MMHE gains on Maybank IB Research upgrade

KUALA LUMPUR (May 10): Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) shares rose on Thursday after Maybank IB Research upgraded the stock to a Buy with a target price of RM5.70 and said the company's 1Q12 results 2 were on track (25% of Maybank IB's full-year forecast).

MMHE added three sen to RM4.91 in the morning session on Thursday with 486,500 shares traded.

In a note Thursday, the research house said MMHE's yard space had expanded and order book momentum is set to soar in 2H12.

"The improving outlook, coupled with a 44% fall in share price from its peak in 2011, makes MMHE's valuations much more attractive now, in our view.

"MMHE is a direct proxy to Petronas' domestic E&P programs," it said.



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Maybank IB Research upgrades MMHE to Buy, target price RM5.70

KUALA LUMPUR (May 10): Maybank IB Research has upgraded Malaysia Marine and Heavy Engineering Holdings Bhd to a Buy with a target price of RM5.70 and said the company's 1Q12 results 2 were on track (25% of Maybank IB's full-year forecast).

In a note Thursday, the research house said MMHE's yard space had expanded and order book momentum is set to soar in 2H12.

"The improving outlook, coupled with a 44% fall in share price from its peak in 2011, makes MMHE's valuations much more attractive now, in our view.

"MMHE is a direct proxy to PETRONAS' domestic E&P programs," it said.



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Stocks to Watch Southern Steel, Sunway, TRC Synergy, Malayan Flour Mills, KKB Engineering, Sime Darby, MMHE

KUALA LUMPUR (May 10): Investor sentiment at Bursa Malaysia on Thursday may remain weak in line with the gloomy sentiment at most global markets, as political uncertainties in Greece and the rising costs of fixing Spain's banks ignited worries that the eurozone's debt crisis was worsening.

The concerns over Europe added to worries about the impact of softer growth in the US on the global economic outlook, causing a broad retreat from risky assets with world shares falling, oil prices down for a sixth straight session and the commodity-linked Australian dollar hitting new lows, according to Reuters.

The market's immediate attention was on Athens where efforts to form a government were expected to fail, putting its ability to meet the terms of its bailout deal in doubt and raising the possibility of Greece being forced out of the euro, it said.

Among the stocks that could be in focus on Thursday are SOUTHERN STEEL BHD [], Sunway Bhd, TRC SYNERGY BHD [], MALAYAN FLOUR MILLS BHD [], KKB ENGINEERING BHD [], SIME DARBY BHD [] and Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE).

Southern Steel has entered into a joint venture (JV) agreement with Belgium-based NV Bekaert SA (NV BK) to form a JV company in Singapore to manufacture specified steel wires in the Asean region. It said in a filing on on Wednesday that it would hold 45% in the JV, with NV BK holding the remaining 55%.

Sunway Bhd's unit Sunway CONSTRUCTION [] Sdn Bhd and TRC Synergy Bhd's subsidiary Trans Resources Corporation Sdn Bhd were among the companies that secured four additional construction packages worth RM3.22 billion for the Sungai Buloh-Kajang MRT.

Sunway Construction was awarded package V4 worth RM1.17 billion, for works between Section 17, Petaling Jaya and the Semantan Portal, while Trans Resources was awarded the Depot package worth RM458.98 million for works related to the Sungai Buloh depot in an open tender category.

Malayan Flour Mills is allocating some RM120 million to expand its flour factory and poultry operations in Malaysia over the next two years. Managing director Teh Wee Chye said the capital expenditure will be financed with the firm's internal funds and bank loans. It has also earmarked US$15 million (RM46.05 million) to expand its two flour factories in Vietnam, he said.

KKB Engineering's net profit for the first quarter ended Mar 31, 2012 fell 60.82% to RM7.71 million from RM19.68 million a year ago, due to the completion of major projects in 2011 and the absence of new projects for both its construction and steel fabrication divisions.

Sime Darby Property and CapitaMalls Asia Ltd will jointly develop a RM500 million shopping mall in Taman Melawati in the Klang Valley. In a joint statement Wednesday, the two companies said they had entered into a conditional agreement to form a 50:50 joint venture to develop the mall on a freehold site in Taman Melawati.

MMHE's net profit for the first quarter ended Mar 31, 2012 fell 39.16% to RM78.27 million from RM128.64 million a year ago, due to the completion of contracts under its engineering and construction arm as well as its marine conversion and repair arm.



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MMHE 1Q net profit falls 39.16% in 1Q12 to RM78.27m

KUALA LUMPUR (May 9): Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) net profit for the first quarter ended Mar 31, 2012 fell 39.16% to RM78.27 million from RM128.64 million a year ago due to the completion of contracts under its engineering and CONSTRUCTION [] arm as well as its marine conversion and repair arm.

In a statement on Bursa Malaysia on Wednesday, the group said its revenue also decreased 27.95% to RM665.27 million from RM923.29 million a year earlier.

Earnings per share were 4.90 sen compared to 8.00.

MHB attributed the lower earnings to the completion of its engineering, procurement, construction, installation and commissioning (EPCIC) contract in Turkmenistan and its progress on two conversion contracts as well as higher rigs and support vessel repair works secured during the quarter.



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KLCI falls as eurozone woes grip global markets

KUALA LUMPUR (May 9): The FBM KLCI fell on Wednesday as concerns over the economic and political direction of several eurozone countries kept regional and global investors on tenterhooks.

The FBM KLCI lost 5.70 points to close at 1,584.90, weighed down by losses at blue chips.

Losers outpaced gainers by 450 to 273, while 313 counters traded unchanged. Volume was 1.28 billion shares valued at RM1.42 billion.

Asian bourses were mired in the red as Greece struggled to form a government two days after an election, heightening the risk that a hard-won bailout deal could be scrapped, according to Reuters.

Meanwhile, European shares edged lower on Wednesday as a technical rebound from four-month lows was offset by falls among Spanish banks, which were dragged by fears they would be forced to raise money to cover their property assets, said Reuters.

Technical momentum was supportive after key indexes in the US and Europe closed above support levels on Tuesday, sending a bullish short-term signal despite still-depressed market sentiment as a political impasse in Greece threatened to deepen the eurozone crisis, it said.

At the regional markets, the Shanghai Composite Index lost 1.65% to 2,408.59, Japan's Nikkei 225 lost 1.49% to 9,045.06, Taiwan’s Taiex fell 0.93% to 7,475.71, South Korea’s Kospi lost 0.85% to 1,950.29, Hong Kong’s Hang Seng Index shed 0.75% to 20,330.64 and Singapore’s Straits Times Index fell 1.06% to 2,900.91.

On Bursa Malaysia, BAT fell 64 sen to RM55.04, Petronas Dagangan and HLFG lost 24 sen each to RM19.70 and RM11.94, MISC 13 sen to RM4.46, PPB, MMHE and Aeon 12 sen each to RM16.60, RM4.88 and RM9.75 respectively, MSM 11 sen to RM5.20, IJM Corp 10 sen to RM5.44 and BLD PLANTATION []s fell nine sen to RM8.81.

Naim Indah Corp was the most actively traded counter with 80.2 million shares done. The stock was unchanged at 49 sen.

Other actives included Ingenuity Solutions, Metronic, Permaju, Harvest Court, Focus, Ariantec, Astral Supreme and CBSA.

Gainers included Tahps, GCE, GAB, Panasonic, Nadayu, YHS, KGB, Ajinomoto, Tasek and Sunway.



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Market Commentary

The FBM KLCI index gained 11.69 points or 0.75% on Wednesday. The Finance Index increased 0.53% to 14082.29 points, the Properties Index up 0.18% to 1039.21 points and the Plantation Index rose 0.18% to 8611.44 points. The market traded within a range of 7.30 points between an intra-day high of 1575.71 and a low of 1568.41 during the session.

Actively traded stocks include NICORP, CSL, YTL, TIGER, HWGB, EURO, AXIATA, SIME, ASUPREM and SILVER. Trading volume increased to 1273.33 mil shares worth RM1844.76 mil as compared to Tuesday’s 1163.12 mil shares worth RM1471.04 mil.

Leading Movers were CIMB (+14 sen to RM7.40), TENAGA (+15 sen to RM6.47), AXIATA (+6 sen to RM5.12), PETGAS (+48 sen to RM16.98) and PETCHEM (+8 sen to RM6.78). Lagging Movers were DIGI (-5 sen to RM3.95), YTLPOWR (-2 sen to RM1.77), HLBANK (-4 sen to RM12.06) and MMHE (-1 sen to RM5.35). Market breadth was positive with 444 gainers as compared to 334 losers. -- JF Apex Securities Bhd



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CIMB Research has technical buy on MMHE at RM5.42

KUALA LUMPUR (March 12): CIMB Research has technical buy on Malaysia Marine and Heavy Engineering at RM5.42 at which it is trading at a FY13 price-to-earnings of 20.8 times and price-to-book value of 3.5 times.

It said on Monday the stock is penetrating the wedge resistance. If it succeeds, there is a good chance that prices may re-rate towards RM5.65 and RM5.78. Momentum should pick up once the candles swing past the 50-day SMA.

“The bullish divergence on the MACD indicator shows that selling pressure has tapered off. This, together with the rising RSI signal line, shows that the bulls are slowly making a comeback.

“As long as prices stay above the RM5.28 level, any pullback is an opportunity to accumulate,” CIMB Research said.



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Market Commentary

The FBM KLCI index lost 15.08 points or 0.95% on Wednesday. The Finance Index fell 0.82% to 14089.39 points, the Properties Index dropped 0.69% to 1050.54 points and the Plantation Index down 0.52% to 8600.14 points. The market traded within a range of 12.87 points between an intra-day high of 1585.30 and a low of 1572.43 during the session.

Actively traded stocks include NICORP, HWGB, SILVER, HWGB-WB, CSL, AMEDIA, ENVAIR, KEYWEST, GOCEAN and TECFAST. Trading volume increased to 1742.64 mil shares worth RM2030.26 mil as compared to Tuesday’s 1288.12 mil shares worth RM1792.17 mil.

Leading Movers were ARMADA (+3 sen to RM4.23), UMW (+3 sen to RM7.19), RHBCAP (+4 sen to RM7.76), PETDAG (+4 sen to RM18.50) and MMHE (+2 sen to RM5.32). Lagging Movers were SIME (-19 sen to RM9.80), CIMB (-11 sen to RM7.31), GENTING (-18 sen to RM10.74), MAYBANK (-8 sen to RM8.71) and YTL (-6 sen to RM1.69). Market breadth was negative with 283 gainers as compared to 476 losers. -- JF Apex Securities Bhd



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Flash: Petronas posts 3Q net profit of RM13.5 bn, dividends RM28 bn

KUALA LUMPUR (March 5): Petroliam Nasional Bhd posted net profit of RM13.542 billion for the third quarter ended Dec 31, 2011, down 36% from RM21.205 a year ago where there was a one-time gain from the sale of share in two units.

It said on Monday, its financial performance benefited from higher crude prices and improved sales volumes of most products.

It had proposed a tax exempt final dividend amounting to RM28.0 billion for the financial period ended Dec 31, 2011.

Commenting on the prices, it said the higher crude prices were driven by supply concerns arising from the geo-political crises in the Middle East and North Africa region. As a result, benchmark crude prices spiraled upwards with Dated Brent increasing by 26.4% and Tapis OSP by 33.2% on a year-on-year comparison.

Group revenue improved by RM18.0 billion or 29.9% to RM77.997 billion from RM60.041 billion due to higher realised prices of crude oil and condensates and other energy commodities.

“Profit and EBITDA (earnings before interest, tax, depreciation and amortization) decreased by RM8.2 billion and RM3.3 billion respectively as compared to the same quarter last year which were primarily contributed by the gain of RM9.3 billion from the initial public offerings of Petronas Chemicals Group Bhd and Malaysia Marine and Heavy Engineering Holdings Bhd recorded last year,” it said.

Petronas said that excluding the IPO gain, profit and EBITDA increased by RM1.1 billion and RM6.0 billion respectively due to improved margins.



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HDBSVR lowers MMHE target price to RM4.75

KUALA LUMPUR (Feb 22): HwangDBS Vickers Research (HDBSVR) said Malaysia Marine and Heavy Engineering Holdings Bhd’s (MMHE) earnings came in at RM46.4 million (down 42% on-quarter, down 65% on-year), taking 9MFY11 profit to RM205.6 million.

It said on Wednesday the earnings were slightly below its expectation but far below consensus’.

“4Q11 revenue was RM716.1 million (up 55% on-quarter, -46% on-year), while EBIT was RM52.9 million (-38% on-quarter, -53% on-year). EBIT margin normalised to 7.4% in the quarter (versus 18.3% in 3Q11 due to provision reversal).

“Also, contribution from its JV in Turkmenistan dived to RM1.1 million (from RM15.4 million in 3Q11) because the project there is in advanced stage,” it said.

HDBSVR said thanks to RM1.6 billion new contracts awarded by ExxonMobil in Oct-November 2011, MMHE’s order book increased to RM3.1 billion from RM1.9 billion in September 2011.

“Nevertheless, delays at Gumusut Kakap project could hinder its chances of securing more contracts. Meanwhile, the Sime Darby yard acquisition is delayed again, to 2Q12. Its yard optimisation program is also under review, which would have an impact on investment tax allowance. We have not imputed contribution from the new yard pending more details upon conclusion of the acquisition,” it said.

“Our TP is nudged down to RM4.75 (pegged to 22 times FY12 EPS) after our earnings downgrade for lower order win assumption. We remain cautious of MMHE’s earnings outlook given the slow order book replenishment. There is no sight of major order wins in the near term, as Malikai and Turkmenistan phase 2 projects may not materialise this year. MMHE’s valuation is expensive at 26 times FY12 EPS versus its Singaporean peers’ 14 times,” it said.



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Stocks to watch: AFG, Maybank, Tradewinds Plant, KrisAssets

KUALA LUMPUR (Feb 22): With the corporate results season for the October-December in full swing until Feb 29, they will provide the leads for investors.

So far the banks and PLANTATION []s have been reporting firm set of earnings, based on the recent results, though there had been some writebacks.

Among the stocks to watch are ALLIANCE FINANCIAL GROUP BHD [] (AFG), MALAYAN BANKING BHD [], Tradewinds Plantations Bhd and TH PLANTATIONS BHD [].

Also in focus could be QL RESOURCES BHD [], KRISASSETS HOLDINGS BHD [], Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE), Malaysia Airports Holdings Bhd (MAHB), TEBRAU TEGUH BHD [] and ENG TEKNOLOGI HOLDINGS BHD [].

AFG posted net profit of RM121.29 million in the third quarter ended Dec 31, 2011, up 9% from the RM111.26 million, underpinned by growth in interest income due to the expansion in loans.

Its revenue increased by 9.2% to RM311.43 million from RM284.98 million. Earnings per share were 7.90 sen compared with 7.30 sen.

AFG said for the nine months ended Dec 31, 2011, the earnings rose 14.6% to RM371.80 million from RM324.27 million while it recorded a 9% increase in revenue of RM935.80 million from RM858.18 million.

Maybank has proposed to establish a subordinated programme of up to RM7 billion in nominal value. The net proceeds from the issuance of the subordinated notes will be utilised to fund Maybank’s working capital, general banking and other corporate purposes.

Tradewinds Plantations’ earnings increased 17.5% to RM97.75 million in the fourth quarter ended Dec 31, 2011 from RM83.33 million a year ago, boosted by an increase in its palm products production.

Its revenue soared 174% to RM804.23 million from RM293.45 million.

For the year ended Dec 31, 2011, its net profit increased 79.9% to RM335.46 million from RM186.40 million. Revenue rose 86.8% to RM1.70 billion from RM909.13 million.

TH Plantations recorded a 11.3% fall in profits to RM37.71 million in the fourth quarter ended Dec 31, 2011 from RM42.52 million a year ago, due to maintenance carried out during the quarter.

Its revenue increased by 1.99% to RM130.09 million from RM128.53 million. It proposed dividend per share of 12.50 sen.

For the year ended Dec 31, 2011, net profit increased 39.5% to RM124.83 million from RM89.48 million. Revenue rose 18.8% to RM434.86 million to RM365.97 million.

QL Resources' net profit increased by 3.8% to RM34.42 million in the fourth quarter ended Dec 31, 2011 from RM33.14 million a year ago, due to increased sales in its marine product manufacturing arm, palm oil activities and livestock farming. Its revenue increased 10.6% to RM498.96 million from RM450.95 million a year ago.

KrisAssets said the market value of its two malls -- Mid Valley Megamall and The Gardens Mall in Kuala Lumpur – have been revalued at RM3.290 billion as at Dec 31, 2011. It said this was RM470 million above the valuation as at Sept 30 of RM2.82 billion.

MMHE’s earnings fell 65.4% to RM46.35 million in the third quarter ended Dec 31, 2011 from RM134.15 million a year ago. Its revenue declined 45.6% to RM716.15 million from RM1.316 billion a year ago.

For the nine months, its earnings fell 36.1% to RM205.60 million from RM322.11 million in the previous corresponding period. Its revenue declined 39.1% to RM2.137 billion from RM3.512 billion.

MAHB’s earnings were just up 0.8% to RM122.88 million in the fourth quarter ended Dec 31, 2011 from RM121.91 million a year ago. Its revenue increased by 2% to RM837.38 million from RM820.60 million.

For the financial year ended Dec 31, 2011, its earnings rose 26.6% to RM401.11 million from RM316.78 million. Its revenue increased 11.6% to RM2.754 billion from RM2.468 billion.

Tebrau Teguh reported net losses of RM1.13 million for the fourth quarter ended Dec 31, 2011 due to higher operating expenses. It was also in the red with net loss of RM212,000 a year ago.

For FY11, it was still profitable, with net profit of RM2.58 million, down by 29% from RM3.63 million in FY10. Revenue fell 37.3% to RM113.41 million from RM180.97 million.

Eng Teknologi was in the red for the fourth quarter ended Dec 31, 2011 and for the financial year with net losses of RM51.81 million, and RM42.90 million. The manufacturer of components for hard disk drives said it wasimpacted by the severe floods in Thailand last year.



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Malaysian Marine posts lower Q2 profit of RM46.4m

Malaysian Marine and Heavy Engineering Holdings Bhd, the rig-building arm of MISC Bhd, said second-quarter profit dropped to RM46.4 million from RM134.1 million a year earlier.

Revenue fell to RM716.1 million from RM1.3 billion a year ago, the company said in a Kuala Lumpur exchange filing. The drop was because it no longer recognised revenue from a project in Turkmenistan, the statement said. -- Bloomberg



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MMHE 3Q net profit dn 65.4% to RM46.35m on-yr, 9-month RM205.6m

KUALA LUMPUR (Feb 21): Malaysia Marine and Heavy Engineering Holdings Bhd’s earnings fell 65.4% to RM46.35 million in the third quarter ended Dec 31, 2011 from RM134.15 million a year ago.

It said on Tuesday its revenue declined 45.6% to RM716.15 million from RM1.316 billion a year ago. Its earnings per share were 2.90 sen compared with 8.80 sen.

MMHE’s board of directors recommended a final single tier dividend of 10 sen per share amounting to RM160.0 million.

Commenting on the results, it said revenue from its engineering and CONSTRUCTION [] division fell from RM1.269 billion to RM594.1 million mainly due to no further recognition of revenue from PCIC Turkmenistan Block 1, Phase 1 project in the quarter as compared to the corresponding quarter.

The project contract was novated to a jointly controlled entity, MMHE-TPGM Sdn Bhd with effect from Jan 1,2011.

As for the marine conversion and repair segment, revenue improved from RM46.3 million to RM132.1 million after MMHE secured two new conversion contracts, which started during the period and higher numbers of energy vessels repairs secured during the quarter.

The operating profit for the marine conversion and repair improved during the quarter amounting to RM16.1 million as compared to RM2.3 million in the corresponding quarter.

For the nine months, its earnings fell 36.1% to RM205.60 million from RM322.11 million in the previous corresponding period. Its revenue declined 39.1% to RM2.137 billion from RM3.512 billion.

The company had on March 2, 2011 announced the change of financial year end from March 31 to Dec 31. The first new financial year would end on Dec 31, 2011 with a shorter nine-month period from April 1, 2011 to Dec 31, 2011.



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Market Commentary

The FBM KLCI index gained 6.66 points or 0.43% on Friday. The Finance Index increased 0.66% to 13863.47 points, the Properties Index up 0.08% to 1046.78 points and the Plantation Index rose 0.30% to 8821.29 points. The market traded within a range of 6.24 points between an intra-day high of 1559.92 and a low of 1553.68 during the session.

Actively traded stocks include PDZ, COMPUGT, GPA, DIALOG-WA, NICORP, TIGER, EXTOL, PERISAI, GOCEAN and IPOWER. Trading volume increased to 2265.97 mil shares worth RM1941.98 mil as compared to Thursday’s 2185.22 mil shares worth RM1972.18 mil.

Leading Movers were TENAGA (+11 sen to RM6.11), MAYBANK (+6 sen to RM8.56), GENTING (+12 sen to RM10.64), SIME (+5 sen to RM9.59) and PBBANK (+6 sen to RM13.70). Lagging Movers were DIGI (-2 sen to RM4.02), MAXIS (-2 sen to RM5.75), GENM (-1 sen to RM3.95), PPB (-4 sen to RM17.66) and MMHE (-3 sen to RM5.41). Market breadth was positive with 511 gainers as compared to 304 losers. -- JF Apex Securities Bhd



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Market closes steadier, but down for the week

KUALA LUMPUR (Feb 17): Blue chips on Bursa Malaysia closed firmer on Friday, tracking the regional markets which posted gains of up to 1.6% as investors were somewhat upbeat that Greece had taken enough measures to ensure it would secure a second bailout.

The FBM KLCI closed up 6.66 points to 1,557.17, boosted by gains in Tenaga, Maybank and Genting. Turnover was 2.27 billion shares valued at RM1.94 billion. There were 511 gainers, 304 losers and 346 stocks unchanged.

All the key Asian markets posted gains. Japan’s Nikkei 225 rose 1.58% to 9,384.17, Hong Kong’s Hang Seng Index 1.01% to 21,491.62. Taiwan Taiex 0.32% to 7,894.36 and South Korea’s Kospi 1.30% to 2,023.47 while Singapore’s Straits Times Index edged up 0.79% to 3,000.59. The Shanghai Composite Index was a marginal 0.01% higher at 2,357.18 while the other China indices closed in the red.

Reuters reported optimism grew on Friday that Greece has finally done enough to secure a second bailout despite worsening relations with Germany, but doubts remained over lenders' demands for tighter supervision of how Athens will implement the deal.

Greek officials say they have done everything asked of them for euro zone finance ministers to sign off on the 130 billion euro (US$170 billion) rescue package on Monday -- a month before Athens needs the money to make 14.5 billion euros of debt repayments due on March 20 or go bankrupt.

At Bursa Malaysia, investors were happy to see the market closing higher after the pullback on Thursday. However, for the week, the KLCI lost 4.51 points down from 1,561.66 on Feb 10.

Analysts said the positive economic data from Bank Negara Malaysia on the economic growth in the fourth quarter of 2011 helped boost sentiment. The cautious outlook for 2012, as forecast by BNM, was expected.

Crude palm oil futures for third-month delivery rose RM54 to RM3,243 per tonne. The ringgit gained 0.0162 to 3.0430 to the US dollar.

Tenaga rose 11 sen to RM6.11, pushing the KLCI up 1.41 points. Maybank added six sen to RM8.56 and GENTING BHD [] 12 sen to RM10.64, nudging the index up by 1.06 points and 1.05 points.

HLFG rose 20 sen to RM11.74, Hong Leong Bank 12 sen to RM11.74, Public Bank six sen to RM13.70, AMMB four sen to RM6.14 and CIMB three sen to RM7.28.

Tasek was the top gainer, up 47 sen to RM8.47 after announcing its dividend payout. Petronas Dagangan rose 20 sen to RM18.02 and Petronas Gas 14 sen to RM16.50.

PDZ was the most active with 178.9 million shares done, adding two sen to 10.5 sen, GPA rose 1.5 sen tp 10.5 sen.

Perisai rose six sen to 98.5 sen. There were 50 million shares crossed in several off-market deals at an average price of 88 sen.

Among the decliners were DiGi, down eight sen to RM4.02, Maxis twos en tp RM5.75 and MMHE three sen to RM5.41.



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Tenaga, Sime, banks drag KLCI into the red as Greece woes persist

KUALA LUMPUR (Feb 16): Selling of Tenaga, Sime Darby and banking stocks dragged the FBM KLCI into the red at midday on Thursday, as investors turned cautious over the delay in the bailout for Greece.

At 12.30pm, the FBM KLCI fell 11.39 points or 0.73% to 1,549.91. Turnover was 1.16 billion shares valued at RM802.26 million. The broader market was weaker with 590 losers to 164 gainers and 285 stocks unchanged.

Reuters reported that another delay in cementing a crucial bailout for stricken Greece underscored how far Europe is from resolving a debt crisis that threatens the stability of the financial system.

A three-hour teleconference between euro zone finance ministers failed to resolve all the issues surrounding a second aid package for Athens, putting off any decision on the matter until Monday at the earliest.

Among the regional markets, Japan’s Nikkei 225 fell 1.4% to 9,258.94, Hong Kong’s Hang Seng Index 0.6% to 21,235.90, Shanghai’s Composite Index 0.18% to 2,362.46 while Taiwan’s Taiex lost 1.19% to 7,910.24 and South Korea’s Kospi 1.12% to 2,002.73. Singapore’s Straits Times shed 0.6% to 2,993.56.

The ringgit weakened against the US dollar to the lowest since Jan 31 at 3.0565 to the greenback. US light crude oil fell 28 cents to US$101.52.

Among the index-linked stocks, Tenaga fell 12 sen to RM6.01, dragging the KLCI down 1.54 points, Sime Darby 9.0 sen to RM9.52, pushing the index down by another 1.28 points.

Hong Leong Bank 14 sen to RM11.48, Public Bank fell 10 sen to RM13.66, CIMB six sen to RM7.24 and Maybank two sen to RM8.51.

Crude palm oil for third month futures fell RM19 to RM3,182 per tonne, which also weighed on PLANTATION []s, with KLK down 52 sen to RM24.86.

Petronas Dagangan lost 38 sen to RM17.84, Petronas Gas 34 sen to RM16.30 and MMHE 12 sen to RM5.45.

Naim Indah regained its footing to climb seven sen to 59 sen and it was the most active with 116.77 million shares done.

Dialog-WA jumped for the second day after it was listed, surging 30 sen to 64.5 sen. Cypark added seven sen to RM1.70. The company expects its solar farming segment to be the main contributor to its profit when its 80ha integrated renewable energy plant becomes operational next month.

Amway’s strong earnings and dividend plan sent the share price up 11 sen to RM9.91.



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Sarawak gas finds to spur new investments

Oil and gas sector
Maintain overweight: Petroliam Nasional Bhd (Petronas) has made two new big gas discoveries offshore Sarawak with estimated recoverable reserves of almost four trillion standard cubic feet (TSCF), an estimated 4% of Malaysia’s current natural gas reserves of 14.8 billion barrels of oil equivalent. The gas finds were at the Kasawari and NC8SW fields in Block SK316 off Sarawak, through exploration wells Kasawari-1 and NC8SW-1. These are the latest wells drilled in Block SK316 which are part of Petronas’ strategy to intensify domestic exploration and prolong its reserves.

The Kasawari-1 well was drilled last November and gas was found in the carbonate reservoirs. The well, drilled to a depth of 3,196m, penetrated about 1,000m of gas column — the longest drilled section of gas column in the country. The well test produced 29 million standard cu ft per day of gas. Preliminary assessments conducted early this month indicate that the gas-in-place for the Kasawari field is over five TSCF, with an estimated recoverable hydrocarbon resource of just over three TSCF — which is one of the largest non-associated gas fields in Malaysia. The NC8SW-1 well, located about 17km south of Kasawari, was drilled last September to a total depth of 3,853m. Gas was found in a 440m column in similar carbonate reservoirs, which are estimated to have recoverable reserves of over 450 billion standard cu ft. Petronas said the NC8SW-1 well discovered potential oil play which requires further evaluation to determine its commercial viability.

While these new gas finds would need another three to five years of analysis and interpretation of seismic data before progressing to the initial development phase, they continue to fuel excitement for oil and gas investments in Sarawak, a major gas producer and exporter with the country’s only liquefied natural gas plant in Bintulu.

Over the next 12 months, we expect Shell’s massive enhanced oil recovery projects in the Baram Delta off Sarawak to gain prominence. These projects involve the Bokor, Bakau, Baram, Baronia, Betty, Fairley Baram, Siwa, Tukau and West Lutong oilfields.

But over the next six months, we expect fresh news from Petronas’ RM15 billion fast-tracked programme to develop gas reserves from a cluster of fields in the North Malay basin, off Peninsular Malaysia. This project is expected to commence production towards the end of 2013. Initial beneficiaries of the North Malay basin development will be fabricators such as Malaysian Marine and Heavy Engineering Holdings Bhd (MMHE), Kencana Petroleum Bhd, SapuraCrest Petroliam Bhd and Dialog Group Bhd. UMW’s oil and gas division, which provides oil country tubular goods and pipelines and rig services, and Wah Seong Corp Bhd for gas compression modules and pipe-coating services, could likewise benefit.

We remain excited about the sector given Petronas’ massive capital expenditure programme of RM300 billion over the next five years involving enhanced oil recovery, marginal fields and cluster/deepwater developments towards maintaining its oil and gas production. We remain “overweight” on the sector and retain our “buy” calls on MMHE, Bumi Armada Bhd, Dialog, SapuraCrest, Kencana Petroleum and Petronas Gas Bhd. — AmResearch, Feb 14


This article appeared in The Edge Financial Daily, February 15, 2012.



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KLCI dips, banks sees mild profit taking

KUALA LUMPUR (Feb 13): Blue chips were marginally lower at midday on Monday, with some mild profit taking seen on bank stocks and Sime Darby, while key regional markets notches small gains after the Greek government approved an austerity bill to secure a second bailout.

At 12.30pm, the FBM KLCI was down 1.79 points to 1,559.87. During the past two weeks, the KLCI had gained nearly 40 points from the 1,521 on Jan 31.

Turnover was 1.62 billion shares valued at RM952.19 million. Decliners led advancers 402 to 350 while 321 stocks were unchanged.

Japan’s Nikkei 225 rose 0.85% to 9,022.78, Hong Kong’s Hang Seng Index added 0.7% to 10,928.50, Shanghai’s Composite Index 0.14% to 2,355.19, Taiwan’s Taiex 0.43% to 7,896.11, South Korea’s Kospi 0.50% to 2,003.73 and Singapore’s Straits Times Index 0.31% to 2,969.1.

US light crude oil rose 93 cents to US$99.60 while Brent crude rose more than US$1 to US$118.35.

At Bursa Malaysia, among the index-linked stocks CIMB fell six sen to RM7.15, Maybank five sen to RM8.47, Public Bank four sen to RM13.96. Sime Darby lost three sen to RM9.64 and Air Asia three sen also to RM3.75.

Crude palm oil third-month futures rose RM28 to RM3,158. OSK Research said with inventory remaining above 2.0 million tonnes and CPO price being range bound, the rally has been driven by liquidity rather than fundamentals.

Far East was the top loser, down 24 sen to RM7.06, United PLANTATION []s 18 sen to RM21.82 and Chin Tek 10 sen to RM8.90.

Naim Indah Corp fell 7.5 sen to 59.5 sen with 125 million shares when it resumed trading after announcing a corporate exercise last Friday. The recent rally was seen as too steep, as the share price was chased up speculators.

Compugates was the most active with 211.66 million shares done, up 1.5 sen to 13.5 sen.

Tebrau Teguh added 5.5 sen to 94.5 sen as investors believed the company was more valuable than the 76 sen offer price made by Iskandar Waterfront Holdings Bhd (IWH).

BAT was the top gainer, adding 66 sen to RM50.96, Genting 20 sen to RM10.50 and MBSB 16 sen to RM2.39. IOI Corp added one sen to RM5.48 and MMHE two sen to RM5.60.



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Penny stocks see heavy trade, broader market firm

KUALA LUMPUR (Feb 10): The two-day rally on Bursa Malaysia took a breather on Friday, with the FBM KLCI slightly in the red but the broader market displayed some resilience, with heavy trading in penny stocks.

At 12.30pm, the KLCI was down 1.96 points or 0.13% to 1,563.36, which was line with the cautious key regional markets. Turnover was 1.96 billion shares valued at RM1.30 billion. Advancers led decliners 503 to 297 while 344 stocks were unchanged.

All the major regional markets fell, except Shanghai’s Composite Index which edged up 0.36% to 2,357.98.

Japan’s Nikkei 225fell 0.22% to 8,982, Hong Kong’s Hang Seng Index 0.58% to 10,888.60, Taiwan’s Taiex 0.6% to 7,863.49, South Korea’s Kospi 0.88% to 1,996.87 and Singapore’s Straits Times Index 0.27% to 2,973.

US light crude oil fell 33 cents to US$99.51. Brent crude slipped from a six-month high towards US$118 a barrel.

Market sentiment could have been affected by investors’ concerned about prospects of restructuring Greece's debt and global lenders demanded more steps even after it struck a long-awaited deal on fiscal reforms.

Reuters reported that Greek political leaders clinched a deal on severe austerity measures and reforms indispensable for a second international bailout in two years, but the country's lenders sought a parliamentary seal of approval before providing any aid.

At Bursa Malaysia, traders were quick to cash out the Selangor related counters after the rally petered out in the absence of any significant news. Puncak Niaga fell 17 sen to RM1.72 with 15.63 million shares done, KPS 11 sen to RM1.28, KHSB nine sen to 69 sen and JAKS 5.5 sen lower at 66.5 sen.

Among the index-linked stocks, Genting fell 16 sen to RM10.30, IOI Corp 12 sen to RM5.48, Tenaga 11 sen to RM6.19, HL Bank eight sen to RM11.50 and Sime Darby two sen to RM9.68.

The top 10 most active counters were penny stocks. Metronic Global was the most active, with 82.74 million shares done, up 0.5 sen to eight sen.

Maybank rose four sen to RM8.51, Public Bank two sen to RM13.98 while MMHE was the top performer among the index stocks, registering a 13 sen gain to RM5.50.



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Blue chips close slightly lower, Tenaga, MMHE weigh

KUALA LUMPUR (Jan 18): Blue chips closed slightly lower on Wednesday, weighed down by declines in heavyweights Tenaga and MMHE but the broader market was mixed, with strong trading interest in small caps and penny stocks.

At 5pm, the FBM KLCI was down 1.98 points to 1,517.38. Turnover was 1.49 billion shares valued at RM1.60 billion. There were 368 gainers, 364 losers and 359 stocks unchanged.

Among key regional markets, Japan’s Nikkei 225 rose 0.99% to 8,550.58, Hong Kong’s Hang Seng Index added 0.30% at 19,686.92 but South Korea’s Kospi shed 0.02% to 1,892.39 and Singapore’s Straits Times Index fell 0.79% to 2,793.53.

European markets were in the red as investors were worried about Greek bond talks and government debt sales, a day after economic data had raised hopes the global economy wouldn't slowdown as much as feared.

Reuters reported international creditors are set to meet the Greek government to resume the talks that broke down last week over the interest rate Greece will offer on new bonds and a plan to enforce investor losses. A deal with the private sector is vital to cash-strapped Athens if it is to avoid going bankrupt when 14.5 billion euros ($18.5 billion) of bond redemptions fall due in late March.

At Bursa Malaysia, the KLCI was trading between 1,513 and 1,519 and managed to close off its intra-day low of 1,513.

A fund manager said the markets had priced in the eurozone crisis and he expected to see more upside for the markets, albeit intermittent swings in trading conditions depending on the newsflow.

At Bursa Malaysia, he said there was some profit taking ahead of the Chinese New Year next week, especially on stocks which had run-up recently. He expected the market to hold steady at the current levels.

Among the heavyweights, Tenaga fell 13 sen to RM6.10 after reporting net losses in the first quarter ended Nov 30, 2011. MMHE shed 12 sen to RM5.32 on concerns about the uncertainties about its projects and delays.

Petronas Dagangan and Petronas Gas fell 10 sen each to RM17.40 and RM15.28.

EUPE was the top loser, down 14.5 sen to 48.5 sen, Ibraco 14 sen lower at RM1.30 and Ireka 12.5 sen to 66.5 sen in thin trade.

Poultry stock DBE was the most active with 138.96 million shares done, adding two sen to 11 sen while its warrants rose 1.5 sen to 6.5 sen.

BIMB, seen as the only Syriah-compliant banking stock, jumped 22 sen to RM2.24 in heavy trade with 10.21 million units done. BIMB-CB added 1.5 sen to 9.0 sen and BIMB-CC six sen to 17.5 sen. The two warrants accounted for 100 million units transacted.



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