KL shares mixed in early trade

Share prices on Bursa Malaysia were mixed in early trading session Tuesday on lack of appetite among investors for riskier assets, dealers said.

At 9.15am, the FTSE Bursa Malaysia KLCI (FBM KLCI) stood at 1,559.64, down 0.93 of a point, after opening 2.41 points higher at 1,562.98.

HwangDBS Vickers Research said the local bourse may continue to climb slowly and steadily amid positive foreign news flows.

"The benchmark FBM KLCI will probably advance towards the immediate resistance target of 1,580 points ahead," it said in a statement today. Wall Street was closed yesterday for a but most European stock markets rose overnight.

Essentially, the research firm said investors remained confident that the eurozone finance ministers would be able to wrap up talks for Greece to meet certain conditions in exchange for international bailout funds.

The Finance Index rose 1.52 points to 13,917.06 but the Plantation Index erased 69.58 points to 8,751.17 and the Industrial Index rose 0.91 of a point to 2,911.03

The FBM Emas Index lost 4.37 points to 10,837.88, the FBM Mid 70 Index earned 2.021 points to 12,339.79 and the FBM Ace Index gained 19.64 points to 4,744.41.

Gainers outpaced losers 147 to 105 while 170 counters were unchanged, 1,062 untraded and 19 others were suspended with turnover at 173.023 million shares worth RM57.811 million.

Among actives, United Plantation added 24 sen to RM23.00, Panasonic Manufacturing earned 18 sen to RM20.60 while Hartalega and Quality Concrete gained 14 sen each to RM8.10 and RM1.44, respectively.

Heavyweights, Maybank and Sime Darby were unchanged at RM8.61 and RM9.63, respectively, Petronas Chemicals earned one sen to RM6.93 and CIMB erased one sen to RM7.29. -- Bernama



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Blue chips cautious in early trade, eyes on Greece again

KUALA LUMPUR (Feb 21): Blue chips on Bursa Malaysia slipped in early trade on Tuesday as investors awaited the outcome of a 130 billion ero rescue for Greece.

Reuters reported that Euro zone finance ministers were expected to approve the rescue plan with strict conditions after months of uncertainty that has shaken the currency bloc, although work remained to be done to make the numbers add up.

At 9.30am, the FBM KLCI was down 1.16 points to 1,559.41. Turnover was 282.20 million shares valued at RM133.63 million. However, gainers led losers 174 to 161 while 238 stocks were unchanged.

Among the decliners were Esso, down 12 sen to RM3.64 after its earnings fell. CI Holdings lost seven sen to Rm1.26, Top Glove six sen to RM4.86, KLK also six sen to RM24.08 and Bursa Malaysia five sen to RM7.35.

Among the lower liners SPB lost 10 sen to RM3.61, Jobstreet five sen to RM2.16 and KKB four sen to RM1.71.



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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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CIMB Research maintains Neutral on MSM, TP RM4.65

KUALA LUMPUR (Feb 21): CIMB Equities Research said MSM Malaysia Holdings’ record performance in FY11 may not be sustainable as future profit margins could be crimped by higher raw material costs.

It said on Tuesday that it was offset by the group’s strong cash flows and dividend yield prospects.

“FY11 net profit was in line at 101% of our forecast and 102% of consensus. The one sour note was the surprising absence of a final dividend.

“We fine-tune FY12-13 earnings for lower raw sugar costs, leading to a slightly higher target price (still based on 12.6 times P/E),” it said.

CIMB Research said it was maintaining Neutral rating in view of its 5% net dividend yield. Its target price for MSM was RM4.65.



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RHB Research remains positive on Daibochi, FV RM2.78

KUALA LUMPUR (Feb 21): RHB Research Institute remains positive about Daibochi’s long-term growth strategy and is maintaining its Market Perform call on the stock.

It said on Tuesday it had made some minor changes to the fair value estimate of RM2.78 a share (RM2.77 previously) based on 9.5 times FY12 EPS.

“We remain positive on Daibochi’s long-term growth strategy on the back of its emphasis in production innovation (including electronic packaging and medical), as well as its emphasis on Australia.

“Nevertheless, we remain cautious as there could still be risks of margin erosion due to the price volatility of raw material components (although raw material prices have recently stabilised),” said RHB Research.



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HDBSVR sees recovery for Notion VTec in FY12, maintains Buy, TP RM2.10

KUALA LUMPUR (Feb 21): HwangDBS Vickers Research (HDBSVR) expects Notion VTec to see a recovery in the current financial year (FY12), underpinned by the hard disk drive (HDD) segment.

It said on Tuesday that it was maintaining a Buy with a target price of RM2.10.

HDBSVR said Notion VTec posted losses in 1QFY12 (October to December 2011) registered losses after flooding at Notion’s factories in Ayutthaya disrupted operations.

Revenues were hit hard, with camera revenue tumbling the most by 45% on-year to RM16.4 million, while HDD revenue fell 35% to RM13.6 million.

However, the weak result was within its and street expectations. Notion also booked RM5.5 million provisional loss after insurance claims for damaged inventories, plant & equipment.

These caused EBITDA margins to shrink to 11.8% vs 1QFY11’s 41.1%. Separately, Notion VTec announced a three-for-four bonus issue and one-for-four free warrant issue, which would take fully diluted paid-up share capital to RM185.2 million comprising 370.4 million shares, assuming full exercise of its 30.7 million outstanding warrants, implying 11.7 sen FY12F diluted EPS.

Notion Vtec’s Thai plant is expected to resume normal operations by June. Hence, earnings should improve in FY12, underpinned by: (i) higher average selling prices for HDD components given the supply deficit; (ii) additional three Japanese HDD customers; and (iii) the camera segment resuming normal operations by next month. We are retaining our forecasts pending a briefing later this morning.

“The stock has run-up following a series of positive news, but Notion’s exposure to a rapidly recovering HDD sector has yet to be priced in. Our RM2.10 TP is pending review,” it said.



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HDBSVR: Market may advance slowly amid positive foreign news

KUALA LUMPUR (Feb 21): HwangDBS Vickers Research (HDBSVR) said the Malaysian stock market may continue to climb slowly and steadily amid positive foreign news flows on Tuesday.

“The benchmark FBM KLCI will probably advance towards the immediate resistance target of 1,580 ahead,” it said.

HDBSVR said while Wall Street was on holiday yesterday, most European stock markets rose overnight. Essentially, investors remained confident that the eurozone finance ministers would be able to wrap up talks for Greece to meet certain conditions in exchange for international bailout funds.

At Bursa Malaysia, stocks which could see trading interest are Mitrajaya Holdings, which has secured the awards of 3 CONSTRUCTION [] projects (to build LRT stations and apartments) worth RM182 million.

Also in focus is Nilai Resources Group, in response to a selective capital reduction and repayment proposal made by its major shareholder at a cash offer price of RM1.50 per share (versus its current share price of RM1.30).

Notion VTec could see trading interest after proposing a three-for-four bonus issue and an issuance of free warrants on the basis of one warrant for every four existing shares held prior to the bonus issue.



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Stocks to watch: Affin, Sarawak Plantations, Mitrajaya, Nilai Resources, Notion VTec

KUALA LUMPUR (Feb 21): As the corporate reporting season picks up pace, there seem to be a mixed bag of results, with banks and PLANTATION []s providing slight upside compared with the other sectors.

AFFIN HOLDINGS BHD []’s earnings rose 4.7% to RM132.54 million in the quarter ended Dec 31, 2011 from RM126.57 million a year ago. Its revenue increased by 14.4% to RM709.81 million from RM620.54 million. Earnings per share were 8.87 sen compared with 8.47 sen.

For the financial year ended Dec 31, 2011, the banking group said it recorded its best ever performance so far, with record profit before tax (PBT) of RM709.1 million compared with RM637.5 million in 2010. This was a RM76.1 million or 11.2% increase.

SARAWAK PLANTATION BHD [] posted net profit of RM19.66 million in the fourth quarter ended Dec 31, 2011, up 139% from the RM34.35 million a year ago when there was impairment losses of RM10.60 million. Revenue fell 3.4% to RM111.62 million from RM115.61 million a year ago. Its administrative expenses declined to RM8.83 million from RM18.60 million

For FY11, Affin said the earnings rose 139% to RM82.24 million from RM34.35 million. Revenue increased by 40.6% to RM479.36 million from RM340.83 million following the increase of revenue from the oil palm operations segment.

MITRAJAYA HOLDINGS BHD [] has secured three projects valued at RM181.55 million, of which two are for the light rail transit (LRT) contracts and one for a housing project in Putrajaya.

The major shareholders of Nilai Resources Group Bhd have proposed a selective capital repayment (SCR) of RM1.50 a share, which is a premium of 20 sen above the Feb 17 closing price of RM1.30.

The major shareholders are Akarmas Sdn Bhd and Tan Sri Dr Gan Kong Seng who collectively hold 62.937 million shares or 55.1% equity, who will not be entitled to the SCR.

NOTION VTEC BHD [] has proposed a bonus issue of up to 138.91 million new shares on the basis of three bonus shares for every four existing shares held.

It reported net losses of RM4.83million in the first quarter ended Dec 31, 2011 compared with net profit of RM13.41 million a year ago. Its revenue fell 33.9% to RM39.63 million from RM59.98 million. Its loss per share was 3.13 sen compared with earnings per share of 8.79 sen.

ESSO MALAYSIA BHD []’s earnings fell 71.5% to RM34.58 million in the fourth quarter ended Dec 31, 2011 from RM121.51 million a year ago. Its revenue was 16.5% higher at RM2.75 billion compared with RM2.359 billion a year ago. Earnings per share were 12.80 sen compared with 45 sen.

For the financial year ended Dec 31, 2011, it reported a 42.9% decline in earnings to RM153.35 million from RM268.58 million in FY10. Revenue, however, increased 33.6% to RM11.26 billion from RM8.42 billion.

POS MALAYSIA BHD [] recorded net profit of RM25.06 million in the October-December quarter in 2011 compared with RM6.08 million a year ago mainly due to a provision of investment and a one-off impairment provision. It said revenue increased by 4.4% to RM289.63 million from RM277.33 million.

In the 12-month period from January to December 2011, its earnings rose about 66.8% to RM112 million from RM67.11 million. Its revenue increased 15.6% to RM1.173billion from RM1.014 billion.

The group’s profit from operations rose 38.2% to RM146.0 million (2010: RM105.7 million) for the period ended Dec 31, 2011, due to the full year impact of domestic tariff increase commencing July 1, 2010 coupled with the benefits realized from transformation initiatives.



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