KLCI slips at mid-morning as Asian markets edge down

KUALA LUMPUR (Jan 6): The FBM KLCI slipped at mid-morning on Friday, in line with the overall tepid sentiment at key regional markets, following the weaker overnight close at European markets.

The FBM KLCI slipped 1.87 points to 1,512.56 at 10am, with losses including at KLK, Petronas Chemicals and Genting.

Gainers edged losers by 212 to 192, while 215 counters traded unchanged. Volume was 377.83 million shares valued at RM220.1 million.

Asian shares edged down and the euro hovered near a 16-month low against the dollar and an 11-year low against the yen on Friday on worries the euro zone debt crisis is crippling European banks, but more positive U.S. data helped curb the losses, according to Reuters.

At the regional markets, Japan’s Nikkei fell 0.74% to 8,425.75, Hong Kong’s Hang Seng Index was down 0.50% to 18,718.90, South Korea’s Kospi lost 1.21% to 1,841.24, Singapore’s Straits Times Index shed 0.20% to 2,707.61 and Taiwan’s Taiex inched down 0.01% to 7,129.95.

Meanwhile, the Shanghai Composite Index added 0.13% to 2,151.34.

BIMB Securities Research in a note Jan 6 said it would be interesting to see investors trading stance over the immediate term as their sentiments “yo-yo” between Eurozone crisis and improved US economic data.

It said that on Thursday, it seemed like a dead heat despite encouraging unemployment figures coupled with better housing starts in the US as the DJI Average closed flat to remain at above the 12,400 level.

As for the European bourses, most ended the day lower spooked by the spike in treasury yields of both Spain (5.64%, +0.2%) and Italy (7.09%, +0.15%), it said.

Regionally, it was generally a mixed day following the lacklustre European performance, it said.

Locally, the FBMKLCI finally rebounded after the opening 2 days of decline.

The benchmark index gained 10 points to close at 1,514 almost at par to its resistance of 1,515 mark.

“Yesterday we noticed buying interest to centre on PLANTATION [] stocks as advocated by us of a re-rating following a resilient CPO price which hovers at above the RM3,000 level.

“We expect accumulation of plantation and oil & gas stocks to persist and should prop the index higher to 1,520,” it said.

On Bursa Malaysia, KLK was the top loser at mid-morning and fell 76 sen to RM24.50; Tradewinds Plantations was down 18 sen to RM4.32, BHIC lost 16 sen to RM3.95, Box-pak eight sen to RM2.44, Orient seven sen to RM5.25, KYM, GAB, Petronas Chemicals and Genting fell six sen each to RM1.49, RM13.18, RM6.32 and RM11.08 respectively, while K-Power was down five sen to 45 sen.

Gainers included Can-One, MPI, Petronas Gas, HLFG, Batu Kawan, Muda, Nestle, Dutch Lady and Unisem, while the actives included Nextnation, XDL, Utopia, JCY, HWGB, Wijaya and Can-One.



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KYM to raise RM7.65m from private placement of 5m new shares

KUALA LUMPUR (Dec 12): KYM HOLDINGS BHD [] expects to raise RM7.65 million from the proposed placement of five million new shares of 50 sen each.

It said on Monday the new shares, representing 4.6% of its paid-up, would be placed out at RM1.53 per share. Its share price closed one sen lower at RM1.55 with 35,000 shares done.

The proceeds would be used as working capital for the group including initial investment of about RM5 million for a reclamation of 3,400 acres at Bagan Datoh, Perak, building of the infrastructure requirements, including jetties.

KYM will have a 37.5% stake in PEIH Holdings Sdn Bhd which will build the infrastructure for the Perak Eco Industrial Hub (PEIH).

“The proceeds from the proposed private placement are adequate for the group’s present working capital requirements. Due to the size of the PEIH project, it is envisaged that further investment and funding will be required in the future.

“However, the quantum of the additional investment and funding required for the PEIH project can only be reasonably ascertained until the detailed layout plan and CONSTRUCTION [] designs which are expected to be finalised in the next six months,” it said.

Meanwhile, according to its financial statements for the second quarter ended July 31, its net asset per share was 93 sen.



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KYM proposes private placement for working capital

PETALING JAYA: Property developer and construction company KYM Holdings Bhd yesterday announced a proposed private placement of up to five million new ordinary shares of 50 sen each, representing 4.6% of the group’s issued and paid-up capital.

The private placement exercise will be implemented in tranches, with the first comprising 1.3 million KYM shares, while the balance shall be issued subsequently based on prevailing market conditions.

The issue price of the first tranche is fixed at RM1.53 per placement share which represents a discount of 10% to the five-day weighted average market price of KYM traded on Bursa Malaysia Securities Bhd between Nov 10 and Nov 16 (both dates inclusive) or RM1.70 per share.

The issue price of subsequent tranches will be determined at a later stage and shall not be priced at more than 10% discount to the five-day weighted average market price of KYM shares immediately prior to the price fixing date to be determined, according to the statement.

The group plans to utilise the proceeds from the placement to fund its working capital requirements which include operating expenses such as staff salaries, development expenditure, promotional and marketing expenditure, and other expenses to improve the group’s operations.

Assuming that all placement shares are issued at RM1.53 each, KYM is expected to raise gross proceeds of approximately RM7.65 million upon successful completion of the exercise. Of the total gross proceeds, RM7.55 million will be utilised for the group’s working capital requirements.

The group said the rationale of the proposed private placement is to raise funds for working capital requirements, improve its cash flow position and provide continued support to its businesses.

It added that via the exercise, the group will be able to raise additional working capital without incurring interest costs compared with taking up additional bank borrowings.

It is also the most expeditious and cost-effective method of raising funds as opposed to the pro-rata issuance of securities such as rights issue which may financially burden the shareholders of the company.

Shareholdings of the group’s major shareholders will be diluted due to the enlarged issued and paid-up capital to approximately 114.8 million units from 109.8 million units prior to the exercise.

For example, holdings of substantial shareholder Cheong Chan Holdings Sdn Bhd will be diluted to 19.4% from 20.3%, according to the announcement.

Subsequently, the group’s net assets per share will also be diluted from 93 sen per share as at Jan 31 to 57 sen after the completion of the proposed private placement and other corporate exercises.

Total borrowings will rise to RM38.6 million from RM24.6 million as at Jan 31. Hence, its gearing ratio will also increase to 0.59 times against 0.25 times.


This article appeared in The Edge Financial Daily, November 18, 2011.



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KLCI falls for the fourth day as regional markets slide

KUALA LUMPUR (Nov 18): The FBM KLCI extended its losses for the fourth day running on Friday, Nov 18, in line with the slump at key regional markets following the sharp overnight fall at Wall Street.

Asian shares fell for a fourth day in a row and the dollar firmed on Friday as Europe's funding difficulties intensified, with Spanish borrowing costs hitting an unsustainable level and premiums for dollar funds rising further, according to Reuters.

In a sign global funding strains may spread to Asia, benchmark three-month euroyen interest rates futures fell to an eight-month low on Friday on concerns that tightness in dollar money markets may prompt non-Japanese banks to raise yen at a higher rate, it said.

The FBM KLCI fell 1.67 points to 1,463.80 at mid-morning, weighed by losses at select blue chips.

Losers edged gainers by 266 to 135, while 190 counters traded unchanged. Volume was 374.82 million shares valued at RM186.88 million.

At the regional markets, South Korea’s Kospi slumped 2.25% to 1,834.50, Hong Kong’s Hang Seng Index lost 1.91% to 18,457.43, Taiwan’s Taiex fell 1.48% to 7,278.12, Japan’s Nikkei 225 lost 1.29% to 8,370.12, Singapore’s Straits Times Index was down 1.10% to 2,747.68 while the Shanghai Composite Index shed 0.81% to 2,443.14.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to on Nov 18 clients said that due to US markets’ very poor tone last night, there could be another downward day for the local index.

He advised investors to trade with a short-term time frame locally, adding that profit-taking and liquidation would take place ahead of the weekend.

“It is unwise to join the recent penny stock activity (eg Harvest with its suspension, designation and limit-down and SYF with its large cumulative 2 days’ price and percentage drop) as these stocks do not have any fundamentals and the companies are loss-making.

“Sell these stocks swiftly if their trends turn down violently,” he said.

Among the decliners at mid-morning, PPB fell 18 sen to RM16.62, HLFG lost 14 sen to RM11.42, Public Bank 10 sen to RM12.58, KYM, Hong Leong Bank and TDM eight sen each to RM1.66, RM10.48 and RM3.28, UMW seven sen to RM6.53 while CBIP and Petronas Chemicals fell six sen each to RM3.90 and RM6.19.

Compugates was the most actively traded counter with 30.8 million shares done. The stock was unchanged at 8 sen.

Other actives included Frontken, Envair, DPS Resources, SAAG, Fastrak, Extol and SYF Resources.

Gainers at mid-morning included BAT, Fima Corp, DiGi, TSH Resources, MAHB, Proton, Harvest Court and GAB.



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KYM Hldgs slides on private placement plan

KYM Holdings Bhd, a Malaysian investment group, fell in Kuala Lumpur trading after announcing plans for a private placement, which would dilute earnings. The stock dropped 1.2 per cent to RM1.72 at 9:15 a.m. local time, set for its biggest drop since Nov. 10. -- Bloomberg



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