HWDBSVR sees KLCI slipping below 1,580

KUALA LUMPUR (March 29): Hwang DBS Vickers Research said there is a possibility that the key FBM KLCI will slip below its immediate support line of 1,580 on Thursday.

In its market outlook on Thursday, it said if the KLCI falls below the 1,580, the index may be on its way to test the next support level of 1,555 in the near term.

This comes as Wall Street lost momentum overnight. Major U.S. stock indices were down 0.5% each amid disappointing economic data and falling crude oil prices.

Hoping to buck the weak market sentiment on our local bourse are two counters: (a) Gamuda after announcing stronger-than-expected quarterly profit yesterday evening; and (b) Bintai Kinden, as it would be involved (via a joint venture arrangement) in a electrical services and control systems job in Singapore’s MRT project valued at S$166 million.

Separately, two ACE Market companies will resume trading: (a) Key West Global, following its plan to venture into the oil & gas industry in Indonesia via the acquisition of convertible bonds for US$52.5m; and (b) Nextnation, which has proposed to acquire land in Cyberjaya for RM18.5 million, a bonus issue of one warrant for every 10 existing shares and a private placement exercise.



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Stocks to watch: Gamuda, Syarikat Takaful, Bintai Kinden, WCT

KUALA LUMPUR (March 29) : While trading momentum in the Malaysian stock market has improved, analysts said cautious sentiment ahead of the country’s general election could prompt traders to safeguard their profits against the backdrop of challenging external macro dynamics.

Apart from less optimistic sentiment on economic growth prospects in the US and China, analysts also foresee the return of inflation as a key theme in financial markets, spurred by rising crude oil prices.

“We remain neutral on Malaysia. On the positive side, we currently do not expect its rates to increase, and we like the defensiveness of the market, with about one-third of its total market cap in defensive sectors, such as telecoms and utilities.

“National elections are likely to add to market volatility as well, although we expect the event to be market-neutral,” HSBC Global Research wrote in a note.

The FBM KLCI of 30 stocks erased earlier gains to finish 4.35 points lower at 1,583.75 points on Wednesday.

Stocks to watch on Thursday include GAMUDA BHD [], SYARIKAT TAKAFUL MALAYSIA BHD [], Bintai Kinden Corp Bhd and WCT BHD []. Other companies which could attract interest are NEXTNATION COMMUNICATION BHD [] and ENG TEKNOLOGI HOLDINGS BHD [].

Infrastructure-based Gamuda’s earnings rose 45.1% to RM136.47 million in the second quarter ended Jan 31, 2012 compared with RM94.02 million a year ago.

For the first half, earnings increased by 47.2% to RM268.79 million from RM182.55 million in the previous corresponding period.

Syarikat Takaful’s share price rose 5% or 15 sen to close at RM3.05 after CIMB Equities Research said the Islamic insurance firm should trade higher at RM4.60 in anticipation of its growth potential.

Bintai Kinden and joint venture partner Samsung C&T Corp have clinched S$166.24 million (about RM405 million ) worth of projects from Singapore’s Land Transport & Authority.

The jobs include the supply and installation of electrical services apart from tunnel ventilation and environmental control systems

Singapore-based Oversea-Chinese Banking Corp Ltd has emerged as a substantial shareholder in CONSTRUCTION [] firm WCT Bhd after acquiring a 5.01% stake in the builder.

Nextnation plans to raise up to RM15.49 million under a private placement of 137.21 million new shares to finance the telecommunication software developer’s commercial land acquisition, and capital needs. Trading of Nextnation shares were suspended from 2.30pm to 5pm on Wednesday.

The board of Eng Teknologi has accepted the revised takeover offer of RM2 a share by the founders and major shareholders of the hard disk drive component manufacturer.

SYF RESOURCES BHD [] swung into the black with net profit of RM3.22 million in the second quarter ended Jan 31, 2012 compared with net losses of RM431,000 a year ago due to higher sales with lower raw material costs.

For the first half ended Jan 31, 2012, it posted net profit of RM42.46 million compared with net loss of RM1.01 million in the previous corresponding period.



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Nextnation to raise RM15 million from private placement

KUALA LUMPUR (March 28) : NEXTNATION COMMUNICATION BHD [] plans to raise up to RM15.49 million under a private placement of 137.21 million new shares to finance the telecommunication software developer’s commercial land acquisition, and capital needs.

In a statement to the exchange on Wednesday, Nextnation said the placement shares which account for 30% of its issued share base, will come with free detachable warrants. These warrants will be issued on the basis of three warrants for every two new shares.

Nextnation said the private placement will be undertaken after the company’s planned bonus issue of 45.74 million warrants on the basis of one warrant for every 10 existing shares held.

Proceeds from the private placement will partially finance the firm’s purchase of a RM18.52 million land measuring 5.9 acres (2.4ha) in Cyberjaya to accommodate the group’s office , data centre, research and development laboratory, and incubation campus. The land will be acquired from Cybeview Sdn Bhd, a subsidiary of the Minister of Finance Inc, according to Nextnation.

Trading of Nextnation shares was suspended from 2.30pm to 5pm on Wednesday in conjunction with the announcement of the corporate exercises The stock was last transacted at 10.5 sen.



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Trading of Nextnation shares suspended

KUALA LUMPUR (March 28) : Trading of NEXTNATION COMMUNICATION BHD [] shares will be suspended from 2.30pm to 5pm on Wednesday.

The telecommunication software developer said in a statement to the exchange that it has requested for the suspension to accommodate an announcement. Nextnation shares were last transacted at 10.5 sen.

The company which is undertaking a private placement of 41.58 million new shares, had recently fixed the issue price at 11.5 sen each. This translates into total proceeds of RM4.78 million.



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PT Inovisi Infracom takes up 9.09% stake in Nextnation?

KUALA LUMPUR (March 13): PT Inovisi Infracom Tbk of Indonesia is believed to have taken up a 9.09% stake in NEXTNATION COMMUNICATION BHD [] under the latter’s private placement exercise.

A filing with Bursa Malaysia on Tuesday showed that Anguilla-registered Great World Ltd – believed to be a subsidiary of Inovisi Infracom – had taken up the block of 41.58 million shares.

The issue price for the placement of 41.58 million new Nextnation was 11.5 sen per placement share. This was about 6% above the five-day volume weighted average market price of Nextnation shares up to and including March 1 of 10.85 sen.

Nextnation’s core business is to provide end-to-end mobile application services connecting to 500 mobile networks, supporting thousands of developers and distributors.

Great World Ltd is an information TECHNOLOGY [] company which is based in Malaysia. As of Nov 15, 2010, Great World Ltd operates as a subsidiary of Inovisi Infracom, which is based in Jakarta.

According to Inovisi Infracom’s website, it is a diversified infrastructure investment holding company with business in telecommunication, energy & resources, oil & gas, power electricity & engineering, shipping & logistic, real estate investments, toll road concessions, Internet, media and e-commerce businesses.



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Inovisi acquires 10% stake in Nextnation

Nextnation Communication Bhd's Indonesian outsourcing customer, PT Inovisi Infracom Tbk, has acquired a 10 per cent stake in the company.

In a statement today, Nextnation said the private placement by Inovisi would allow it to secure a portion of the capital expenditure fund of US$5 million it required to take on the project it recently secured from the Indonesian conglomerate.

Nextnation group chief executive officer, Larry Tey, said the stake showed a strong vote of confidence from Inovisi in the company.

"There is a possibility of Inovisi increasing its stake to 30 per cent in the future," he said.

Tey said Nextnation recently won an outsourcing project to provide mobile platform infrastructure hosting and maintenance services to Inovisi.

"This project will provide Nextnation with a minimum guaranteed revenue of approximately RM67.5 million over three years.

"The company expects to generate a 31 per cent profit margin, or approximately RM21 million, over the same period," he said. Nextnation is listed on Ace Market on Bursa Malaysia.

Inovisi is an infrastructure investment holding company listed on the Indonesia Stock Exchange. -- Bernama



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Stocks to watch: Tenaga, Proton, Bina Puri, Nextnation

KUALA LUMPUR (Jan 18): Stocks on Bursa Malaysia could see some positive upside on Wednesday, as sentiment is underpinned by firmer close on regional markets after the favourable GDP data growth in China.

Reuters reported that the slightly better economic news from China and Germany countered concerns over Europe's debt crisis on Tuesday, lifting European shares and the single currency, but Greek default fears and a looming debt sale by Spain held gains in check.

The latest survey of German economic sentiment, conducted by the ZEW think tank, posted its biggest ever monthly rise in January, easing fears of a recession in Europe's largest economy.

Among the stocks to watch on Wednesday include TENAGA NASIONAL BHD [], PROTON HOLDINGS BHD [], BINA PURI HOLDINGS BHD [] and NEXTNATION COMMUNICATION BHD [].

Hard disk drive manufacturers could see trading interest again after Western Digital Corp expected its two factories in Thailand to return to pre-flood production levels by September after the planned resumption of operations at its Navanakorn plant in March.

Western Digital, hit hard by the floods, resumed production at its Bang Pa-in plant in central Ayutthaya on Nov. 30 and its objective is to bring back its capacity to rapidly support its customers.

Reuters quoted Western Digital president and CEO John Coyne said the impact of the floods had reduced its output by 30%.

Tenaga Nasional Bhd expects to return to black in the second quarter ending Feb 2012, boosted by the RM2 billion received from Petroliam Nasional Bhd and the government under the fuel cost-sharing mechanism.

It posted a net loss of RM224.70 million for the first quarter ended Nov 30, 2011 compared to net profit RM716.50 million a year earlier. The losses were due mainly to 29.5% increase in operating expenses due to continued use of oil and distillate as alternative fuel to generate electricity.

Meanwhile, a day after DRB-HICOM BHD [] emerged as the successful bidder for Khazanah Nasional Bhd’s 42.7% stake in Proton Holdings Bhd, DRB-Hicom was actively buying up the shares from the open market.

DRB-Hicom bought 39.927 million Proton shares or 7.27% stake via open market at prices ranging from RM5.40 to RM5.47 per share.

Bina Puri Holdings Bhd’s Pakistan subsidiary has inked a concession agreement with the National Highway Authority of that country to build a 136km-long motorway under a build-transfer-operate concept for a contract value of RM864 million .

It said on Tuesday that its subsidiary, Bina Puri Pakistan (Private) Ltd had signed the 28-year concession agreement for the conversion of the existing four-lane Karachi-Hyderabad superhighway into a six-lane motorway.

Bina Puri said the CONSTRUCTION [] cost amounted to RM644 million and that the construction, upgrading and rehabilitation of the motorway is to be completed over 30 months, adding that it expected the groundbreaking to be sometime in March 2012.

Nextnation Communication Bhd expects cumulative profit of about US$7 million over the initial period of three years from its IT infrastructure project with Indonesia’s PT Inovisi Infracom, Tbk.

IOI CORPORATION BHD []’s subsidiary Multi Wealth (Singapore) Pte Ltd has won the tender bid for a parcel of land in the island republic for S$408 million (RM995.50 million).

AXIS Real Estate Investment Trust (Axis REIT) has targeted to increase its total assets portfolio from RM1.28 billion at end-2011 to RM2 billion by 2013. In the immediate term, it expects its portfolio increase to about RM1.4 billion once it completes two property acquisitions at the end of this month.

Axis REIT has identified PROPERTIES [] worth RM545.3 million for possible acquisitions and is conducting due diligence on a number of them.



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Nextnation: US$7m profit from IT infra project with Indonesia’s Inovisi

KUALA LUMPUR (Jan 17): NEXTNATION COMMUNICATION BHD [] expects cumulative profit of about US$7 million over the initial period of three years from its IT infrastructure project with Indonesia’s PT Inovisi Infracom, Tbk.

Nextnation said on Tuesday it would sell mobile platform infrastructure hosting and maintenance services to Indonesia’s PT Inovisi Infracom, Tbk.

Under the heads of agreement inked on Thursday, it would sell to Inovisi an IP interconnection platform to serve telecom operators offering IP services and an IP bandwidth optimiser, allowing data to be sent out via faster and more consistent IP networks.

“Inovisi will provide Nextnation a minimum revenue guarantee of not less than US$22.50 million over an initial period of three years, with an option to extend for another three years subject to overall performance. Nextnation's initial investment commitment for this Project is estimated at US$5 million.

“The funds will be used to purchase the necessary equipment and to set up the IT infrastructure to fulfil the project's requirements. From this project, Nextnation targets to achieve a cumulative profit contribution of about US$7 million over the initial period of three years,” it said.



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KL shares firmer at mid-morning trade

Shares on Bursa Malaysia were traded firmer at mid-morning Monday, boosted by gains in selected heavyweights and supported by interesting local corporate developments, dealers said.

At 11.03am, the FTSE Bursa Malaysia KLCI (FBM KLCI) was 3.03 points higher at 1,517.16, pushed up by gains mostly seen in Petronas Gas, which contributed 1.16 points, to the increase in benchmark index. Earlier, the FBM KLCI opened 0.93 of a point to 1,515.06.

The Finance Index rose 25.8 points to 13,413.51, the Plantation Index added 8.29 points to 8,445.22, while the Industrial Index advanced 12.99 points to 2,769.84.

The FBM Emas Index gained 23.851 points to 10,440.66, the FBM 70 Index jumped 30.399 points to 11,613.43, the FBMT100 Index was 21.771 points higher at 10,246.61 and the FBM Ace perked 19.33 points to 4,149.25.

Gainers thumped losers by 302 to 191 while 268 counters were unchanged, 727 untraded and 24 suspended. Turnover stood at 617.079 million shares worth RM377.513 million.

Two counters -- Jaks Resources Bhd and Inari Bhd -- were suspended during trading this morning. Jaks Resources, suspended from 10.10am, is expected to announce a proposed joint venture for an independent power plant project in Vietnam, while Inari, halted from trading since 10.42am, will also be making an announcement.

Leading the actives' list is Kumpulan Hartanah Selangor, tipped to be taken private by its major shareholder, Kumpulan Perangsang Selangor, saw its shares surging 10.5 sen to 47 sen, followed by Nextnation Communication Bhd, which earned one sen to 12.5 sen.

Meanwhile, Proton-CG:CW was up 7.5 sen to 55.5 sen after news on DRB-Hicom and General Motors Corp are keen on the national automaker's stakes.

Heavyweights, Maybank added one sen to RM8.24, Sime Darby was unchanged at RM9.06, while CIMB Group rose five sen to RM7.23 and Petronas Gas gained 30 sen to RM15.10. -- Bernama



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KL shares lower at mid-afternoon

Share prices on Bursa Malaysia continued their downtrend at mid-afternoon today with persistent profit-taking largely in plantation-related stocks, led by Kuala Lumpur Kepong and Tradewinds Plantation, dealers said.

At 3.28pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 5.02 points to 1,509.41.

The local bourse continued to be influenced by tepid sentiment globally over the uncertain eurozone debt crisis, dealers said.

However, investors were also cautiously awaiting the United States jobs data due later in the day.

The Finance Index dropped 29.239 points to 13,362.28, Plantation Index plunged 102.45 points to 8,381.26 and the Industrial Index fell 17.07 points to 2,747.29.

The FBM Mid 70 Index dropped 10 points to 11,601.92, the FBM Ace Index rose 0.84 of a point to 4,110.64 and the FBM Emas Index fell 25.89 points to 10,390.96.

Decliners led advancers 390 to 302 while 286 counters were unchanged. Volume stood at 1.025 billion shares valued at RM829.795 million.

For the actives, Nextnation rose 2.5 sen to 11 sen, Hibiscus Petroleum-WA added one sen to 65 sen and Unisem-WA went up 12.5 sen to 39.5 sen.

Among heavyweights, Maybank lost six sen to RM8.23, Sime Darby inched down two sen to RM9.05, CIMB eased one sen to RM7.15 and Petronas Chemicals slid seven sen to RM6.31. -- Bernama



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Nextnation to capitalise on mobile Internet traffic

KUALA LUMPUR: ACE Market-listed Nextnation Communication Bhd, a mobile application service provider, is seeking ways to capitalise on mobile Internet traffic, said CEO and managing director Tey Por Yee.

Nextnation’s clients telecommunication operators such as Celcom, DiGi and Maxis have requested Nextnation to develop solutions and services to capitalise on the heavy Internet traffic and bandwidth usage, which are mainly going to social networking sites such as Facebook, he said after the company AGM yesterday.

“How do we convert ourselves from a conventional texting or mobile payment services provider to be able to cater for the mobile Internet? That is the challenge,” Tey said.

He said Nextnation’s services are mostly through text messaging, but its clients now want services that are tuned or specialised for the mobile Internet, such as media streaming.

Although telcos are already charging users for mobile Internet usage, they still see an opportunity in their traffic, he said.

Nextnation has not come up with any conclusive solutions yet, but Tey said mobile advertising or merchandising are some of its ideas.

Telcos provide voice and data services, but value-added services and solutions are provided by companies such as Nextnation.

Nextnation Network Sdn Bhd, wholly-owned subsidiary of Nextnation, is a leading end-to-end mobile multimedia application services provider (ASP) that offers one-stop mobile and wireless solutions to telecommunication companies, corporate and consumer markets

On the company’s growth, Tey said most of the its future revenue would be derived from overseas businesses. Tey said about 40% of overseas revenue is from Indonesia and the rest from Thailand. Nextnation’s overseas revenue accounted for 63% of the total for its FY11 ended April 30.

It posted a net profit RM1.06 million for FY11 versus RM4.57 million previously, while revenue increased to RM72.31 million against RM66.09 million a year earlier.

The difference in net profit was mainly due to a gain of RM4.5 million from the disposal of subsidiary companies that was recorded in FY10, the annual report stated.

Tey said compared with Indonesia and Thailand, there is a limit to growth in Malaysia given its population size.

The company’s market share in the niche segment (customised services) is 30% in Malaysia, 20% in Indonesia and about 15% in Thailand, according to Tey.

He said Nextnation also provides original equipment manufacturing (OEM) services — where it provides the technology and takes back the royalties — in countries such as India, China and the UK.

On Nextnation’s profitability, Tey said the company’s revenue is increasing but profits are declining.

“I think going forward, in terms of the margins, it is going to be a very competitive environment,” said Nextnation corporate finance vice-president Adrian Ooi Kock Aun.

Ooi attributed the decline in profits to stiffer competition and the increasing sophistication of its services, which have increased costs.

He said Nextnation may diversify into related and non-related sectors. One possibility in a non-related sector is property, such as smart building design, Ooi said.

The company targets to transfer to the Main Market when it meets the requirements, he said.


This article appeared in The Edge Financial Daily, October 25, 2011.