CIMB Research has technical sell on MHC Plantations at RM1.73

KUALA LUMPUR (March 29): CIMB Equities Research has a technical sell on MHC PLANTATION []s at RM1.73, at which it is trading at a price-to-book value of 0.5 times.

It said on Wednesday the rally from its September 2011 low may have exhausted.

CIMB Research pointed out the bulls are beginning to retreat after prices hit a high of RM1.84. Another black candle on Wednesday should send prices towards its next supports at RM1.66 and RM1.54.

“Indicators are showing signs of exhaustion. MACD signal line is losing pace while RSI has also hooked downward.

“Use any rebound towards RM1.78-1.84 to unload on strength. Unless prices swing past the RM1.85 level, the odds now favour the bears,” it said.



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KLCI closes marginally higher, stays above 1,580-level

KUALA LUMPUR (March 22): the FBM KLCI closed marginally higher on Thursday in line with the mostly mixed regional markets.

However, European stocks slipped on Thursday, keeping the benchmark world equity index below recent eight-month highs, while the dollar was weaker against the yen as data showing China's factory activity shrank renewed concerns about global growth, according to Reuters.

The HSBC flash PMI, the earliest indicator of China's industrial activity, fell to 48.1 in March from February's four-month high of 49.6, with new orders sinking to a four-month low, it said.

It raises the prospect for a further monetary policy easing to help underpin growth, although lingering inflation risks put Beijing's policymakers in a dilemma, it said.

The 30-stock FBM KLCI closed 0.71 of a point higher at 1,583.24, lifted by select blue chips including KLK and Tenaga. Losers overtook gainers by 379 to 363 whie 360 counters traded unchanged. Volume was 2.86 billion shares valued at RM1.5 billion.

At the regional markets, the Shanghai composite Index shed 0.10% to 2,375.77, Singapore’s Straits Times Indexwas down 0.74% to 2,983.48 and South Korea’s Kospi was down 0.05% to 2,026.12.

Elsewhere, Hong Kong’s Hang Seng Index gained 0.22% to 20,901.56, Japan’s Nikkei 225 added 0.40% to 10,127.08 and Taiwan’s Taiex rose 0.98% to 8,059.94.

KLK was the top gainer and added 40 sen to RM23.82, Takaful rose 23 sen to RM2.65, Cybertowers and Jaya Tiasa up 19 sen each to 54 en and RM7.69, MHC PLANTATION []s up 17 sen to RM1.77, Southern Acids 15 sen to RM2.50, Sunchirin and Tenaga 13 sen each to RM1.55 and RM6.71, while Litrak gained 11 sen to RM4.10.

Metronic was the most actively traded counter with 347.7 million shares done. The stock was unchanged at 25.5 sen.

Other actives included Utopia, Ingenuity Solutions, Ariantec, Flonic, DBE Gurney, Hubline and Naim Indah Corp.

Decliners included Lafarge Malayan Cement, PPB, United Plantations, Nestle, Hightec, Kulim, RHB Capital and IOI Corp.



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KLCI reverses earlier losses at mid-morning

KUALA LUMPUR (March 22): The FBM KLCI reversed its early losses and moved into positive territory at mid-morning on Thursday, lifted by gains in Petronas-linked counters and select blue chips including Genting.

At 10.21am, the KLCI was up 2.84 points to 1,585.37. Gainers led losers by 251 to 188, while 287 counters were traded unchanged. Volume was 1.04 billion shares valued at RM280.35 million.

Maybank IB Research said the KLCI’s resistance areas of 1,577 and 1,594 would cap market gains, whilst the weaker support areas are at 1,562 and 1,575.

“Due to the US markets’ weaker tone last night, we could be in for a range-bound day,” it said, adding that any low-volume and price rebound on Thursday could be a great selling opportunity.

Among the gainers, BAT rose 40 sen to RM53.60, Petronas Gas up 20 sen to RM16.78, Jaya Tiasa 15 sen to RM7.65, KLK 14 sen to RM23.56 and MHC 11 sen to RM1.71.

Hong Leong Bank rose 10 sen to RM12.22 while Uzma, Petronas Dagangan, KESM and Genting advanced eight sen each to RM2.08, RM18.50, RM2.11 an RM10.78 respectively.

Utopia was the most active with 204.91 million shares done. The stock added 2.5 sen to 10 sen.

Other actives included Mtronic, Ingenuity Solutions, Ariantec, DBE Gurney, Key West and Palette.

Decliners included Sarawak Oil Palms, SMPC, Aeon Credit, KrisAsssets, Auto Ventures, Bernas, IOI Corp and BHIC.



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Stocks to watch: BToto, Lysaght, Bumi Armada, MHC Plantations

KUALA LUMPUR (March 21) : As the FBM KLCI rebounded from the red to close in positive territory on Wednesday, it will be interesting to watch if the index will be able to sustain its gains on Thursday.

The KLCI rose 0.31% or 4.91 points to close at 1,582.53 points on Wednesday.

Analysts said they remain cautious on the trading dynamics of the KLCI following gains from its low last September. This has prompted anticipation of profit-taking by institutional and retail investors ahead of the country’s general election against a lack of domestic catalyst.

The expectation is that the KLCI may consolidate in the near term and the spotlight will now be directed at companies with smaller market capitalisation.

Stocks to watch on Thursday include BERJAYA SPORTS TOTO BHD [] Lysaght Galvanised Steel Bhd, TEXCHEM RESOURCES BHD [], Bumi Armada Bhd, MHC PLANTATION []S BHD [] and DAYA MATERIALS BHD [].

BToto posted net profit of RM112.74 million in the third quarter ended Jan 31, 2012, a slight decline of 1.8% from the RM114.87 million a year ago. Its revenue rose 15.5% to RM983.46 million from RM851.16 million. Earnings per share were 8.44 sen compared with 8.59 sen. It declared a third interim single tier exempt dividend of 6.0 sen per share which will go ex on April 9.

For the nine-month period ended Jan 31, 2012, its earnings rose 27.3% to RM310.52 million from RM243.91 million in the previous corresponding period. Revenue rose at a slower pace of 6.3% to RM2.691 billion from RM2.532 billion.

Lysaght clinched four subcontracts with a collective value of RM22.75 million from Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd, The contracts involve the supply, fabrication, delivery and installation of antenna poles, Lysaght said.

Shares of Lysaght which was untraded on Wednesday, last closed at RM2.08 last Friday (March 16).

Oil and gas support services firm Daya Materials and Italy-based joint venture partner Magneti Marelli which is a part of the Fiat Group, has secured a RM62 million contract from the Penang Development Corp to build a factory and offices at Penang’s Batu Kawan Industrial Park.

Daya Materials rose one sen to 19.5 sen on Wednesday.

Diversified entity Texchem Resources Bhd is selling a controlling 70% stake in two units to Japan-based Fumakilla Ltd for US$42.4 million. The subsidiaries are Technopia Sdn Bhd, a manufacturer of insecticides, and PT Technopia Jakarta, a mosquito coil producer.

Trading of Texchem shares which was suspended on Wednesday will resume trading on Thursday. The stock was last traded at 59 sen on Tuesday (March 20)

Oil and gas support services firm Bumi Armada has secured a RM115 million contract from Brazil national oil company Petróleo Brasileiro S.A. for the supply of a platform supply vessel to the South American entity. Bumi Armada added three sen to RM4.32 on Wednesday.

MHC plans to undertake a bonus issue 56.16 million new shares and a similar number of warrants. Both exercises will undertakenon the basis two bonus units (new shares and warrants) for every five existing shares held.

MHC shares was down one sen to RM1.60.



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MHC Plantations proposes 2-for-5 bonus issue, warrants

KUALA LUMPUR (March 21): MHC PLANTATION []S BHD [] has proposed a bonus issue of 56.15 million new shares on the basis of two bonus shares for every five existing shares held.

It said on Wednesday, the corporate exercise would also include a bonus issue of 56.15 million warrants on the basis of two free warrants for every five existing shares held.

MHC said based on the paid-up share capital of MHC as at March 19 of RM140.38 million comprising 140.38 million MHC shares, a total of 56.15 million bonus shares may be issued.

It added that 56.15 million free warrants would be issued pursuant to the proposed bonus issue of warrants.

The indicative exercise price of the warrants was assumed at RM1.33 per warrant, a premium of 19.8% to the theoretical ex-bonus price of RM1.11 per MHC share up to an including March 19 of RM1.55 per share.



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MHC Plantations 3Q earnings down 32.4% to RM8.5m

KUALA LUMPUR: MHC PLANTATION []S BHD []'s earnings fell 32.4% to RM8.53 million in the third quarter ended Sept 30, 2011 from RM12.62 million a year ago, dragged by the recognition of negative goodwill of RM6.23 million.

It said on Thursday, Oct 27, the negative goodwill arose from an acquisition of additional shares in an associate a year ago. However, revenue rose 10% to RM8.59 million from RM7.82 million. Earnings per share were 6.05 sen compared with 8.97 sen.

MHC said the higher revenue was due to the higher prices of fresh fruit bunches (FFB). It noted that due to the cyclical nature of the business, third quarter was normally the peak production season.

Profitability in 3Q11 was slightly lower compared to 2Q11 due to a decrease in FFB prices by 11% despite a higher yield of 12%, it added.

For the first nine months ended Sept 30, 2011, net profit increased 33.07% to RM25.09 million from RM18.85 million a year ago. Revenue rose 36.78% to RM26.29 million from RM19.22 million.