Stocks to Watch Bursa, China Stationery, UMW, CMMT, Naim

KUALA LUMPUR (April 19): Economic and political factors, besides weakening technical indicators, could dictate the direction of Malaysian stocks on Friday, as investors evaluate the impact of global economic data against domestic pre-election sentiment.

Analysts said the on-going European debt crisis and slower growth in China, apart from the anticipation of Malaysia's coming general election, could lead to persistent selling pressure in the FBM KLCI.

The FBM KLCI of 30 stocks erased earlier gains to finish in the red at 1,596.62, down 2.24 points on Thursday.

Stocks to watch on Friday are BURSA MALAYSIA BHD [], China Stationery Ltd, UMW HOLDINGS BHD [], Capitamalls Malaysia Trust (CMMT) and Naim Holdings Bhd.

Bursa posted flat profit growth in the first quarter (1Q), as the stock exchange operator's lower operating expenses mitigated the impact of less revenue during the period. Bursa said its net profit rose 0.7% to RM40.77 million in the quarter ended March 31, 2012 from RM40.49 million a year earlier, while revenue fell 4.8% to RM110.52 million from RM116.11 million.

Regulators have queried China Stationery on the unusual trading patterns of the company's shares. The company said it was not aware of any factors contributing to the rise in the price and volume of the stock. China Stationery also said it had no plans to declare an interim dividend nor undertake a dual listing in Hong Kong.

AmResearch Sdn Bhd had raised its earnings forecast for UMW, an automotive and oil and gas support services entity, by up to 25% for financial years ending Dec 31, 2012 to 2014. AmResearch also revised upwards its target price for the stock by 31% to RM8.90 from RM6.80, and upgraded the shares to a "buy" from "hold".

CMMT's 1Q net profit rose 10% from a year earlier, as the retail-based Real Estate Investment Trust (REIT) registered higher revenue, following the inclusion of the East Coast Mall in Kuantan to the group's portfolio. CMMT said net profit came to RM34.44 million against RM31.44 million previously, while revenue was up 36% to RM71.4 million from RM52.68 million.

Real estate developer and builder Naim is diversifying into the healthcare business via a collaboration with KPJ HEALTHCARE BHD []. Both Naim and KPJ will set up a joint venture company on 30% and 70% basis respectively to construct and operate a hospital in Miri, Sarawak.



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KPJ Healthcare teams up with Naim Holdings to set up hospital in Sarawak

KUALA LUMPUR (April 19): KPJ HEALTHCARE BHD [] is teaming up with NAIM HOLDINGS BHD [] to build and own a hospital in Miri, Sarawak.

It said on Thursday that its wholly owned unit, Kumpulan Perubatan (Johor) Sdn Bhd (KPJSB)had signed a joint venture agreement (JV) with Naim Land Sdn Bhd (NLSB) for the purpose of designing, developing, building, completing and owning a purpose-built hospital building and subsequently operating as a hospital on 4-acre land in Kuala Baram district.

NLSB is a wholly owned subsidiary of Naim Holdings Bhd.

KPJ said the JV would operate through a joint venture company (JVC) , of which KPJSB will hold 70% equity interest while NLSB will hold the remaining 30% equity interest at all times.

It said the JVC would have an initial authorised share capital of RM25 million divided into 25 million ordinary shares of RM1.00 each and an initial issued share capital of RM2.00 divided two (2) ordinary shares of RM1.00 each.

KPJ said the subscription price of RM13.76 million for 13.76 million JVC shares would be financed via internally generated funds of the KPJ Group.

On the rationale for the JV, KPJ said the joint venture was in line with its objective to increase its network of hospitals to locations where private healthcare is in demand, enlarge the customer base as well as other areas of healthcare services.

IT said the JV would leverage on KPJ and NLSB’s capabilities to successfully operate as a private hospital.

“The Proposed JV shall lower KPJ’s initial start up cost, i.e. cost of land and CONSTRUCTION [] cost of hospital building, and lower maintenance spend,” it said.



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KLCI closes higher but some pullback expected next week

KUALA LUMPUR (April 6): The FBM KLCI closed higher on Friday, while the few regional markets that were open for trade ended the day in negative territory, as investors stayed on the sidelines ahead of key U.S. jobs data.

China shares ended up 0.2 percent in thin volume on Friday, moving around a key psychological level as investors awaited a slew of economic data next week which could signal possible policy changes, according to Reuters.

The FBM KLCI closed 5.43 points higher at 1,598.87.

Gainers led losers by 457 to 248, while 324 counters traded unchanged. Volume was 1.28 billion shares valued at RM1.14 billion.

At the regional markets, the Shanghai Composite Index added 0.19% to 2,306.55, Taiwan’s Taiex gained 0.87% to 7,706.26, south Korea’s Kospi edged up 0.01% to 2,029.03 while Japan’s Nikkei 225 fell 0.81% to 9,688.45.

Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said the FBM KLCI was now ripe for a pullback towards a lower sideways range of 1580-1600 level.

“We reckon the equity optimism will take a mild negative turn following a surprised absence of USA stimulus and Spanish revived fiscal concerns with the bond yields climbing to their highest level in five month (Spanish 10-Year bond rose to 5.8%).

“This has stoked concerns regarding the European debt crisis, boosted safe-haven appeal of the USA dollar and weighed on local risk-taking sentiment,” he said.

DR Nazri said he also expects the bullish sentiment to take a pause after the Federal Reserve meeting minutes earlier this week indicated reduced prospects for more quantitative easing.

ON Bursa Malaysia, BAT was the top gainer and added 48 sen to RM55.46, Dutch Lady added 30 sen to RM35.80, Tradewinds PLANTATION []s and BLD Plantations rose 25 sen each to RM5.44 and RM9.40, Tradewinds up 18 sen to RM9.97, TDM 17 sen to RM4.95, SMPC and Naim Holdings 15 sen each to RM2.12 and RM2.05, Mulpha 14 sen to 60 sen and MAHB 13 sen to RM5.89.

Naim Indah Corp was the most actively traded counter with 149.52 million shares done. The stock rose 8.5 sen to 57 sen.

Other actives included Metronic, SuperComNet, Ariantec, CSL, Focus, Tiger Synergy, Green Ocean, Ingenuity Solutions and TMS.

Decliners included F&N, Batu Kawan, Shell, HUp Seng, Hong Leong Industries, Takaful, HDBS, Aeon and Tiong Nam Logistics.



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KLCI snaps losing streak, but stays shy of 1,600-level at mid-day

KUALA LUMPUR (APRIL 6): The FBM KLCI snapped its two-day losing streak on Friday and rose at the mid-day break, while key regional markets were mostly closed for the Easter weekend holidays.

The FBM KLCI rose 6.29 points to 1,599.73 at the mid-day break.

Gainers led losers by 319 to 233, while 306 counters traded unchanged. Volume was 595.27 million shares valued at RM502.46 million.

The ringgit strengthened .07% t0 3.0625 versus the US dollar; crude palm oil futures for the third month delivery rsoe RM14 per tonne to RM3,546, crude oil was US$103.31 per a barrel (as of April 4 closing) whiel gold fell US$1.18 an ounce to US$1,630.05.

Asian shares struggled on Friday, with many markets closed for the Easter holiday, as investors stayed on the sidelines ahead of key U.S. jobs data, avoiding risk after rising yields in weaker euro zone countries refuelled concerns about the region's debt issues, according to Reuters.

Worries about Spain's rising bond yields were offset somewhat by fresh U.S. data on Thursday that provided more evidence of a recovering labour market, raising prospects of the non-farm payrolls report due later on Friday being solid, it said.

At the regional markets, Japan’s Nikkei 225 fell 1.05% to 9,665.28, Taiwan’s taiex added 0.60% to 7,685.52 and South Korea’s Kospi shed 0.25% to 2,023.75.

BIMB Securities Research in a note April 6 said that European stocks climbed in the final hour of trading on Thursday, after new on US initial jobless claims fell to their lowest levels in four years last week.

Meanwhile Spain’s 10-year bonds dropped for a third day, pushing the yield on the country’s benchmark debt seven basis points higher to 5.76%, it said.

The research house Wall Street ended largely unchanged in a lackluster session as investors hesitated to jump in amid ongoing worries over the euro zone and ahead of Friday's monthly jobs report.

Nonetheless, for the week, all three major averages recorded their worst decline this year, it said.

The Dow Jones Industrial Average slipped 0.11 percent, to close at 13,060.14, declining for a third-straight session while S&P 500 erased or 0.06 percent, to finish at 1,398.08, it said.

BIMB Research said that regionally, most major indices closed lower yesterday, due to weak Spanish bond sale which weaken investors’ confidence.

“In the local front, the FBM KLCI is well supported at 1,590 levels despite poor regional performance, losing 0.36% to close at 1,593.44. Net foreign participation remains positive yesterday at RM66.2m.

“Technical point of view, the near term outlook remains sluggish with immediate support to be seen at 1,590 followed by 1,580,” it said.

ON Bursa Malaysia, BAT the top gainer in the morning session and rose 68 sen to RM55.66, Dutch Lady added 50 sen to RM36, Tradewinds PLANTATION []s rose 31 sen to RM5.50, SMPC up 28 sen to RM2.25, Tradewinds 23 sen to RM10.02, Naim Holdings 14 sen to RM2.04, Mulpha 13 sen to 59 sen, Hing Yap 12 sen to RM1.68, MBM Resources 11 sen to RM4.91 and HLFG added 10 sen to RM12.48.

Naim Indah Corp was the most actively traded counter with 58.3 million shares done. The stock rose 2.5 sen to 51 sen.

Other actives included Metronic, Tiger Synergy, CSL, Green Ocean, Focus, TMS, Ariantec, Systech and DBE Gurney.

Decliners included Shell, F&N, Petrol One, KLK, HDBS, SapureCrest, Batu Kawan, Subur, Perduren and MGRC.



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CIMB Research has technical sell on Naim Holdings at RM1.55

KUALA LUMPUR (Dec 12): CIMB Equities Research has a technical sell on Naim Holdings at RM1.55 at which it is trading at a price-to-book value of 0.5 times.

It said on Monday Naim Holdings violated its triangle support on Friday. This is a worrying sign as it may signal the beginning of next downleg.

“If prices continue to stay below the support-turned-resistance trend line, we expect the candles to fall towards its next support levels are RM1.45 and RM1.35,” it said.

CIMB Research said the MACD is falling deeper into the negative territory while RSI has also fallen into the oversold territory.

“Unload on strength looks like a good option here, especially near the RM1.58-1.60 resistances. However, always put a buy stop at RM1.65,” it said.



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Naim not spared in gloomy property outlook

KUALA LUMPUR: Naim Holdings Bhd has not been spared in the gloomy Sarawak property outlook, suggesting that the sluggish sentiment in the sector is not only skewed towards Peninsular Malaysia.

In notes to Bursa Malaysia accompanying its financial results last Thursday, the Sarawak-based property and construction firm said its weaker financial performance was attributable in part to the slow demand for properties in Sarawak.

“We are disappointed with the current results. This is due in part to the sluggish demand for property in Sarawak over the past two years, amid fears of overheating in the property sector affected by uncertainties over the increasing cost of commodities, rising interest rates and decreasing purchasing power,” Naim said.


The company saw its net profit for 9MFY11 ended Sept 30 drop 44% to RM41.6 million from RM75.3 million a year ago. Revenue declined 24% to RM318.7 million during the period in review from RM420.3 million a year earlier, while earnings per share fell to 17.58 sen from 31.78 sen previously.

Regulatory bodies tightening controls could also dampen the prospects of property companies.

Bank Negara Malaysia recently announced new financing rules starting next year, which require loan applicants to go through a more exhaustive process when applying for loans, including mortgages.

However analysts said banks had already tightened lending policies over the past few months, even before the new guidelines were introduced.

“We understand banks have not been too generous on financing margins and this very much depends on the applicant’s existing debt obligations,” according to a research report dated Nov 21 by AmResearch.

Despite the weak fundamentals in the sector, Naim managed to register property sales of RM170 million for the nine months ended Sept 30, 2011, surpassing a total of some RM145 million registered for the entire year in 2010.

Naim said the company is making inroads into the upcoming Bintulu property market, leveraging its landbank in the prime location of the old Bintulu airport as well as setting up an office in Kota Kinabalu, to pave the way for expansion to Sabah.

According to analysts, the company is finalising the details of the maiden launch of a mixed-used commercial development located on 37 acres of land within the old Bintulu airport. The project has an estimated gross development value (GDV) of RM1.5 billion. The next leg up would be 33 acres of prime land at Batu Lintang within Kuching.

OSK Research said: “But we feel that take-up rates could be weak with a softening property market.”

In a note on Nov 26, the research house downgraded its call on Naim to “sell” given its less than optimistic outlook. OSK revised Naim’s fair value downward to RM1.56 from RM1.83 previously.

AmResearch has revised Naim’s fair value downward to RM3.39 (from RM3.72 previously) and MIDF to RM2.43 (from RM4.65 previously), though maintaining a “buy” call on the company.

Naim shares have shed almost half their value year-to-date, and closed at RM1.69 yesterday.


This article appeared in The Edge Financial Daily, November 30, 2011.



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Naim slips on 72pc Q3 net income plunge

Naim Holdings Bhd, a Malaysian construction company, fell to a six-week low in Kuala Lumpur trading after reporting a 72 percent drop in third-quarter net income to RM10.3 million.

The stock dropped 2.8 percent to RM1.71 at 9:21 a.m. local time, set for its lowest close since Oct. 12. -- Bloomberg



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