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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KLCI ends lower, but hangs on above 1,590-level

KUALA LUMPUR (April 20): The FBM KLCI extended its losses to close lower on Friday, as external factors weighed on investor sentiment and dragged stocks lower.

The index fell 4.77 points to close at 1,591.85, weighed by losses including at Petronas Chemicals, Genting, RHB Capital and CIMB.

Market breadth was negative with 364 losers, 317 gainers and 361 counters unchanged. Volume was 1.63 billion shares valued at RM1.48 billion.

Meanwhile, Asian shares fell and commodity-linked currencies such as the Australian dollar slipped on Friday after disappointing U.S. economic data stirred doubts about the strength of the recovery, according to Reuters.

Renewed worries on the euro zone debt crisis also kept riskier assets under pressure, as a better-than-feared Spanish bond auction failed to allay concerns that Spain may follow Greece, Ireland and Portugal in needing an international bailout, it said.

A weekend featuring a potentially rocky meeting of the International Monetary Fund, which is seeking to boost its funds to help contain Europe's problems, and the first round of a French presidential election have heightened the nervousness, said Reuters.

At the regional markets, Japan’s Nikkei 225 was down 0.28% to 9,561.23, Taiwan’s taiex lost 1.52% to 7,507.15, South Korea’s Kospi fell 1.26% to 1,974.65 and Singapore’s Straits Times Index xx

Meanwhile, the Shanghai Composite Index rose 1.19% to 2,406.86 and Hong Kong’s Hang Seng Index edged up 0.07% to 21,010.64.

On Bursa Malaysia, Aeon fell 19 sen to RM9.41, Manulife and Petronas Chemicals fell 14 sen each to RM3.22 and RM6.56, MISC down 13 sen to RM5.03, Genting and Bursa fell 12 sen each to RM10.80 and RM6.85, while SAM Engineering, Litrak, Lafarge Malayan Cement and Kian Joo fell 10 sen each to RM3.55, RM4, RM7.21 and RM2.04 respectively.

Ariantec was the most actievely traded counter with 436.8 million shares done. The stock rose 4.5 sen to 22 sen.

Other actives included Metronic, Focus, Naim indah Corp, CSL, Astral Supreme, AWC and SuperComNet.

Gainers included BAT, Dutch Lady, Aeon Credit, KLK, Jaya Tiasa, Panasonic, Country View, Carlsberg, CBIP and GAB.



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KLCI succumbs to global economic woes

KUALA LUMPUR (APRIL 17): The FBM KLCI succumbed to the mounting concerns over the euro zone sovereign debt crisis that kept most regional markets in negative territory on Tuesday.

The FBM KLCI closed 1.32 points lower at 1,596.19.

Gainers edged losers by 355 to 341, while 351 counters traded unchanged. Volume was 2.08 billion shares valued at RM1.63 billion.

Hong Kong shares fell on Tuesday, dragged lower by large-cap bank and materials shares as nervous investors awaited a bond auction which could see a further jump in Spain's borrowing costs, threatening a new crisis in the euro zone, according to Reuters.

On the mainland, the Shanghai Composite fell 0.94% to 2,334.98, while the CSI300 index was off 1.3 percent, it said.

Elsewhere, Hong Kong’s Hang Seng Index fell 0.23% tyo 20,562.31, Japan’s Nikkei 225 shed 0.06% to 9,464.71, Taiwan’s taiex lost 1.86% to 7,585.87, South Korea’s Kospi down 0.37% to 1,985.30 and Singapore’s Straits Times Index shed 0.18% to 2,986.59.

Among the decliners on Bursa Malaysia, Dutch Lady fell 56 sen to RM34.60, Warisan down 30 sen to RM2.33, Tahps fell 27 sen to RM4.53, BAT lost 22 sen to RM54.46, SMPC 21 sen to RM1.12, MISC 13 sen to RM5.17, while KLuang and Ta Ann fell 12 sen each to RM2.68 and RM6.57.

Ariantec Global was the most actively traded counter with 515.66 million shares done. The stock jumped 8.5 sen to 20 sen. It had earlier been issued an unusual market activity (UMA) query by Bursa Malaysia Securities Bhd to Ariantec Global Bhd over the sharp rise in the price and high volume in the company’s shares recently.

Other actives included Metronic, Focus, Astral Supreme, Ingenuity Solutions, SuperComNet, CSL, Naim Indah Corp and Winsun.

Meanwhile, the gainers on Tuesday included SAM Engineering, Carlsberg, CSL, Subur Tiasa, Y&G, Golsta, Southern Acids, Rapid, Manulife and The Store.



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Stocks to Watch Petra, MAS, MISC

KUALA LUMPUR (Apr 3): There is still room for the FBM KLCI to trade higher, according to analysts, as technical trading dynamics improve in anticipation of more positive updates by the government ahead of Malaysia’s general election.

Analysts said the 30-stock index has breached the 1,600 point level; hence, the possibility that the FBM KLCI will reach the next hurdle of 1,620 points.

The benchmark added 2.85 points to close at a fresh all-time high of 1,606.63 points on Tuesday.

Stocks to watch on Wednesday include PETRA ENERGY BHD [], Y.S.P.SOUTHEAST ASIA HOLDING [] Bhd, SARAWAK OIL PALMS BHD [] (SOPB), MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and MISC BHD [].

Petra Energy has signed a memorandum of understanding with Baker Hughes (M) Sdn Bhd to undertake oil and gas projects in Malaysia.

Y.S.P. plans to reward shareholders with a single-tier first and final dividend of six sen per ordinary share for financial year ended Dec 31, 2011.

SOPB is diversifying into the shipping business following a joint venture (JV) agreement with Shin Yang Shipping Corp Bhd.

MAS has called off its plans to set up a short-haul regional premium airline, and will instead provide such services via an operating unit under the company.

Malaysian Rating Corp Bhd (MARC) has revised the outlook of MISC’s Islamic bonds to negative from stable. The revision has taken into account the shipping firm’s weaker financials, according to MARC.



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KLCI edges up mid-day, lifted by select blue chips

KUALA LUMPUR (March 29): The FBM KLCI edged up at the mid-day break on Thursday, lifted by select blue chips including CIMB, Genting-linked counters, Petronas Chemicals and BAT.

At 12.30pm, the KLCI was up 0.41% to 1,584.16. Gainers trailed losers by 197 to 388, while 318 counters were traded unchanged. Volume was 819.28 million shares valued at RM554.24 million.

Asian shares fell for a second successive day on Thursday as concerns about growth prospects in the world's two largest economies, the United States and China, prompted investors to trim their risk exposure ahead of the end of the quarter, according to Reuters.

Hong Kong’s Hang Seng Index lost 1.2% to 20,634.30, Taiwan’s Taiex fell 2.67% to 7,823.78, South Korea’s Kospi fell 1.06% to 2,010.26, Japan’s Nikkei 225 was down 0.82% to 10,099.30, the Shanghai Composite Index 0.58% to 2,271.60 and Singapore’s Straits Times Index 0.28% to 3,007.44.

Among the gainers on Bursa Malaysia, Dutch Lady was the top gainer, up RM2.62 to RM37.50.

BAT added 18 sen to RM56.52, Aeon 14 sen to RM9.35, Toyo Ink 14 sen to RM9.35, MISC 12 sen to RM5.32 and Shell 10 sen to RM10.20. Southern Acids, Kulim, Ta Ann and Crescesndo added nine sen each to RM2.39, RM4.30, RM6.18 and RM1.90 respectively.

CIMB rose seven sen to RM7.57, while Petronas Chemicals, Genting and Genting PLANTATION []s added two sen each to RM6.70, RM11.12 and RM3.89 respectively.

Naim Indah Corp was the most actively traded counter with 56.7 million shares done. The stock added half a sen to 48.5 sen.

Other actives included Ariantec, Focus, SuperComnet, Metronic, Key West and Iris Corp.

Among the decliners were Shangri-la, BLD Plantations, GAB, Sungei Bagan, RHB Capital, SMPC, PPB, SBC Corp and Kris Assets.



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KLCI slips at mid-day break in line with regional markets

KUALA LUMPUR (March 28): The FBM KLCI slipped at the mid-day break on Wednesday in line with the overall weaker sentiment at key regional markets, after US stocks retreated from near four-year peaks on Tuesday.

Asian shares drifted lower on Wednesday as investors waited for more clues on the state of the U.S. economy, after hopes for further stimulus from the U.S. Federal Reserve strengthened risk appetite and lifted prices the previous session, according to Reuters.

Te FBM KLCI shed 0.91 of a point to 1,587.19, weighed by losses at select blue chips including BAT, MISC and Tenaga.

Gainers trailed losers by 173 to 383, while 296 counters traded unchanged. Volume was 637.64 million shares valued at RM341.29 million.

The ringgit weakened 0.20% to 3.0635 versus the US dollar; crude palm oil futures for the third month delivery rose RM 9 per tonne to RM3,490, crude oil fell 57 cents per barrel to US$106.76, while gold lost 88 cents an ounce to US$1,679.00.

Among the decliners in the morning session, United PLANTATION []s fell 16 sen to RM24.72, BAT down 10 sen to RM54, Parkson and MISC down eight sen each to RM5.42 and RM5.21, WCT and Tenaga lost seven each to RM2.37 and RM6.42, while Box-pak, Batu Kawan and Ivory fell six sen each to RM2.18, RM18.62 and 65 sen respectively.

Shares of Supercomnet Technologies Bhd extended their losses in active trade for the second day on Wednesday after the proposed disposal of an 18.66% stake by several major shareholders fell through.

Supercomnet fell 13 sen to 23 sen with 85.09 million shares traded.

Other actives included Utopia, Metronic, Ariantec, Silver Bird, and Tiger Synergy.

Meanwhile, the gainers included Dutch Lady, Takaful, Bintulu Port, TDM, Widetech, Alliaaz, KLK< KFCH and Kulim.



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CIMB Research has technical buy on MISC at RM5.42

KUALA LUMPUR (March 23): CIMB Equities Research has a technical buy on MISC at RM5.42 at which it is trading at FY13 price-to-earnings of 15.9 times and price-to-book value of 1.2 times.

It said on Friday MISC appears to have completed the final leg of its long term bullish wedge pattern. The pick up in trading volume at the low on March 14 possibly suggest a selling climax. Two days later, trading more than doubled on the positive day.

“Indicators are showing signs of selling exhaustion. The triple bullish divergence on its MACD and RSI would support the selling climax view,” it said.

CIMB Research said any weakness should be viewed as a chance to buy as long as prices stay above the RM5.01 low. This bounce could reach as high as RM6.20.



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KLCI starts week on positive tone, select blue chips support

KUALA LUMPUR (March 19): The FBM KLCI started the week on a positive tone and closed slightly higher on Monday, lifted by gains of select blue chips including Petronas Gas, Tenaga and MISC.

The FBM KLCI closed 2.2 points up at 1,573.60. Turnover was 1.80 billion shares valued at RM1.51 billion. Declining stocks led advancers 434 to 319 while 329 counters were unchanged.

Asian shares edged higher and the dollar was steady against the yen on Monday after the U.S. market hit an almost four-year high last week and with higher European stocks reflecting signs of growing stability in the euro zone, according to Reuters.

The Shanghai Composite Index rose 0.23% to 2,410.18, Japan’s Nikkei 225 edged up 0.12% to 10,141.99, South Korea’s Kospi was up 0.62% to 2,0467.00. However, Hong Kong’s Hang Seng Index fell 0.92% to 21,121.67, and Taiwan’s Taiex shed 0.14% to 8,043.92 and Singapore’s Straits Times Index was down 0.68% to 2,990.09.

Ariantec Global was the most actively traded counter with 235.2 million shares done. The stock gained four sen to 13.5 sen.

Other actives included Metronic Global, Pan Malaysian Industries, Naim Indah Corp, IFCA MSC, Focus Point, Asia-Bio, Carotech and Hibiscus warrants.

Among the gainers were Dutch Lady, up 52 sen to RM30.50, Petronas Gas 40 sen to RM16.40, MISC 21 sen to RM5.36, HL Bank 18 sen to RM12 and Bumi Armada 16 sen to RM4.28.

Rock Chemical Industries rose 31 sen to RM2.06 or four sen below the RM2.10 takeover offer by Mega First Corp Bhd.

Bumi Armada added 16 sen to RM4.28. CIMB Equities Research raised the target price for Bumi Armada to RM4.80 from RM4.12.

It valued Bumi Armada at 18.2 times CY13 price-to-earnings, which is a 40% premium over its target market price range which was recently raised from 12.6 times to 13 times.

However, EPMB fell the most as investors were disappointed over its proposed acquisition of the 26km Maju Expressway (MEX) from Maju Holdings Sdn Bhd which was viewed as pricey.

Under the deal, the auto parts maker will pay RM1.7 billion for the highway concessionaire which included the debts. The MEX links the city centre in Jalan Tun Razak here to Putrajaya. OSK Research said the acquisition at RM1.7 billion would include assuming debts totaling RM550 million.

“Besides, the high interest cost will erode earnings in the immediate term. Given its excellent run but this pricey acquisition, we downgrade EPMB to a Neutral from a Buy, slashing its fair value from RM1.38 to RM1.15,” it said.

Other decliners were Cybertowers, down 14 sen to 31.5 sen, Top Glove 13 sen to RM4.83 while MAHB, Maybank and Mudajaya shed nine sen each to RM5.53, RM8.72 and RM3.01.



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MISC near RM5 level on weak outlook

KUALA LUMPUR (March 15): Shares of MISC BHD [] fell on Thursday as the outlook was weighed down by concerns about more losses from its tanker division.

At 2.48pm, MISC was down 14 sen to RM5.04 with 1.549 million shares done.

The FBM KLCI was just 0.67 of a point higher at 1,576.38. Turnover was 752.91 million shares valued at RM780.31 million. There were 233 gainers, 390 losers and 342 stocks unchanged.

CIMB Equities Research had in a Feb 23 report lowered the target price for MISC to RM4.80 from RM5.80 then. It had lowered its target price-to-book value from 1.2 times to 1.0 times which was closer to its peers.

The research house said for 2012-13, it expected losses from the tanker division to expand further as the 10 very large crude carriers that are currently on profitable term charters will expire in the next one to two years. When renewed, these vessels are likely to turn in losses.

“On a more positive note, 2012 will see the two converted Modular Capture Vessels commence their 20-year contract in the United States and two DP aframax tankers begin their 15-year charter for Petrobras. These long-term charters will provide a fixed stream of income for MISC,” said CIMB Research.



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KLCI slips into the red at closing

KUALA LUMPUR (March 13): The FBM KLCI slipped into negative territory in late trade on Tuesday, weighed by losses at select blue chips including banking stocks, MISC and Tenaga as the pullback from Monday did not seem to be over as investors turned cautious.

The FBM KLCI closed 0.73 of a point lower at 1,564.02. Losers beat gainers by 469 to 288, while 329 counters traded unchanged. Volume was 1.16 billion shares valued at RM1.47 billion.

At the regional markets, the Shanghai Composite Index fell 0.19% to 2,434.86. However, Hong Kong’s Hang Seng Index rose 0.97% to 21,339.70, Japan’s Nikkei 225 added 0.09% to 9,899.08, Singapore’s Straits Times Index 0.89% to 2,988.57, South Korea’s Kospi 1.13% to 2,025.04 and Taiwan’s Taiex 1.31% higher at 8,031,51.

European shares gained on Tuesday on hopes German and U.S. data will support rising hopes of an economic recovery ahead of a monetary policy statement by the Federal Reserve, according to Reuters.

Among the decliners on Bursa Malaysia, United PLANTATION []s fell 16 sen to RM24.82, MISC, Tasek, Advanced Packaging, lost 15 sen each to RM5.10, RM8.60 and RM1.30 while Tenaga was down 13 sen to RM6.32.

BLD Plantations and Panasonic lost 12 sen each to RM9.18 and RM22.08, while Padini and Oriental Holdings fell 11 sen each to RM1.45 and RM6.13.

Among banking stocks, Public Bank fell eight sen to RM13.66, BIMB down six sen to RM2.27, Hong Leong Bank four sen to RM12.10, CIMB three sen to RM7.26 and RHB Capital one sen to RM7.79.

Naim Indah Corp was the most active with 176.5 million shares done. The stock fell four sen to 78.5 sen.

Other actives included IFCA MSC, Takaso, Winsun, YTL, HWGB, Silver Bird, and XDL.

Meanwhile, gainers included BAT, Sin Heng Chan, Euro Holdings, TSH, Petronas Chemicals, Tradewinds Plantations and Manulife.



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Stocks to watch: Pantech, MISC, EngTek, Johore Tin, MAHB

KUALA LUMPUR (March 9): Malaysian stocks could take the cue from positive sentiment across global markets on Friday as investors pinned their hopes that Greece’s sovereign debt woes will be contained. Markets could also find support from the anticipation of better employment numbers in the US.

Private holders of Greek government bonds have until Thursday night (March 8) to voluntarily swap their bonds for new ones. The swap is vital to help Greece to obtain bailout funds, without which the country may default on its debt obligations this month.

Reuters reported that as of Wednesday, major banks and pension funds, accounting some 40% of Greece's outstanding bonds, has participated the in the swap, raising hopes that the country could avert a default. US policymakers are expected to announce on Friday, a rise of 210,000 jobs in the country’s non-farm payrolls. This could boost sentiment among Asian exporting nations.

Japan stole the limelight on Thursday when it announced that its gross domestic product contracted by an annualized 0.4%, less than the 2.3% contraction estimated earlier.

Key regional markets racked up gains of up to more than 2% on Thursday, as investors’ sentiment was boosted by hopes that Greece could avert a default and positive news on the US economy.

However, the FBM KLCI lagged the regional markets and managed to close up only 3.53 points or 0.22% to 1,578.36, after falling 15.08 points – the worst loss for this year – on Wednesday

Stocks to watch on Friday include PANTECH GROUP HOLDINGS BHD [], MISC BHD [], ENG TEKNOLOGI HOLDINGS BHD [], JOHORE TIN BHD [], and Malaysia Airports Holdings Bhd (MAHB)

Pantech, a pipes, fittings and flow controls solutions provider, has acquired the entire stake in UK-based Nautic Steels (Holdings) Ltd for GBP9.5 million or RM45.46 million. Pantech said on Thursday the acquisition will help the company expand its geographical presence and product range. Pantech shares rose 1.5 sen to close at 54 sen.

Moody's Investors Service had on Thursday downgraded credit ratings of MISC Bhd to Baa2 from Baa1. The outlook on the ratings remains negative. According to Moody’s, the downgrade reflects MISC’s weaker earnings amid excess capacity which could stifle the shipping firm’s profitability.

Moody’s is also mindful of MISC’s substantial capital needs requiring additional debt funding, which will lead to higher debt leverage and negative cash flow in the short to medium term. MISC shares closed five sen down to RM5.32

Meanwhile, founders and major shareholders of Eng Teknologi Holdings Bhd who are in the midst of privatising the hard disk drive component maker, say they are still in talks with financiers on the funding dynamics for the acquisition, and that the outcome could result in a lower offer price for the proposed takeover. Eng Teknologi finished at RM1.78, down one sen.

Meanwhile, OSK Research said Johore Tin shares are trading at attractive valuations with a low market capitalisation of RM75.6 million, hence, the possibility of the company being an acquisition target. OSK maintained its buy call for Johore Tin with a fair value of RM1.51. Johore Tin added six sen to RM1.14.

Malaysia Airports Holdings Bhd (MAHB) has fixed the price of its recently announced private placement of up to110 million new shares at RM5.60. This translates into gross proceeds of RM616 million, MAHB said MAHB shares declined three sen to RM5.62.



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Moody’s downgrades MISC’s ratings, outlook negative

KUALA LUMPUR (March 8): Moody's Investors Service downgraded the senior unsecured issuer and debt ratings of MISC BHD [] to Baa2 from Baa1. The outlook on the ratings remains negative.

It said on Thursday the rating action reflects a weaker than expected performance for the nine months ended December 2011, higher-than-tolerance leverage, and Moody's view that the company's cash flows are unlikely to materially improve over next 12 to 18 months given the weak industry outlook.

“The outlook on the ratings remains negative, reflecting Moody's concerns about a substantial funding gap for the year 2012, which if funded by debt may result in a further increase in leverage,” it said.

A Moody's vice president and senior analyst Vikas Halan said MISC’s operating performance was particularly weak in its petroleum and chemical shipping segments, both of which reported operating losses higher than expectations.

“Overcapacity in both petroleum and chemical segments has resulted in lower freight rates in the spot markets. This, combined with high fuel costs, have resulted in lower margins for the period. We do not expect the situation to improve materially in 2012,” he said.

Halan added MISC’s operating lease adjusted debt/ annualised EBITDA was at 7.8 times as of Dec 31, 2011, which was well beyond the ratings agency’s tolerance level for its ratings.

“The exit the from liner business announced in November 2011 will cut losses in that segment and will improve overall EBITDA. However, the company's committed capex of nearly a US$1.0 billion in 2012 will limit its ability to improve its credit metrics,” he said.

Moody’s said MISC's liquidity was weak. Although it has large cash balance of RM4.2 billion but it also has committed capital expenditure of RM3.2 billion and over RM5.9 billion of debt maturing in the current year.

Moody's expects MISC to continue to have access to external funding given its past track record and both direct and indirect support from Petrliam Nasional Bhd.

The ratings agency also said if there was a protracted disruption in company's ability to fund itself, albeit unlikely, would result in further pressure on the ratings.

MISC's Baa2 ratings reflects both the strong support provided by its parent, Petronas (A1/Stable) and its standalone rating of now Ba2, which was lowered from Ba1.

The stand-alone rating continues to reflect: (1) the company's ability to secure vessel contracts by aligning its business development with its parent Petronas; (2) the diversified nature of its fleet and its leading market position in LNG transportation, which provides stable income; and (3) the term contracts that provide nearly half of its revenues from shipping segments and offers some protection against the cyclicality in freight rates.

However, these strengths are counter-balanced by: (1) excess global capacity in the liner, petroleum, and chemical transportation sectors, which could pressure the company's freight rates and profit margins; and (2) substantial capital expenditures requiring additional debt funding, which will result in higher debt leverage and negative cash flow in the short to medium term.



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KLCI falls the most in 2012

KUALA LUMPUR (March 7): Blue chips closed lower on Wednesday, with the FBM KLCI among the biggest losers among the key regional markets as it fell the most so far this year on uncertainties whether Greece could secure enough support for its debt revamp.

At the close, the KLCI was down 15.08 points to 1,574.83, which could derail the recent rally which saw the 30-stock index poised to hit the all-time high of 1,597 in July last year.

Turnover was 1.74 billion shares valued at RM2.03 billion. However, the broader market did show some improvement with losers beating gainers 476 to 283 while 314 stocks were unchanged.

Reuters reported a clutch of Greek pension funds and some foreign investors are holding back on a bond swap deal which would enable Greece to meet a debt repayment on March 20, sparking concerns about a chaotic default if participation is low. Greek private creditors have until late Thursday to say whether they will take part.

Key regional markets fell, with the Nikkei 225 down 0.64% to 9,576.06, the Hang Seng Index 0.86% to 20,627.70, Shanghai Composite Index 0.65% to 2,394.79, Taiwan’s Taiex 0.44% to 7,903.08, the Kospi 0.91% tp 1,982.15 and Singapore’s Straits Times Index 0.58% to 2,915.03.

As for Bursa Malaysia, dealers said the pullback was expected as the KLCI was running counter to the key regional markets on Tuesday which fell up to 2%.

They said there was some trading activity in lower liners and penny stocks but this did not have much bearing on the market’s direction.

They also saw no reason for Naim Indah Corp to jump 13.5 sen to 65.5 sen in the absence of any positive fresh news.

Sime Darby fell the most, down 19 sen to RM9.80 and dragging the KLCI down 2.70 points. CIMB lost 11 sen to RM7.31, Genting 18 sen to RM10.74 and Maybank eight sen to RM8.71, pushing the 30-stock index down by a total of 4.93 points.

BAT was the top loser, down 56 sen to RM51.96, HLFG 40 sen to RNM12.10, Batu Kawan 24 sen to RM18.70, MISC 23 sen to RM5.38 and Oriental 21 sen to RM6.28 and Genting PLANTATION []s 20 sen to RM9.29.

Dijaya Corp fell 18 sen to RM1.49 and the warrants 8.5 sen to 54.5 sen.



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Regional markets in the red, KLCI dn nearly 13 pts

KUALA LUMPUR (March 7): All key regional market fell in the morning session on Wednesday, extending their losses from the previous day on renewed uncertainty over Greece's bailout and mounting worries about slowing global economies.

At 12.30pm, the FBM KLCI staged a correction, falling 12.98 points or 0.82% to 1,576.93. Turnover was 941.31 million shares valued at RM939.97 million. Losers beat gainers 515 to 158 while 262 counters were unchanged.

Japan’s Nikkei 225 lost 0.81% to 9,559.45, Hong Kong’s Hang Seng Index fell 0.75% to 20,649.46, Taiwan’s Taiex 0.37% to 7,908.40, South Korea’s Kospi 0.81% to 1,984.25 and Singapore’s Straits Times Index 0.58% to 2,914.97.

US light crude oil rose 43 cents to US$105.13 while crude palm oil futures fell RM9 to RM3,233 per tonne. The ringgit weakened to RM3.0288 against the US dollar.

BIMB Securities Research said it had expected the overnight fall on Wall Street to cause some negative knee-jerk reactions “but (we) see this as a very good opportunity to accumulate on weakness”.

Dealers said retail participation in the market had been low, with traders punting on lower liners and speculative counters. They added local funds were mostly the bigger players in the trading of blue chips and big cap stocks.

CIMB was the biggest drag on the KLCI. It fell 11 sen to RM7.31, pushing the index down by 1.94 points.

HLFG fell the most, down 40 sen to RM12.10, Genting PLANTATION []s 20 sen to RM9.29, MISC 20 sen to RM5.40, Genting 18 sen to RM10.74 and PPB 14 sen to RM16.72.

Dijaya fell 12 sen to RM1.55 and the warrants five sen to 58 sen in active trade, but they were off their intra-morning lows.

Naim Indah was the most active with 204.60 million shares done, up 10.5 sen to 62.5 sen, bucking the weaker market. Silver Bird added five sen to 23.5 sen.

Among the gainers were Ta Ann, up nine sen to RM5.76 and Esso seven sen to RM3.69. Advanced Packaging rose 15 sen to RM1.40 and Iretex 13 sen to RM1.10.



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MISC falls after 3Q net loss of RM1.74 bn, RHB Research has FV RM5.70

KUALA LUMPUR (Feb 23): Shares of MISC BHD [] fell to a low of RM5.68 on Thursday after it reported net loss of RM1.74 billion in the third quarter ended Dec 31, 2011.

At 10.15am, it was down 10 sen to RM5.70. There were 99,400 shares done.

The FBM KLCI was just 0.25 of a point down at 1,560.27. Turnover was 484.02 million shares valued at RM320.93 million. Losers beat gainers two to one with 345 declining stocks compared with 177 advancers.

On Wednesday, MISC attributed the losses in 3QFY11 due to recognition of one-off provisions totalling RM1.45 billion. This was in stark contrast to the net profit of RM1.38 billion a year ago

For the nine-month period, MISC recorded a net loss of RM1.481 billion due to the recognition of one-off provisions totalling RM1.452 billion following its recent decision to exit from the liner business.

RHB Research said the shipping sector that has yet to fully recover from the previous global economic downturn in 2008-2009 is staring at the possibility of another prolonged downturn.

The crux of the segment’s problem has always been over-investment in capacity during good times in the mid-2000s. Now with the growth in demand for shipping services coming to a halt, the research house expected rates to deteriorate further.

“However, to a certain extent, MISC’s earnings will be cushioned with recurring income from its LNG division, as well as high earnings growth at its offshore business and MMHE.

“Indicative fair value is cut by 7% from RM6.15 to RM5.70 based on ‘sum of parts’, having updated MISC’s cash balance and our indicative fair value for MMHE,” it said.



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MISC slips on RM1.74b quarterly loss

MISC Bhd, an owner-operator of liquefied natural gas tankers, fell 1.7 per cent to RM5.70 as of 9:50 a.m. in Kuala Lumpur, headed for its lowest close since Jan. 3.

The company reported a quarterly loss of RM1.74 billion compared with a profit of RM1.38 billion a year earlier, due to provisions from its decision to exit the liner business, it said in an exchange filing. -- Bloomberg



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Market opens on cautious note, MISC, AirAsia down

KUALA LUMPUR (Feb 23): Blue chips opened weaker on Thursday, in line with the cautious regional markets as investors worried about a global economic slowdown due tohigh oil prices and that that the Euro zone could slip into a recession.

At 9.12am, the FBM KLCI was down 3.01 points to 1,557.51. Turnover was 144.99 million shares valued at RM62.78 million. There were 102 gainers, 141 losers and 216 stocks unchanged.

Sentoria, which made its debut on the Main Board, fell 2.5 sen to 82.5 sen. Its offer price to the public was 85 sen while it had placed out shares at 87 sen.

Among the decliners were KL Kepong, falling for the third day after its dividend went ex on Tuesday. It lost 52 sen to RM23.12.

BAT fell 28 sen to RM52.48, Genting PLANTATION []s 23 sen to RM9.02 while Public Banj and HLFG shed six sen each to RM13.62 and RM11.70.

MISC fell 12 sen to RM5.68 after it suffered net loss of RM1.74 billion in the third quarter ended Dec 31, 2011 compared with net profit of RM1.38 billion a year ago due to recognition of one-off provisions totalling RM1.45 billion.

AirAsia gave up six sen to RM3.59 after its fourth quarter earnings fell 56.3% to RM135.66 million when compared with RM311.08 million a year ago as it was impacted by aircraft fuel expenses, which rose to RM475.07 million from RM292.44 million on-year.



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Stocks to watch: Sentoria, AirAsia, Hartalega, WCT, Kencana, TSH, MISC, KLK, Perisai

KUALA LUMPUR (Feb 23): Property developer Sentoria Group Bhd will be the stock to watch on Thursday, when it makes its debut on the Main Board of Bursa Malaysia.

The property developer is the first company to list in 2012.Its offer of 20 million new shares at an 85 sen each to the public was oversubscribed by 5.4 times.

RHB Research Institute had accorded a fair value of 92 sen based on a 30% discount to its sum-of-parts valuation.

Other stocks which could see trading interest following fresh corporate developments and financial results include AIRASIA BHD [], HARTALEGA HOLDINGS BHD [], WCT BHD [], KENCANA PETROLEUM BHD [], TSH RESOURCES BHD [], MISC BHD [], KUALA LUMPUR KEPONG BHD [] (KLK) and PERISAI PETROLEUM TEKNOLOGI [] Bhd and IJM CORPORATION BHD [].

AirAsia’searnings fell 56.3% to RM135.66 million in the fourth quarter ended Dec 31, 2011 when compared with RM311.08 million a year ago as it was impacted by aircraft fuel expenses, which rose to RM475.07 million from RM292.44 million on-year.

It recorded foreign exchange losses of RM137.38 million compared with forex gain of RM44.29 million a year ago.

For the financial year ended Dec 31, 2011, its net profit fell 46.8% to RM564.14 million from RM1.06 billion in FY10.

Nitrile latex glove maker Hartalega’s earnings rose 3% to RM50.70 million in the third quarter ended Dec 31, 2011 from RM49.20 million a year ago. For the nine months ended Dec 31, 2011, net profit increased 10% to RM151.60 million from RM137.76 million.

It proposed a bonus issue of up to 371.65 million 50 sen shares on a one-for-one basis and free warrants issue of up to 74.331 million free warrants on the basis of one free warrant for every five existing shares held on the entitlement date.

WCT secured a RM331 million contract for a mixed commercial project with a medical centre in Kota Kinabalu.

Kencana secured a RM101 million contract from Murphy Sarawak Oil Co. Ltd for two offshore platforms in Sarawak.

TSH Resources Bhd posted record net profit of RM120.54 million in the financial year ended Dec 31, 2011, an increase of 43% from the RM84.28 million a year ago and its expects the Indonesian oil palm estates to boost future earnings.

As for the fourth quarter ended Dec 31, 2011, net profit fell 39.8% to RM26.15 million from RM43.45 million. TSH said the reduction was primarily due to a foreign exchange loss of RM10.962 million and a RM7.291 million reduction in contributions from jointly controlled entities

MISC suffered net loss of RM1.74 billion in the third quarter ended Dec 31, 2011 compared with net profit of RM1.38 billion a year ago due to recognition of one-off provisions totalling RM1.45 billion.

For the nine-month period, MISC recorded a net loss of RM1.481 billion due to the recognition of one-off provisions totalling RM1.452 billion following its recent decision to exit from the liner business.

Kuala Lumpur Kepong recorded a 12.1% increase in earnings to RM340.98 million in the first quarter ended Dec 31, 2011, boosted mainly by its PLANTATION []s business, when compared with RM304.18 million a year ago.

Perisai’s net profits soared 106.8% to RM21.28 million for the financial year ended Dec 31, 2011 from RM10.25 million a year ago, boosted by profit contributed by the Intan Group, which it acquired in August last year. For the year ended Dec 31, 2011, its revenue was up 9.6% to RM82.41 million from RM75.21 million a year ago.

For the fourth quarter ended Dec 31, 2011, Perisai’s earnings 62.3% to RM11.21 million from RM6.93 million.

IJM Corporation’s earnings rose 5.7% to RM135.23 million in the third quarter ended Dec 31, 2011 from RM127.96 million a year ago. Its revenue chalked up 30.1% increase to RM1.172 billion from RM901.34 million. Earnings per share were 9.81 sen compared with 9.47 sen.

IJM Corp said for the nine-month period, its net profit was 1.1% higher at RM325.04 million from RM328.83 million. Its revenue rose at a stronger pace of 23.6% to RM3.303 billion from RM2.672 billion.



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MISC posts 4Q net loss of RM1.74 bn on one-off provisions of RM1.45 bn

KUALA LUMPUR (Feb 22): MISC BHD [] suffered net loss of RM1.74 billion in the third quarter ended Dec 31, 2011 compared with net profit of RM1.38 billion a year ago due to recognition of one-off provisions totalling RM1.45 billion.

It said on Wednesday the provisions were part of the group's planned exit from the liner business. The provisions included impairment of assets, withdrawal from trade alliances and termination of related services and operational contracts.

“Poor market conditions combined with slower trading activities in the shipping segments have led to additional impairment losses totalling RM260.0 million being recognised by the group for the quarter,” it said.

MISC said its revenue for the third quarter was RM2.878 billion, down 5.5% from RM3.045 billion a year ago. Loss per share was 39.10 sen compared with earnings per share of 30.90 sen.

“The decline in group revenue for the current quarter was mainly due to lower revenue in Liner business following withdrawal from a few trade services. Depressed aframax freight rates in petroleum business and novation of certain heavy engineering projects to a jointly controlled entity further contributed to the decrease in revenue,” it said.

For the nine-month period, MISC recorded a net loss of RM1.481 billion due to the recognition of one-off provisions totalling RM1.452 billion following its recent decision to exit from the liner business.

“Excluding liner provisions, the group also recognised RM287.2 million impairment losses on its vessels on the back of poor shipping market,” it said. Its revenue for the nine months fell 9.5% to RM8.506 billion from RM9.401 billion.



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Excitement abounds, stay in oil and gas

Oil and gas sector
Maintain overweight: Petroliam Nasional Bhd’s (Petronas) domestic activities are picking up, from first production systems to rejuvenation jobs. Platforms, chemicals and floating solutions are the essentials for development. Jobs will likely be spread out favouring a large group of local service providers such as Bumi Armada Bhd, M3Nergy Bhd, MISC Bhd, Ramunia Holdings Bhd, Tanjung Offshore Bhd and Deleum Bhd. We remain “overweight” on the sector.

Our recent fact-finding “coffee talk” round with oil and gas service providers revealed that a series of field developments will be rolled out this year. We have identified five projects revolving around the rejuvenation/enhanced oil recovery (EOR), early production system (EPS) and marginal to shallow water field projects. They are: (i) Petronas Carigali’s Angsi (EOR project off Peninsular Malaysia); (ii) Shell’s St Joseph (EOR project offshore Sabah); (iii) Carigali’s Tanjung Baram EPS; (iv) Hess’ Belud (Sabah’s shallow water field project); and (v) Hess’ Kamelia field.

This is a fast-track project. Petronas has set a target to hit first oil production by June 2013. It requires a vessel-based sea-water reverse osmosis (SWRO) plant (chemical floating production, storage and offloading [FPSO]) with the capacity to desalinate 150,000bpd of seawater to increase oil recovery rates up to 20%. US-based Water Standard won the oilfield desalination project and will likely partner an FPSO operator for this job. Conversion is expected to take 16 months to complete.



This project is similar to the Angsi field but on a smaller scale (30,000bpd desalination injection capability), and will use chemical alkaline surfactant polymer (ASP). Shell recently issued an invitation-to-bid (ITB) for the engineering, procurement, construction and commissioning (EPCC) job. Unlike the Angsi field, the main asset (vessel) will be owned by Shell. The winner of the EPCC job will jointly undertake the front-end engineering design (FEED) studies, choose and convert the tanker and earn project management fees, similar to Bumi Armada’s Sepat project.

Hess’ Belud field plan, meanwhile, calls for an FPSO and wellhead platform for the oil and gas complex on Block SB302 with first oil or gas production by 2014. The Kamelia project too requires an FPSO. Separately, the Tanjung Baram EPS project, awarded to a foreign party, is running into complications and will likely miss the first oil production target (1,000 to 3,000bpd) set for July 2012. A re-tender could occur should the issue remain unresolved.

We think Bumi Armada is the likeliest partner for Water Standard for the Angsi project. This would involve a chemical FPSO. For St Joseph, we gather that five bidders were invited (M3Nergy, Bumi Armada, Deleum, BW Offshore Sdn Bhd and Tanjung). Bids will close in February with an announcement in three months. Elsewhere, our ground checks suggest that M3Nergy’s odds of securing an FPSO contract are high; we think it could be for the Belud project. Also, market talk suggests that the MISC-Ramunia partnership is a frontrunner for an FPSO for the Kamelia field. — Maybank IB Research, Jan 27


This article appeared in The Edge Financial Daily, January 30, 2012.



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