KLCI stays in the black, lags regional markets

KUALA LUMPUR (Jan 17): The FBM KLCI managed to stay barely above the 1,510-point level at the mid-day break on Tuesday, and lagged behind key regional markets.

At 12.30pm, the index edged up 1.20 points to 1,510.26.

Losers overtook gainers by 313 to 288, while 314 counters traded unchanged. Volume was 737.43 million shares valued at RM793.79 million.

The ringgit strengthened 0.22% to 3.1318 versus the US dollar; crude palm oil futures for the third month delivery rose RM23 per tonne to RM3,149, crude oil added 43 cents per barrel to US$100.12 while gold jumped US$14.52 an ounce to US$1,658.32.

At the regional markets, Japan’s Nikkei 225 rose 0.77% to 8,442.75, Hong Kong’s Hang Seng Index gained 1.88% to 19,369.90, the Shanghai Composite Index added 0.93% to 2,226.67, Taiwan’s Taiex rose 1.29% to 7,194.93, South Korea’s gained 1.49% to 1,887.00 and Singapore’s Straits Times Index was up 0.91% to 2,781.60.

Among the gainers on Bursa Malaysia this morning, BAT was up 40 sen to RM49.70, Ibraco 21 sen to RM1.44, Petronas Dagangan up 20 sen to RM17.42, Genting 18 sen to RM10.74, Teck Guan 13 sen to 79 sen, Subur Tiasa and Bursa up 12 sen each to RM2.44 and RM6.94, Degem 11.5 sen to RM1.04 and Shell 11 sen to RM9.53.

Proton was the most actively traded counter after Khazanah Nasional Bhd finally put an end to months of speculation and announced it was divesting its 42.72% Proton stake to DRB-HICOM BHD [] for RM5.50 per share or RM1.291 billion cash.

Upon completion of the sale and purchase agreement, DRB-Hicom will be obliged to undertake a mandatory general offer on the remaining Proton shares.

Proton jumped 26 sen to RM5.44 with 53.61 million shares done.

Other actives included Compugates, DRB-Hicom shares and warrants, E&O, Hovid and DGSB.

Decliners at mid-day included GAB, Nestle, United PLANTATION []s, Dutch Lady, Panasonic, MISC and MMHE.



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HLIB: DRB-Hicom to be key automotive player

DRB-Hicom Bhd is on its way to becoming the key regional automotive player with own Proton marque, as well as exporting Volkswagen vehicles to regional markets, says Hong Leong Investment Bank (HLIB).

It said over the longer term, DRB-Hicom could penetrate the regional market with the Proton marque, gaining international recognition.

DRB-Hicom has also expressed an interest in supporting the development of Proton’s hybrid and electric vehicle technology.

However, HLIB said it raises concerns over the DRB-Hicom's performance which will be weighed down by Proton's existing issues of restructuring the Lotus Group, plants underutilisation, incompetence in technology and lack of product offerings.

"We do not expect DRB-Hicom to sell off Lotus in the immediate term, mainly due to the collaboration between Lotus and Proton in developing Global Small Car - hybrid vehicles or better known as Proton Emas, which is expected to be introduced in 2012/13," it said.

HLIB believes that DRB-Hicom does not need to inject capital into Lotus in the near term. This because the Lotus Group has already secured a RM1.35 billion loan to fund the initial stage of its RM2.4 billion restructuring cost.

On the Proton post-mandatory general offering (MGO) exercise, HLIB also believes that DRB-Hicom does not need to inject capital into Proton, as its balance sheet looks healthy with a net gearing of 45.3 per cent.

Furthermore, Proton still has cash of RM1.3 billion (net cash of RM355 million), indicating a sufficient enough cash level to fund its capital expenditure for the next 2-3 years, it added. DRB-Hicom shares were down five sen to RM2.12 as at 11.45 am today. -- BERNAMA



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Telekom in talks with property developers to expand HSBB offerings

KUALA LUMPUR(Jan 17): TELEKOM MALAYSIA BHD [] (TM) is currently in negotiations with 20 property developers to expand its high-speed broadband (HSBB) offerings to new property projects, riding on the real estate cycle's uptrend.

TM small medium enterprises (SME) executive vice president Azizi A Hadi said on Tuesday that TM SME was focusing on urban areas such as Klang Valley, Penang and Johor to grow the take-up of its HSBB offerings for residential, commercial and office buildings.

Azizi also said TM SME last year signed 11 agreements with property developers nationwide for provision of HSBB services in new projects.

He was speaking after TM SME signed an agreement with privately owned property developer BHL Group of Companies for the provision of TM's HSBB network infrastructure and services to BHL's three projects.

The three projects are USJ One Park in Subang Jaya, KL Palace Court in Kuchai Lama and an upcoming project in Cheras. The total gross development value for the three projects are RM680 million.



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Petronas said to sell Labuan crude

Petroliam Nasional Bhd, the Malaysian state oil company known as Petronas, offered to sell 600,000 barrels of Labuan crude for loading in March, said two traders who participate in the market, declining to be identified because the information is confidential. -- Bloomberg



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Petronas said to sell Labuan crude

Petroliam Nasional Bhd, the Malaysian state oil company known as Petronas, offered to sell 600,000 barrels of Labuan crude for loading in March, said two traders who participate in the market, declining to be identified because the information is confidential. -- Bloomberg



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KL shares remain bullish at midmorning

Share prices on Bursa Malaysia remained positive at midmorning today amid steady key regional markets, dealers said.

At 11am, the FBM KLCI gained 2.14 points or 0.14 per cent to 1,511.20 after opening 0.55 point higher at 1,509.61.

The Finance Index rose 0.20 of a point to 13,372.92, the Industrial Index was up 4.72 points to 2,779.90 while the Plantation Index declined 14.22 points to 8,414.55.
The FBM Emas Index added 16.08 points to 10,430.39, the FBM Mid 70 Index gained 26.40 points to 11,737.93 and the FBM ACE Index was 4.65 points higher at 4,270.14.

Gainers led losers 243 to 242 while 278 counters traded unchanged. Volume was 526.19 million shares valued at RM536.79 million.

Proton advanced 26 sen to RM5.44 with 46.37 million shares traded after Khazanah announced it was divesting the 42.7 per cent Proton stake to DRB-Hicom for RM5.50 per share or RM1.29 billion cash.

Compugates shed half a sen to 7.5 sen, DRB-Call Warrant slipped 2.5 sen to 12.5 sen while Proton-Call Warrant rose one sen to 52.5 sen.

For the heavyweights, Maybank was unchanged at RM8.19, Sime Darby rose one sen to RM9.09 while CIMB lost two sen to RM7.17. -- BERNAMA



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KL shares remain bullish at midmorning

Share prices on Bursa Malaysia remained positive at midmorning today amid steady key regional markets, dealers said.

At 11am, the FBM KLCI gained 2.14 points or 0.14 per cent to 1,511.20 after opening 0.55 point higher at 1,509.61.

The Finance Index rose 0.20 of a point to 13,372.92, the Industrial Index was up 4.72 points to 2,779.90 while the Plantation Index declined 14.22 points to 8,414.55.
The FBM Emas Index added 16.08 points to 10,430.39, the FBM Mid 70 Index gained 26.40 points to 11,737.93 and the FBM ACE Index was 4.65 points higher at 4,270.14.

Gainers led losers 243 to 242 while 278 counters traded unchanged. Volume was 526.19 million shares valued at RM536.79 million.

Proton advanced 26 sen to RM5.44 with 46.37 million shares traded after Khazanah announced it was divesting the 42.7 per cent Proton stake to DRB-Hicom for RM5.50 per share or RM1.29 billion cash.

Compugates shed half a sen to 7.5 sen, DRB-Call Warrant slipped 2.5 sen to 12.5 sen while Proton-Call Warrant rose one sen to 52.5 sen.

For the heavyweights, Maybank was unchanged at RM8.19, Sime Darby rose one sen to RM9.09 while CIMB lost two sen to RM7.17. -- BERNAMA



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SP Setia eyes move into Vietnam city centres

SP Setia Bhd, Malaysia’s second-biggest publicly traded developer, hopes to take advantage of lower prices in Vietnam’s property market by starting a development in downtown Ho Chi Minh City or Hanoi.

Setia’s first two projects in Vietnam are housing developments in Binh Duong province, adjacent to Ho Chi Minh City, the country’s business center. The developer is now looking for a “high-rise building with some branding” to boost its corporate image in Vietnam.

Vietnam’s property prices are falling amid a glut of high-end residential apartment developments, the U.K.-listed Vietnam Property Fund Ltd said last month. Asking prices have dropped over the past “six, seven weeks,” said Alex Loh, Setia’s chief resident representative in Vietnam.

“We are looking for opportunistic deals,” Loh said in an interview yesterday in his Ho Chi Minh City office, declining to give details on any potential projects or prices. “We have been trying for the last few weeks and months. We are looking at coming back closer to the city now.”

Vietnam marked SP Setia’s first move outside its home base and the company has now also expanded into Australia. Chief Executive Officer Liew Kee Sin said in 2008 that the Kuala Lumpur-based company planned to spend “a lot of effort and time” in developing its projects in Vietnam.

Sales in the country have been slow, hurt by commercial bank lending rates of “about 18 or 19 percent,” Loh said, as the Vietnamese central bank pushed up its policy rates to slow Asia’s fastest inflation.

“They’re not very happy with it,” Loh said about his company’s view on Vietnam five years after committing to its first project in the country. “The pace here is just not there. But head office understands it, so they’re still going along with a slower pace-type of sales over here.”

SP Setia expects to identify a downtown project in Vietnam by the second quarter, and be at the “negotiations stage” by that time, he said. -- Bloomberg



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