KLCI hovers in negative territory at mid-morning

KUALA LUMPUR (May 9): The FBM KLCI hovered in negative territory at mid-morning on Wednesday in line with the overnight fall at Wall Street and weaker sentiment at regional markets, underpinned by global economic and political worries.

At 10.01am, the FBM KLCI fell 3.03 points to 1,587.57, weighed by select blue chips.

Gainers trailed losers by 132 to 234, while 219 counters traded unchanged. Volume was 237.19 million shares valued at RM17908 million.

Asian shares fell and the euro stayed pressured on Wednesday, as Greece struggled to form a government two days after elections, raising the risk that a hard-won bailout could be nullified, according to Reuters.

BIMB Securities Research in a note Wednesday said the conditions in Europe was ripe for traders to create some volatility in the equity markets and yesterday could be the beginning of the trend.

With the initial focus on Spain and now the political issues in France and Greece, investors may be in for a roller coaster ride this month, it said.

Reacting to the European uncertainty, the Dow Jones Industrial Average sank 76.44 points to 12,932 but off its intra-day low of 12,810, it said.

“Needless to say, European bourses took the brunt of yesterday’s selling as all ended up in a sea of red,” it said.

The research house said regional markets had a mixed session possibly from the weak opening in Europe amid the ongoing consolidation mode.

“Locally, the FBM KLCI rebounded by 5.73 points to just above the immediate 1,590 resistance at 1,590.60.

“For today, it will be interesting to gauge the resilience of investors whether they will all jump into the selling bandwagon. For us, we believe there will be some broad based knee jerk reaction and should pressure the FBM KLCI on the downside,” it said.

On Bursa Malaysia at mid-morning, F&N Fell and Petronas Dagangan fell 14 sen each to RM18.90 and RM19.80, Hong Leong Bank and Genting down 12 sen each to RM12.12 and RM10.54, Sarawak PLANTATION []s 11 sen to RM2.92, Rapid and IJM Corp 10 sen each to RM2.57 and RM5.44, while NPC, MAHB and Ajiya lost eight sen each to RM2.60, RM5.71 and RM1.60 respectively.

Permaju was the most actively traded counter with 25.7 million shares done. The stock rose 3.5 sen to 91 sen.

Other actives included Harvest Court, Naim Inda Corp,Perisai, Sanbumi, Metronic, Compugates, JCY and Komark.

Gainers included KGB, Tasek, Komark, KLK, Mercury, CIMB, SKB Shutters, Multico, Perisai and Permaju.



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KLCI crosses 1,590-level as blue chips lift

KUALA LUMPUR (May 8): The FBM KLCI closed higher on Tuesday on some mild bargain hunting while regional markets ended mixed, albeit recovering from sharp decline on Monday after election results in Europe spooked investors.

The FBM KLCI rose 5.73 points to close at 1,590.60 on Tuesday, lifted by gains including at BAT, Petronas-linked counters and Genting.

Gainers beat losers by 404 to 307, while 357 counters traded unchanged. Volume was 1.27 billion shares valued at RM1.24 billion.

Uncertainty over the implications of the Greek and French elections for Europe's efforts to resolve its debt crisis sent the euro and shares lower on Tuesday and supported safe-haven German government bonds, according to Reuters.

Attention is focused on Greece where politicians are struggling to form a government after voters plunged their country into limbo in Sunday's election. The uncertainty has reignited fears its hard-fought bailout deal could unravel, forcing the country's exit from the euro, it said.

At the regional markets, the Shanghai Composite Index shed 0.12% to 2,448.88, Hong Kong’s Hang Seng index was down 0.25% to 20,484.75, while Japan’s Nikkei 225 rose 0.69% to 9,181.65, South Korea’s Kospi gained 0.54% to 1,967.01, Taiwan’s taiex added 0.10% to 7,545.71 and Singapore’s Straits Times Index.

On Bursa Malaysia, BAT and Petronas Dagangan added 52 sen each to RM55.68 and RM19.94, Tasek and Dutch Lady were up 26 sen each to RM9.29 and RM33.30, Kulim 21 sen to RM4.45, MKH 20 sen to RM2.40, GAB 18 sen to RM13.34, Ekovest 17 sen to RM2.65, Iretex 16 sen to RM1.30, Permaju 14.5 sen to 87.5 sen, Petronas Gas 14 sen to RM17, Genting 10 sen to RM10.66 and Petronas Chemicals two sen to RM6.57.

Ariantec was the most actively traded counter with 76.74 million shares done. The stock fell half a sen to 24.5 sen.

Other actives included Naim indah Corp, Compugates, Sanbumi, TMS, Harvest, Permaju, JCY and Metronic.

Decliners included Jaya Tiasa, Toyo Ink, MMHE, Lafarge Malayan Cement, Sarawak Oil Palms, JCY, Top Glove, Ibraco and IJM land.



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Permaju says unaware of reasons for active trade

KUALA LUMPUR (May 8): PERMAJU INDUSTRIES BHD [] said it was not aware of any corporate developments relating to its business and affairs that could account for the unusual market activity (UMA) involving its shares.

Responding on Tuesday to an UMA query from Bursa Malaysia Securities Bhd a day earlier, Permaju said it was not aware of any rumour or report, or any other possible explanation to account for the unusual market activity.

At the mid-day break on Tuesday, Permaju rose 11 sen to 84 sen with 21.35 million shares traded.



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KLCI stays in the black at mid- day break

KUALA LUMPUR (May 8): The FBM KLCI reversed its earlier losses and stayed in positive territory at the mid-day break on Tuesday, in line with most key regional markets that shrugged off jitters from a day earlier following election results in Greece and France.

The FBM KLCI added 2.75 points to 1,587.62 at the mid-day break, lifted by gains at select blue chips.

Gainers outpaced losers by 302 to 272, while 332 counters traded unchanged. Volume was 620.94 million shares valued at RM467.71 million.

The ringgit strengthened 0.01% to 3,0543 versus the US dollar; crude palm oil futures rose RM28 per tonne to RM3,374, crude oil shed two cents per barrel to US$97.92 and gold fell US$1.63 an ounce to US$1,636.93.

Shares recovered on Tuesday from the previous day's plunge, as sentiment improved on hopes Spain would use public funds to bolster its struggling banks, although persistent wariness over Greece weighed on the euro, according to Reuters.

MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.1 percent, having slid more than 2 percent the day before for its worst daily fall in about five months and hitting its lowest in about three months, it said.

At the regional markets, Japans’ Nikkei 225 gained 0.68% to 9,180.87, South Korea’s Kospi added 0.50% to 1,966.13, Singapore’s Straits Times Index was up 0.42% to 2,937.16 and Taiwabn’s Taiex edged up 0.13% to 7,548.19.

Meanwhile, the Shanghai Composite Index lost 0.65% to 2,435.90 and Hong Kong’s Hang Seng Index shed 0.05% to 20,525.90.

On Bursa Malaysia, BAT was the top gainer and rose 70 sen to RM55.86, Kulim 24 sen to RM4.48, Tasek 20 sen to RM9.23, Ekovest 17 sen to RM2.65, MSM 16 sen to RM5.34, Atlan 13 sen to RM4.39, Tong Herr and Permaju 11 sen each to RM2.51 and 84 sen, whiel Nakamichi and Multico added 10 sen each to 76 sen and RM1.25.

Menawile, Genting rose eight sen to RM10.64, Genting PLANTATION []s six sen to RM9.50 and Petronas Chemicals up three sen to RM6.58.

TMS was the most actively traded counter with 41.34 million shares done. The stock added half a sen to 9.5 sen.

Other actives included Sanbumi, Ariantec, JCY, Permaju, Naim Indah Corp and Metronic.

Decliners in the morning session included Jaya Tiasa, Toyo Ink, Lafarge Malayan Cement, PPB, JCY, Sarawak Oil Palms, IJM Land, MMHE, Texchem and OIB.



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Permaju share trade halted for one hour

KUALA LUMPUR (May 8): Trading in the shares of PERMAJU INDUSTRIES BHD [] has been halted for one hour from 9.09am to 10.09am on Tuesday.

The stock was among the most actively traded prior to the trade halt.

Permaju rose 12 sen to 85 sen with 6.48 million shares done.

Bursa Malaysia Securities Bhd had on Monday issued an unusual market activity (UMA) query to Permaju Industries Bhd over the sharp rise in the price and high volume in the company’s shares recently.



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Stocks to Watch F&N, Bumi Armada Bhd, PerMaju Industries Bhd and MSM Holdings Bhd

KUALA LUMPUR (May 7): The FBM KLCI may extend its losses on Tuesday, in line with the tepid investor sentiment at most global markets, after most Asian and European equities were mired in the red following several electoral results in the troubled eurozone area.

Greek and French election results rattled investors on Monday by undermining confidence in the region's plans to cut spending and tackle its debt crisis, sending the euro to a three-month low, according to Reuters.

European shares also initially traded lower, with Greek stocks down 6.4 percent, but reaction was muted with the UK market closed for a holiday. Wall Street stocks were expected to reflect the weaker tone when they were being trading, it said.

Among the stocks that could be in focus on Bursa Malaysia on Tuesday are Fraser & Neave Holdings Bhd (F&N), Bumi Armada Bhd, PERMAJU INDUSTRIES BHD [] and MSM Holdings Bhd.

F&N declared an interim single tier dividend of 20 sen per share for the financial year ending Sept 30, 2012 amounting to RM73 million to be paid on Aug 1. Its net profit fell 18.93% to RM107.01 million in its second quarter ended Mar 31,2012 from RM131.99 million a year earlier as a result of the cessation of its Coca-Cola business and flood disruptions in Thailand.

Bumi Armada Bhd’s unit has secured a five-year contract worth US$65 million (RM198.9 million) to provide an accommodation workboat. The company said on Monday that its subsidiary, Bumi Armada Navigation Sdn Bhd ("BAN") had been awarded the contract by Tecnologías Relacionadas con Energía y Servicios Especializados, SA de CV (TRESE). "The Vessel will be providing accommodation and offshore support services in the Mexican territorial waters."

Meanwhile, Bursa Malaysia Securities Bhd issued an unusual market activity (UMA) query to Permaju Industries Bhd over the sharp rise in the price and high volume in the company’s shares recently.

MSM Malaysia Holdings Bhd profits rose 7.05% in its first quarter ended Mar 31, 2012 to RM66.39 million from RM62.02 million a year ago, due to higher sales volume and average selling prices. It said on Monday that its revenue for the quarter increased 5.68% to RM531.76 million from RM503.17 million a year earlier.



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Bursa queries Permaju

KUALA LUMPUR (April 19): Bursa Malaysia Securities Bhd has issued an unusual market activity (UMA) query to PERMAJU INDUSTRIES BHD [] over the sharp rise in the price and high volume in the company’s shares recently.

Permaju was the among the most actively traded stocks in the morning session on Thursday on Bursa Malaysia with 3.16 million shares done.

The stock closed 20 sen higher at 73 sen with 16 million shares done.



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Select blue chips lift KLCI marginally higher

KUALA LUMPUR (May 3): The FBM KLCI closed higher on Thursday, erasing its earlier losse, lifted by gains at select blue chips including AirAsia, Telekom, AMMB and CIMB.

The stock index added 0.78 of a point to 1,583.17.

Gainers trailed losers by 344 to 390, whiel 325 counters traded unchanged. Volume was 1.29 billion shares valued at RM1.21 billion.

Meanwhile, Asian shares slipped on Thursday and the euro languished near a two-week low after disappointing economic data from both sides of the Atlantic rekindled concerns about the strength of global growth, according to Reuters.

But European stock markets were seen opening stronger, fueled by hopes that a European Central Bank policy meeting later in the session will prepare the ground for further stimulus measures, it said.

At the regional markets, the Shanghai Composite Index edged up 0.07% to 2,440.08, Hong Kong’s Hang Seng index fell 0.28% to 21,249.53, Taiwan’s Taiex lost 0.23% to 7,659.53, South Korea’s Kospi shed 0.20% to 1,995.11 and Singapore’s Straits Times Index down to 3,000.94. Japan’s Nikkei 225 was closed for a national holiday.

On Bursa Malaysia, Knusford was the top gainer and rose 34 sen to RM2.28, Airasia added 27 sen to RM3.60, Panasonic up 22 sen to RM22.92, BAT 20 sen to RM55.24, Country View 19.5 sen to 84 sen, MPHB, Tradewinds PLANTATION []s and Tradewinds added 14 sen each to RM2.86, RM6 and RM9.99 respectively, MBM Resources was up 13 sen to RM5.09 and Permaju was up 12.5 sen to 55.5 sen.

Utopia was the most actively traded counter with 84.11 million shares done. The stock was unchanged at 8 sen.

Other actives included Ariantec, Naim Indah Corp, AirAsia, Metronic, Astral Supreme, Compugates and DayaMaterials.

Meanwhile, the decliners included Genting, BLD Plantations, MAHB, PPB Bank, Shell, Pasdec,Eng Kah and Rexit.



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Sanbumi MD increases stake in fellow timber player Permaju

KUALA LUMPUR: Something appears to be brewing between two unrelated and generally thinly traded stocks — Sanbumi Holdings Bhd and Permaju Industries Bhd.

The former’s major shareholder has been building up a sizeable stake in the latter, leading to speculation that this may lead to an alliance between the two companies.

Both Sanbumi and Permaju share a common business interest in timber and both companies are loss-making.

The typically illiquid stock of Permaju saw relatively large movements of its shares traded off market last week.

On Nov 29, Sanbumi managing director Datuk Chua Tiong Moon bought an additional 3.63 million shares in Permaju at 29 sen a piece for RM1.05 million in a married deal.

This brought his total shareholdings to 12.99 million shares or a 6.91% stake in Permaju, making him the third largest shareholder behind brothers Tan Sri Chai Kin Kong and Datuk Chai Kin Loong, who have 10.95% and 7.35% direct stakes in the company respectively.

On the next day (Nov 30), 4.5 million Permaju shares were exchanged in an off-market cross trade at the same price of 29 sen. These shares were sold by Kin Kong, Kin Loong and other family members.



In contrast, Permaju’s 30-day volume traded average is just 7,077 shares.

Permaju’s biggest shareholder Kin Kong had reduced his stake from 13.7% on April 22 to 10.94%, and on Sept 28 selling most of the 7.64 million shares in the open market.

Kin Kong also disposed of 2.9 million Sanbumi shares, reducing his stake to 4.99% with a total of 8.694 million shares.

It appears that Chua has been building up his stake in Permaju, possibly buying up the Chai brothers’ shares.

It is unclear what Chua’s motive is, although there could be a synergy between the two companies’ timber businesses.

Permaju and Sanbumi have a market capitalisation of RM58.78 million and RM47.31 million respectively.

Permaju has two core businesses in timber and automotive. While Permaju’s timber segment accounted for a majority of the group’s assets, its automotive division contributed almost 10 times the revenue compared with timber.

Permaju’s timber business which has 59.41% of the group’s assets at RM140.84 million only contributed RM14.09 million in revenue or 8.94% of their full-year revenue ended Dec 31, 2010. The timber segment incurred a loss of RM5.35 million overall.

Its automotive segment which contributed 90.98% of its 2010 revenue, accounted for 46.44% of the group’s total assets in the same period.

Permaju executive chairman Datuk Rahadian Mahmud Mohammad Khalil wrote in the 2010 annual report, “The group’s timber log trading activity is to be further rationalised and to cease if the trading environment remains unhealthy.”

Permaju has RM16.96 million worth of timber concession rights in Pahang and Kelantan and Sanbumi’s principal activities through its subsidiaries are saw milling, manufacture of downstream timber products, timber log and timber product trading.

For the group’s 3Q results ended Sept 30, Permaju incurred losses of RM5.02 million, with its timber business offering weak revenue return to assets.

The timber business which has RM123.24 million in assets or 53.54% of the group’s total assets only contributed RM4.75 million in revenue or 3.72% of the group’s total for the quarter and incurred an overall loss of RM276,000.

In the same quarter, Permaju’s automotive segment with RM114.06 million in assets (49.54% of total assets) contributed RM122.66 million to the group’s top line or 96.19% of total revenue with a loss of RM2.26 million.

Sanbumi chalked up net losses of RM5.24 million for the nine months to Sept 30.

Both stocks are trading at a similar 0.36 times price-to-book ratio. Their net assets per share stood at 84 sen and 70 sen respectively as at Sept 30.

Permaju’s share price closed at 30 sen unchanged while Sanbumi gained 0.5 sen to 25 sen last Friday.


This article appeared in The Edge Financial Daily, December 5, 2011.



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