RHB Research downgrades Gamuda to market perform, FV RM3.02

KUALA LUMPUR (Dec 12): RHB Research Institute had downgraded GAMUDA BHD [] to market perform and cut its fair value to from RM3.41 to RM3.02.

It said on Monday that it expects 1QFY07/12 net profit to come in at RM100 million to RM105 million that will have met its expectations but miss the market consensus.

“We believe 1QFY07/12 core net profit declined 17-21% on-quarter due to the absence of a writeback of over-provision of scheduled highway maintenance, continued easing in property profits and slightly reduced CONSTRUCTION [] margins,” it said.

“Fair value cut from RM3.41 to RM3.02, now valuing Gamuda’s construction business at 12 times one-year forward earnings (from 14 times previously),” it said.

RHB Research said this was in line with the downgrade in its one-year forward target PER for the construction sector to 8.0 times and 12 times (from 10 times to 14 times previously).



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CIMB Research has technical sell on Naim Holdings at RM1.55

KUALA LUMPUR (Dec 12): CIMB Equities Research has a technical sell on Naim Holdings at RM1.55 at which it is trading at a price-to-book value of 0.5 times.

It said on Monday Naim Holdings violated its triangle support on Friday. This is a worrying sign as it may signal the beginning of next downleg.

“If prices continue to stay below the support-turned-resistance trend line, we expect the candles to fall towards its next support levels are RM1.45 and RM1.35,” it said.

CIMB Research said the MACD is falling deeper into the negative territory while RSI has also fallen into the oversold territory.

“Unload on strength looks like a good option here, especially near the RM1.58-1.60 resistances. However, always put a buy stop at RM1.65,” it said.



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CIMB Research has technical sell on Muhibbah at RM1.02

KUALA LUMPUR (Dec 12): CIMB Equities Research has a technical sell on Muhibbah Engineering at RM1.02 at which it is trading at a FY13 price-to-earnings of 4.4 times and price-to-book value of 0.8 times.

It said on Monday Muhibbah Engineering broke below its triangle pattern last week.

“If the candles fail to push back above the support-turned-resistance trend line soon, we expect prices to fall towards 95 sen and 90 sen,” it said.

CIMB Research said the near term outlook does not look encouraging as prices are trading below all its key moving averages. Resistance is seen at RM1.05-RM1.08.

“Technical landscape looks subdued. MACD signal line has slipped into the negative territory while RSI has also hooked downward,” it said.



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CIMB Research has technical sell on Meda Inc at 56.5 sen

KUALA LUMPUR (Dec 12): CIMB Equities Research has a technical sell on Meda Inc at 56.5 sen at which it is trading at a price-to-book value of 1.5 times.

It said on Monday Meda is consolidating in a huge ascending wedge pattern and this is usually perceived as a reversal sign.

“If prices fail to swing past the recent swing high of 59 sen soon, there is a high possibility that prices may dwindle towards the 54 sen support trend line. The following support levels are 52 sen and 49.5 sen,” it said.

CIMB Research said aggressive traders may start to lock in some profits now while others should only join the seller’s camp when prices slip below the support trend line. Near term gains are likely capped at 59 sen. Put a buy stop at 60 sen.

The research house said the bearish divergence on MACD indicator shows that buying momentum is weakening. RSI too has hooked downward.



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HDBSVR: KLCI may recoup part of losses from last week

KUALA LUMPUR (Dec 12): Hwang DBS Vickers Research expects the FBM KLCI to likely recoup part of its cumulative loss of 28.9-point (or 1.9%) last week as it will likely climb towards the immediate resistance line of 1,475 ahead.

It said on Monday the positive sentiment would be underpinned by the recovery on Wall Street last Friday when its key stock indices jumped between 1.6% and 1.9% at the closing bell.

The firmer close on Wall Street was supported by a pact reached by the European countries for deeper economic integration as well as a proposal to boost a rescue fund size.

“While the latest developments may not mean the eurozone has already found a solution to its sovereign debt problems, we reckon Asian equities – including Malaysia – could be in for a technical rebound today,” it said.

HDBSVR said among the counters that may ride on a market bounce-up today include: (a) Proton shares, after its adviser Tun Dr Mahathir Mohamad was quoted as saying that Khazanah would be selling its controlling stake in Proton to DRB-Hicom at above market price with a general offer likely to be made; and (b) MBSB, after its CEO reportedly said it should be able to achieve a pretax-profit of RM500 million next year instead of 2015 as previously planned.



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Genting group invests RM1 bln in new JPO attractions

JOHOR BAHARU, Dec 11 (Bernama) -- Prime Minister Datuk Seri Najib Tun Razak said the Genting Group will invest RM1 billion on new attractions in phase two of the development of Johor Premium Outlets (JPO) in Kulaijaya.

Najib, who launched JPO early Sunday, said the new attractions include a water theme park, convention centre and 2,000-room hotel.

"The Genting Group will also spend RM100 million to build 60 more outlets at JPO, which are expected to be completed in a year," he told reporters at the media conference after Iskandar Malaysia's fifth anniversary celebrations at Puteri Harbour, Nusajaya Sunday.

Also present were Johor Menteri Besar Datuk Abdul Ghani Othman and Khazanah Nasional managing director Tan Seri Azman Mokhtar.

JPO is the 70th Premium Outlets megastore in the world and the first in Southeast Asia.

It features some 80 brand names at discounts of 25 to 65 per cent every day.

JPO is a joint venture between Genting Group and the Simon Property Group of the United States. - Bernama



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Petronas Chemical building new plants in Sabah, Johor

KEMAMAN (Dec 11): Petronas Chemical Group (PCG) is in the process of constructing two new plants, one each in Sabah and Johor, at a cost of over US$21 billion.

Its president Dr Abdul Hapiz Abdullah said PCG will build the Sabah Ammonia Urea (SAMUR) fertiliser plant in Sipitang, Sabah at a cost of US$1.6 billion, while in Pengerang, Johor, it will set up the US$20 billion RAPID (Refinery and Petrochemicals Integrated Development) plant.

"PCG is still new, but our business keeps expanding," he said after attending a Beach Care programme organised by its subsidiary Ethylene and Polyethylene (M) Sdn Bhd (EPEMSB) at Kuala Kerteh beach here Sunday.

Abdul Hapiz said PCG owns 22 companies, with seven joint ventures with firms in Europe, Japan and South Africa.

PCG's profit this year at RM4.6 billion is the same as last year's, he said.

"However, it is better as last year's profit was calculated from March to March, while this year's figure is only for the nine months from April to December.

"With the company expanding, we hope PCG will post better profits next year compared to this year," he said. - Bernama



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Stocks to watch: IGB, Notion, Axiata, SYF

KUALA LUMPUR (Dec 10): Stocks on Bursa Malaysia could be given a boost on Monday following the firmer close on Wall Street as EU leaders worked out a plan to restore market confidence.

The Dow Jones industrial average ended up 186.56 points, or 1.55%, at 12,184.26. The Standard & Poor's 500 Index was up 20.84 points, or 1.69%, at 1,255.19. The Nasdaq Composite Index rose 50.47 points, or 1.94%, at 2,646.85.

For the week, the Dow rose 1.4%, the S&P gained 0.9% and the Nasdaq was up 0.8%.

As for Bursa Malaysia, the FBM KLCI fell 12.79 points or 0.87% to 1,460.13, weighed by losses including at KL Kepong, GENTING BHD, PPB, AMMB and Gamuda.

Hong Kong’s Hang Seng Index lost 2.73% to 18,586.23, South Korea’s Kospi fell 1.97% to 1,874.75, Japan’s Nikkei 225 was down 1.48% to 8,536.46, Taiwan’s Taiex lost 1.28% to 6,893.30, the Shanghai Composite Index shed 0.62% to 2,315.27 and Singapore’s Straits Times Index lost 1.24% to 2,694.60.

However, whether the rebound could last in the week ahead also remains to be seen.

Affin Investment Bank head of retail research Dr Nazri Khan is more cautious as he believes the FBM KLCI is likely to pullback lower to 1,430 to 1,420 support level on absence of an EU catalyst and lack of momentum from last week liquidity boost rally.

“We reckon the bearishness are driven by two important factors namely : (1) further caution from S&P 500 warning to massively downgrade EU countries and (2) investors losing expectation over EU summit to produce a financial bazooka to contain the debt crisis,” he said.

Stocks which could see trading interest on Monday include IGB Group Bhd, Axiata Group Bhd, NOTION VTEC BHD [] and SYF RESOURCES BHD [].

On Monday, Broadcast Australia will ink and agreement with Axiata Group Bhd’s unit Axiata Celcom wherein the former will be Celcom’s technical partner to bid for the RM2 billion digital terrestrial television broadcasting (DTTB) project.

Celcom would ultimately be providing infrastructure for the (DTTB) network and rent it out for stable income in the future.

Celcom, which invested RM1 billion in the 3G infrastructure this year and plans to spend another RM1 billion next year.

The Edge weekly reports that the IGB group is said to have engaged investment banks to look into structuring a real estate investment trust. The property group is hoping to launch the REIT by first half of 2012.

It also reported that Notion VTec Bhd is hoping to grow its hard disk drive segment by 40% next year with the growing momentum in its 2.5in HDD base plate business, which is expected to turn profitable in the second quarter.

Meanwhile, SYF is now on firmer footing after regularising its financial condition. It recorded net profit of RM39.24 million in the first quarter ended Oct 31, 2011 when compared with net loss of RM581,000 a year ago after the waiver of debts and overprovision of interest.

Its revenue was 6.3% higher at RM42.98 million compared with RM40.44 million a year ago. Its earnings per share were 43.37 sen compared with loss per share of 0.69 sen.



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