Hong Leong initiates coverage on UEM Land

KUALA LUMPUR (March 16) : Hong Leong Investment Bank Bhd has initiated coverage on UEM LAND HOLDINGS BHD [] with a Hold recommendation and a target price of RM2.35.

In a note on Friday, Hong Leong said it expects UEM Land to post earnings growth of 14% to 33% during the FY12 to FY14 period. This takes into account the developer’s unbilled sales of RM1.85 billion and income contribution from its key projects.

Hong Leong said there is improvement in the quality of UEM Land’s earnings fundamentals, as the developer continues to increase its focus on property sales instead of land disposal as the main source of its income.

UEM Land shares fell one sen to RM2.23 on Thursday.



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Stocks to watch: eBworx, UEM Land, CBIP, KLK

KUALA LUMPUR (March 3): With the FBM KLCI currently at overbought levels, investors ponder whether the FBM KLCI can reach the all-time high of 1,594.74 in July 2011.

On Friday, CIMB led the KLCI to a higher close, as the firmer blue chips galvanised market sentiment. The KLCI rose 10.33 points or 0.66% to 1,583.78.

A further upward trend could boost sentiment among smaller cap stocks, but this would also hinge on external factors from the eurozone and high oil prices which could stifle global growth.

On Wall Street, the S&P and Nasdaq notched their eighth week of gains out of the last nine, but momentum ran out on Friday as stocks ended the day lower in a thinly traded session.

Energy shares were the big losers in the broad decline, falling alongside crude oil prices, though other cyclical groups, including industrials and financials, also lost altitude.

Reuters said the Dow Jones industrial average dipped 2.73 points, or 0.02 percent, to 12,977.57 at the close. The Standard & Poor's 500 Index slipped 4.46 points, or 0.32 percent, to 1,369.63. The Nasdaq Composite Index shed 12.78 points, or 0.43 percent, to close at 2,976.19.

For the week, the Dow inched down 0.05 percent, while the S&P 500 rose 0.3 percent and the Nasdaq added 0.4 percent. On Tuesday, the Dow closed above 13,000 for the first time since May 2008, though it has subsequently struggled to maintain that level.

Affin Investment Bank head of retail research Dr Nazri Khan said on the technical front, the short term momentum might be overbought, but it was normal to expect the KLCI to stay at overbought level for an extended period of time.

“With the KLCI at seven months high, we see the bulls having the upper hand now with all oscillators pointing up accompanied by good trading volume (KLCI has rallied a respectable 62 points and 4% year-to-date with 1.6 billion shares average daily volume suggesting strong buyers underneath).

“The next FBMKLCI target should ultimately come in at July 2011 all-time-high of 1597 level. Short term supports meanwhile are seen at last week high and low near 1565 and 1550 level respectively,” he said in a note.

Meanwhile stocks to watch on Monday include EBWORX BHD [], UEM Land Bhd, CB INDUSTRIAL PRODUCT HOLDING [] Bhd (CBIP), KUALA LUMPUR KEPONG BHD [], ENVAIR HOLDING BHD [] and CyPARK RESOURCES BHD [].

Hitachi Ltd had on Friday launched a conditional voluntary general offer for eBworx Bhd with an indicative purchase price of 90 sen a share. Its pre-suspension price was 78.5 sen.

eBworx said Hitachi had proposed to acquire the shares by making a conditional voluntary general offer to all holders of the shares with a minimum level of acceptances of no less than 85% of the nominal value of the shares excluding the treasury shares held by the company.

UEM Land has targeted a 40% increase in net profit under its key performance indicators for 2012. It was reported the property developer was also targeting a 50% increase in revenue.

UEM Land managing director and CEO Datuk Wan Abdullah Wan Ibrahim was quoted as saying the optimism was underpinned by the various launches this year with a combined gross development value of RM4.5 billion.

He was also quoted saying that for 2012, UEM Land was targeting to achieve RM3 billion in property sales with new residential and commercial property launches.

Meanwhile, The Edge weekly said palm oil mills builder and equipment manufacturer CB Industrial Product Holding is quietly transforming itself into a medium-size palm oil player with the expansion of its Indonesian PLANTATION [] venture.

CBIP would also attract interest as its one-for-one bonus issue goes ex on Monday.

KL Kepong plans to build three refineries in Indonesia to tap higher margins after Jakarta lowered its processed edible oil export taxes, Reuters reported.

With 56% of the its total 248,498 ha land bank in Indonesia, KLK’s plantations director Roy Lim was quoted saying there was little choice but to build the refineries there.

Envair plans to undertake a private placement of up to 35.56 million new shares or 30% of its paid-up to raise RM9.78 million or 27.5 sen per share. It last traded price was 29.5 sen.

The shares would be placed out to its major shareholder Deepak Jaikishan, the directors Mohd Anuar Mohd Hanadzlah and Mohd Shukri Abdullah and independent third parties.

Cypark Resources Bhd has proposed a private placement of up to 15.52 million shares or 10% of the paid-up share capital, to raise up to RM27.48 million.

The indicative issue price was RM1.77 per placement share, which would be a discount of about 10% to the five-day volume weighted average market price of the shares up to and including the last practical date of RM1.9585.

Poultry-based DBE Gurney Bhd has proposed to place out 67.33 million shares or 10% of the current paid-up share capital to raise funds for working capital.

It said the proposed private placement will enable the group to raise fund for working capital requirements, improve the group’s cash flow position and also to provide continued support to the group’s existing business and future business expansion.

DBE Gurney said assuming the placement shares were issued at an indicative issue price of 10 sen per placement share based on the par value of the shares, the proposed private placement is expected to raise gross proceeds of up to RM6.73 million.



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CIMB Research: UEM Land final results way ahead of expectations

KUALA LUMPUR (Feb 29): CIMB Equities Research said UEM Land’s final results were way ahead of expectations and its share price target was RM2.56.

It said on Wednesday the RM2.2 billion new sales notched up in FY11 were also impressive.

“The group has set the bar high for 2012 with headline KPIs of 50% revenue growth, 40% profit growth and 10% ROE. In view of the strong finals and high KPIs, we upgrade UEM Land from neutral to Trading Buy,” it said.

CIMB Research, which has a trading buy, also raised RNAV and EPS for the more ambitious KPIs and balance sheet adjustments.

“Our target price rises because of the higher RNAV and a halving of our RNAV discount to 5%,” it said.



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Stocks to watch: IPPs, Mah Sing, Genting, UEM Land

KUALA LUMPUR (Feb 29): With the current corporate results drawing to an end on Wednesday, investors’ focus would be on the companies with the stronger set of financial results and their prospects for the year ahead as the external and domestic economies slow down.

The important decision would be to pick companies which would be able to ride through slower growth, especially PLANTATION []s and banks with overseas operations.

Among the stocks to watch on Wednesday after independent power producers (IPPs), MAH SING GROUP BHD [], GENTING BHD [] and UEM Land Bhd.

The Energy Commission has invited the first generation of independent power producers to submit their plans to extend the power purchase agreements (PPAs).

These IPPs, whose PPAs were scheduled to end in three to four years, were invited to extend the agreements on condition they would reduce the capacity payments.

Mah Sing Group Bhd posted net profit of RM41.03 million in the fourth quarter ended Dec 31, 2011, up 30.8% from RM31.35 million a year ago, boosted by the property segment.

Its revenue increased by 41% to RM422.12 million from RM299.28 million. Earnings per share were 4.93 sen compared with 3.77 sen. It announced dividend of 11 sen a share.

For FY11, its earnings rose 42.7% to RM168.55 million from RM118.07 million in FY10.

Genting Bhd reported net profit of RM772.91 million in the fourth quarter ended Dec 31, 2011, up 66% from RM465.43 million a year ago.

Its revenue increased by 23.9% to RM5.06 billion from RM4.08 billion. Its earnings per share were 20.94 sen compared with 12.57 sen while it proposed a dividend of 4.5 sen a share.

Group profit before tax was RM1.802 billion, compared with RM1.182 billion a year ago as it included a reversal of RM308.6 million in respect of previously recognised impairment loss relating to the UK casino licenses and a net fair value gain of RM64.4 million on derivative financial instruments.

UEM LAND HOLDINGS BHD [] posted a 3.84% increase in earnings to RM140.56 million for the fourth quarter ended Dec 31, 2011, from RM135.36 million, due to improved performance from the group's various development activities.

It said the board was confident of the group’s prospects in the coming financial year as the on-going projects had unbilled sales of RM1.85 billion as at Dec 31, 2011.

Shareholders of TSM GLOBAL BHD [], who own 28.07% of the paid-up share shares, have offered to acquire all the business, including assets and liabilities, for RM159.24 million or RM1.25 per share.

Property developer, Dijaya Corp Bhd's earnings rose 12.8% to RM39.02 million for the fourth quarter ended Dec 31, 2011, from RM34.59 million a year ago, due to better sales performance and recognition of progress billings from its project launches in 2011.

Revenue was up 53.2% to RM156.19 million from RM101.91 million. Earnings per share were 8.53 sen compared to 7.60 sen a year ago.

KFC Holdings Bhd (KFCH) saw its fourth quarter earnings decline 21.9% to RM38 million from RM48.67 million a year ago.

It said KFC India and KFCH International College continued to incur high initial start-up costs in the current quarter during the gestation period.

QSR BRANDS BHD [] reported net profit of RM38.69 million in the fourth quarter ended Dec 31, 2011, up 9.7% from the RM35.25 million a year ago due to better profits from Pizza Hut Malaysia.

Cafe chain operator Oldtown Bhd recorded RM11.66 million in profits for the fourth quarter ended Dec 31, 2011 as it benefited from an increase in exports of its beverage products and higher selling prices.

Steel contractor Eversendai Corporation Bhd recorded profits of RM36.42 million for the fourth quarter ended Dec 31, 2011, due to higher revenue from current on-going projects. Its revenue was RM313.29 million while earnings per share were 5.41 sen.

For the financial year ended Dec 31, 2011, revenue was RM1.03 billion, while profits were RM119.45 million.

Benalec Holdings Bhd, posted a 52.51% increase in earnings to RM28.84 million for the second quarter ended Dec 31, 2011, from RM18.91 million due to net gain on sale of land in the current quarter.

Its revenue was 40.54% lower to RM26.89 million from RM45.22 million mainly due to certain projects located in Melaka had already reached the completion stage.

RHB CAPITAL BHD [] posted an 8.09% fall in profits to RM348.39 million for the fourth quarter ended Dec 31, 2011, from RM380.15 million due to increased competition among banks.



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UEM Land records RM140.5m in 4Q earnings, unbilled sales of RM1.85b

KUALA LUMPUR (Feb 28): UEM LAND HOLDINGS BHD [] posted a 3.84% increase in earnings to RM140.56 million for the fourth quarter ended Dec 31, 2011, from RM135.36 million, due to improved performance from the group's various development activities.

It said on Tuesday, that the board was confident of the group’s prospects in the coming financial year as the on-going projects had unbilled sales of RM1.85 billion as at Dec 31, 2011.

“The profits from these future billings will be recognised substantially over the next two financial years. The group will also be launching several residential and commercial projects in the Klang Valley, Cyberjaya and Nusajaya in 2012. These projects will ensure the groups’ profitability is sustainable in the near future,” it said.

UEM Land’s 4Q11 revenue soared 115.22% to RM597.80 million from RM277.76 million. Earnings per share were 3.25 sen compared to 3.72 sen a year ago.

The higher contributions were attributed to improved performance to the group's activities in SiLC, East Ledang, Nusa Idaman, Nusa Bayu and Symphony Hills. The quarter also saw the consolidation of results from SUNRISE BHD [], as a factor to its increased earnings.

For the financial year ended Dec 31, 2011, revenue rose 261.7% to RM1.70 billion compared to RM471.14 million the previous year, while profits were up 55.1% to RM301.71 million from RM194.54 million.



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Iskandar Malaysia starting to bear fruit

Iskandar Malaysia
During our recent visit to Iskandar Malaysia, we were pleasantly surprised by the strong 65% bookings for UEM Land Holdings Bhd’s Imperia@Puteri Harbour condos launched in November 2011 at a record RM725 per sq ft (comparable with suburban condominiums in Kuala Lumpur).

Impiana@East Ledang condos also saw brisk sales with two blocks almost fully sold within six months at RM480 psf (against RM300 psf for the adjacent Ujana apartments launched in 2009). Southern Industrial and Logistics Clusters (SiLC) industrial land values continued to appreciate with the latest transactions hitting RM35 psf against 2010’s RM25 psf.

For S P Setia Bhd, Johor remains a core market (29% of sales) with sales surging 57% in FY11.

Since its launch in December 2011, the Johor Premium Outlets (JPO) has been seeing strong crowds, especially during weekends (locals and Singaporeans). About 90% of Phase 1’s 70 stores are operational (Coach, Ferragamo, Burberry, Levis, Guess) while the rest are being fitted out (Polo Ralph Lauren, Tommy Hilfiger, Brooks Brothers).

Discounts range from 30% to 60% (a tad better than Singapore sales). Accessibility to JPO is good (10 minutes from Senai Airport via a dedicated interchange) with clear signs.

However, the food court is small and car park pay machines are limited. JPO’s size pales in comparison with similar outlets in the US, Japan and Hong Kong, but Phase 2 could see another 60 outlets (130 in total).

Future development may also include a 2,000-room hotel and water theme park. Genting Plantations Bhd will be the largest beneficiary given its 2,226ha in Kulai — every RM5 psf increase (from RM10 psf assumed) would raise its sum-of-parts value by 10%.

Iskandar is set to reach its tipping point in 2012/13 following the completion of key catalyst developments and infrastructure improvements.

The recent Malaysia-Singapore leaders’ retreat saw continued improvement in bilateral ties (including plans to build an underground link for a rapid transit system by 2018).

The entry of more developers (Temasek Holdings, Sunway and China’s Zhuoda Group in Medini, Bandar Raya Developments Bhd in Nusajaya, Dijaya Corp Bhd in Danga Bay) should help expedite Iskandar’s overall development progress.

We believe Singapore’s stubbornly high property prices and latest stamp duty hike could lead to spillover demand for Iskandar properties. — HwangDBS Vickers Research, Jan 16


This article appeared in The Edge Financial Daily, January 17, 2012.



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Plantations to lead local rally, says Affin Research’s Nazri

KUALA LUMPUR (Jan 15): The PLANTATION [] sector may lead the local market rally this week, starting Monday, despite the worries about the downgrade of several European countries especially France.

Affin Investment Bank head of retail research, Dr Nazri Khan said the market may shift focus back toward Q4 corporate earnings and economic data.

He added equity markets may face a barrage of critical data which includes China Q4 GDP, US industrial production and inflation report and Bank of Canada’s interest rate statement.

“Given that there is a lot of liquidity sitting at the sidelines, any stronger than expected recovery in the economic data may bring huge inflow of liquidity which in turn could become the tsunami the market has been waiting for,” he said.

Nazri pointed out the plantation sector (which have gained an impressive 4.8% gain over the last two weeks) to lead the local market rally.

He added there was a strong resurgence of interest in plantation stocks such as KLK, Kulim, Genting Plantation, Sarawak Oil Palms, Rimbunan Sawit and Gleanely Plantation.

“If the pick-up in liquidity and the stirrings by selected blue-chips and frontliners are maintained - especially in the plantation and CONSTRUCTION [] sector - are any indication, our view is that the local market may actually be inching towards an early 2012 recovery,” it said.

However, he said on the negative front however, the direction of oil can still be a wild card on the current positive sentiment.

He advised investors should keep a close eye on the price of crude oil as there are tensions between the west and Iran over the latter’s nuclear ambitions threaten to destabilise oil supplies.

Nazri said any serious embargo on Iranian exports by the USA may produce retaliations which can hike up the oil price.

“Technically speaking, we see positive MACD, Stochastics and RSI as well as healthy average trading volume (above 1.5 billion shares) as indicating upside momentum and more accumulation next week.

“Finally, we see positive local newsflow to sustain the local sentiment,” he said.

Nazri said the following headlines to excite the markets which may include rumours on RHB and MBSB merger, Genting Group getting a casino licence in Miami, CIMB expanding big into Laos, MMC proposed privatisation of KTMB, AirAsia X expanding into Australia after withdrawing flights in India and Europe, TM bidding for digital television broadcasting, UEM LAND HOLDINGS BHD [] mega launch of RM5.5 billion of property projects and Sapura Crest US$100 million construction award in offshore Vietnam.



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UEM Land eyes RM3b in sales for 2012

KUALA LUMPUR: UEM Land Holdings Bhd is targeting RM3 billion in property sales this year, riding on new launches with a gross development value (GDV) of RM5.5 billion.

CEO Datuk Wan Abdullah Wan Ibrahim said the group will be launching properties in Nusajaya (Johor), Mont’Kiara, the Kuala Lumpur central business district, and Bangi and Kajang (Selangor). The properties include mixed developments of residential, commercial and office spaces.

Wan Abdullah said the UEM Land group fulfilled its target of RM2.2 billion in sales last year and is confident of achieving RM3 billion in sales in 2012.

“We expect a dramatic increase in the take-up rate this year,” he said, adding that his optimism is based on the strong uptake and sales achieved in the past two years.

Wan Abdullah was speaking to reporters after a signing ceremony between UEM Land and Medini Security Services Sdn Bhd yesterday.

The signing of the joint venture agreement yesterday was for Medini Security Services, a wholly-owned subsidiary of Iskandar Investment Bhd, and UEM Land to form a full-fledged security service company to provide enhanced security for Nusajaya, one of the five nodes of Iskandar Malaysia.

Services will be carried out in two phases. Phase 1 includes the guarding of premises, monitoring and response, event and critical infrastructure protection. Phase two will comprise all aspects of Phase 1 plus individual security escort teams, training, consultancy and corporate security.

Iskandar Investment Bhd CEO Datuk Syed Mohamed Syed Ibrahim (left) exchange documents with Wan Abdullah after the signing of the joint venture agreement yesterday.

The security service company will spend about RM8 million in its first year, with RM4 million for vehicles and communication equipment.

The sum will increase annually as the company increases the amount of CCTV cameras on the Nusajaya Loop later on.

Although the joint venture company will not be a profit centre, it will earn revenue from the provision of security services to any project in the Nusajaya area, said Wan Abdullah.

He said 20 auxiliary police officers have been deployed to Nusajaya with a further 160 to be deployed by 2015.

“This initiative is part of the Nusajaya Security Blueprint we had developed and practised throughout the zone. While relying on technology to provide a single and uniformed security platform, we believe that omnipresence is also key in providing residents with a more secure environment and in gaining the confidence of investors and ultimately, peace of mind for Nusajaya stakeholders,” he said.

Asked about the progress of UEM Land’s bid for the 7.6ha in Bangsar at the intersection of Jalan Bangsar and Jalan Maarof, Wan Abdullah said the group has been shortlisted and invited to present its case again to the panel. When it is fully developed, the parcel of land will have an estimated GDV of RM5 billion.

The land used to house Unilever (M) Holdings Sdn Bhd’s plant and was owned by Perbadanan Aset Keretapi. Its new owner, Pelaburan Hartanah Bhd, a government entity set up to promote bumiputera ownership of prime real estate, opened the tender for the development of the land last year and will announce its decision in the first half of 2012.

Other bidders include Mah Sing Group Bhd and Land & General Bhd.


This article appeared in The Edge Financial Daily, January 11, 2012.



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UEM Land targets RM3b sales this year

UEM Land Holding Bhd, which plans to launch RM5.5 billion worth of properties, aims to record sales of RM3 billion this year.

Managing Director/Chief Executive Officer Datuk Wan Abdullah Wan Ibrahim said the properties were located in Johor, Kuala Lumpur Central Business District, Mont Kiara and Bangi.

UEM Land achieved sales of RM2 billion last year, he told reporters here today after the company inked a joint venture agreement with Medini Securities Services Sdn Bhd to enhance security features in Nusajaya.

Since the mid-90s, 11,000 units of residential properties were sold in Nusajaya by UEM Land and other developers.

"The company alone sold 3,500 units since 2006.

"We expect the demand structure to continue this year," Wan Abdullah said, adding that the take up rate stood at 85 per cent, currently.

On the joint-venture, he said the company has collaborated to form a full-fledged security service company with Medini Security to provide enhanced security for Nusajaya.

Eight million ringgit has been budgeted this year to implement this initiative as part of the Nusajaya Security Blueprint, he added.

"We are looking into areas of improvement such as the expansion of our CCTV coverage in the vicinity to further add value to the current security features," he said.

By 2015, the joint venture company is expected to have an estimated 160 auxiliary police officers who will be deployed in critical areas.

UEM Land, is the master developer of Nusajaya, the key driver of Iskandar Malaysia, Johor. -- Bernama



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Flash: UEM Land targets RM3 billion in property sales this year, says CEO

KUALA LUMPUR (Jan 10): UEM LAND HOLDINGS BHD [] targets RM3 billion in property sales this year, said its chief executive officer Datuk Wan Abdullah Wan Ibrahim.

"We will be launching RM5.5 billion worth of PROPERTIES [] this year across Malaysia with a target of RM3 billion in sales," said Abdullah at a signing between UEM Land and Medini Security Services Sdn Bhd on Tuesday.

He said the group planned to launch these properties in Kajang and the KL central business district.

Abdullah added that the group had managed to fulfill its 2011 target of RM2 billion sales.



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A sluggish Malaysian start to 2012

US stocks climbed and sent the S&P 500 index to its highest level since end-October 2011, amid signs that manufacturing output is increasing from China to Australia and America. Manufacturing across the globe showed improvement in December, suggesting that production is weathering strains from Europe’s debt crisis.

In the US, a report showed factory output grew at the fastest pace in six months.

Australian manufacturing expanded for the first time in six months while similar Chinese and German data surpassed economist estimates recently, too. Another report showed construction spending in the US rose in November for a third time in four months.

Locally, the FBM KLCI traded in a listless sideward price range of 23.05 points with consistent volumes (of 1.61 billion to 1.67 billion shares) done. The market rose in a listless manner yesterday on minor nibbling activities in some key blue chip stocks.

Some minor local buying lifted the market especially yesterday, after post window-dressing profit-taking activities on Tuesday and Wednesday.

The index closed at 1,514.43 yesterday, up 10.21 points from the day before as blue chip stocks like CIMB Group Holdings Bhd, DiGi.Com Bhd, IOI Corp Bhd, Kuala Lumpur Kepong Bhd and Petronas Chemicals Group Bhd inched up in afternoon buying activities.

The recent upward market action for the KLCI since Dec 21, 2011 has now caused the daily price bars to remain marginally above the 18-, 40- and 200-simple moving average line (SMA). The obvious support levels are seen at 1,487, 1,502 and 1,514 while the key resistance levels are seen at 1,525, 1,530 and 1,597.

Due to the potentially volatile global markets, we believe that investors should remain cautious and take a short-term view of the market. The current rebound may still be viewed as a “bear market relief rally”. From the all-time high of 1,597.08 (July 2011) to the 1,310.53 swing low (September 2011), the index surpassed the 1,500-psychological mark to a temporary high of 1,530.73 (December 2011).

Despite surpassing the 200-SMA level of 1,501.52 currently, the indicators like the MACD Histogram and Oscillator depict bearish divergence signals — indicating waning upside on the strength, depth and breadth of the index components.

Our stock in focus this week is UEM Land Holdings Bhd — the flagship company of the real estate investment and development business of UEM Group which is wholly-owned by Khazanah Nasional Bhd. The counter was admitted into the FBM KLCI 30 benchmark index on Dec 19, 2011.

Since then, the stock has risen from RM2.25 until it reached a high of RM2.47 on Dec 23. After that high, it fell to its last traded price of RM2.28. It is now undertaking the development of Nusajaya into a regional city with diverse catalyst developments to create and promote economic growth and development in the area.

UEM Land recently released its 3Q results for FYE11. It recorded a lower revenue of RM290.8 million compared with RM372.8 million for the previous quarter mainly due to weaker contribution from the overall developments. Second, it saw weaker industrial land sales of RM84.2 million against RM122.1 million in the preceding quarter due to stronger sales performance for the Southern Industrial & Logistics Clusters (SiLC) project.

Our Maybank IB fundamental analyst expects increasingly tougher competition in the property market, especially in the office segment due to massive government land developments.

These projects, which have similar concepts as UEM Land’s Aurora Tower and developments in Mont’ Kiara, could flush the market with ample supply of varieties, boost take-up/occupancy risks and limit pricing power.

Currently, Maybank IB has a “hold” call on UEM Land with a target price of RM2.02.

There are 14 other research houses that cover the counter of which there are 10 “buy” calls, three “hold” and one “sell”.

UEM Land’s share price made a key daily and major Wave-5 high at RM3.40 (Jan 13, 2011), with grossly overbought and bearish divergent signals. Since that high, it plunged to a recent low of RM1.54 on Sept 26 (a bad loss of 54.7% in about a nine-month time frame).

Look to sell UEM Land on any rallies to its resistance areas as the moving averages depict a neutral trend for this stock, which eventually would succumb to further selling activities on high volume. The high of RM2.47 represents the 50% retracement level (from RM3.40 to RM1.54) and immediate key resistance for this stock.

The daily indicators (like the MACD and Stochastic) are firmly negative and now depict the obvious indications of UEM Land’s eventual weakness.

We expect UEM Land to remain weak on any rebound or retracement to its resistance levels of RM2.28, RM2.47 and RM2.58. It will attract some major selling at those levels. The weaker support levels are at RM1.54, RM2 and RM2.22. Our technical downside targets for UEM Land are RM1.54, RM1.74 and RM2.

In our 1Q12 strategy piece released recently, we favour some Asean countries for investments in 2012. They are Indonesia and Thailand.

Do attend our Maybank IB event next Saturday (Jan 14 at 8.30am) at the Securities Commission to hear what our regional research heads’ top sectors and picks are in those countries.

Lee Cheng Hooi is head of retail research at Maybank Investment Bank. The views expressed in the article are the opinions of the writer and should not be construed as investment advice. Please exercise your own judgment or seek professional advice for your investment decisions. Technical report appears every Wednesday and Friday.



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HDBSVR sees upside for UEM Land, TP RM2.30

KUALA LUMPUR (Jan 6): Hwang DBS Vickers Research (HDBSVR) sees the successful talks between the governments of Malaysia and Singapore as a strong boost to the prospects of Iskandar Malaysia.

The research house said on Friday that Iskandar Malaysia is expected to reach its tipping point in 2012 following the completion of key catalyst developments and infrastructure improvements.

The industrial cooperation work group may serve as a springboard for more investments from Singapore into Iskandar Malaysia which has received RM77.8 billion worth of committed investments as at Dec 2011.

HDBSVR said UEM Land will be the largest beneficiary of improving Malaysia-Singapore ties given that it is the largest landowner in Iskandar Malaysia with 11,000 acres in Nusajaya.

UEM Land is also the project manager for the M+S Pte Ltd developments (S$11bn) in Singapore. Assuming project management fee of 3% of GDV and a 50% share, it could boost UEM Land’s RNAV by an additional 1.3% or 5 sen/share.

“Maintain Hold call for UEM Land with RM2.30 TP, based on 40% discount to RNAV of RM3.82,” it said.



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UEM Land a top pick of RHBCap

UEM Land Holdings Bhd, a Malaysian developer, rose the most in a week in Kuala Lumpur trading after RHB Capital Bhd upgraded the country’s property industry to “neutral.”

The stock climbed 1.4 percent to RM2.26 at 9:13 a.m. local time, set for its biggest increase since Dec. 27.

UEM Land was among RHB’s top picks, according to a report by analyst Loong Kok Wen today. -- Bloomberg



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HDBSVR sees cautious trading ahead for Thursday

KUALA LUMPUR (Jan 5): Hwang DBS Vickers Research (HDBSVR) said if the FBM KLCI falls beneath the crucial 1,500 then the benchmark index could pull back further ahead on Thursday.

It said that on Wednesday, the KLCI fell for the second day in a row, slipping 9.3 points to bring its cumulative loss to 26.5-point (or 1.7%) since the beginning of the year.

In contrast, its closest regional peers – the Philippines (+1.5%), Indonesia (+1.3%) and Thailand (+1.1%) – chalked up strong gains.

HDBSVR said against a cautious market backdrop, stocks that may still garner investors’ interest include:

(a) JCY International, which in an unprecedented practice by Malaysia corporate, announced via the stock exchange that the group is expected to show a steep jump of 1,900% year-on-year and 460% quarter-on-quarter in its net profit to approximately RM150 million for the Oct-Dec 2011 quarter;

(b) Proton, after its chairman publicly said he has put in a bid to buy over Khazahan Nasional’s 42.7% stake in the national car maker; and

(c) UEM Land, given its exposure in Iskandar Development as more investments and initiatives may be announced when the Prime Ministers of Malaysia and Singapore meet this morning.



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KLCI extends loss as renewed eurozone worries weigh on global markets

KUALA LUMPUR (Jan 4): The FBM KLCI reversed its earlier gains and extended its losses on Wednesday as key regional markets retreated on renewed concerns over the eurozone debt crisis.

The FBM KLCI fell 9.32 points to 1,504.22, down from its intra-day high of 1,525.14.

Losers overtook gainers by 404 to 387, while 318 counters traded unchanged. Volume was 1.66 billion shares valued at RM1.53 billion.

Asian shares closed mixed, while European shares broke a four-session rally on Wednesday as concerns over the euro zone's huge refinancing needs lead investors to cash in on recent gains, according to Reuters.

Banking stocks, many of which are heavily exposed to euro zone debt, fell 0.9% ahead of a German debt auction later in the session, it said.

At the regional markets, the Shanghai Composite Index fell 1.37% to 2,169.39, Hong Kong’s Hang Seng Index lost 0.80% to 18,727.31, and South Korea’s Kospi was down 0.49% to 1,866.22.

Meanwhile, Japan’s Nikkei 225 rose 1.24% to 8,560.11, Taiwan’s Taiex up 0.42% to 7,082.97 and Singapore’s Straits Times Index added 0.84% to 2,711.02.

On Bursa Malaysia, Petronas Dagangan lost 44 sen to RM17, Y&G down 24.5 sen to 75.5 sen, HLFG shed 22 sen to RM11.52, APM 20 sen to RM4.30, Mah Sing and UEM Land lost 15 sen each to RM1.95 and RM2.23, CIMB 14 sen to RM7.10, Ibraco 13 sen to RM1.23 and GAB fell 12 sen to RM13.22.

Among the gainers, Dutch Lady gained 58 sen to RM24, KLK 50 sen to RM23.50, Batu Kawan 48 sen to RM17.98, BAT 36 sen to RM49.80, BHIC 23 sen to RM3.85, Allianz 18 sen to RM4.94, Lafarge Malayan Cement 16 sen to RM7.14, Shell 15 sen to RM9.30 while MISC gained 13 sen to RM5.73.

The actives included HWGB, JCY, Hibiscus, Astral Supreme, Maxbiz and Nextnation.



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KL shares close lower

Shares of the following companies had unusual moves in Malaysia trading. Stock symbols are in parentheses and prices are as of the close in Kuala Lumpur.

The FTSE Bursa Malaysia KLCI Index fell 0.6 per cent to 1,504.22, its second day of declines.

Plantation stocks: Kuala Lumpur Kepong Bhd gained 2.2 per cent to RM23.50, a record close. IJM Plantations Bhd advanced 3.9 per cent to RM2.96, its highest close since April 29. Kulim Malaysia Bhd climbed 2.3 per cent to RM4.42, a record.

The March-delivery palm oil contract advanced 1.6 per cent to RM3,225 per metric ton on the Malaysia Derivatives Exchange yesterday, the highest close since Nov. 18. It traded at RM3,220 at 5:08 p.m. today.

Property stocks: Mah Sing Group Bhd lost 7.1 per cent to RM1.95, the most since Sept. 13. UEM Land Holdings Bhd slid 6.3 per cent to RM2.23, its steepest decline since Sept. 26.

Malaysia’s property industry was downgraded to “trading buy” from “overweight” by CIMB Group Holdings Bhd, which cited concerns economic growth will slow this year. UEM Land was cut to “neutral” and Mah Sing was downgraded to “trading buy,” CIMB analyst Terence Wong wrote in a report.

YTL Power International Bhd, a power producer, added 1.1 per cent to RM1.85, its highest close since Dec. 8. UBS AG upgraded the stock to “neutral” from “sell” following a 29 per cent drop in its share price since November 2010, Nicole Goh, an analyst at UBS, wrote in a report. She also raised the stock’s price estimate to RM1.90 from RM1.75. -- Bloomberg




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UEM Land, Mah Sing fall on CIMB

UEM Land Holdings Bhd and Mah Sing Group Bhd fell in Kuala Lumpur trading after CIMB Group Holdings Bhd downgraded Malaysia’s property industry on concern economic growth will slow this year.

UEM Land dropped 4.2 per cent to RM2.28 at 3:32 p.m. local time, set for its steepest decline since Nov. 1. Mah Sing lost 5.7 per cent to RM1.98, bound for its largest drop since Sept. 26. UEM Land was cut to “neutral” from “trading buy” and Mah Sing was downgraded to “trading buy” from “outperform,” CIMB said in a report. -- Bloomberg




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KLCI pares down gains at mid-day, Asian markets mixed

KUALA LUMPUR (Jan 4): The FBM KLCI pared down it gains at the mid-day break on Wednesday as the Hong Kong and China markets retreated into negative territory, while other markets saw limited gains.

Hong Kong shares reversed early gains to finish lower at midday on Wednesday, underperforming Asian peers, with lackluster turnover suggesting investors were cautious, refraining from chasing recent gains, according to Reuters.

Mainland Chinese markets reopened after a New Year holiday to an ambivalent start despite expectations that some favourable policy news over the long weekend could boost sentiment. Weakness in China weighed on Hong Kong, Reuters cited traders as saying.

The FBMKLCI was up 1.21 points to 1,514.75 at 12.30pm, lifted by gains at select blue chips. The index had earlier risen to its intra-morning high of 1,525.14.

Gainers led losers by 377 to 269, while 306 counters traded unchanged. Volume was 958.42 million shares valued at RM782.15 million.

The ringgit strengthened 0.38% to 3.1388 versus the US dollar; crude palm oil futures for the third month delivery fell RM23 per tonne to RM3,198, crude oil shed 17 cents per barrel to US$102.79 while gold lost US$4.50 an ounce to US$1,599.00.

At the regional markets, Japan’s Nikkei 225 was up 1.32% to 8,566.67, Singapore’s Straits Times Index added 0.54% to 2,702.87, Taiwan’s Taiex rose 0.32% to 7,075.94 and South Korea’s Kospi edged up 0.01% to 1,875.57.

Meanwhile, Hong Kong’s Hang Seng index fell 0.29% to 18,822.68 and the Shanghai Composite Index shed 0.22% to 2,194.67.

On Bursa Malaysia, Dutch Lady was the top gainer at the mid-day break and was up 78 sen to RM24.20.

Other gainers included KLK that rose 60 sen to RM23.60, BAT 44 sen to RM49.88, Batu Kawan 40 sen to RM17.90, BHIC 22 sen to RM3.84, Shell 15 sen to RM9.30, MISC 13 sen to RM5.73, Ajiya and Jaya Tiasa up 12 sen each to RM1.75 and RM7.02, while LPI Capital added 10 sen to RM13.78.

Among the decliners, Petronas Dagangan fell 22 sen to RM17.22, GAB down 12 sen to RM13.22, Kluang 11 sen to RM2.54, AIC 10 sen to RM1.20, Iretex nine sen to 91 sen, while Tradewinds, Asdion and UEM Land lost seven each to RM9.90, 35 sen and RM2.31 respectively.

The actives included HWGB, JCY, Maxbiz, Envair, XDL, Karambunai and Nextnation.



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KAF, UEM Land, JCY buck market downtrend

PETALING JAYA: Amid the bearish market sentiment yesterday, several stocks bucked the generally downward trend, perked up by company-specific news.
Stocks such as stockbroker KAF-Seagroatt & Campbell Bhd, property developer UEM Land Holdings Bhd and hard disk drive (HDD) component maker JCY Holdings Bhd ended the day higher, outpacing the broader FBM KLCI which shed 12.61 points or 0.85% to settle at 1465.17.

KAF rose 15 sen or 11.3% to end at RM1.48 after The Edge Financial Daily reported yesterday that a Singapore bank, speculated to be OCBC Bank, is looking to acquire the company’s securities business.

OCBC, the second largest banking group in Singapore and Southeast Asia, is the only one of Singapore’s big three banks with no presence in Malaysia’s capital market services industry.

Following The Edge Financial Daily article, Bloomberg also reported yesterday that OCBC is planning to acquire 49% of KAF’s equities brokerage unit for 1.3 to 1.4 times book value, and that the transaction will be completed in early 2012, quoting unnamed sources.

Last week, United Overseas Bank (UOB), Singapore’s third largest banking group, entered into an agreement to acquire Innosabah Securities Bhd from Kretam Holdings Bhd for RM56.68 million.







Government-linked property developer UEM Land closed three sen or 1.3% higher at RM2.28, on high volume of 16.71 million shares. This came a day after the stock was included as one of the constituents of the 30-stock FBM KLCI on Monday. As the only pure property developer on the KLCI, analysts said the status may attract investors looking for exposure to Malaysia’s property sector, and in particular Iskandar Malaysia.

In a recent report, Maybank-Kim Eng said the group will likely win more government land deals such as the Rubber Research Institute of Malaysia (RRIM) land in Sungai Buloh, Selangor, the former Pudu jail land development project in Jalan Hang Tuah, as well as the former Unilever factory land in Bangsar, Kuala Lumpur.

Another stock which captured investor interest yesterday was JCY, which closed three sen higher at 91 sen per share, following a three sen gain on Monday. The stock was among the most actively traded with 34.1 million shares changing hands.

An article in The Edge weekly noted that JCY’s plant in Thailand had escaped the flooding that devastated the country’s industrial parks, and that the company is poised to benefit from higher prices of HDD components.

JCY managing director James Wong told The Edge that the price of HDD components has increased by 20% due to a shortage following the supply chain disruption in Thailand.

“Before the floods, the average selling price [ASP] of HDD had been falling around 2% to 3% every quarter. But the floods caused a shortage of HDDs, which pushed up ASP,” he said Wong.


This article appeared in The Edge Financial Daily, December 21, 2011.



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Market Commentary

The FBM KLCI index lost 12.61 points or 0.85% on Tuesday. The Finance Index fell 0.75% to 13080.61 points, the Properties Index up 0.68% to 967.77 points and the Plantation Index down 0.49% to 7849.12 points. The market traded within a range of 12.10 points between an intra-day high of 1476.41 and a low of 1464.31 during the session.

Actively traded stocks include UTOPIA, ASUPREM, JCY-CD, MAXBIZ, ASUPREM-WA, JCY, SANICHI, RA, GAMUDA-CS and FOCUS. Trading volume increased to 1642.89 mil shares worth RM1243.57 mil as compared to Monday’s 1601.87 mil shares worth RM1033.26 mil.

Leading Movers were TENAGA (+5 sen to RM5.50), YTLPOWR (+4 sen to RM1.80), MAYBANK (+2 sen to RM8.24), UEMLAND (+3 sen to RM2.28) and RHBCAP (+2 sen to RM6.82). Lagging Movers were CIMB (-15 sen to RM6.90), DIGI (-9 sen to RM3.61), GENTING (-18 sen to RM10.36), PETCHEM (-15 sen to RM6.05) and PPB (-50 sen to RM16.70). Market breadth was negative with 328 gainers as compared to 429 losers. -- JF Apex Securities Bhd



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