Wijaya gains 3% on Indonesian venture

KUALA LUMPUR (April 18) : WIJAYA BARU GLOBAL BHD [] shares climbed as much as 3% on Wednesday morning after the timber entity said it plans to undertake logging operations and oil palm cultivation in Indonesia.

The stock added two sen to 74 sen before settling lower at 73 sen at lunch break.

Wijaya told the bourse on Tuesday that it is talking to a few interested parties on the feasibility of undertaking logging operations and oil palm cultivation in Indonesia’a Papua province.

“However, all the negotiations are still in the very preliminary stage and nothing has been concluded yet,” Wijaya said.



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Wijaya Baru climbs 6% on proposed timber complex

KUALA LUMPUR (April 16) : WIJAYA BARU GLOBAL BHD [] shares rose as much as 6% on news that the firm plans to set up an integrated timber complex in Indonesia.

The stock rose four sen to an intraday high of 75.5 sen on Monday before being transacted lower at 74 sen at 2.32pm.

Wijaya Baru told Bursa Malaysia last Friday that it is in the “long term interest of the company” to establish an integrated timber complex in Indonesia. The firm, however, said it has yet to sign a joint venture agreement to set up the complex.



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CIMB Research has technical sell on Wijaya Baru Global at 78 sen

KUALA LUMPUR (March 5): CIMB Equities Research has a technical sell on Wijaya Baru Global at 78 sen at which it is trading at a price-to-book value of 0.8 times.

CIMB Research said on Monday that Wijaya Baru has been gyrating in a rising wedge pattern for a long time and the recent fall could be seen as a prelude to more downside ahead," it said.

"If we are right, selling pressure should accerate in days to comme, if not weeks, unless prices swing back above the support-turned-resistance trend line," it said.

The research house said the MACD signal line has slipped into the negative territory. RSI is also below the 50pts mark. Hence, the odds are slightly favouring the bears.

"Use any rebound towards 79 sen to 82 sen to unload on strength. Unless prices swing past the RM0.845 level, we would rather stick with the bear’s camp.The support is at 72.5 sen and 68 sen," it said.



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OSK Retail Research: Rally for Wijaya Baru may have started

KUALA LUMPUR (Feb 21): OSK Retail Research said the expected rally of WIJAYA BARU GLOBAL BHD []’s share price may have finally started following the break out from the sideways range last week.

It said on Tuesday that Wijaya was one of the stocks featured in its Daily Trading report in December last year.

“The stock was expected to trade higher after closing above the mid-2011 high on a daily basis. However, the expected rise did not materialise and the stock traded sideways at the high level instead.

“The resumption of the uptrend may have finally started after it closed above the psychological 80 sen last Friday,” it said.

To recap, OSK Research said the long-term downtrend since reaching the highs of 2005 appeared to have ended by the price surge in mid-2011, closing above the 2010 high.

This upward bias was reinforced by the subsequent shallow correction – 50% of the mid-2011 rally – and the rising 50-week MAV line.

The change of trend was finally confirmed by the 52-week high close in Dec 2011. However, the 80 sen price level proved to be a tough resistance to break and the stock traded sideways for the next two months instead.

The breakout finally happened last week when it closed above 80 sen for the first time on a weekly basis. It was followed by a higher close on Monday and another close above 80 sen this Friday should confirm the breakout.

“Thus, the stock is expected to rally further and positions can be initiated at the current level or on pullback,” it said.

OSK Research said a close below 76 sen could be a stop level, as this price level withstood four tests in the past two months.

A measured move based on mid-2011 rally could see the price trading at RM1.10, also the high of 2003 and 2004. If broken, resistance is expected at the prior support of RM1.40 and a stronger one at RM1.80, the high of 2005 and 2007.

OSK Research said the trade will not pan out if the stop loss is triggered. Look for the stock to trade lower instead and a close below the September-low of 50 sen will likely spell the end of the eight-month rally.



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Wijaya to start logging in Indonesia in 2Q12

KUALA LUMPUR: Wijaya Baru Global Bhd, in which politician Datuk Seri Tiong King Sing owns a 32.02% stake, will begin logging operation in Indonesia in 2Q12, after having received the go-ahead from shareholders at the EGM yesterday to acquire Wealth Gate Pte Ltd and Suffolk Pte Ltd for a total of US$80 million (RM251 million).

Suffolk and Wealth Gate, incorporated in Singapore, have 80,000ha of land in Irianjaya, Indonesia that have been approved for oil palm plantation and related activities. The land valued at US$1,000 per ha is covered with virgin forests and Wijaya will extract the timber first before the area is converted into oil palm plantations.

Wijaya chairman Datuk Abdul Azim Mohd Zabidi said there are no plans to undertake oil palm plantation in Indonesia at the moment,though it remains an option.

He added that after logging is completed and the land cleared, only then will the company weigh options to either venture into plantation or sell the land or lease it to others to plant oil palm trees.

“It is (venturing into oil palm plantation) on the radar and the option is there. But Wijaya has always been a timber company. We had a timber concession in Sarawak and that licence expired in July 2010. We want to stay focused on our core business and that is why we explored this deal,” said Azim.

“This business (timber) has been contributing well to profits year in, year out for the last 20 years,” added Azim.

The concession for oil palm cultivation for the total 80,000ha will last for 35 years and may be renewed for another 25.

Azim acknowledged that there has been a global slowdown due to issues in the eurozone and the US, but said, “What goes down must come up. When the global market recovers, we expect to see demand for construction activity increase, hence more demand for timber.”

“Furthermore, it is unlike those days where you had a lot of timber concession areas. In fact, Indonesia has imposed a (two-year) moratorium (from April 2010) as part of an international treaty with Norway. Fortunately, this (the two plots of land) was approved prior to that,” said Wijaya Group CEO and executive director Datuk Faizal Abdullah.

Wijaya will pay for 20% of the US$80 million purchase consideration via internal funds with the remaining 80% in borrowings sourced from Export-Import Bank of Malaysia Bhd (Exim). The company could not raise funds through a rights issue or shares placement as its current stock price is trading below its par value of RM1.00.

The acquisition should be completed by year-end after Wijaya secures the necessary funding, said Azim, and the company will start clearing the land.

Since both plots of land are virgin forests, Wijaya will have to build up the entire infrastructure for timber extraction which Azim said will cost around RM40 million, including the cost of setting up a sawmill.

Timber logging could begin as early as 2Q12 once the infrastructure is in place, said Azim, who said Wijaya has all the appropriate permits, including undertaking an environmental impact assessment.

Wijaya’s share price rose sharply yesterday to close at 80.5 sen, up 4.5 sen or 5.9% in reaction to the company getting shareholders’ approval for the Indonesian deal.


This article appeared in The Edge Financial Daily, December 7, 2011.



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Stocks to watch: Guocoland, CBIP, Ekovest, MRCB, Wijaya Baru

KUALA LUMPUR (Dec 7): Investor sentiment at the local stock market is likely to remain cautious on Wednesday in line with the overall tepid mood at key regional markets a day earlier after Standard & Poor's warned it might downgrade top-rated Germany and other euro zone countries.

S&P had placed the ratings of 15 euro zone countries on credit watch negative, including the region's two biggest economies Germany and France, and said "systemic stresses" are building as credit conditions tighten in the 17-nation region.

However, analysts say they are cautiously optimistic that European policymakers would make some progress in finding a solution to the eurozone debt crisis at the summit later this week, and as such the decline at the stock market was not expected to be severe, with the exception of further shocks like credit rating downgrades.

On Bursa Malaysia, among the stocks that could be in focus are GUOCOLAND (MALAYSIA) BHD [], CB INDUSTRIAL PRODUCT HOLDING [] Bhd (CBIP), EKOVEST BHD [], MALAYSIAN RESOURCES CORPORATION BHD and Wijaya Baru Global Berhad.

Guocoland’sunit is acquiring 46.72 acres of land worth RM107.8 million in the Cheras locality as part of its land bank expansion plan for future developments.

Its unit Ace Acres Sdn Bhd had entered into a sales and purchase agreement with Bond Corporation Sdn Bhd to acquire nine parcels of land located in Cheras and Mukim Petaling.

Meanwhile, CBIP secured a RM17.88 million contract from Felda Palm Industries Sdn Bhd for the conversion of the Trolak palm oil mill in Sungkai, Perak. Its unit Modipalm Engineering Sdn Bhd has accepted the letter of award to build and install the mill.

Ekovest - MRCB JV Sdn Bhd (EMJV) was picked the be the project delivery partner (PDP) by the government for to assist in the implementation and delivery of the River of Life (ROL) project.

EMJV is a joint venture between Ekovest Bhd and Malaysian Resources Corporation Bhd, where Ekovest will subscribe to 60% of the issued and paid up capital of the Company, while MRCB will subscribe to the remaining 40%. EMJV said it would earn a maximum fee of RM22 million or 1% of the total projected works to be delivered over three years.

It will also receive monetary incentives for the work done and the contract is expected to contribute positively to its future earnings.

Meanwhile, Wijaya Baru received its shareholders’ nod to acquire US$80 million in timber and palm oil concessions from Wealth Gate Pte Ltd and Suffolk Pte Ltd.

Wijaya will acquire 100% of Suffolk and Wealth Gate's shares, giving Wijaya ownership of two 40,000 ha plots of land in Irianjaya which can be converted into oil palm PLANTATION []s.



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Wijaya Baru gets shareholder nod to buy timber, palm oil concessions

KUALA LUMPUR (Dec 6): WIJAYA BARU GLOBAL BHD [] received shareholder approval for the acquisition of US$80 million in timber and palm oil concessions from Wealth Gate Pte Ltd and Suffolk Pte Ltd.

Its chairman Datuk Seri Abdul Azim Mohd Zabidi said on Tuesday after the company’s EGM that Wijaya would be acquiring 100% of Suffolk and Welathgate's shares which will grant the company ownership of two 40,000 hectre plots of land in Irianjaya which have the rights to be converted into palm oil PLANTATION []s.

The land is currently covered in virgin forests and Wijaya will be extracting timber from it.

Wijaya has no plans to undertake palm oil plantation operations in the future, but told press that the option is there, he said.

The acquisition should be completed by the end of the year when Wijaya secures funding, which will be 80% debt.

Abdul Azim said that timber extraction activities may begin as early as 2Q 2012, once RM40 million worth of infrastructure, including a sawmill, was in place.



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KL shares higher in tight-range trading

Share prices on Bursa Malaysia opened higher today in tight-range trading as investors sought for fresh direction, dealers said.

After 10 minutes of trading, the FBM KLCI rose 0.55 per cent or 8.16 points to 1,493.42 from yesterday's 1,485.26 close. The key index opened 4.18 points higher at 1,489.44 this morning.

A dealer said the local bourse is likely to remain steady in narrow trading as investors retreated to the sidelines ahead of the closely watched US non-farm payroll report.

Sentiments could turn bearish in the absence of market-stimulating news from the local front and in Asia, coupled with the weaker overnight close on Wall Street, he said.

HwangDBS Vickers Research said after posting cumulative 53.7 points gains or 3.8 per cent over three straight days, the benchmark FBM KLCI could swing sideways with a marginal downward bias ahead.

"The immediate support and resistance levels are currently seen at 1,475 and 1,500, respectively," it said in a research note today.

The research house, however, said Tenaga Nasional could support the local bourse as the power utility company would benefit from the fuel cost-sharing mechanism with Petronas and the government, which would translate to substantial cost savings.

Tenaga Nasional was among the major contributors to the key index, gaining 9 sen to RM5.77.

On Bursa Malaysia, the Finance Index gained 10.38 points to 13,338.72, the Plantation Index added 24.84 points to 7,842.47, and the Industrial Index climbed 31.06 points to 2,700.32. The FBM Emas Index jumped 42.72 points to 10,181.64 and the FTSE Bursa Malaysia Mid 70 Index rose 7.50 points to 10,964.88.

The FTSE Bursa Malaysia Ace Index, however, slipped 15.64 points to 4,138.66. Trading was moderate with 91.51 million shares worth RM57.37 million.

Gainers led losers by 119 to 61 while 96 counters were unchanged, 1,203 untraded and 15 others were suspended.

Volume leaders, Wijaya rose 0.5 sen to 24.5 sen, Sycal Ventures was 2.5 sen higher at 22 sen, while Compugates was flat at 8.5 sen.

For heavyweights, Maybank declined 3 sen to RM8.36, CIMB lost 2 sen to RM7.20, while Sime Darby gained 12 sen to RM9.16. -- Bernama



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Wijaya to pay RM255m for Suffolk, Wealth

Wijaya Baru Global Bhd will acquire Suffolk Pte Ltd and Wealth Gate Pte Ltd for RM255.2 million, which represents a discount of 1.2 per cent or RM3.1 million, to 90 per cent of the total market value of the properties valued at about RM258.3 million.

In October, the company said it was buying the two companies with rights to extract timber in Papua Province in Indonesia.

The market value has been revised downwards to RM287 million as a result of an update in the rate of extractable timber within the said properties, it said in a filing to Bursa Malaysia today. -- Bernama



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Wijaya Baru seeks partner for Indonesian venture

Petaling Jaya: Wijaya Baru Global Bhd (WBG), which has clinched a deal to log and clear 80,000 hectare of land in Indonesia to make way for an oil palm plantation, will seek partners for the cultivation venture.

Chief executive officer Datuk Faizal Abdullah said the company is in talk with Malaysian entities for a possible joint venture.

Early this month, WBG signed two deals to buy Suffolk Pte Ltd (SPL) and Wealthgagte Pte Ltd (WPL) for US$40 million (RM124.4 million) each.

SPL has a joint-venture deal with PT Trimegah Karya Utama, where it has been granted exclusive rights to extract and sell timber in the district of Jair, Regency of Boven Digoel, Province of Papua, Indonesia on 40,000ha.

Similarly, WPL also has a joint-venture deal with PT Manunggal Sukses Mandiri where it will have rights to another 40,000ha of land adjacent to SPL's land.

Timber activities can only happen after it receives an approval letter from Indonesia's Forestry Ministry.

After issuing the approval letter, the National Land Authority will issue the rights to plant oil palm trees on the same land.

In June this year, WGB appointed Datuk Che Abdullah@Rashidi Che Omar to its board. He has some 37 years of experience in the plantation industry.

Faizal feels that his appointment will help steer the group in the right direction, in terms of roping in a partner and establishing WBG's expertise in oil palm.

WBG, which has 20 years of experience in the timber business, expects to set up a joint venture that will see the plantation company holding a majority stake in it.

Faizal said once WBG gains expertise in this field, it may consider venturing into oil palm cultivation on its own.

However, he added that since Che Abdullah is a non-executive director at Sime Darby Plantations, WBG is unlikely to form a joint venture with Sime as it would be a conflict of interest.

According to Faizal, the likely scenario could see WBG divide the land into few blocks of possibly 10,000ha each.

"The land is huge ... from the north to south it is about 30km and from east to west, roughly 60km," he said.

The entire clearing of the land has to be done within six years.