MAS, AirAsia share trading to be halted from 9am today

KUALA LUMPUR (May 2): Trading in the securities of Malaysian Arline System Bhd and AIRASIA BHD [] will be halted from 9am on Wednesday at the request of the two airlines pending a material announcement.

Malaysia Airlines was expected to announce the cancellation of plans for a share swap with budget carrier AirAsia.

For more on this, read today’s edition of the Edge Financial Daily’s report on Boards of Khazanah and Tune Air today will make official their decision to abandon the RM1.1 billion share-swap deal involving MAS and AirAsia.



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Alliance Research downgrades CIMB To Hold, cuts target price to RM7.92

KUALA LUMPUR (May 2): Alliance Research has downgraded CIMB Group Holdings Bhd to a Hold from Buy and cut it target price for the stock to RM7.92 from RM8.80 previously following a report that that Bank of Indonesia (BOI) was planning to impose new caps on single shareholder stakes in the country's commercial banks as early as next month.

The research house it viewed this development to be potentially negative for CIMB and Maybank, given their majority stakes in the respective Indonesia banks.

At present, CIMB owns 96.9% of CIMB Niaga while Maybank owns 97.5% of Bank Internasional Indonesia (BII).

Therefore, the implementation of this regulation could force these banks to pare down their stakes in respective Indonesian subsidiaries and dampen their earnings prospects, it said in note April 30.

“Among the two domestic banking giants, we expect CIMB to be more severely impacted, given that CIMB Niaga’s significant contribution to the group’s bottomline and to remain its key earnings driver going forward.

“For FY11, CIMB Niaga contributed about 30% of CIMB’s PBT while BII contributed 5% of Maybank’s PBT, respectively,” it said.



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Stocks to watch Kencana, Pantech, Spritzer, KNM, Silver Bird

KUALA LUMPUR (May 1): The FBM KLCI could be range bound when trading resumes on Wednesday after May Day holiday on May 1, given the absence of fresh catalysts.

The FBM KLCI fell some 25.72 points in April, as investor sentiment took a beating given rising external and domestic uncertainties.

Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said he expects the FBM KLCI to trend lower in response to rising solvency risk and borrowing cost in Europe (Spain & Italy) and rising local political uncertainties.

“Despite positive comments from the USA Fed on possible monetary stimulus, a weaker than expected read on April Euro zone sentiment and rising European bond yield seemed to bring struggling European growth and debt concerns back into focus.

Most markets in Asia and Europe were closed on Tuesday to mark the May Day holidays and the Monday close at Wall Street was less then encouraging as The S&P 500 posted its first monthly decline since November on Monday, as stocks slipped in one of the lightest trading days of the year on signs the U.S. economy may be slowing and as a recession in Spain highlighted risks in the euro zone.

The Dow Jones industrial average dropped 14.68 points, or 0.11 percent, to 13,213.63. The Standard & Poor's 500 Index fell 5.45 points, or 0.39 percent, to 1,397.91. The Nasdaq Composite Index lost 22.84 points, or 0.74 percent, to 3,046.36.

Among the stocks that could be in focus on Bursa Malaysia are KENCANA PETROLEUM BHD [], PANTECH GROUP HOLDINGS BHD [], SPRITZER BHD [], KNM GROUP BHD [] and SILVER BIRD GROUP BHD [].

Kencana Petroleum Bhd’s wholly owned subsidiary, Kencana HL Sdn. Bhd. ("Kencana HL") in consortium with Shinryo (M) Sdn Bhd has secured an engineering, procurement, CONSTRUCTION [] and commissioning (“EPCC”) from PETRONAS GAS BHD [].

Kencana said on Monday that the contract was for the EPCC of two cogeneration plants, having combined capacity of 50MW of electrical power and steam capacity of 120 ton per hour.

The company said the portion of the contract value for Kencana HL was estimated at RM35 million.

Pantech Group Holdings Bhd Net profit for the fourth quarter ended Feb 29, 2012 surged 90% to RM10.68 million from RM5.11 million a year earlier, due mainly to an increase in revenue.

The company said on Monday that its revenue for the quarter jumped 76.2% to RM128.45 million from RM72.9 million in 2011 due to improved sales demand from oil and gas sector with the on-going new projects.

Earnings per share rose to 2.37 sen from 1.14 sen, whiel net assets per share was 75 sen.

Pantech proposed a final single tier dividend of 1.3 sen per share 20 sen each amounting to RM5.84 million for the financial year ended Feb 29, 2012, subject to shareholders' approval.

Spritzer Bhd net profit for the third quarter ended Feb 29, 2012 jumped 69.4% to RM3.66 million from RM2.16 million a year earlier, due mainly to higher sales of more profitable carbonated and flavoured drinks and natural mineral water products.

The company said on Monday that its revenue for the quarter rose 33% to RM45.22 million from RM34.09 million in 2011 on higher sales volume.

KNM Group Bhd (KNM) has proposed to undertake a fund raising exercise involving a Rights Issuance of RM200 million.

In a filing to Bursa Malaysia Securities Bhd on Monday, KNM said the definitive terms for the Rights Issue would be determined by the Board of the Company subject to the advice of the Company’s Corporate Advisors to be appointed in due course.

Silver Bird Group Bhd’s proposed group restructuring scheme is expected to be finalised by the middle of May 2012 said Silver Bird Group’s chairman of audit committee, Richard Azlan Abas after the company’s AGM on Monday.

“The group restructuring plan will include, but not limited to, capital reduction, share consolidation, rights issue and debt restructuring. However, it is still in its preliminary stage and very fluid. We hope to finalise the proposed plan once we get an agreement from the major stakeholders by the middle of May.” he added.

When asked about the amount of rights issue which the company intends to raise for its restructuring plan, Richard said it would amount to RM60 million.



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Silver Bird Group to finalise proposed restructuring scheme by mid May

KUALA LUMPUR (May 1): SILVER BIRD GROUP BHD []’s proposed group restructuring scheme is expected to be finalised by the middle of May 2012 said Silver Bird Group’s chairman of audit committee, Richard Azlan Abas after the company’s AGM on Monday.

“The group restructuring plan will include, but not limited to, capital reduction, share consolidation, rights issue and debt restructuring. However, it is still in its preliminary stage and very fluid. We hope to finalise the proposed plan once we get an agreement from the major stakeholders by the middle of May.” he added.

When asked about the amount of rights issue which the company intends to raise for its restructuring plan, Richard said it would amount to RM60 million.

“Major shareholders have been cooperative thus far as we are working for a solution that will be favourable for shareholders,” he said.

Richard mentioned that on-going forensic investigations has encountered several speed bumps as they were faced with wilful destruction of documents, high volume of unusual transactions which the alleged executive directors were not present for explanation as well as certain records that had been taken away by authorities.

The company’s restated accounts as at Feb 29, 2012 which was announced on Bursa Malaysia last Friday recorded a negative shareholders fund variance of RM 297.08 million as compared to that as at Oct 31, 2011.

“RM18 million is attributable to the four months operation [between Oct 31, 2011 to Feb 29, 2012] and RM279 million is in relation to adjustments made. The RM300 million variance will be reflected in 2QFY12 results,” said Richard.

Chairman Datuk Dr Gan Khuan Poh added that the company practiced prudence, as accorded by accounting standards, when providing for impairment and other non monetary transaction adjustments explaining the RM300 million losses in the restated financial statements.

According to the company, with the RM300 million of losses reflected in the company’s financial statement, it will most likely post a loss position for the FY12.

However, the company said that a viability study conducted by independent consultants indicated that the company can be turned around into a profit making situation moving forward provided it is properly managed.

“If we can increase the average sales to back where we were before (the irregularities occurred) and if we can monetise our network and create value out of it, we can bring in significant increase in revenue.

“So far, I think the value of our network has not been maximised yet,” said Gan.

Gan told the press that to counter competition and gain back sales, the company is strategizing to venture into a new niche segment of premium bread. Currently, research is being conducted for its proposed premium bread segment.

Silver Bird Group was thrust into the spotlight earlier this year when the company sought more time to table its annual audited financial statements which was due end February. Share price closed at 0.16 sen on Monday, up 3.23%.



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SC says received a total of 19 corporate proposals in Q1 2012

KUALA LUMPUR (April 30); The Securities Commission Malaysia (SC) received a total of 19 corporate proposals in Q1 2012 as compared to 41 proposals in Q4 2011.

In a statement Monday, the SC said this was in line with the trend of increasing preference for fund-raising through issuance of corporate bonds and sukuk, the majority (79%) of the proposals were for issuance of private debt securities (PDS).

The SC said that out of the 19 corporate proposals, 15 were for PDS while the remaining four (i.e. 21%) were equity applications.

“Out of the four equity applications, two were for IPO, as compared to one in Q4 2011,” it said.

The SC said approved ringgit-denominated sukuk issuances in Q1 2012 stood at RM11 billion, which reflected an increase from the RM7.7 billion registered in the same quarter last year.

“The SC has also approved one IPO in Q1 2012, which is expected to raise RM20.4 million from the capital market, with a potential market capitalisation of RM82.0 million.

“Total amount of funds to be raised from the IPO and private debt securities approved in Q1 2012 is RM21.9 billion, compared to RM49 billion in Q4 2011,” it said.

For collective investment schemes, the SC said it approved 14 applications to establish new funds in Q1, as compared to 33 in Q4 last year.

“Out of the total applications for new funds, five were for the establishment of new unit trust funds; nine were for wholesale funds,” it said.



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Pantech 4Q net profit surges 90% to RM10.68m

KUALA LUMPUR (April 30): PANTECH GROUP HOLDINGS BHD [] Net profit for the fourth quarter ended Feb 29, 2012 surged 90% to RM10.68 million from RM5.11 million a year earlier, due mainly to an increase in revenue.

The company said on Monday that its revenue for the quarter jumped 76.2% to RM128.45 million from RM72.9 million in 2011 due to improved sales demand from oil and gas sector with the on-going new projects.

Earnings per share rose to 2.37 sen from 1.14 sen, whiel net assets per share was 75 sen.

Pantech proposed a final single tier dividend of 1.3 sen per share 20 sen each amounting to RM5.84 million for the financial year ended Feb 29, 2012, subject to shareholders' approval.

For the financial year ended Feb 29, Pantech’s net profit rose 19% to RM34.5 million from RM28.99 million in 2011, while revenue rose to RM437.03 million from RM335.78 million.

Reviewing its performance, Pantech said the higher profit and revenue was due mainly to higher sales from both manufacturing and trading division, and the contribution of margin from sale of carbon steel niche products.

On its prospects, Pantech said it would continue to focus and expand on its existing revenue generating businesses and seek opportunities to grow its businesses, both locally and overseas, by expanding its capacity as the major pipes, fittings and flow controls solutions provider to the oil and gas industries and related upstream and downstream industries.

“The recent oil and gas discoveries offshore Malaysia and the on-going oil and gas investment under Economic Transformation Programme (ETP) announced by the Government of Malaysia is expected to intensify capital investment in this sector.

“The Group is of the view that the long term outlook of the oil and gas industries continues to be positive and barring any unforeseen circumstances, the Group expects its overall performance for the next financial year to remain satisfactory,” it said.



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Sozo Global proposes first and final net tax exempt dividend of 3.8 sen

KUALA LUMPUR (April 30): Sozo Global Ltd has proposed a first and final tax exempt dividend of 3.8 sen per share for the financial year ended Dec 31, 2011.

In a filing to Bursa Malaysia Securities Bhd on Monday, the company said the dividend was subject to the shareholders’ approval at its the forthcoming Annual General Meeting.



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Spritzer 3Q net profit jumps 69.4% to RM3.66m

KUALA LUMPUR (April 30): SPRITZER BHD [] net profit for the third quarter ended Feb 29, 2012 jumped 69.4% to RM3.66 million from RM2.16 million a year earlier, due mainly to higher sales of more profitable carbonated and flavoured drinks and natural mineral water products.

The company said on Monday that its revenue for the quarter rose 33% to RM45.22 million from RM34.09 million in 2011 on higher sales volume.

Earnings per share increased to 2.18 sen from 1.65 sen, while net assets per share was RM1.13.

For the nine months ended Sept 29, Spritzer posted net profit RM8.57 million compared to RM7.84 million a year earlier, on the back of revenue RM131.53 million from RM104.73 million in 2011.

On its prospects, the company said that whilst the domestic economic outlook had remained positive, the global economic outlook was highly uncertain mainly due to the ongoing European sovereign debt crisis.

It said the persistent high raw material prices also posed a greater challenge to the group.

The company said it would continue to focus on achieving greater economies of scale and improving its productivity and operational efficiency so as to remain competitive.

“In line with our expansion plan and higher installed capacity, the Group will seek to further broaden its product range, including the recent introduction of the larger-pack-size bottled water suitable for the use of water dispensers, to cater to the needs of the various market segments.

“With the resilient domestic market and our continuous efforts to improve our export sales, we remain confident that the volumes and earnings of our various bottled water products will be further strengthened,” it said.



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