Dutaland falls after IOI ends RM830m land deal

KUALA LUMPUR: Shares of DUTALAND BHD [] fell at the start of trade on Thursday, Oct 27 as investors reacted negatively to IOI Corp’s decision to terminate the RM830 million land purchase deal.

At 9am, Dutaland was down 6.5 sen to 54.5 sen. There were 1.32 million shares done.

The FBM KLCI rose 3.75 points to 1,461.55. Turnover was 15.28 million shares valued at RM15.36 million. There were 77 gainers, 27 losers and 52 stocks unchanged.

On Tuesday, IOI Corp announced it terminated its proposed acquisition of 11,977.91 ha (29,597.42 acres) of oil palm PLANTATION [] land from Dutaland, citing “non-compliance of certain terms and conditions”.

However, Dutaland has rejected the reasons for the termination.

ECM Libra Research said that as Dutaland does not accept the termination, a legal suit may ensue.

“Dutaland was expected to make a profit of RM511 million from the sale of the land and they may seek a specific performance relief from the court for the transaction to be completed,” it said.

The research house said at the price of RM69,294 a hectare, many considered the purchase to be a pricey one. As such, some fractions of the market would perceive this to be a positive development.

ECM Libra Research said although the termination of the SPA is a setback to IOI’s plan to increase its fresh fruit bunches, it may allow the group to look for better opportunities elsewhere. However, this issue between IOI and Dutaland will have to be resolved first.

ECM Libra Research keeps IOI TP at RM6.11

KUALA LUMPUR: ECM Libra Research continues to have a Trading Buy call on IOI Corp as crude palm oil (CPO) prices have already corrected and appear to be rising again.

The research house said on Thursday, Oct 27 while it doesn’t expect prices to strengthen significantly in the long term, there could nonetheless be some adjustment back to the RM3,000 a tonne level if more news on the La Nina emerges in the market in coming weeks.

However, it also said prices could also weaken further if there is more news on improving soybean supplies with ongoing South American plantings.

“Whatever the case, we view it to be a trading market at the moment and IOI makes for a good proxy given their healthy liquidity.

“Our target price of RM6.11 is unchanged based on FY12 P/E of 20.4x which represents mid-cycle valuation,” it said.

OSK Research reaffirms Buy on MAHB

KUALA LUMPUR: OSK Research is reaffirming its Buy call on Malaysia Airports Holdings Bhd (MAHB) with a discounted cashflow (DCF) derived target price of RM7.36.

It said on Thursday, Oct 27 MAHB reported commendable earnings, with its cumulative core net profit coming in line with its estimates but ahead of consensus.

OSK Research said topline growth was fuelled by higher passenger spending while its bottom-line got a boost from a higher utilisation rate and economies of scale.

“MAHB is likely to see a reduction in User Fees paid to the Government given the freeze on the airport operator’s proposed tariff hike, as the Government will pay compensation for the potential revenue loss,” it said.

The research house said in the pipeline are two more JV initiatives and a 50-acre development of a factory outlet.

“With its 9MFY11 earnings in line, we make no changes to our earnings at this juncture. We re-affirm our BUY call, with a DCF-derived target price of RM7.36, based on 9% WACC,” it said.

CIMB Research has technical sell on Bina Goodyear

KUALA LUMPUR: CIMB Equities Research has a technical sell on Bina Goodyear at 67 sen at which it is trading at a price-to-book value of 0.5 times.

It said on Thursday, Oct 27 that the recent countertrend rebound may have exhausted. Prices hit a snag at the 50-day SMA and the bears have since become more aggressive.

“If the 30-day SMA fails to hold, there is a high possibility that the 74 sen high is likely its near term peak.

“Indicators are beginning to show signs of exhaustion. MACD histogram bars are easing while RSI has hooked downward. The next support levels are 64 sen and 55.5 sen,” it said.

CIMB Research said traders should do well selling into strength, especially near the 72 sen to 74 sen resistances. It would only review its call if 74 sen is taken out.

CIMB Research has technical buy on Supermax

KUALA LUMPUR: CIMB Equities Research has a technical Buy on Supermax Corporation at RM3.26 at which it is trading at a FY12 price-to-earnings of 8.8 times and price-to-book value of 1.5 times.

It said on Thursday, Oct 27 thatthe rebound from its September’s low is still intact. Prices swung above its 30-day and 50-day SMAs to keep the bulls afloat.

“As long as the support trend line holds (now at RM3.00), we think the odds are slowly turning to the bulls. Next upswing is likely to push prices towards RM3.40 and RM3.60,” it said.

CIMB Research said the technical landscape remains positive. MACD signal line has returned to the black while RSI is above the 50pts mark.

“Any pullback is an opportunity to accumulate. However, put a stop at RM3.00 to limit downside risk,” it said.

CIMB Research has technical buy on MPHB

KUALA LUMPUR: CIMB Equities Research has a technical Buy on MULTI-PURPOSE HOLDINGS BHD [] at RM2.55 a share at which it is trading at a price-to-book value of 1.3 times.

It said on Thursday, Oct 27 that MPHB’s share price broke out of its resistance trend line on Tuesday. Prices also tried to take out its 50-day SMA along the way.

“We think the stock is ripe for a stronger rebound. If we are right, prices should edge closer towards RM2.70 and RM2.87.

“Technical landscape remains conducive. MACD signal line is about to turn positive while RSI is above the 50pts mark,” it said.

CIMB Research said traders with higher risk appetite may start to nibble now. However, it is important to keep stop tight at below RM2.50-RM2.44.

HDBSVR sees KLCI extending gains to 1,475

KUALA LUMPUR: Hwang DBS Vickers Research said there was no comprehensive plan to resolve the European sovereign debt crisis following a high-profile summit on Wednesday, Oct 26.

The research house said on Thursday while an agreement to recapitalise the European banks has been reached, no announcement was made on the write-down of Greece’s sovereign debt and the boosting of a rescue fund size for the region.

Still, key U.S. equity indices jumped between 0.5% and 1.4% Wednesday night due to better U.S. economic data and hopes that the European problems would be solved eventually.

“This may give a short-term boost to Asian equities today. Our Malaysian bourse will likely climb too with its benchmark FBM KLCI rising towards its immediate resistance target of 1,475,” it said.

Hwang DBS Vickers Research said among the stocks that could attract buying interest include Hibiscus Petroleum, which has proposed to pay US$55 million for a 35% stake in Lime with interest in three companies that have concession rights in offshore oil & gas exploration assets in the Middle East.

Stamford College to be delisted from Bursa

PETALING JAYA: Stamford College Bhd will be delisted from Bursa Malaysia after Bursa Securities rejected its application to extend further the deadline to submit its regularisation plan for approval.

In a filing with the exchange, the company said its securities would be removed from Bursa Securities’ official list on Monday next week.

Earlier this month, Stamford College made an application to extend the time to submit its regularisation plan by four months to Feb 4, 2012.

Last year, Bursa Securities had rejected the Practice Note 17 (PN17) company’s proposed regularisation plan which involved the acquisition of a steel manufacturing business.

The rejection was based on concern that the proposal was not sufficiently comprehensive to resolve all problems, financial or otherwise, that had caused Stamford College to trigger the PN17 criteria.

Bursa Securities said the group’s steelmaking business, which only began operation in February 2010, had yet to show that it was able to generate profits and positive cashflows or be proven to be a viable business.

Moreover, the steel manufacturing business depended highly on a single supplier and single customer, which was a related party, to sustain its business operations.

As for the core education business, there was uncertainty whether the profits to be generated from it would be able to sustain the group’s performance.

The company made a net loss of RM1.1mil on revenue of RM4.86mil for the second quarter ended June 30.