HDBSVR sees selling pressure weighing on market

KUALA LUMPUR (Nov 22): Hwang DBS Vickers Research (HDBSVR) sees selling pressure continuing to weigh on Asian markets including Malaysia on Tuesday after the overnight fall on Wall Street.

It said US stocks fell, with key equity indices tumbling between 1.9% and 2.1% amidst the deadlock in the US congressional deficit talks.

Other regional stock exchanges also ended weaker, possibly due to the on-going concerns over the European debt crisis which may drag global economic outlook.

“Back home, we expect selling pressures for our benchmark FBM KLCI to continue today amidst the bearish external sentiments. Technically speaking, the immediate support level is now seen at 1,415,” it said.

HDBSVR said in terms of corporate news flows, counters that may attract increased trading interest today include: (a) Malaysia Airports, following a news report that its KLIA2 may face cost overruns, (b) Harvest Court, as Mohd Nazifuddin Najib, resigned as a director of the company, (c) Malaysian Airline System, after reporting its 3rd consecutive quarterly loss on Monday night.



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MAS continues losing streak

KUALA LUMPUR (Nov 22): MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) continued its losing streak when it posted RM477.59 million net loss for the third quarter ended Sept 30, 2011, compared to net profit RM233.23 million a year earlier.

The airline said the loss was due mainly to higher fuel cost, derivative loss of RM70 million and unrealised foreign exchange loss of RM195 million.

It said on Nov 21 that its revenue for the quarter rose to RM3.56 billion from RM3.39 billion in 2010.

Loss per share was 14.3 sen compared to earnings per share of 6.98 sen in 2010, while net assets per share fell to 69 sen from RM1.06 a year earlier.

This is the third consecutive quarterly loss for the airline since the beginning of this financial year.

For the nine months ended Sept 30, the airline posted net loss RM1.25 billion compared to net profit RM8.55 million.

Reviewing its performance, MAS said the operating environment for airlines in general remains challenging for the fourth quarter of 2011.

Not only was jet fuel price staying high, but the worsening economic situation in Europe was being translated into weak forward booking profiles for long-haul routes, it said.

“Management is undertaking immediate counter-measures to address this situation via heightened dynamic revenue management activities, and other commercial initiatives to mitigate the situation.

“Notwithstanding management’s efforts to mitigate the adverse situation, we expect the fourth quarter operational results to be weaker than the current quarter,” it said.



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Stocks to watch: Triplc, Harvest, Alam Maritim, Eversendai, Mah Sing

KUALA LUMPUR (Nov 22): Market sentiment is expected to be cautious on Tuesday with investors again staying on the sidelines as the euro zone's debt crisis struck again at the heart of Europe.

In the UK, bank and commodity stocks weighed on the FTSE 100 at midday on Monday, with clouds gathering over the prospect for global growth as U.S. debt talks broke down and France was told it could lose its Aaa rating from Moody's, Reuters reported.

Meanwhile, billionaire investor Warren Buffett warned of a major flaw in the 17-member euro zone system and added it would take more than words to fix it.

At Bursa Malaysia, which saw the FBM KLCI sliding 1.4% or 20.32 points to 1,434.08, dragged by key blue chips including Genting, MISC and index-linked PLANTATION [] stocks on Monday, there would not be any rush to buy equities.

Among the stocks to watch are TRIPLC BHD [], HARVEST COURT INDUSTRIES BHD [], ALAM MARITIM RESOURCES BHD [], Eversendai Corporation Bhd, MAH SING GROUP BHD [], LATEXX PARTNERS BHD [] and UNITED PLANTATIONS BHD [].

Triplc will be uplifted from the Practice Note 17 classification on Tuesday after it had regularised its financial condition.

This will see the listing and quotation of 6.367 million settlement shares issued pursuant to the capitalisation of RM6.36 million or 25% of the RM25.47 million in debts owing by the group to certain substantial shareholders and creditors and the waiver of the remaining 75% of such debts amounting to RM19 million.

Also to be quoted are 64.02 million shares of RM1 each issued under the consolidation of every 100 shares of 43 sen each into 43 shares subsequent to the reduction of the paid-up b cancelling 57 sen of the par value of each of the 148.88 million shares in issue after the capitalisation.

Harvest Court announced Mohd Nazifuddin Najib has resigned as an independent director on Monday. He was appointed to the board on Oct 28. Nazifuddin still owns 3.98 million Harvest Court shares.

Alam Maritim’s third quarter net profit rose 50.5% to RM13.33 million from RM8.92 million a year ago, underpinned by its offshore support vessels segment. Its revenue increased by 71.3% to RM116.03 million from RM67.69 million while earnings per share were 1.70 sen compared with 1.20 sen.

Eversendai’s order book increased to RM1.60 billion with the latest contract secured by its subsidiary Shin Eversendai Engineering (M) Sdn Bhd to build part of the Manjung power plant. The contract was for the boiler and auxiliary equipment for the Manjung Unit 4, which was awarded by Alstom Services Sdn Bhd.

Mah Sing’s earnings jumped 45.6% to RM43.22 million in the third quarter ended Sept 30, 2011 from RM29.67 million.

It said the performance was underpinned by strong sales which exceeded the RM2-billion mark as up to Nov 15, due to the strong branding and the flexibility afforded by its comprehensive portfolio of PROPERTIES [].

Latexx Partners’ net profit for the third quarter ended Sept 30, 2011 fell 27.8% to RM12.73 million from RM17.63 million a year earlier, due mainly to the persistently high raw material prices and the weaker US dollar. Its revenue for the quarter slipped 6.2% to RM121.81 million from RM129.88 million in 2010.

United Plantations’ net profit for the third quarter ended Sept 30, 2011 jumped 32.6% to RM105.15 million from RM79.27 million a year earlier, driven mainly by significant improvement in the selling prices of crude palm oil (CPO) and palm kernel (PK). Its revenue for the quarter surged 59.3% to RM439 million from RM275.54 million in 2010.

The plantation company declared an interim dividend of 18.75 sen net per share for the year ending Dec 31, 2011, and a special dividend 11.25 sen net per share, to be paid on Dec 21.



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Mohd Nazifuddin resigns from Harvest Court board

KUALA LUMPUR (Nov 21): HARVEST COURT INDUSTRIES BHD [] said Mohd Nazifuddin Najib has resigned as an independent director, 25 days after he was appointed.

The company said on Monday that his resignation took effect on the same day. He was appointed to the board on Oct 28.

He still owns 3.98 million Harvest Court shares.

Nazifuddin is the chairman of 1Green Enviro Sdn Bhd, Magna Healthcare Sdn Bhd, Cahaya Pedoman Sdn Bhd, Tribus Sdn Bhd and Sagajuta (Sabah) Sdn Bhd. He also the director of Kingtime International Ltd and Dynac Sdn Bhd.



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Alam Maritim on firm growth, vessels biz picks up

KUALA LUMPUR (Nov 21): ALAM MARITIM RESOURCES BHD [] recorded firm earnings growth in the third quarter ended Sept 30, with net profit up 50.5% to RM13.33 million from RM8.92 million a year ago, underpinned by its offshore support vessels segment.

It said on Monday its revenue increased by 71.3% to RM116.03 million from RM67.69 million while earnings per share were 1.70 sen compared with 1.20 sen.

Alam Maritim said when compared with the second quarter ended June 30, “the group’s revenue for the current quarter of RM116.03 million was significantly higher than the preceding quarter's revenue of RM67.90 million by 70.9% mainly due to higher revenue registered by the offshore support vessels segment as a result of higher vessel utilisation rate and contribution from pipe-lay barge related projects,” it said.

It also said the profit before taxation of RM14.88 million was a significant improvement in financial performance as compared to profit before taxation of RM5.55 million in 2Q mainly due to higher gross profit margin quarter-on-quarter from the offshore support vessels segment as well as higher other income derived for the current financial quarter under review.

For the nine-month period, its earnings fell 71.2% to RM13.65 million from RM47.39 million in the previous corresponding period while revenue was higher by 8.2% at RM218.62 million from RM201.99 million.

“This is mainly attributable to higher revenue derived from offshore support vessels segment (by 24.1%) despite lower contribution from the underwater services and offshore installation and CONSTRUCTION [] segment (by 51.8%).

The profit before taxation for the current financial period of RM13.71 million was 75.3% lower than the RM55.51 million a year ago, due mainly to lower gross profit margin registered for the current financial period as compared to last year for all business segments.

“In addition, lower share of profit of jointly controlled entities and other income has also contributed to the adverse financial performance for the financial period under review,” it said.



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Bumi Armada eyes at least 2 new jobs a year

KUALA LUMPUR: Oil-field services provider Bumi Armada Bhd is optimistic about the outlook for next year, boosted by sustainable oil prices at above US$70 (RM222) per barrel and continued investment by oil companies in the sector.


With this in mind, the company is eyeing a number of deep-water development projects in Latin America, West Africa and Asia.

It aims to secure at least two new project annually.

Currently, its order book stands at RM7.2 billion of which about 70 per cent comes from the floating production storage and offloading (FPSO) vessel business.

Executive director and chief executive officer Hassan Basma said investments in the oil and gas sector are at the highest level in two decades.

"There are a lot of investments going on in the industry. We see demand for FPSO vessels higher than supply, and that is definitely good for our business outlook," he said during a media briefing here yesterday.

For the third quarter, Bumi Armada reported a 7.5 per cent lower net profit of RM92.57 million due to listing expenses inccured in July this year and higher taxes.

Revenue rose to RM403.9 million from RM328.9 million previously.

For the nine-month period ended September 30, its net profit was unchanged at RM240 million, while revenue was 35 per cent higher at RM1.17 billion against RM870.2 million before.



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MAS remains in the red in 3rd quarter

KUALA LUMPUR: Malaysian Airline System Bhd (MAS) remained in the red for the third quarter ended September 2011 with a pre-tax loss of RM461.54 million compared to a pre-tax profit of RM236.074 million in the same period of 2010.

The airline was also in the red for the second quarter financial period with a pre-tax loss of RM509.411 million compared with a pre-tax loss of RM532.591 million in the corresponding period of 2010.

Revenue for the third quarter, however, improved to RM3.565 billion from RM3.399 billion posted in the same period in 2010, the company said in a filing to Bursa Malaysia yesterday.

For the cumulative nine months, the national carrier posted a pre-tax loss of RM1.209 billion on turnover of RM10.244 billion.

For the third quarter, the group recorded an operating loss of RM156 million compared to a profit of RM35 million in the same quarter of 2010. The loss was attributed to higher fuel cost.

The group recorded a loss after tax of RM477 million for the quarter compared to RM234 million profit in the previous corresponding quarter. It said the after tax loss was inclusive of derivative loss of RM70 million and unrealised foreign exchange loss of RM195 million.

Meanwhile, total operating revenue rose by five per cent to RM3.493 billion for the quarter. Total expenditure increased by 10 per cent or RM357 million to RM3.721 billion due mainly to increase in fuel cost. -- Bernama



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Nazifuddin resigns from Harvest Court board

Kuala Lumpur: Mohd Nazifuddin Mohd Najib has quit from the board of Harvest Court Industries Bhd, less than a month after he was appointed to the board.


Mohd Nazifuddin was appointed non-executive director of Harvest Court in late October, alongside Datuk Raymond Chan Boon Siew.

Chan is the managing director of the Sagajuta group of companies and 1Green Enviro Sdn Bhd. The 28-year-old Mohd Nazifuddin also sits on the boards of 1Green Enviro and Sagajuta (Sabah) Sdn Bhd.

Chan controls about 15.7 per cent of Harvest Court, while filings to the stock exchange show that Mohd Nazifuddin holds nearly four million Harvest Court shares.

Chan’s Sagajuta received considerable press mileage after the company was linked to a possible takeover of Jerneh Asia Bhd, a company controlled by the country’s richest man, Robert Kuok Hock Nien.



Within months after the deal fell through, Chan emerged in Harvest Court, fuelling speculation that Sagajuta’s assets might be injected into Harvest Court.

Speculation of an imminent corporate deal helped push Harvest Court shares and its warrants up by more than 100 per cent.

Chan, however, maintained that he only plans to offer construction contracts to Harvest Court to help turn around the loss-making company.

In early November, he told Business Times that Sagajuta (Sabah) has close to RM1.2 billion worth of construction contracts.
Meanwhile, on the trading floor yesterday, Harvest Court shares and its warrants faced heavy selling pressure in the final hour of trading.

The mother share, which was traded as high as RM1.60 before lunch, ended the day four sen up at RM1.40.

The warrants, which were traded higher most part of the day, closed 11 sen lower at RM1.04.

Harvest Court was declared as a designated stock on November 14 2011 after regulator Bursa Malaysia Bhd issued a query on the company's unusual market activity, followed by an investors alert issue.

As a designated security, investors who want to buy either the mother share or the warrant will have to pay cash up front, and hold the securities for a minimum of three trading days before they can sell them.

The stock has gained over 400 per cent between November 1 and November 14.

Still, there was buying support on Harvest Court securities over the past two days. It is estimated that investors had spent as much as RM28 million over the past two trading days to buy the mother and baby.

At yesterday's closing, its share price was almost 300 per cent higher than what it was trading at early this month (40 sen).



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