild recovery following the recent sell-down. However, sentiment remained cautious in view of growing concerns over the impact of the eurozone debt crisis and as China's manufacturing activity weakened with the poor global economic outlook, a dealer said.

The Finance Index, gained 71.83 points to 12,850.60 and the Plantation Index increased 16.31 points to 7,587.52, while the Industrial Index increased 13.25 points to 2,629.

The FBM Emas Index rose 36.29 points to 9,858.97, the FBM70 Index rose 37.07 points to 10,733.08, the FBM Top 100 Index increased 37.11 points to 9,665.45 and the FBM ACE Index increased 18.38 points to 4,148.58.

Advancers led decliners 331 to 258 while 239 counters were unchanged, 645 untraded and 16 others suspended. Volume stood at 789.4 million shares worth RM448.5 million.

Among active counters, MBF Holdings warrants rose eight sen to 33.5 sen, Compugates Holdings declined half a sen to 7.5 sen, Sumatec Resources declined four sen to 24.5 sen and KNM Group slipped nine sen to RM1.03.

For the heavyweights, Maybank gained one sen to RM8.18, CIMB rose nine sen to RM6.77, AMMB Holdings increased two sen to RM5.53 and Sime Darby increased 10 sen to RM8.83. -- Bernama



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