MPI up 1% on dividends, OSK cuts earnings forecast and TP

KUALA LUMPUR (April 27) : MALAYSIAN PACIFIC INDUSTRIES [] Bhd (MPI) rose as much as 1% as investors bought the stock to capitalise on its dividends.

MPI shares added three sen to RM3 before trading lower at RM2.99 at lunch break with about 52,000 shares changing hands. The stock had risen despite a downward revision to the company’s earnings forecast and share price.

In a note, OSK Research Sdn Bhd said it has revised downwards its earnings forecast for MPI by RM30.2 million and RM1.2 million for financial years ending June 30, 2012 (FY12) and 2013 respectively. This takes into account MPI’s latest quarterly financials.

The earnings forecast revision has prompted OSK to lower its target price for MPI shares by 1.6% or six sen from RM3.70 to RM3.64 while maintaining its “trading buy” call for the stock.

MPI posted a net loss of RM7.43 million in the third quarter ended March 31, 2012 against a net profit of RM5.05 million a year earlier as revenue fell18% to RM275.76 million from RM334.82 million. The company said revenue fell as it registered lower sales in major markets including European and Asian countries apart from the US.

Cumulative nine-month net loss came to RM33.26 million against a net profit of RM56.18 million previously while revenue fell 19% to RM870.6 million from RM1.07 billion.MPI said it plans to reward shareholders with a second interim tax-exempt dividend of five sen a share for FY12.



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Stocks to Watch MAHB, TA Global, Maybank, Aliran Ihsan, MPI

KUALA LUMPUR (April 26): The Malaysian stock market may take the cue from domestic concerns ahead of the coming general election, as investors assess the impact of the much-anticipated Bersih 3.0 rally on Saturday.

Analysts said these local factors could have the upper hand in dictating the direction of the FBM KLCI, despite more optimistic sentiment from the global backdrop.

Trading on the local bourse was volatile on Thursday, as the benchmark erased gains to sink into the red before closing up with a 0.34-point gain to 1,579.69. That could be indicative of trading dynamics on Friday.

Stocks to watch on Friday are Malaysia Airports Holdings Bhd (MAHB), TA Global Bhd, MALAYAN BANKING BHD [] (Maybank), ALIRAN IHSAN RESOURCES BHD [], and MALAYSIAN PACIFIC INDUSTRIES [] Bhd (MPI).

Airport operator MAHB said first quarter (1Q) net profit rose 7% from a year earlier, as revenue growth mitigated the impact of higher operating expenses. MAHB said net profit came to RM102.73 million in the quarter ended March 31, 2012, against RM96.09 million previously. Revenue grew 6% to RM657.71 million from RM617.77 million.

TA Global, a property developer and investor, is acquiring the Movenpick Karon Beach Resort in Thailand from Saudi Arabia-based Kingdom Holding Co for US$90.21 million (RM276.94 million), a move which will see the acquirer making its initial venture into Thailand's hotel industry. TA Global said it is purchasing the entire stake in two wholly-owned units of Kingdom Holding — namely, Kingdom 5-KR-194 Ltd and Kingdom 5-KR-195 Ltd, under which the hospitality assets are held.

Maybank and water-treatment specialist Aliran Ihsan shares will trade ex-dividend on Friday. Maybank plans to reward shareholders with a final cash dividend of 36 sen a share, less 25% tax for the six-months ended Dec 31, 2011. Note that Maybank had changed its financial year end from June 30 to Dec 31 in July last year.

Aliran Ihsan plans to pay a single-tier first interim dividend of 8.5 sen a share for financial year ending Dec 31, 2012.

Semiconductor manufacturer MPI said it posted a net loss of RM7.43 million in the third quarter (3Q) ended March 31, 2012 against a net profit of RM5.05 million a year earlier, as revenue fell 18% to RM275.76 million from RM334.82 million. The company said revenue fell as the group registered lower sales in major markets — including European and Asian countries — apart from the US. MPI said it plans to reward shareholders with a second interim tax-exempt dividend of five sen a share for financial year ending June 30, 2012.



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MPI posts net loss RM7.43 million in 3Q

KUALA LUMPUR (APRIL 26): MALAYSIAN PACIFIC INDUSTRIES [] Bhd (MPI) posted a net loss of RM7.43 million for the third quarter ended March 31, 2012 compared to net profit RM5.05 million a year earlier, due mainly to drop in revenue.

The company said on Thursday that its revenue for the quarter fell 17.63% to RM275.76 million from RM334.82 million in 2011, attributing the drop to overall weak demand.

Loss per share was 3.83 sen compared to earnings per share of 2.61 sen a year earlier.

The company declared a second interim dividend of five sen per share tax exempt

For the nine months ended March, MPI posted nest loss RM33.26 million compared to net profit RM56.18 million in 2011, while revenue fell to RM870.60 million from RM1.07 billion.

Reviewing its performance, MPI said revenue by segments saw the European sector fell the most by 31% followed by Asia, down 13% and the US by 9%.

On its outlook, MPI said the business prospects would remain challenging across all segments for the financial year ending June 31, 2012.

“However, despite the uncertain macor-economic outlook, there are positive signs that demand is inceasing and that the industry is starting to recover,” it said.



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CIMB Research upgrades tech sector to Trading Buy

KUALA LUMPUR (March 30): CIMB Equities Research is upgrading the tech sector from Underperform to Trading Buy as sentiment is turning positive, helped by a better book-to-bill ratio.

In its outlook report issued on Friday, it said the sector was not an outright Overweight as 1Q12 may be a weak quarter, similar to 4Q11.

“In light of our recent semicon sector upgrade, we now have three Trading Buys(JCY, MPI, and Unisem) and two Neutral calls (Jobstreet and Uchi). We raise our target prices for JCY, MPI and Unisem but lower our target price for Jobstreet and Uchi. Our top picks are Unisem and JCY,” said CIMB Research.



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KLCI closes lower as Asian markets dip

KUALA LUMPUR (March 28): The FBM KLCI closed lower on Wednesday as Asian markets slipped into the red, led by the Shanghai Composite Index that fell more than 2.5%.

The FBM KLCI fell 4.35 points to close at 1,583.75. Market breadth was negative with losers beating gainers by 491 to 244, while 350 counters traded unchanged. Volume was 1.56 billion shares valued at RM1.31 billion.

Asian markets were mostly in the red, as Hong Kong and China shares ended lower on Wednesday, as weak corporate earnings reports increased worries over the domestic economy, according to Reuters.

At the regional markets, the Shanghai Composite Index lost 2.65% to 2,284.88, Hong Kong’s Hang Seng index fell 0.77% to 20,885.42, Japan’s Nikkei 225 was down 0.71% to 10,182.57, South Korea’s Kopsi fell 0.39% to 2,031.74 and Singapore’s Straits Times Index shed 0.10% to 3,015.98.

On Bursa Malaysia, Southern Acids was the top loser and fell 20 sen to RM2.30, Hartalega fell 15 sen to RM7.95, Petronas Gas 14 sen to RM16.76 and MPI, 13 sen to RM3.12.

Fima Corp, Y&G, Toyo Ink and Coastal Contracts lost 12 sen each to RM6.11, 58 sen, RM1.46 and RM1.98 respectively.

Shares of Supercomnet 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 15 sen to 21 sen with 110.9 million shares traded.

Other actives included Metronic, Utopia, Ariatec, IFCA MSC, Silver Bird, Ingenuity Solutions and Naim Indah Corp.

Gainers included Dutch Lady, BAT, Bintulu Port, Takaful, BLD PLANTATION []s, MAHB, Sungai Bagan, Manulife and SMPC.



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KLCI pares down gains at mid-day

KUALA LUMPUR (March 27): the FBM KLCI pared down some of its gains at the mid-day break on Tuesday while key regional markets mostly rebounded on the back of the firmer overnight close at Wall Street.

Asian stocks rebounded on Tuesday and the dollar struggled after Federal Reserve Chairman Ben Bernanke said ultra-loose monetary policy was still needed to reduce unemployment even though the U.S. economy has shown signs of improvement, according to Reuters.

Wall Street stocks had risen more than 1 percent on Bernanke's comments, which supported views that easy monetary policy would remain in place for some time and fanned expectations for more asset purchases by the U.S. central bank, it said.

The FBM KLCI was up 5.20 points to 1,588.18 at the mid-day break, lifted by gains at select blue chips. The index had earlier risen to its intra-morning high of 1,591.03.

Losers edged gainers by 334 to 311, while 333 counters traded unchanged. Volume was 1.09 billion shares valued at RM726.26 million.

The ringgit strengthened 0.33% to 3.0697 versus the US dollar; crude palm oil futures for the third month delivery rose RM3 per tonne to RM3,462, crude oil fell 28 cents par e barrel to US$106.75 and gold lost US$3.15 an ounce to US$1,686.93.

At the regional markets, Japan’s Nikkei 225 rose 1.56% to 10,174.10, Hong Kong’s Hang Seng Index gained 1.37% to 20,951.20, the Shanghai Composite Index edged up 0.20% to 2,355.29, Taiwan’s Taiex was up 0.42% to 8,001.40, South Korea’s Kospi rose 0.60% to 2,031.27 and Singapore’s Straits Times Index added 0.85% to 2,999.72.

On Bursa Malaysia, Dutch Lady rose 60 sen to RM32, F&N was up 28 sen to RM18.54, Petronas Dagangan gained 24 sen to RM18.72, HLFG 18 sen to RM12.30, Genting PLANTATION []s 16 sen to RM9.41, MPI 15 sen to RM3.28, Petronas Gas and KLK up 14 sen each to RM16.88 and RM24, Amway 11 sen to RM9.81 and Ekovest 10 sen to RM2.70.

Metronic was the most actively traded counter with 152.12 million shares done. The stock rose 2.5 sen to 23 sen.

Other actives included Ariantec, Supercomnet, Frontken, Oversea Enterprise, Focus, TMS, Edusopec and Flonic.

Decliners this morning included Nestle, Supercomnet, SMPC, NISC, Top Glove, Favelle Favco, Allianz, AirAsia and Kossan.



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KLCI rebounds at mid-morning

KUALA LUMPUR (March 27): The FBM KLCI rebounded at mid-morning on Tuesday, in line with the overnight gains at Wall Street and improved sentiment at the key regional markets.

At 10.05am, the FBM KLCI added 6.76 points to 1,589.74, lifted by gains at select blue chips including Petronas-linked stocks and index-linked PLANTATION [] counters.

Gainers led losers by 275 to 186, while 258 counters traded unchanged. Volume was 434.91 million shares valued at RM221.33 million.

Wall Street stock rose more than 1% on Monday, as Federal Reserve Chairman Ben Bernanke's comments supported views that easy monetary policy would remain in place for some time and fanned expectations for more asset purchases by the U.S. central bank, according to Reuters.

Asian stocks rebounded on Tuesday and the dollar eased after Federal Reserve Chairman Ben Bernanke said ultra-loose monetary policy was still needed to reduce unemployment even though the U.S. economy has shown signs of improvement, it said.

At the regional markets, Hong Kong’s Hang Seng Index rose 1.26% to 20,929.10, the Shanghai Composite Index added 0.42% to 2,360.44, Taiwan’s Taiex gained 0.30% to 7,991.17, South Korea’s Kospi rose 0.73% to 2,034.01 and Singapore’s Straits Times Index was up 0.67% to 2,994.38.

Meanwhile, Japan’s Nikkei 225 fell 1.69% to 10,187.40.

BIMB Securities Research in a note March 27 said Ben Bernanke’s encouraging statement on the US job market acted as a confidence booster that propped the Dow Jones Industrial Average 161 points higher to convincingly breach its resistances of 13,150 and 13,200.

Over in Europe, more commitment (if required) would be available by Eurozone policy makers enhanced equities participation with almost all closed on positive territory.

The research house said that regionally, most Asian bourses ended Monday’s session on a weaker note as the developments in the west were missed.

Domestically, the FBM KLCI finally corrected with a marginal 2.9 point dip to 1,583 after fighting really hard to stay above the 1,585 level, it said.

“Nonetheless, with the positives all round overnight, we would reckon this to sway trading on a more positive note and the index should trend between the 1,585/90 range.

“We noticed foreign buying was apparent again yesterday with a net participation of RM233 million pushing total inflow of foreign monies surpassing the RM4 billion mark year-to-date,” it said.

On Bursa Malaysia, Dutch lady was the top gainer and rose 46 sen to RM31.86, Petronas Dagangan was up 22 sen to RM18.70, Petronas Gas and F&N rose 14 sen each to RM16.88 and RM18.40, Ta Ann and MPI up 11 sen each to RM6.11 and RM3.24, while Hong Leong Industries, BAT, PPB and KLK gained 10 sen each to RM4.17, RM54.10, RM16.74 and RM23.96 respectively.

Oversea Enterprise was the most actively trade counter with 25.18 million shares done. The stock rose six sen to 20.5 sen.

Other actives included Supercomnet, TMS, Eduspec, Iris Corp, Carotech and Flonic.

Meanwhile, the decliners included Supercomnet, Hartalega, MSM, CHHB, AirAsia, SMPC, PUC, Favelle Favco and Chin Well.



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Stocks to watch: Mah Sing, Malaysia Pacific Corp, Adventa, BLand

KUALA LUMPUR (March 26): Malaysian stocks may continue to find support from local institutional investors on Tuesday as pre-election sentiment dominate the domestic backdrop against global economic growth concerns

Analysts said there are growing concerns on the sustainability of major economies including the the US and China, sentiment from which, have the ability to influence the direction of financial markets.

“Technically, the current rising wedge (in the FBM KLCI) already implies bearish connotations and will be confirmed upon a decisive breakout,” TA Securities Holdings Bhd said on Monday.

The research house said while the KLCI could advance, downside risk to the stock market barometer is on the rise.

The 30-stock KLCI erased its earlier gains to finish at 1,582.98, down 0.18% or 2.85 points on Monday

Stocks worth noting on Tuesday are MAH SING GROUP BHD [], MALAYSIA PACIFIC CORP BHD [] (MPCorp), ADVENTA BHD [] and BERJAYA LAND BHD [].

Other stocks are UNISEM (M) BHD [], MALAYSIAN PACIFIC INDUSTRIES [] Bhd (MPI), Supercomnet Technologies Bhd, Xidelang Holdings Ltd, and CB INDUSTRIAL PRODUCT HOLDING [] Bhd.

Mah Sing has proposed a commercial property project in Kota Kinabalu’s central business district with a combined gross development value of RM830 million.

Meanwhile Amanah Raya Development Sdn Bhd is selling its entire 22% syake of Lakehill Resort Development Sdn Bhd to Malaysia Pacific Corp Bhd (MPCorp) for RM100.88 million. MPCorp said Amanah Raya Development had exercised its put option to sell the stake to MPCorp’s unit.

Adventa posted a weaker set of financial results for the first quarter ended Jan 31, 2012 with net profit falling 33% to RM2.71 million from RM4.05 million as it was impacted by margin squeeze, foreign exchange loss and higher finance cost.

Its revenue slipped 2.2% to RM103.81 million from RM106.19 million while earnings per share were 1.77 sen compared with 2.65 sen.

CIMB Equities Research has upgraded Unisem from “underperform” to “outperform” and raised its fair value by 87% from RM1 to RM1.87. CIMB has also increased its FY12 to FY14 earnings forecasts for the semiconductor manufacturer by 7% to 19%

It also upgraded MPI, also a semiconductor entity, from “underperform” to “outperform” and raised its target price for the stock from RM2.79 to RM4.08, up 46%.

Berjaya Land's net profit fell 93% to RM2.52 million in the third quarter ended Jan 31, 2012 from RM34.91 million a year ago, as lower real estate sales offset higher income from its gaming and hospitality operations. Its total group revenue rose 13% to RM1.12 billion from RM990.6 million.

Bursa Malaysia has queried wire and cable manufacturer Supercomnet on the unusual trading patterns of its shares. The stock rose as much as 93% or 28 sen to an intraday high of 58 sen on Monday before closing lower at 49.5 sen. Some 41 million shares were transacted, putting the stock among the most active and top gainers.

Xidelang shares will go ex-dividend on Tuesday. The shoe manufacturer had last January proposed a bonus share issue which is undertaken concurrently with a private placement of new shares and renounceable rights issue of warrants.

CBIP, has clinched a RM44.67 million job to build a 45 tonne per hour palm oil mill from Syarikat Ladang Sungai Terah Sdn Bhd, a wholly-owned subsidiary of Kumpulan Perladangan PKINK Bhd.



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Unisem, MPI rally on rating, target price upgrades

KUALA LUMPUR (March 26) : Shares of semiconductor manufacturers UNISEM (M) BHD [] and MALAYSIAN PACIFIC INDUSTRIES [] Bhd (MPI) rallied on Monday after CIMB Investment Bank Bhd Research upgraded its recommendation and fair values for both stocks.

This is in anticipation of a recovery in the global semiconductor industry, according to CIMB Research.

Unisem rose 11% or 15 sen to RM1.48 at 3.26pm on Monday while MPI gained 3% or 10 sen to RM3.17 to be among the top gainers across the local bourse.

CIMB Research, in a note on Monday, said it had upgraded Unisem from “underperform” to “outperform” and raised its fair value by 87% from RM1 to RM1.87 for the stock. The research house also increased its FY12 to FY14 earnings forecasts for the semiconductor manufacturer by 7% to 19%.

Similarly, the research firm also upgraded MPI from “underperform” to “outperform” and raised its target price for the stock from RM2.79 to RM4.08, up 46%.



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MPI still waiting for the tide to turn

Malaysian Pacific Industries Bhd (Feb 2, RM3.42)
Maintain underperform at RM3.48 with revised target price of RM2.79 (from RM2.55): We cut our FY12 ending June earnings forecast to reflect the lacklustre demand for 2012. We tweak our target price for housekeeping purposes while still applying a 60% discount to its five-year historical adjusted average price-to-book value (P/BV). We reiterate our “underperform” call given the downside risks.

Peter Yates, group managing director, hosted MPI’s 2QFY12 briefing on Tuesday. Key takeaways were: (i) the PC/laptop segment will continue to be a problem this quarter; (ii) the smartphone/tablet segment will drive growth; (iii) over 80% of production has now been converted to the high density line; (iv) Suzhou Phase 2 is now completed and has landed a new tenant; (v) MPI has secured a new smartphone customer, and (vi) cost-cutting measures helped to contain 2QFY12 losses.

There were no surprises during the briefing. Visibility is low as customers are holding back. Utilisation rates remain below 70% for the second straight quarter and we suspect will continue to do so in 3QFY12. Despite the inventory cutback and market talk of a bottoming of inventory days, inventory days in 4QFY11 are expected to remain elevated at 79.3, albeit down slightly from 81 currently. 3QFY12 revenue is expected to remain flat assuming the macroeconomic situation does not deteriorate and the company continues to manage costs. While 4QFY12 prospects look brighter, we remain cautious as stockpiles are still higher than 2008 levels and customers continue to guide for a moderate decline over the next two quarters.

MPI’s recent share price resurgence seems premature and downside risk outweighs the upside. Investors should avoid MPI and the general semiconductor industry until orders start to pick up and the macroeconomic environment improves. Switch to JCY International Bhd to take advantage of the hard disk drive recovery from the recent shortage caused by the Thai floods. — CIMB Research, Feb 2


This article appeared in The Edge Financial Daily, February 3, 2012.



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Another bad quarter for Malaysian Pacific Industries

Malaysian Pacific Industries Bhd (Jan 31, RM3.48)
Maintain sell at RM3.68 with a fair value of RM2: MPI reported sequentially weaker results as 2QFY12 revenue fell to RM279.2 million (-11.5% quarter-on-quarter [q-o-q], -24% year-on-year [y-o-y]) on anaemic demand from upstream players amid an industry-wide general inventory correction as the semiconductor industry suffered a disruption in its supply chain. During the quarter, fixed costs remained high owing to underutilisation of assets, which led to negative operating margins, which narrowed by 280 basis points (bps) q-o-q (-1,270 bps y-o-y) to -5.8% and in turn dragging down group bottom line to a loss of RM16.2 million.

Customers’ guidance for the upcoming quarter, being a seasonally weaker period, is: (i) Skyworks expects revenue to contract by 9% q-o-q to US$360 million (RM1.09 billion) as handset manufacturing tapers off after the holiday season; (ii) Maxim anticipates revenue to weaken to US$555 million to US$585 million, implying a 1% to 6% q-o-q decrease, due to softer demand from the end markets, especially PC notebooks and optical equipment used in communications infrastructure; and (iii) Linear Technology believes that it is at an inflection point and estimates revenue to go up by 4% to 8% q-o-q.

Last week, the International Monetary Fund (IMF) cut its global growth forecast by 0.7% and 0.6% for FY12 (4% to 3.3%) and FY13 (4.5% to 3.9%) on fears the European debt crisis may cause ripple effects globally. We think there might be a prolonged slowdown in the sector as consumers may be more cautious on spending. According to SEMI, the global industry association serving the manufacturing supply chains for the microelectronic, display and photovoltaic industries, the industry is still plagued by an oversupply of semiconductor equipment, with the book-to-bill ratio for worldwide semiconductor manufacturing equipment at 0.88 for the month of December. In addition, the Semiconductor Industry Association said November quarterly worldwide semiconductor sales contracted by 2.4% q-o-q and 3.1% y-o-y.



The worst is not over for the local semiconductor industry or MPI as the current run-up in its share price is unjustifiable. For now, we are maintaining our financial forecasts while reiterating our “sell” call with our fair value unchanged at RM20, based on 0.6 times FY12 price-to-net tangible assets. — OSK Research, Jan 31


This article appeared in The Edge Financial Daily, February 2, 2012.



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KLCI reverses earlier losses, closes up 7.7 points

KUALA LUMPUR (Jan 30): The FBM KLCI reversed its earlier losses and rose in the final minutes of trade on Tuesday in line with the higher closing at regional markets, lifted by gains including at Petronas-linked counters and Genting.

The FBM KLCI rose 7.74 points to close at 1,521.29. For the month, however, the index fell 9.44 points from its closing of 1,530.73 on Dec 30 last year.

Gainers overtook losers by 415 to 394, while 353 counters traded unchanged. Volume was 1.78 billion shares valued at RM2.18 billion.

At the regional markets, the Shanghai Composite Index edged up 0.33% to 2,292.61, Hong Kong’s Hang Seng Index rose 1.14% to 20,390.49, Japan’s Nikkei 225 was up 0.11% to 8,802.51, South Korea’s Kospi was up 0.79% to 1,955.79 and Taiwan’s Taiex added 1.48% to 7,517.08, while Singapore’s Straits Times Index rose 0.64% to 2,906.69.

Meanwhile, European shares rose on Tuesday on hopes Greece was nearing a debt swap deal needed to avoid a messy default, while European leaders agreed on stricter budget discipline measures to help prevent further debt accumulation in the region, according to Reuters.

On Bursa Malaysia, Petronas Gas rose 48 sen to RM15.68, Petronas Dagangan 30 sen to RM18, Glenealy 24 sen to RM7.37, FIma Corp and Coastal Contracts 23 sen each to RM6.45 and RM2.30, Genting 22 sen to RM11.12, BLD PLANTATION []s and GAB 20 sen each to RM8.59 and RM12.40, while Malayan Flour Mills added 19 sen to RM4.33.

Among the decliners, MPI fell 20 sen to RM3.48, Perstima down 18 sen to RM3.72, United Plantations 16 sen to RM20.34, Advanced Packaging and Hong Leong Bank 14 sen each to RM1.18 and RM11.36, Nestle, APM Automotive, Lafarge Malayan Cement and Uzma lost 10 sen each to RM55.70, RM4.50, RM6.68 and RM1.76 respectively, while Asia File lost nine sen to RM3.61.

The actives included Coastal Contracts, DRB-Hicom, Compugates, Axiata, DBE Gurney, TMS and Mudajaya.



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Falling European sales send MPI into the red

KUALA LUMPUR: Malaysian Pacific Industries Bhd (MPI) reported a 24.1% fall in revenue to RM279.2 million for 2QFY12 ended Dec 31 from RM367.6 million in the previous corresponding quarter, mainly due to poor performance in Europe. As a result, MPI saw a net loss of RM16.2 million or 8.37 sen a share for 2QFY12, compared with a net profit of RM25.29 million in 2QFY11.

By segment, its revenue fell 35%, 22% and 13% in Europe, Asia and the US respectively from the previous corresponding quarter. “European billings reduced significantly during the period under review. This shifted the revenue mix for Europe from 31% in 2QFY11 to 27% for the quarter under review,” said MPI.

For the six months ended Dec 31, 2011, MPI’s revenue came to RM594.8 million, an 18.92% drop from RM738 million in the previous corresponding period. It made a loss of RM25.84 million from a profit of RM51.13 million previously.

MPI closed 10 sen higher at RM3.68 yesterday, with 792,900 shares traded. The counter has been on the rise since the Chinese New Year break, rising 40 sen or 12.2% from RM3.28 on Jan 20.


This article appeared in The Edge Financial Daily, January 31, 2012.



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KLCI slips below 1,515-level at mid-day, select blue chips weigh

KUALA LUMPUR (Jan 31): The FBM KLCI slipped to below the 1,515-point level at the mid-day break on Tuesday, weighed by losses at select blue chips including Tenaga and PLANTATION []-related stocks.

The FBM KLCI fell 2.24 points to 1,511.31 at the mid-day break. Market breadth turned negative with losers leading gainers by 418 to 263, while 329 counters traded unchanged. Volume was 829.67 million shares valued at RM768.79 million.

The ringgit strengthened 0.43% to 3.0468 versus the US dollar; crude palm oil futures for the third month delivery fell RM19 per tonne to RM3,063, crude oil added 58 cents to US$99.36 while gold rose US$5.10 an ounce to US$1,735.18.

Meanwhile, Asian shares and the euro recovered earlier losses on Tuesday after Greek Prime Minister Lucas Papademos raised hopes for a deal to be reached this week to avoid a default, but markets were starting to worry that Portugal might need a second rescue, according to Reuters.

Japan’s Nikkei 225 added 0.40% to 8,827.91, Hong Kong’s Hang Seng Index was up 0.71% to 20,304.40, the Shanghai Composite Index gained 0.19% to 2,289.43, Taiwan’s Taiex added 0.24% to 7,425.48, South Korea’s Kospi was up 0.46% to 1,949.42, but Singapore’s Straits Times Index shed 0.40% to 2,876.84.

On Bursa Malaysia, BAT fell 54 sen to RM48.84, Hong Leong Bank 18 sen to RM11.32, MPI 17 sen to RM3.51, Asia File and Advanced Packaging 14 sen each to RM3.56 and RM1.18, JT International and Perstima 12 sen each to RM6.83 and RM3.78, Lafarge Malayan Cement 11 sen to RM6.67, Tenaga 10 sen to RM5.87 and Ta Ann nine sen to RM5.67.

Among plantation-related stocks, KLK fell six sen to RM25.66, while IOI Corp and Batu Kawan shed four sen each to RM5.36 and RM19.20.

Gainers included Glenealy, Malayan Flour Mills, Fima Corp, GAB, Coastal Contracts, Maxis, Mudajaya, Triplc, BLD Plantations and Shell, while the actives included DRB-Hicom, DBE Gurney, Axiata, TMS and DGSB.



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KLCI extends loss at mid-morning as investors stay on sidelines

KUALA LUMPUR (Jan 31): The FBM KLCI extended its losses at mid-morning on Tuesday, albeit marginally as investors stayed on the sidelines ahead of the Federal Territories day holiday on Wednesday that would see the local stock market closed.

The FBM KLCI shed 1.31 points to 1,512.24 at mid-morning, weighed by select blue chips.

Gainers trailed losers by 206 to 214, while 263 counters traded unchanged. Volume was 336.38 million shares valued at RM209.43 million.

Meanwhile, Asian shares and the euro struggled on Tuesday as stumbling talks on Greek debt restructuring reignited concerns over funding in other highly indebted countries, with markets starting to worry that Portugal might need a second bailout, according to Reuters.

At the regional markets, Japan’s Nikkei rose 0.43% to 8,831.00, Hong Kong’s Hang Seng Index up 0.93% to 20,348.00, the Shanghai Composite Index gained 0.41% to 2,294.42, Taiwan’s Taiex rose 0.85% to 7,470.51, South Korea’s Kospi added 0.88% to 1,957.55 and Singapore’s Straits Times Index edged up 0.13% to 2,891.94.

BIMB Securities Research on Tuesday said that unresolved negotiation over Greece’s debt remains as the main obstacle for many equity markets.

There was some progress within the EU as most countries had signed a financial pact to strengthen the region’s financial standing, it said in a note.

It said investors were now more risks tolerant as many would still prefer to accumulate stocks on weaknesses, as reflected by the Dow Jones Industrial Average’s intra-day rebound erasing earlier losses to end the session 7 points lower.

The research house said as for European bourses, selling continued to hinder performances as most closed lower.

As expected, regional bourses succumbed to bouts of profit taking following a weak opening in Europe with no fresh catalysts in sight, it said.

“For Malaysia, the FBM KLCI broke its immediate resistance of 1,515 to end the day with a 7 points loss at 1,513.

“We expect the index to remain rather flat today from the lack of fresh leads,” it said.

Meanwhile, Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients Tuesday said the FBM KLCI’s resistance areas of 1,513 and 1,530 would cap market gains, whilst weaker support areas may be located at 1,493 and 1,510.

“Due to the US markets’ mildly negative tone last night, we could be in for yet another range bound trading day before the City Day holiday tomorrow,” he said.

On Bursa Malaysia, BAT was the top loser at mid-morning and fell 28 sen to RM49.10; PPB fell 18 sen to RM16.72, Perstima 13 sen to RM3.77, MPI 12 she to RM3.56, Hong Leong Bank 10 sen to RM11.40, JobStreet, Tenaga and Petronas Dagangan down eight sen each to RM2.10, RM5.89 and RM17.62, while TSR Capital fell six sen to 87 sen.

Gainers included Glenealy, Malayan Flour Mills, Petronas Gas, Mudajaya, Coastal Contracts, Triplc, Plenitude, CBIP and Aeon, while the actives included DBE Gurney, DRB-Hicom, TMS, Maybulk, Mudajaya and Coastal warrants.



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Malaysian Pacific Industries shared dip in early trade

KUALA LUMPUR (Jan 31): MALAYSIAN PACIFIC INDUSTRIES [] Bhd shares retreated in early trade on Tuesday after the company said that it expects its business prospects to remain challenging across all segments for the financial year ending June 30, 2012 given the uncertain macro-economic outlook.

At 9.05am, MPI fell 13 sen to RM3.55 with 55,000 shares done.

MPI posted net loss RM16.21 million in the second quarter ended Dec 31, 2011 compared to net profit RM25.29 million a year earlier, due mainly to weaker demand and lower revenue.

Its revenue for the quarter fell 24.04% to RM279.23 million from RM367.59 million in 2010. Loss per share was 8.37 sen compared to earnings per share of 13.05 sen, while net assets per share were RM3.77.

Reviewing its performance, MPI said while the weak semiconductor market was affecting all its segments, many of the manufacturing hubs in Asia were shutting down towards the end of December to adjust for the lower demand.

“This, coupled with the general inventory correction in the industry, has further impacted the supply chain and revenue of the sub-contracting business during the quarter under review,” it said.



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HDBSVR: KLCI could extend slide after weak Wall Street

KUALA LUMPUR (Jan 31): HwangDBS Vickers Research said the weaker overnight close on Wall Street would weigh on regional markets including Bursa Malaysia.

It said on Tuesday the FBM KLCI could extend its slide. The benchmark index – which tumbled 7.4 points on Monday – may make its way towards the psychological support level of 1,500 ahead, it said.

On Wall Street, major U.S. equity indices were down between 0.1% and 0.3% amid concerns of slow progress in Greece’s debt negotiations.

HDBSVR said in terms of news flows, Bank Negara Malaysia is scheduled to hold its monetary policy committee meeting on Tuesday evening, with expectations for the policymakers to keep interest rates unchanged.

On the corporate front, of interest will be stocks including Malaysia Airports Holdings, which has proposed to raise funds via a private placement exercise of up to 110 million new shares (for gross proceeds of approximately RM598 million).

In Tenaga Nasional, its CEO indicated that he would be quitting when his contract ends in June

MALAYSIAN PACIFIC INDUSTRIES [] reported net loss of RM16 million in the October-December quarter, while its share price jumped 34% over the last two weeks.



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RHB Research maintains market perform on MPI, FV at RM3.47

KUALA LUMPUR (Jan 31): RHB Research Institute is maintaining its market perform outlook on MALAYSIAN PACIFIC INDUSTRIES [] (MPI) Bhd while its fair value estimate was raised to RM3.47.

The research house said on Tuesday its FV estimate was raised after it had increased the benchmark forward target price-to-book value from 0.8 times to 1.0 times.

On Monday, MPI reported a 6MFY06/12 net loss of RM25.8 million on the back of weak demand for MLP and broad-based packages due to slumping sales for electronic devices during the quarter.

“We would not be surprised if management guides for a revenue decline of 5%-10% qoq for 3QFY06/12 at the briefing later Tuesday, similar to peers’ recent guidance.

“We reduced our FY06/12 net profit forecast from RM6.5 million to RM2.5 million. However, we have maintained our assumptions of a pick-up in 2HCY12, and thus our FY13-FY14 estimates are relatively unchanged,” said RHB Research.



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Stocks to watch: MAHB, Public Bank, MPI, Axiata

KUALA LUMPUR (Jan 31): Stocks on Bursa Malaysia could trade on a cautious note on Tuesday following investors’ disappointment over the absence of a Greek debt deal, though the broader market was firmer with interest in lower liners.

Reuters reported that dampened optimism about the global economic picture and the Greek crisis pushed the euro off six-week highs and sent world stocks lower on Monday with investors cautious ahead of an EU leaders’ summit.

EU leaders will sign off on a permanent rescue fund for the euro zone at a summit on later on Monday and are expected to agree on a balanced budget rule in national legislation, with unresolved problems in Greece casting a shadow on the discussions.

As for Bursa Malaysia, the FBM KLCI fell 7.33 points to close at 1,513.55, weighed by losses including at Genting, Hong Leong Bank and HLFG. However, gainers led losers by 460 to 387, while 310 counters traded unchanged. Volume was 2.31 billion shares valued at RM1.84 billion.

Among the companies which could see trading interest are Malaysia Airports Holdings Bhd (MAHB), PUBLIC BANK BHD [], MALAYSIAN PACIFIC INDUSTRIES [] Bhd (MPI) and Axiata Group Bhd.

Other stocks of interest would be Perusahaan Sadur Timah Malaysia (Perstima) Bhd, D’nonce TECHNOLOGY [] Bhd and also JOTECH HOLDINGS BHD [], and AIC CORPORATION BHD [] and AutoV Corporation Bhd.

MAHB plans to raise RM598.40 million from a proposed share placement exercise to finance the new low cost carrier terminal at Kuala Lumpur International Airport (klia2).

The airports operator said it planned to issue 110 million new shares, or 10% of its issued and paid-up share capital to investors to be identified via a book building exercise.

Based on a 5% discount to the five-day volume weighted average market price (VWAMP) of MAHB shares up to and including Jan 27, of RM5.7298, the indicative issue price for the placement shares would be RM5.44.

Public Bank Bhd recorded net profit of RM876.98 million in the fourth quarter ended Dec 31, 2011, up 3.6% from a year ago due to higher net interest and net income from Islamic banking business. It declared a second interim single-tier dividend of 28 sen per share.

Its revenue rose 11.8% to RM3.32 billion from RM2.97 billion a year ago. Its earnings per share were 25.04 sen compared with 24.16 sen.

For the 4Q ended Dec 31, 2011, the group registered a pre-tax profit of RM1.163 billion, an increase of RM33.0 million or 2.9% as compared to the previous corresponding quarter. The improved performance was mainly due to higher net interest and net income from Islamic banking business.

MPI posted net loss RM16.21 million in the second quarter ended Dec 31, 2011 compared to net profit RM25.29 million a year earlier, due mainly to weaker demand and lower revenue.

Its revenue for the quarter fell 24.04% to RM279.23 million from RM367.59 million in 2010. Loss per share was 8.37 sen compared to earnings per share of 13.05 sen, while net assets per share were RM3.77.

Axiata Group Bhd has received another two-year extension from the Securities Commission (SC) to get the local authorities’ approval for its outdoor structures.

The SC had given it until Jan 29, 2014 to get the approvals for the outdoor structures, which were part of the conditions for its listing on Bursa Malaysia.

As at Dec 19, 2011, Axiata said 22 outdoor structures were pending approval from local authorities. Applications for 27 outdoor structures have been declined, and the Celcom Group is in the midst of appealing to the relevant local authorities.

Perstima’s net profit for the third quarter ended Dec 31, 2011 fell 42.95% to RM7.99 million from RM14.01 million a year ago, due mainly to lower sales volume coupled with lower profit margin. Its revenue for the quarter slipped 9.4% to RM204.26 million from RM225.47 million in 2010.

D’nonce Technology Bhd posted net loss of RM6.11 million in the first quarter ended Nov 30, 2011 compared with a net profit of RM498,000 a year ago due to the impact of the severe flooding in Thailand last year.

Its factories in Bangkok were inundated by the flood waters which damaged its property, plant and equipment and inventories in early October 2011. As to date, its factories in Bangkok have yet to commence operations.

Datuk Goh Tian Chuan’s special purpose vehicle Temasek Formation Bhd (TFB) has received the Securities Commission’s approval to merge Jotech Holdings Bhd, and AIC Corporation Bhd and AutoV Corporation Bhd.

The proposed merger of the three companies for a total consideration of about RM696 million would be satisfied via the issuance of new Temasek Formation shares.



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Malaysian Pacific Industries posts net loss RM16.21m in 2Q

KUALA LUMPUR (Jan 30): MALAYSIAN PACIFIC INDUSTRIES [] Bhd posted net loss RM16.21 million in the second quarter ended Dec 31, 2011 compared to net profit RM25.29 million a year earlier, due mainly to weaker demand and lower revenue.

The company said on Monday that its revenue for the quarter fell 24.04% to RM279.23 million from RM367.59 million in 2010.

Loss per share was 8.37 sen compared to earnings per share of 13.05 sen, while net assets per share was RM3.77.

For the nine months ended Dec 31, MPI posted net loss RM25.84 million compared to net profit RM51.13 million, on the back of a 19.4% drop in revenue to RM594.84 million from RM738.05 million.

Reviewing its performance, MPI said while the weak semiconductor market was affecting all its segments, many of the manufacturing hubs in Asia were shutting down towards the end of December to adjust for the lower demand.

“This, coupled with the general inventory correction in the industry, has further impacted the supply chain and revenue of the sub-contracting business during the quarter under review,” it said.

“The board anticipates that business prospects will remain challenging across all segments for the financial year ending June 30, 2012 given the uncertain macro-economic outlook,” it said.



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