Ta Ann edges up after Maybank IB starts coverage

KUALA LUMPUR (April 5): TA ANN HOLDINGS BHD [] shares edged up on Thursday after Maybank Investment Bank Bhd Research initiated coverage on one the stock at RM6.20 with a Buy Rating and target price of RM8, and said three key catalysts will propel earnings for the company, namely: (i) an explosive 18% 3-year forward CAGR in FFB output, (ii) Japan‟s reCONSTRUCTION [], (iii) a maiden contribution from its forest PLANTATION [] in 2015.

At 11.30am, Tan Ann added four sen to RM6.24 with 27,600 shares traded.

In a note Thursday, the research house said Ta Ann’s earnings quality was boosted by its transformation into a producer of palm oil, which contributed 77% of PBT in 2011.

“The stock trades at 11.7x 2013 PER, with low EV/planted ha of about RM39,600, and is poised to deliver an 11% 3-year net profit CAGR. We initiate coverage with a Buy and RM8.00 TP on 15x 2013 PER (+29% upside),” it said.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Kurnia Asia shares down on insurance unit disposal

KUALA LUMPUR (April 5) : KURNIA ASIA BHD [] (KAB) shares fell on Thursday morning following updates that the government has approved AMMB HOLDINGS BHD []’s plan to acquire KAB’s general insurance arm.

KAB shares, one of the most actively traded with some eight million shares done, fell 4.7% or three sen to 60.5 sen at 10.37am.

In separate statements to the exchange on Wednesday, AMMB and KAB said the minister of finance has approved the planned acquisition of KAB’s 100%-owned subsidiary Kurnia Insurans (M) Bhd by AmG Insurance Bhd, which is 51% owned by AMMB.

Both AMMB and KAB said details on the transaction will be disclosed when both AmG and KAB sign a definitive agreement.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Malaysian shares down on European debt concerns

KUALA LUMPUR (April 5) : Malaysian shares fell on Thursday morning in tandem with Asian markets following a weaker overnight close across US and European bourses. Global markets had reacted negatively to fresh updates from Europe where Spain’s government bond auction was not well received.

This has raised concerns on the sustainability of European economies which are contending with their sovereign debt woes.

Malaysia’s FBM KLCI fell 5.83 points to 1,593.44 as at 10am with some 178 million shares worth RM89 million changing hands. There were 85 gainers versus 250 declining stocks.

Top gainers EKOVEST BHD [] added 17 sen to RM2.76 while BOUSTEAD HEAVY INDUSTRIES CORP [] Bhd was up six sen to RM3.34.

Decliners GENTING BHD [] fell 14 sen to RM10.94 while SMPC Corp Bhd was down 13 sen to RM1.92.

Most active was METRONIC GLOBAL BHD [] which added 0.5 sen to 15.5 sen with some 15 million shares done.

Among Asian equity benchmarks, Japan’s Nikkei 225 fell 1.05% to 9,716.99 points while Australia’s S&P / ASX 200 declined by a similar quantum to 4,288.4



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Maybank IB starts coverage on Ta Ann with Buy call, target price RM8

KUALA LUMPUR (April 5): Maybank Investment Bank Bhd Research has initiated coverage on TA ANN HOLDINGS BHD [] at RM6.20 with a Buy Rating and target price of RM8, and said three key catalysts will propel earnings for the company, namely: (i) an explosive 18% 3-year forward CAGR in FFB output, (ii) Japan‟s reCONSTRUCTION [], (iii) a maiden contribution from its forest PLANTATION [] in 2015.

In a note Thursday, the research house said Ta Ann‟s earnings quality was boosted by its transformation into a producer of palm oil, which contributed 77% of PBT in 2011.

“The stock trades at 11.7x 2013 PER, with low EV/planted ha of about RM39,600, and is poised to deliver an 11% 3-year net profit CAGR. We initiate coverage with a Buy and RM8.00 TP on 15x 2013 PER (+29% upside),” it said.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

RHB Research maintains Neutral on automotive sector

KUALA LUMPUR (April 5): RHB Research has maintained its Neutral call on automotive sector and said the auto industry made a shaky start to 2012 with total industry volume (TIV) in Jan declining 14.7% and 25.2% month-on-month and year-on-year respectively.

In a note Thursday, the research house said the softer sales were attributed to seasonal factors given the earlier than usual Lunar New Year holidays, the more stringent financing guidelines implemented by Bank Negara Malaysia (BNM) and the lingering effects of component supply disruption arising from the floods in Thailand.

“While the lower-end segment is likely to be the most exposed to the tighter financing environment, we expect the market (borrowers and lenders) to gradually adapt,” it said.

RHB Research said the key event in 2Q12 will be the announcement of the third iteration of the National Automotive Policy (NAP) that could potentially benefit domestic auto parts manufacturers.

“However both Thailand and Indonesia enjoy a strong head start as regional production hubs for numerous global OEMs.

“Still Neutral on the sector. DRB-HICOM and MBM are the top picks,” it said.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Alliance Research maintains Buy on AMMB, target price RM7.40

KUALA LUMPUR (April 5): Alliance Research has maintained its Buy recommendation on AMMB HOLDINGS BHD [] with a target price of RM7.40 after AMMB announced on April 4 that it received the Finance Ministry's approval, for the acquisition of a 100% equity interest in Kurnia Insurans.

“We are positive on this deal although pricing remains the key issue. We observe that banking M&A news flow has accelerated recently and has attracted investor interests on the stock.

“We believe that the potential for ANZ to increase its stake in AMMB is imminent. Maintain BUY with a target price of RM7.40,” it said.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

KLCI extends loss on external woes

KUALA LUMPUR (April 5): The FBM KLCI extended its loss on Thursday, in line with the weaker overnight close at the US markets as well as lacklustre opening at regional markets.

The 30-stock index fell 3.79 points to 1,595.48 at 9am.

Losers led gainers by 57 to 23, while 86 counters traded unchanged. Volume was 13.1 million shares valued at RM4.09 million.

US stocks fell for a second day on Wednesday as investors contemplated a world without monetary stimulus and a poorly received bond auction in Spain suggested the effects of Europe's funding operations were waning, according to Reuters.

Meanwhile, Global stocks dropped more than 1 percent and gold tumbled to its lowest in nearly three months on Wednesday a day after U.S. central bank meeting minutes dented hopes for more economic stimulus and as a Spanish debt auction drew weak results, it said.

BIMB Securities Research said European stocks fell for a second day yesterday after Spain sold fewer bonds than its maximum target and the Federal Reserve damped expectations of more monetary stimulus for the US. Spain sold €2.6bn (US$3.4bn) of bonds; near the minimum target of €2.5bn; and borrowing costs rose in its first auction since the country said public debt will surge to a record this year.

US stocks ended in negative territory for a second day fueled by disappointment over the Fed's latest minutes and ongoing worries over the euro zone, the research house said in a note April 5.

The Dow and the S&P logged their biggest decline since March 6, while the Nasdaq suffered its worst day of the year. The S&P 500 lost 1 percent to 1,398.96 while DJIA slid 124.8 points to 13,074.75, it said.

“Back home, the local market has retraced as expected where the FBMKLCI fell more than 7 points to 1,599.27; dragged down by financial and PROPERTIES [] sector.

“Net foreign is still positive at RM176.7m yesterday but we reckon market sentiment to be weaker due to profit taking activities coupled with weak share performance in US and Europe. Expect immediate support to be seen at 1,595 followed by 1,590,” it said.

Among the decliners in early trade, KLK fell 22 sen to RM24.38, Genting lost 10 sen to RM10.98, Maybank don nine sen to RM8.79, RHB Capital and Malayan Flour Mills fell four sen each to RM7.70 and RM2, CIMB, MAS, Mah Sing and TDM fell two sen each to RM7.70, RM1.34, RM2.02 and RM4.68 respectively.

Gainers,meanwhile, included Tradewinds, BHIC, Parkson, SEGi, Pos Malaysia, Leader, Proton and N2N.

The actives included JCY, Carotech, Kurasia, Metronic and Winsun.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Stocks to Watch Xian Leng, ManagePay, AMMB

KUALA LUMPUR (April 4): The Malaysian stock market could see further profit taking on Thursday as investors weigh the impact of global economic updates against positive pre-election sentiment in Malaysia.

Crucial global highlights include US policymakers indication that they may not implement further quantitative easing to spur the world's largest economy. The updates had resulted in losses across Asian markets on Wednesday.

Malaysia's FBM KLCI erased earlier gains to finish 7.36 points or 0.46% lower at 1,599.27 points on Wednesday. In the US, the S&P 500 futures declined 10.5 points, while Dow Jones Industrial Average futures fell 100 points, a possible indication that US stocks may encounter another sell off.

Stocks to watch on Thursday include XIAN LENG HOLDINGS BHD [], APM AUTOMOTIVE HOLDINGS BHD [], ManagePay Systems Bhd, PHARMANIAGA BHD [], and AMMB HOLDINGS BHD [].

Trading of Xian Leng shares had been suspended since 12.16pm on Wednesday. In a statement to the exchange, the firm — which undertakes commercial breeding of ornamental fish — said it requested for the trading suspension pending the release of the findings of a special audit on the company's financials by PricewaterhouseCoopers.

HwangDBS Vickers Research Sdn Bhd has upgraded shares of APM, an automotive parts manufacturer, from "hold" to "buy", and raised its fair value for the stock from RM4.60 to RM5.60.

ManagePay was among the most-actively traded stock on Wednesday, when it rose as much as 27% or 5.5 sen to 26 sen, following updates on its strategic collaboration with Visa Worldwide Pte Ltd.

Pharmaniaga managing director Datuk Farshila Emran said the firm plans to double revenue contribution from the private sector from 3% to some 6% in current financial year ending Dec 31, 2012.

AMMB said its 51%-owned general insurance subsidiary AmG Insurance Bhd has received the government's consent to acquire KURNIA ASIA BHD [] 100% stake in Kurnia Insurans (Malaysia) Bhd.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.