Supermax recovers slightly after Monday’s tumble

KUALA LUMPUR: Shares of Supermax Corp Bhd recovered slightly yesterday after closing at its lowest level since October 2011 — but not nearly enough to scrape back what was lost on Monday after its founder and chief executive officer Datuk Seri Stanley Thai was charged by the Securities Commission Malaysia with alleged insider trading offences.

The glovemaker recovered slightly its losses but still closed the day with a 0.62% decline, in heavy trading.
The stock rebounded to hit an intraday high of RM1.73 before ending the day at RM1.61, with 10.91 million shares exchanging hands. Its market capitalisation stood at RM1.09 billion.

Supermax shares fell 32 sen or 16.5% to close at RM1.62 on Monday, following news that Thai, his wife and sister-in-law were charged in the Kuala Lumpur Sessions Court with handing a broker non-public information about a higher-than- expected hit to the bottom line of Supermax’s former associate APL Industries Bhd, of which he was an investor.

According to theedgemarkets.com, Supermax’s valuation score stood at 1.20, on a scale of 0 to 3, with 3 suggesting a company gives higher-than-market-average returns and is trading at a lower-than-average valuation.

Its fundamental score stood at 1 on a scale of 0 to 3, with 3 suggesting that it is profitable and has a strong balance sheet.

Supermax’s stock also has a volatility rate of 2, which measures the volatility of a stock based on its share price movements relative to the whole market over a period on a scale of 1 to 5, with 1 being the least volatile.

This article first appeared in The Edge Financial Daily, on December 17, 2014.

Supermax rebounds after plunging 16.5% as chief faces insider trading charge

KUALA LUMPUR (Dec 16): Glove maker Supermax Corp Bhd rebounded six sen or 3.7% after plunging 16.5% yesterday as its chief faces insider trading charges.

The Securities Commission (SC) had charged Supermax executive chairman and group managing director Datuk Seri Stanley Thai for insider trading involving APL Industries Bhd (APLI) shares. APLI is a former unit of Supermax.

The SC also charged Thai's spouse Tan Bee Geok and Bee Geok’s sister Tan Bee Hong for insider trading involving APLI shares.

Today, Supermax was traded at RM1.68 at 10.21am after rising as much as 11 sen or 7% to RM1.73 earlier. The FBM KLCI fell 7.31 points or 0.4%.  

Yesterday, Supermax shares fell 32 sen or 16.5% to close at RM1.62. Weak broader market sentiment also weighed on its share price.

The KLCI declined 35.68 points or 2.06% to close at 1,697.31 points.

In a press statement yesterday, the SC said Thai, 54, was charged at the Kuala Lumpur Sessions Court for communicating non-public information between October 26 and 29, 2007 to Tiong Kiong Choon, a remisier with a stock broking company.

Tiong was earlier charged by the SC last Tuesday at the Kuala Lumpur Sessions Court for disposing of 6.2 million APLI shares on October 26 and 29, 2007 while in possession of the information.

In addition, the SC also charged Thai’s spouse Bee Geok for communicating non-public information to Bee Hong between October 23 and 31, 2007.

The regulator alleged that Bee Hong had on October 31, 2007 sold 350,000 APLI shares held in her account while in possession of the information.

Supermax executive chairman, wife charged with insider trading

Glove makers among top losers

KUALA LUMPUR (March 27): Glove makers Top Glove, Hartalega and Kossan were among the top losers in afternoon trade on Tuesday despite the overall firmer market.

At 2.46pm, the Top Glove was down 12 sen to RM4.53 with 350,900 shares done, Haratalega and Kossan lost seven sen each to RM8.02 and RM3.23. Supermax was unchanged at RM1.88.

The FBM KLCI was up 4.55 points to 1,587.53. Turnover was 1.18 billion shares done valued at RM802.06 million. There were 326 gainers, 342 losers and 344 counters unchanged.



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CIMB Research has technical buy on Supermax at RM1.90

KUALA LUMPUR (March 21): CIMB Equities Research has a technical buy on Supermax Corporation at RM1.90 which it is trading at a FY13 price-to-earnings of 7.6 times and price-to-book of 1.7 times

It said on Wednesday the recent correction dragged Supermax to the 38.2% Fibonacci Retracement levels. This would likely be its first line of defence. If prices can hold on above its previous swing low of RM1.87, there is a good chance that a stronger rebound would kick in.

“Technical indicators are showing sign of improvement. MACD signal line has flattened out, suggesting that selling pressure has tapered off. RSI too has bounced off its lows,” it said.

CIMB Research said aggressive traders may take some position here while others should only join the bandwagon after prices swing past the short term resistance trend line at RM2.00. A break below RM1.87 would negate this bullish tone.



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CIMB Research maintains Outperform on Supermax, TP RM2.43

KUALA LUMPUR (March 2): CIMB Equities Research is maintaining its Outperform on SUPERMAX CORPORATION BHD [] and target price of RM2.43.

It said on Friday the target price was on the basis of 9.79 times forward P/E or 25% below Top Glove’s two-year average.

“The rerating catalyst is the start of its 28 million pairs a month surgical glove plant in March 2012, which will boost FY12 pretax profits by 20%,” it said.

CIMB Research said investors should accumulate Supermax’s shares. Valuations are undemanding at an FY12 P/E of 9.6 times, 53.8% below Top Glove’s despite its superior returns and yields.

“Competition and overcapacity risks are there but its focus on distribution and own-brand gloves will shield it from the next one to three years of glut,” it said.

Maintain Outperform and target basis of 9.79x forward P/E or 25% below Top Glove’s 2-year average. The rerating catalyst is the start of its 28m pairs/month surgical glove plant in Mar 2012, which will boost FY12 pretax profits by 20%.



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KLCI edges up at mid-morning, but struggles to sustain early gains

KUALA LUMPUR (Feb 2): The FBM KLCI rose at mid-morning on Thursday, in line with the gains at the key regional markets, but found it hard to sustains its gains.

At 10am, the FBM KLCI was up 7.87 points to 1,529.16, lifted by gains at select blue chips. The index had initially breached the 1,540-level in very early trade.

Gainers led losers by 388 to 188, while 287 counters traded unchanged. Volume was 628.94 million shares valued at RM519.44 million.

At the regional markets, Hong Kong’s Hang Seng Index rose 1.2% to 29,577.00, Japan’s Nikkei 225 added 0.84% to 8,883.94, the Shanghai Composite Index edged up 0.19% to 2,272.28, Taiwan’s Taiex rose 1.15% to 7,635.93, South Korea’s Kospi added 1.42% to 1,987.04 and Singapore’s Straits Times Index was up 0.44% to 2,917.59.

OSK Research director Chris Eng Poh Yoon in his February market outlook on Thursday said the research house’s January Sell call on the FBM KLCI was correct as the market dipped slightly, underperforming almost all major markets in the world.

He said its “Alternative” Top Buys also did well in January with four out of its five Top Buys outperforming the FBM KLCI, namely Supermax, JCY, Old Town and Sarawak Oil Palm

Still, markets performed better than expected and the global rally seems sustained by a flush of liquidity from the Long Term Refinancing Operation (LTRO), he said.

“As such, we are keeping a close eye on the market for the 1st half of Feb. If indeed markets continue to do well, we may be forced to abandon our Bearish stance and upgrade the KLCI to a Neutral with a preliminary year-end target of around 1,600 points.

“To note our 1,466 points current Fair Value will remain intact but it’s a Fair Value not a year-end target,” he said.

Eng said an upgrade would likely see the research house more aggressively promoting the CONSTRUCTION [] and O&G sectors, adding that for now, Consumer stocks are the flavor of the month.

“Top Buys are KPJ, MBSB, QL and Media Chinese as well as Padini which should attract interest as a cheap and good consumer stock,” he said.

On Bursa Malaysia, Petronas Gas added 52 sen to RM16.20, BAT 48 sen to RM49.88, Hartalega 47 sen to RM7.69, Ekovest 21 sen to RM2.96, Kretam and Petronas Dagangan 20 sen each to RM2.55 and RM18.30, Malayan Flour Mills 17 sen to RM4.50, United PLANTATION []s 16 sen to RM20.50, IJM Corp 14 sen to RM5.88 and Lafarge Malayan Cement up 12 sen to RM6.80.

Tebrau Teguh was the most actively traded counter after a takeover offer made by Iskandar Waterfront Holdings Sdn Bhd (IWH), which is offering 76 sen per share – or just one sen above Tebrau’s pre-suspension price of 75 sen.

The stock rose eight sen to 83 sen with 40.7 million shares done.

Other actives included Coastal Contracts, DRB-Hicom, DBE Gurney, UEM Land, Petronas Chemicals, Mudajaya and Jotech.

Decliners included Tahps, Dutch Lady, Melewar, Southern Steel, MPI, Ajinomoto, Glenealy and BHIC.



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Hartalega rises to record high on lower nitrile prices

KUALA LUMPUR: The tug of war between nitrile and latex glove makers has now tilted in favour of the former, following Thailand’s intervention moves to raise rubber prices early last week.

The intervention by Thailand, the world’s largest rubber producer, has arrested the decline in the rubber price and lifted it from recent lows.

On the other hand, nitrile prices have headed south despite high crude oil prices as the performance of the two has started to diverge.

Hartalega Holdings Bhd is the biggest beneficiary of this latest development. Its share price rose to a record high of RM6.90 last Friday as investors expect the glove maker to benefit from lower nitrile prices.

According to CIMB Research, the cash cost for producing nitrile gloves is 20% lower than rubber gloves, as natural rubber prices have risen 17% since Thailand approved measures to boost the price on Jan 24.

As such, the research house anticipates demand to shift from natural rubber to nitrile gloves.

“The widening cost difference between nitrile and natural rubber is positive for Hartalega as its superior affordability will underpin demand for nitrile gloves. This will enable Hartalega to grab market share from natural rubber glovemakers as reduced healthcare budgets in Europe encourage hospitals to search for cheaper alternatives,” CIMB Research said in a note last Friday.



Compared with its peers that manufacture more natural rubber gloves, Hartalega produces 80% of nitrile gloves in its product mix.

The research house said nitrile prices have fallen 35% since last August to stabilise between US$1,500 (RM4,560) and US$1,600 per tonne currently.

“More significantly, nitrile prices have begun to diverge with Brent crude, as the latter has fallen by 15% to US$110 per barrel since mid-2011. We believe that the divergence is the result of the tug of war between weakening oil demand growth (lower prices) and supply risks due to geopolitical uncertainty (higher prices),” said CIMB Research.

In the past, analysts noted there was a strong correlation between nitrile and Brent crude oil price movements.

At the same time, natural rubber prices fell from a record high of RM10.60 per kg last February to around RM6 per kg earlier this month. Since Thailand gave the green light to increase its locally grown natural rubber price to 120 baht (RM11.75) per kg, natural rubber price has increased to RM7.43 per kg.

This is in contrary to earlier views by Top Glove Corp Bhd, Supermax Corp Bhd and estimates by other analysts, who were bearish on rubber prices before the Thai government’s intervention.

Earlier this year, Top Glove and Supermax forecast that natural rubber prices would fall to between RM5.50 and RM6 per kg in the first quarter of 2012.

Analysts also held similar views then as natural rubber prices were expected to fall due to the rubber glut and weakening demand.

Supermax then expected the lower natural rubber price and stronger US dollar to boost its sales by 20% for FY12 ending Dec 31, while Top Glove was looking to increase profits by 30%.

This optimism boosted the share prices of both counters earlier this year.

Supermax and Top Glove rose 30.3% and 26.2% in the last three months to their respective year highs of RM2.32 and RM5.25, but have since pared some of their gains to close at RM2.15 and RM5.05 respectively last Friday.

AmResearch upgraded the sector outlook to “overweight” and upgraded Top Glove and Kossan Rubber Industries Bhd to “buy” with fair values of RM6.15 and RM4.31 respectively.

However, it remains to be seen if these stocks would be re-rated soon as the price control measure by the Thai government has pushed up natural rubber prices.

CIMB Research has an “underperform” on Top Glove with a fair value of RM3.61 and advised investors to accumulate Hartalega shares instead. It has an “outperform” call on Hartalega with a target price of RM8.44.

“While Hartalega’s liquidity is still low compared with Top Glove, it is up 35% since our conference in January. Its major shareholder has indicated a willingness to further improve liquidity via a bonus issue and/or a measured selldown of its majority stake,” CIMB said.

According to Bloomberg data, Hartalega has 11 “buy” and one “hold” calls with a consensus fair value of RM6.98. Supermax has six “buy”, five “neutral” and two “sell” calls with a consensus fair value of RM2.00.

Top Glove has only one “buy”, three “neutral” and four “sell” calls with a consensus fair value of RM3.58, while Kossan has 13 “buy” and four “neutral” recommendations with a consensus fair value of RM3.58.

Hartalega gained RM1.36 or 24.5% in the past three months to close at RM6.90 last Friday. Kossan rose 29.4% in the same period to a high of RM3.65 on Jan 13, before paring down to RM3.47.


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



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Glove makers rise in early trade

KUALA LUMPUR (Jan 30): Shares of glove manufacturers, led by Hartalega advanced in early trade on Monday on improving outlook for the sector.

At 9.30am, Hartalega rose 33 sen to RM7.23, Top Glove was up 13 sen to RM5.18, Supermax added 11 sen to RM2.26 while Kossan was up three sen to RM3.50.

CIMB Research in note Jan 27 had maintained its Outperform rating on Hartalega and said the affordability of nitrile gloves had improved, primarily due to a 35% drop in nitrile price, in contrast to a 17% rise in natural rubber price.

It said this was positive for Hartalega as it will underpin demand for nitrile gloves at a time when EU healthcare budgets are being cut.

“We retain our valuation basis of 11.75x forward P/E, 10% discount to our Top Glove target. Nitrile gloves are now 20% cheaper to produce versus NR, which will underpin demand.

“Hartalega is our top pick in the glove sector with leading returns and margins. Maintain Outperform,” it said.



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Supermax shares dip on ex-date for 1-for-1 bonus issue

KUALA LUMPUR (Jan 26): SUPERMAX CORPORATION BHD []’s share price dipped in relatively thin trade at midday on Thursday as its one-for-one bonus issue went ex on Thursday.

At 12.30pm, it was down four sen to RM2.15. There were 1.13 million shares done at prices ranging from RM2.15 to RM2.25.

The bonus issue involved 340.07 million new shares of 50 sen each to be credited as fully paid-up on the basis of one bonus share for every one existing share held at 5pm on Jan 30.

Earlier Thursday, CIMB Research said it had a technical sell on Supermax at RM2.195 at which it was trading at a FY13 price-to-earnings of 19.1 times and price-to-book value of 2.0 times.

The research house said the rebound from its September 2011 low appeared to have exhausted. It pointed out that last Friday’s sharp pullback violated its short term uptrend channel and this could be seen as a prelude to more downside ahead, it added.

“If we are right, the candles are likely to fall towards RM2.00 and RM1.90 in the near term,” it said.

CIMB Research said sell into strength looks like a good option here, especially near the RM2.30-RM2.40 resistances. Only a sharp rise above RM2.50 would prompt it to review its call on Supermax.



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CIMB Research has technical sell on Supermax at RM2.19

KUALA LUMPUR (Jan 26): CIMB Research has technical sell on Supermax Corp at RM2.195 at which it is trading at a FY13 price-to-earnings of 19.1 times and price-to-book value of 2.0 times.

It said on Thursday the rebound from its September 2011 low appears to have exhausted. Last Friday’s sharp pullback violated its short term uptrend channel and this could be seen as a prelude to more downside ahead, it added.

“If we are right, the candles are likely to fall towards RM2.00 and RM1.90 in the near term.

“Indicators are showing signs of exhaustion. MACD histogram bars are losing pace fast while RSI has also hooked downward. The overbought RSI which may have prompted the selloff is likely still intact,” it said.

CIMB Research said sell into strength looks like a good option here, especially near the RM2.30-RM2.40 resistances. Only a sharp rise above RM2.50 would prompt it to review its call on Supermax.



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KLCI snaps winning streak, but adds 8.94 points week-on-week

KUALA LUMPUR (Jan 13): The FBM KLCI snapped its four-day winning streak and fell on Friday as key regional markets ended the week on a mixed note.

European shares and the single currency rose on Friday after positive comments on the region's outlook from the European Central Bank and the success of Spain's bond auction, with attention focused on Italy's first debt sale of the year, according to Reuters.

The FBM KLCI closed 2.49 points lower at 1,523.07. Week-on-week, however, the index gained 8.94 points.

Losers edged gainers by 397 to 373, while 339 counters traded unchanged. Volume was 1.77 billion shares valued at RM1.61 billion.

Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said the FBM KLCI was likely to extend gains towards 1,550 level following a round of well-received debt auctions in Spain and Italy, expected monetary easing in China and huge liquidity on the domestic front.

“The fact that Italy and Spain sold a total of €22bn ($28bn) of sovereign debt at sharply reduced prices (with implied borrowing costs falling to lowest levels since March 2011) is a major surprise and suggest the European funding problem is gradually improving,” he said.

At the regional markets, Japan’s Nikkei 225 rose 1.36% to 8,500.02, Hong Kong’s Hang Seng Index added 0.57% to 19,204.42, South Korea’s Kospi gained 0.60% to 1,875.68 and Singapore’s Straits Times Index jumped 1.75% to 2,791.54.

Meanwhile, the Shanghai Composite Index fell 1.34% to 2,244.58 and Taiwan’s Taiex shed 0.07% to 7,181.54.

On Bursa Malaysia, Dutch Lady fell 32 sen to RM25.78, Far East down 30 sen to RM6.90, Proton 28 sen to RM5.18, Iretex 12 sen to RM1.05, Advanced Packaging 11 sen to RM1.19, while Aeon, CBIP, JT International and HLFG lost 10 sen each to RM7.35, RM4.75, RM7.08 and RM11.70 respectively.

Among the gainers, Malayan Flour Mills added 31 sen to RM7.86, Supermax 21 sen to RM4.55, Carlsberg and Nestle added 20 sen each to RM8.63 and RM56, Hartalega, MBM Resources and Parkson rose 17 sen each to RM6.57, RM3.47 and RM5.70 respectively, while Milux and Kian Joo added 15 sen to RM1.44 and RM2.16.

Compugates was the most actively traded counter with 101.3 million shares done. The stock added one sen to 7 sen.

Other actives included DRB-Hicom, Utopia and Proton.



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Stocks to watch: Faber Group, Bumi Armada, TAS, Tebrau Teguh

KUALA LUMPUR (Jan 13): Stocks which could see trading interest on Friday include FABER GROUP BHD [], Bumi Armada Bhd, TAS Offshore Bhd and TEBRAU TEGUH BHD [].

The latest suit which Faber’s subsidiary Faber Ltd Liability Company is facing is from a sub-contractor, Sweet Home Technical Works Ltd Liability Company, for services provided for housing projects in Abu Dhabi.

Faber said the statement of claim dated Jan 10 was for AED13.12 million (RM11.21 million), which Faber LLC is disputing.

Meanwhile, UOB Kay Hian Malaysia research had initiated coverage on Bumi Armada with a sell and sum-of-parts target price of RM3.16 due to weaker outlook.

“Despite the promising macro outlook for floating production storage and offloading (FPSO) platforms within the region, Bumi Armada remains one of the most expensive stocks within the oil & gas services sector.

“Minimal exposure in Malaysia, limited lifespan on FPSOs, concentrated revenue stream on a singular asset, exposure to risky markets/counter parties and coupled with a short operating track record are inherent risks the market should not ignore,” said UOB Kay Hian Research.

On an upbeat note, TAS Offshore’s earnings continued to improve, with net profit of RM2.227 million in the second quarter ended Nov 30, 2011 compared with net loss of RM184,000 a year ago, boosted by sale of its tugboats under CONSTRUCTION []. Its revenue was 27.7% higher at RM31.57 million compared with RM24.72 million a year ago.

TAS’ second quarter net profit of RM2.227 million was higher by 75.3% compared with RM1.27 million in the first quarter while its revenue rose 79% or RM13.91 million from RM17.67 million.

Interestingly, Tebrau Teguh could stand to report a gain of RM16.67 million from the sale of two parcels of commercial land in Plentong, Johor.

It is selling the parcels of land for a total of RM28.27 million, which RM16.67 million or 143.7% above the net book value of RM11.60 million as at Dec 31, 2010. The company said the RM28.27 million was based on a valuation report by Messrs. Raine Horne International Zaki + Partners dated June 17, 2011.

“The total net book value as per audited financial statements for the year ended Dec 31, 2010 is RM11.60 million,” it said.

BINA PURI HOLDINGS BHD [] is negotiating the financial and legal aspects of a privatisation concession agreement with the National Highway Authority in Islamabad, Pakistan. Bina Puri said had received the letter of intent dated Nov 11, 2011 from the highway authority.

SUPERMAX CORPORATION BHD []’s 340.07 million new bonus shares will go ex on Jan 26. The company said the shares were issued on a one-for-one basis. The entitlement date is Jan 30.

CIMB Group says its discussions with San Miguel Corp to possibly acquire a stake in Bank of Commerce in the Philippines, was still on-going. It expected to conclude the negotiations by the first quarter of 2012.



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Supermax’s 340m bonus shares to go ex on Jan 26

KUALA LUMPUR (Jan 12): SUPERMAX CORPORATION BHD []’s 340.07 million new bonus shares will go ex on Jan 26.

The company said the shares were issued on a one-for-one basis. The entitlement date is Jan 30.



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Supermax PAT may hit RM110m for FY11

PETALING JAYA: Rubber glove maker Supermax Corp Bhd is expecting to achieve between RM100 million and RM110 million in profit after tax (PAT) and sales of up to RM1 billion for the financial year ended Dec 31, 2011 (FY11).

Its executive chairman cum group managing director Datuk Seri Stanley Thai said FY11 profits would be lower compared to the preceding year due to headwinds such as high natural rubber prices, and volatile forex rates.

Supermax posted RM158.96 million in PAT from RM977.28 million revenue in FY10.

For the first nine months of FY11, it registered net profits of RM77.87 million on the back of RM750.71 million in revenue.

Nevertheless, Thai said Supermax is expected to see its sales grow between 20% and 30% for FY12 due to the strengthening US dollar and softening natural rubber prices.

“FY11 was a challenging year for the industry due to these headwinds. However, natural rubber prices have fallen from its high and is expected to soften to between RM5.50 and RM6 in the first quarter of 2012. This will result in stronger profit margins for natural rubber glove players,” Thai said after the company EGM yesterday.

Natural rubber prices had fallen from an all-time high of RM10.50 per kg in mid-February last year to RM6.50 per kg in December.

Thai said that the profit margins for nitrile gloves would soften further to between 11% and 13% in the second half of 2012. “We expect profit margins for natural rubber gloves to increase to similar levels (as nitrile gloves),” said Thai. Supermax’s product mix is currently 60% natural rubber gloves and 40% nitrile gloves.

Apart from softening natural rubber prices, Thai said FY12 earnings prospects would also be supported by capacity expansion efforts and higher contribution from its distribution arm. Yesterday, Supermax incorporated a wholly owned subsidiary in UK to market and distribute gloves in the region.

“The subsidiary would be focused on marketing (Supermax’s products) to the dental market in UK. In addition, our German subsidiary had also contributed positively to the group since its incorporation in 2010. We see huge growth in the hospital market there,” said Thai, adding that its distribution arm contributes about 40% to the group’s profits.

Supermax is also replacing its old lines and building two new plants to increase its capacity from 17.5 billion gloves per annum currently to 22 billion by the 2H13, at a cost of RM122 million.

While foreign exchange rates are expected to remain volatile this year, Thai said there would be minimal risks as long as exporters lock in the exchange rates on their exports.

On the recent re-emergence of the H1N1 bird flu in Hong Kong, Thai said there is little impact on Supermax at the moment.

“This (the impact or lack of it) is because the Chinese public hospitals use vinyl gloves rather than natural rubber gloves. Nonetheless, we expect demand for natural rubber gloves to increase once healthcare reforms take place in the country,” said Thai.

Natural rubber and nitrile gloves are considered safer and environmental-friendly compared to vinyl gloves.

Yesterday, Supermax’s shareholders approved a proposed one-for-one bonus issue of 340.08 million new shares and a proposed purchase by Supermax of up to 10% of its issued and paid-up share capital.

Thai said the bonus issue is intended to reward shareholders and improve the liquidity of Supermax shares.

Supermax was the top gainer on Bursa Malaysia yesterday, adding 39 sen to close at RM4.32 with 11.18 million shares done.


This article appeared in The Edge Financial Daily, January 12, 2012.



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Supermax gains on setting up UK unit

Supermax Corp, a Malaysian glove maker, rose to the highest level in almost 10 months in Kuala Lumpur trading after saying it set up a marketing and distributing unit in the U.K. under its global expansion plan.

The stock gained 2.1 percent to RM4.41 at 9:17 a.m. local time, set for the highest close since March 22. -- Bloomberg



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Supermax extends gains on positive outlook

KUALA LUMPUR (Jan 12): SUPERMAX CORPORATION BHD [] shares extended their gains in early trade on Thursday on the company’s positive outlook for the glove makers’ sector.

At 9.15am, Supermax added five sen to RM4.37 with 1.15 million shares traded.

The company’s executive chairman Datuk Seri Stanley Thai said on Wednesday said the company expects to record between RM100 million and RM110 million in profit after tax for the financial year ended Dec 31, 2011.

Thai said he also expected RM1 billion in sales in FY11.

For the nine-months ended Sept 30, FY11, Supermax reported RM77.86 million earnings on the turnover of RM750.70 million.



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Stocks to watch: Takaso, CIMB, Tan Chong, Supermax, Hibiscus

KUALA LUMPUR (Jan 12): Stocks on Bursa Malaysia could see some downside bias on Thursday following the weaker macroeconomic issues from its weaker exports outlook and also the troubled eurozone.

RHB Research Institute said on Wednesday it expected Malaysia’s export growth to slow down sharply in 2012 as the global economy will likely experience a protracted slow growth and downside risks remain.

“Indeed, the latest economic data releases suggest that the Eurozone economy might have fallen into a contraction and the US economic growth, though improving, is likely to remain in a low gear,” it said.

Malaysia recorded RM56.86 billion in exports in November 2011, up 8% on-year but when compared to the previous month of October, it fell 10.2%.

Imports for the month were RM47.38 billion, up 8.4% on-year but declined 5.3% on-month.

In its analysis of the November trade data, RHB Research said the 8% on-year export growth in November was the lowest in four months, after holding up at +15.8% in October and off a 15-month high of +16.6% in September.

“This was below the median estimate of an easing to +12.9%, on the back of sliding exports of commodity products as well as a weaker growth in the exports of non-electronic & electrical (E&E) manufactured goods during the month. A smaller contraction in the exports of E&E products, however, helped to mitigate this,” it said.

On the external front, the head of sovereign ratings for Fitch, David Riley warned that the European Central Bank should ramp up its buying of troubled euro zone debt to support Italy and prevent a "cataclysmic" collapse of the euro, , said on Wednesday.

Riley said the collapse of the euro would be disastrous for the global economy, and while it is not Fitch's baseline scenario, it could happen if Italy did not find a way of its debt problems.

"The end of the euro would be cataclysmic. The euro is a reserve currency," Riley said. "What would that do in terms of financial and political stability?"

At Bursa Malaysia, among the stocks to watch are TAKASO RESOURCES BHD [], CIMB Group Holdings Bhd, TAN CHONG MOTOR HOLDINGS BHD [], SUPERMAX CORPORATION BHD [] and Hibiscus Petroleum Bhd.

Takaso, whose shares have been actively traded recently over a proposed timber concession, is set to seal an agreement with Kayumas PLANTATION [] Ltd on Thursday.

The agreement will enable Takaso to diversify and tap into Kayumas’ resources, including its concession and a timber licence. Kayumas also has the logging rights for 40,000 ha of timber in Papua New Guinea.

Philippine conglomerate San Miguel Corp is finalising a deal to sell 60% of its banking arm, Bank of Commerce, to the CIMB Group,.

Reuters said a share-transfer agreement was now being reviewed by the groups involved, the source, who was not authorised to speak to the media about the matter and thus did not want to be identified, told Reuters.

CIMB had said in October it was in early talks to acquire a stake in Bank of Commerce from San Miguel group.

Reuters said Bank of Commerce, with total assets of $2 billion, has capital stock of 16.96 billion pesos (US$385.5 million) as of June 2011, latest bank filings with the central bank show. Based on this data, a sale of a 60% stake in the bank could be worth US$231.3 million.

Tan Chong Motor Holdings had categorically stated it does not plan to acquire a stake in PROTON HOLDINGS BHD [].

It said that it “has neither received any formal invitation nor has any plan to bid for the stake in the national carmaker, Proton”.

Meanwhile, there could be some intermittent profit taking on glove makers after the strong run on Wednesday, if market sentiment weakens.

Supermax expects to record between RM100 million and RM110 million in profit after tax for the financial year ended Dec 31, 2011.

Its executive chairman Datuk Seri Stanley Thai said he also expected RM1 billion in sales in FY11.

For the nine-months ended Sept 30, FY11, Supermax reported RM77.86 million earnings on the turnover of RM750.70 million.

Hibiscus has come under some selling pressure on the back of rising trading volume after the run-up earlier this month. Its shares fell 16 sen to RM1.02 with 31.51 million units done while the warrants fell 2.5 sen to 61 sen with 27.69 million warrants done.



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KLCI closes higher for third day running, gains capped

KUALA LUMPUR (Jan 10): The FBM KLCI closed marginally higher for the third day running on Wednesday, but gains remained capped in line with the mixed sentiment at regional markets.

The FBM KLCI edged up 0.30 of a point to close at 1,522.29.

Gainers beat losers by 437 to 384, while 301 counters traded unchanged. Volume was 1.91 billion shares valued at RM1.94 billion.

Meanwhile, Europe's persistent debt crisis kept the single currency and global stocks under pressure on Wednesday, threatening to overshadow a slight improvement in the economic outlook that has driven a solid rally in world equity markets, according to Reuters.

European shares hit a one-week closing high on Tuesday, and U.S. stocks reached a five-month peak, after an upbeat forecast by aluminum company Alcoa about the demand outlook for the metal and amid rising hopes of a policy easing in China.

At the regional markets, Hong Kong’s Hang Seng Index rose 0.78% to 19,151.94, Japan’s Nikkei 225 added 0.30% to 8,447.88, Taiwan’s Taiex up 0.13% to 7,188.21 and Singapore’s Straits Times Index rose 1% to 2,747.13.

Meanwhile, the Shanghai Composite Index fell 0.42% to 2,276.05 and South Korea’s Kospi lost 0.41% to 1,845.55.

On Bursa Malaysia, glove makers were in focus on expectations that earnings going forward would see improvement given the outlook for favourable natural rubber prices.

Supermax jumped 39 sen to RM4.32, Kossan 27 sen to RM3.57, Hartalega up 22 sen to RM6.22, Top Glove 19 sen to RM5.25, Adventa 11 sen to RM1.73, Latexx 10 sen to RM2.01 and Rubberex added 3.5 sen to 73 sen.

Other gainers included Malayan Flour Mills that added 22 sen to RM7.40, Dutch Lady 20 sen to RM26.20, Hai-O 19 sen to RM2.16 and Mudajaya 17 sen to RM2.49.

Decliners included PPB and Hibiscus that fell 16 sen each to RM17.04 and RM1.02, Genting and KLK down 14 sen each to RM10.76 and RM24.70, Super Enterprise, OFI and Can-One 13 sen each to 82 sen, RM1.52 and RM1.65, while Sui Wah fell 11 sen to RM1.46.

Takaso was the most actively traded counter with 83.6 million shares done. The stock added half a sen to 25 sen.

Other actives included Mudajaya, Hubline, Hibiscus, Iris Corp and XDL.



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Supermax to meet FY2012 profit target: Thai

KUALA LUMPUR:Rubber gloves manufacturer Supermax Corporation Bhd expects to meet its after-tax profit forecast of RM100 million to RM110 million for the company’s financial year ended Dec 31 2011, says executive chairman Datuk Seri Stanley Thai.

Thai estimates revenue of about RM1 billion for the company’s financial year 2011.

He said the company would announce the performance for its financial year 2011 in the middle of February.

According to Thai, Supermax’s performance for its financial year 2011 was affected among others by the firm price of natural rubber and the economic uncertainty.

Supermax posted an after-tax profit of RM158.9 million on revenue of RM977.28 million for its financial year 2010.

Moving forward, he foresees a remarkable performance for the company's financial year 2012 due to the lower price of natural rubber.

Thai estimates an increase of between 20 and 30 per cent in the group's sales for the current financial year.

“Financial year 2012 will be the best year for Supermax. The financial performance will be similar to that of 2010. Our financial year 2012 will record the highest absolute value in the history of the rubber gloves industry,” he said at a press conference after the company’s extraordinary general meeting (EGM) here today.

Thai said natural rubber gloves contributed 63 per cent and 60 per cent to the group’s profit for its financial years 2010 and 2011, respectively.

“For 2012, the contribution of natural rubber gloves to the group’s profit would be higher. Demand for natural rubber gloves is increasing,” he said.

He said apart from the lower natural rubber price, other factors contributing to the expected better earnings would be sales growth and contribution from the company's distribution activities.

Supermax had incorporated a subsidiary in the United Kingdom, which will take care of the markets in England, Scotland and Ireland, he said.

He also said the company’s subsidiary in Germany had recorded high growth in business activities especially in the hospital market in the country.

Thai said Supermax currently produced 17.5 billion pieces of gloves and the number would increase gradually to 22 billion pieces by 2013 with the completion of its two new plants in Meru, Selangor and the replacement of all its production lines.

“There will be a gradual increase of 20 per cent a year in production capacity,” he added.

At the extraordinary general meeting today, shareholders of Supermax approved its proposed bonus issue of 340,077,440 new ordinary shares of RM0.50 each in the company to be credited as fully paid-up on the basis of one bonus share for every one existing Supermax share.

The shareholders also approved the proposed purchase by Supermax of up to 10 per cent of its issued and paid-up share capital. - Bernama



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