KLCI stays in the black at mid-morning, lifted by select blue chips

KUALA LUMPUR (March 23): The FBM KLCI stayed in positive territory at mid-morning on Friday, while most key regional markets were mired in the red following the weaker overnight close at European and US markets on worries of a slowdown in the world economy.

At 10am, the FBM KLCI rose 1.55 points to 1,584.79, lifted by gains at select blue chips including BAT, Genting, Hong Leong bank and KLK.

Gainers trailed losers by 171 to 198, while 259 counters traded unchanged. Volume was 704.78 million shares valued at RM225.39 million.

Meanwhile, most Asian shares fell on Friday and the safe-haven yen gained after data showing shrinking factory activity in China and the euro zone heightened concerns about a slowdown in the global economy, acco0rding to Reuters.

At the regional markets, jaoan;s Nikkei 225 fell 1.07% to 10,019.00, Hong Kong’s Hang Seng Index lost 1.08% to 20,675.00, the Shanghai Composite Index shed 0.66% to 2,360.08, Taiwan’s Taiex lost 0.26% to 8,039.14 and South Korea’s Kospi was down 0.25% to 2,020.98, while Singapore’s Straits Times Index rose 0.28% to 2,987.71.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients the KLCI closed 0.71 points higher on Thursday, at 1,583.24.

“Its resistance areas of 1,585 and 1,594 may cap market gains, whilst the firmer support areas are located at 1,567 and 1,583. Due to the US markets’ weaker tone last night, we could be in for a range-bound day,” he said.

BIMB Securities Research in a note Friday said traders are at it again and we believe any forthcoming negativity will be amplified exponentially. At present they are citing slower global growth as a major concern hence the prevailing selling on equities.

Despite a four-year low in unemployment claims, the Dow Jones Industrial Average declined 78.5 points to hang precariously just above the psychological 13,000 mark. For the same reason, European bourses also suffered similar fate from broad based selling as all ended up in the red, it said.

The research house said the sea of red spread to Asia as well with only a handful posted gains and one of them being the KLCI showed great resilience at 1,583 (+0.7).

“We were again astounded by the buying on the local bourse spearheaded by the foreign side as net foreign participation was a positive RM87 million. Maybe today would be the day that the index may retrace with the immediate support seen at 1,580,” it said.

On Bursa Malaysia, Jaya Tiasa was the top gainer and rose 52 sen to RM8.21, BAT up 50 sen to RM53.80, Genting up 16 sen to RM10.94, Lipo added 16 sen to RM1.20, UMW and Batu Kawan gained 12 sen to RM7.25 and RM18.7.

Kobay rose 10.5 sen to 89.5 sen, Hong leong Bank and Subur added 10 sen each to RM12.18 and RM2.59 while KLK gained eight sen to RM23.90.

SAAG was the most actively traded counter with 12.7 million shares done. The stock gained half a sen to eight sen.

Other actives included Trinity, Ingenuity Solutions, Ariantec, Metronic, Flonic, Astral Supreme and Iris Corp.

Meanwhile, the decliners at mid-morning included Ta Win Holdings, SMPC, Carlsberg, Deleum, AMMB, Kein Hin, Sarawak PLANTATION []s, Tenaga and KYM.



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Stocks advance in early trade, boost from Genting

KUALA LUMPUR (March 23): Blue chips started Friday on a firm note, despite the weaker regional markets, boosted by gains in GENTING BHD [] and Petronas Gas.

At 9.08am, the FBM KLCI was up 2.32 points to 1,585.56. Turnover was 192.74 million shares valued at RM42.05 million. Advancers led decliners 85 to 66 while 132 stocks were unchanged.

CIMB Equities Research said in its technical outlook that the KLCI continued to hang on above the rising wedge resistance-turned-support trend line yesterday. It seems that prices could still make one more push, possibly towards its previous swing high of 1,597 before a deeper correction would take place.

“However, sustainability is the key concern here. If the candles fail to hold on above the 1,575 level, then it would invite selling pressure in days to come. Falling below 1,550 would eliminate all bullish potential in the near term,” it said in its technical report.

Among the blue chips, BAT was up 32 sen to RM53.62 with 100 shares done while PetGas added 18 sen to RM16.70 with 200 units done.

Genting added 14 sen to RM10.90, UMW 12 sen to RM7.25 while Nestle added eight sen to RM55.98 and Sime Darby five sen to RM9.78.

Lipo jumed 15 sen to RM1.19 and Kobay nine sen to 88 sen. Kobay is acquiring full control of its 53.16% subsidiary Lipo via a selective capital reduction and repayment exercise.

Kobay requested Lipo to reduce the paid-up by cancelling one share for every RM1 paid by Lipo to shareholders as capital repayment. All entitled shareholders will receive a cash payment amounting to RM1.25 per Lipo share under the proposed SCR.



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HDBSVR: Malaysian market could come under selling pressure

KUALA LUMPUR (March 23): Hwang DBS Vickers Research (HDBSVR) said with Wall Street showing signs of weakness, investors could be tempted to take profit across Asia on Friday.

It said that key US equity indices were down between 0.4% and 0.7% last night following a weaker-than-expected manufacturing growth data in China.

“Our Malaysian bourse will probably come under selling pressures too. Technically speaking, the benchmark FBM KLCI will likely lose ground to dip below the resistance-turned-support level of 1,580 ahead,” said the research house.

HDBSVR said stocks that may be hit on Friday include Metronic Global and Ariantec Global, amid one press report saying that proprietary day traders have been temporarily barred by some stock broking firms from trading in these two counters.

Hoping to get a lift is Lipo Corporation after its major shareholder Kobay TECHNOLOGY [] has proposed to undertake a selective capital reduction and repayment exercise involving a cash offer price of RM1.25 per share.

Separately, Malaysian AE Models has been awarded a sub-contract job worth RM62m at the new low cost carrier terminal in KLIA.



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Stocks to watch: Ingenuity, Glomac, Jaya Tiasa, S P Setia. Malaysia AE Models, Lipo

KUALA LUMPUR (March 23) : The resilience of Malaysian stocks will be keenly watched on Friday as investors weigh the impact of weaker global macro updates against the effects of pre-election sentiment in the country.

Analysts believe April will be crucial in anticipation of announcements on potential winners of big-ticket domestic public projects ahead of Malaysia’s coming genera l election.

The anticipation could have spurred the FBM KLCI to close higher on Thursday despite a still-weak global sentiment emanating from the US, Europe and China.

The FBM KLCI which sank into the red earlier, had rebounded to close at 1,583.24, up 0.71 point on Thursday.

Stocks to watch on Friday include INGENUITY SOLUTIONS BHD [], GLOMAC BHD [], JAYA TIASA HOLDINGS BHD [], S P Setia Bhd, Malaysia AE Models Holdings Bhd (Maemode) and LIPO CORPORATION BHD [].

Bursa Malaysia has queried computer software developer Ingenuity on the unusual trading patterns of the stock on Thursday.

Glomac reported a 33% rise in net profit to RM21.89 million in the third quarter ended Jan 31, 2012 from a year earlier despite revenue falling 18% to RM145.29 million. The property developer said lower cost of sales had mitigated the impact of lower revenue and higher operating expenses during the quarter.

Jaya Tiasa said its net profit rose 14% to RM45.52 million in the quarter ended Jan 31, 2012 from a year earlier as revenue fell marginally to RM237.56 million from RM237.64 million a year earlier. Lower tax expenses had offset lower revenue and higher operating costs during the quarter, according to the timber and oil palm PLANTATION [] entity

S P Setia reported a 19% rise in net profit to RM74 million in the first quarter to Jan 31, 2012 from a year earlier as revenue fell 5% to RM491.58 million. The property developer said it had sold RM933 million worth of PROPERTIES [] during the quarter, up 27% from a year earlier.

Maemode has secured a RM61.93 million baggage handling system job at the new low cost carrier terminal. The contract was awarded by UEMC-Bina Puri J.V.

KOBAY TECHNOLOGY [] BHD [] is acquiring full control of its 53.16% subsidiary Lipo via a selective capital reduction and repayment exercise.

Kobay requested Lipo to reduce the paid-up by cancelling one share for every RM1 paid by Lipo to shareholders as capital repayment.

“All entitled shareholders will receive a cash payment amounting to RM1.25 per Lipo share pursuant to the proposed SCR,” it said.



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Kobay to take over Lipo subsidiary, proposes SCR, repayment

KUALA LUMPUR (March 22): KOBAY TECHNOLOGY [] BHD [] is acquiring full control of its 53.16% subsidiary LIPO CORPORATION BHD [] via a selective capital reduction and repayment exercise.

Under the corporate exercise announced on Thursday, Kobay requested Lipo to reduce the paid-up by cancelling one share for every RM1 paid by Lipo to shareholders as capital repayment.

“All entitled shareholders will receive a cash payment amounting to RM1.25 per Lipo share pursuant to the proposed SCR,” it said.

Lipo said based on the maximum scenario, entitled shareholders holding 23.94 million shares would receive RM29.93 million cash under the SCR.

“Should there be a shortfall of internally generated funds from Lipo to meet the total capital repayment, Kobay will undertake to address this shortfall by advancing cash to Lipo. Kobay will waive its entitlements to the proposed SCR,” it said.

Upon completion of the proposed SCR, Lipo’s issued and paid-up share capital would be RM20.78 million comprising of 20,782,750 Lipo shares, all of which will be held by Kobay.

Kobay’s rationale was to integrate the management teams and operations of Lipo and its group of companies to achieve synergies from improved economies of scale arising from stronger buying positions with suppliers and more efficient resource allocation.

It also said the one-year volume weighted average price (VWAP) of Lipo as at March 19, 2012 was 96.9 sen, which was below the audited net asset of the Lipo Group as at June 30, 2011.

“The one-year VWAP of Lipo shares of 96.9 sen do not appear to reflect and commensurate with the fundamentals of the Lipo Group.,” it said, adding the proposed SCR would enable the shareholders to realise their investment in Lipo in an efficient and expeditious manner.

Lipo said the board on Thursday deliberated on the SCR offer letter and decided to present the proposal to Lipo’s shareholders for their consideration.



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Stocks to watch : Mega First , Metronic Global , Public Bank, Eng Teknologi

KUALA LUMPUR (March 19) : Malaysian stocks could take the cue from more external news flow on Tuesday as investors weigh the prospects of a recovering US economy against less optimistic updates in China.

The spotlight this week will be directed at the US housing market data, deemed a crucial indicator of the health of the world’s largest economy. Investors are also taking note of China-based banks which are due to report their quarterly earnings.

On Monday, the FBM KLCI rose 0.14% or 2.2 points to finish at 1,573.6.

Stocks to watch on Tuesday include Mega First Corp Bhd and its 60.43% subsidiary ROCK CHEMICAL INDUSTRIES (M) [] Bhd, besides KOBAY TECHNOLOGY [] BHD [] and its 53.16% subsidiary Lipo Corp Bhd.

Heavily-traded METRONIC GLOBAL BHD [] and its 17%-owned unit Ariantec Global Bhd are also worth noting. Other stocks to watch include PUBLIC BANK BHD [], and ENG TEKNOLOGI HOLDINGS BHD [].

Mega First, a power plant builder and property developer , has served a takeover notice on Rock Chemical, a building materials entity, to acquire the remaining shares it does not own at RM2.10 each.

Mega First shares rose two sen to close at RM1.72 on Monday while Rock Chemical was up 31 sen to RM2.06 after both stocks resumed trading at 2.30pm.

Trading of shares in industrial component manufacturers Kobay and Lipo has been suspended since 3.05 pm on Monday, pending an announcement. Kobay was last traded on Friday at 79 sen while Lipo was last transacted at RM1.04 on Monday.

Metronic said it was informed by its managing director Dr Ng Tek Che that he was approached by parties who are keen to acquire his 5.23% stake in the firm.

Metronic,which specialises in system integration of intelligent building management and integrated security management systems, saw its shares rose 0.5 sen to 13 sen with about 177 million shares changing hands on Monday.

Ariantec, which offers information technology services, rose four sen to 13.5 sen with some 235 million shares done.

Public Bank is expected to maintain its 50% dividend payout ratio, chief operating officer Leong Kok Nyem said at the group’s AGM. Public Bank shares rose four sen to close at RM13.64.

The founders and major shareholders of Eng Teknologi who are in the midst of privatising the hard disk drive maker said the takeover offer price has been revised downwards from RM2.50 to RM2. Eng Teknologi shares closed unchanged at RM1.77.



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Lipo Corp, Kobay shares trading halted pending announcement

KUALA LUMPUR (March 19): Trading in the shares of LIPO CORPORATION BHD [] and KOBAY TECHNOLOGY [] BHD [] shares have been suspended from 3.05pm on Monday until further notice.

In separate filings to Bursa Malaysia Securities Bhd on Monday, Lipo Corp said the trading halt in its shares was pending an announcement.

Meanwhile, KObay Tech said the trading suspension was until further notice.



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