DKSH slides after denying buyout bid news

DKSH Holdings (Malaysia) Bhd, a distributor of pharmaceutical and chemical products, slid 9 percent to RM1.92 in Kuala Lumpur trading at 9.42am, bound for its steepest drop since May 4.

The company denied reports of buyout offer after checking with its directors and major shareholder, according to a stock exchange filing. -- Bloomberg



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FBM KLCI remains in negative territory at mid-morning

KUALA LUMPUR (Feb 3): The FBM KLCI remained in negative territory at mid-morning on Friday as losses at select blue chips on mild profit taking ahead of the extended weekend weighed on the index.

At 10am, the FBM KLCI fell 4.69 points to 1,532.40, weighed by losses including at Petronas Dagangan, KLK, Genting and Hong Leong Bank.

Losers led gainers by 337 to 175, while 285 counters traded unchanged. Volume was 583.87 million shares valued at RM349.53 million.

Asian shares and major currencies were stuck in ranges on Friday ahead of key U.S. jobs data, which will offer more clues over the state of the world's largest economy, while Greek debt restructuring talks dragged on, according to Reuters.

At the regional markets, Japan’s Nikkei shed 0.33% to 8,847.50, Hong Kong’s Hang Seng Index was down 0.18% to 20,703.00, the Shanghai Composite Index fell 0.30% to 2,305.53 and South Korea’s Kospi lost 0.76% to 1,969.27.

Meanwhile, Singapore’s Straits Times Index gained 0.53% to 2,916.32 and Taiwan’s Taiex added 0.02% to 7,654.22.

BIMB Securities Research in a note Friday said stocks ended mixed in Wall Street yesterday following drop in jobless claims and mixed earnings results.

The Dow Jones Industrial Average closed 0.09% lower while S&P 500 rose 0.11% and Nasdaq was higher by 0.4%, it said.

The good news in US also sent good sentiment in Europe as major European markets ended higher, it said, adding that the better than expected PMI in China also boosted major regional indices.

Back home, the FBM KLCI broke two resistance level at 1,530 and 1,535 to close at 1,537, it said.

“We may expect some profit taking activities today given the mixed results in US; and the local market may face a little uncertainty due to the long weekend.

“We shall see immediate support at 1,530 followed by 1,520 while resistance at 1,540 and 1,545,” it said.

On Bursa Malaysia, Petronas Dagangan fell 34 sen to RM18, KLK down 26 sen to RM25.34, PPB and DKSH lost 18 sen each to RM17.02 and RM1.93, Malayan Flour Mills 14 sen to RM4.51, Genting and SapuraCrest 10 sen each to RM11.06 and RM5.08, Hong Leong Bank eight sen to RM11.36 while Nadayu and AMMB fell six sen each to RM1.04 and RM5.82.

Gainers included BAT, Kretam, Ta Ann, Jaya Tiasa, TDM, BLD PLANTATION []s, Tradewinds, JCY, Shell and Gamuda, while the actives included Mah Sing, DBE Gurney, Mazbiz, JCY and DRB-Hicom.



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Selling Lotus a viable option: Mahathir

Tun Dr Mahathir Mohamad, Malaysia’s former prime minister, comments on Proton Holdings Bhd after billionaire Syed Mokhtar Al-Bukhary’s DRB-Hicom Holdings Bhd agreed to buy a controlling stake from the government.

Mahathir, who helped found Proton and remains an advisor, also comments on whether DRB should sell Proton’s U.K. sports- car arm Group Lotus International Ltd. The former premier made these comments in an interview in Kuala Lumpur yesterday.

On selling Lotus:

“It is a viable option and I think the new owners of Proton might consider that. But, Lotus is not just a sports-car company. It is an engineering and technology company. It’s selling engineering skills to China and helping people going into the industry.”

Whether Proton’s new controlling shareholder DRB-Hicom can make a difference:

“The man behind DRB-Hicom is a successful entrepreneur. He owns ports and businesses and took over DRB-Hicom from previous owner and has turned it around.

“DRB-Hicom was a great failure before. It lost a lot of money before he took it over and has turned it around. It’s a profitable company and many foreign automotive companies go to this company and want them to be partners. They assemble Mercedes-Benz cars, Volkswagens and Suzukis. They are financially strong. I am confident.

“Of course, they have a lot of borrowings. Nobody is rich with their own money. They are rich with money that they borrow.”

On whether Proton still needs a global strategic partner:

“If you go to Italy, small companies can design and build car, so you don’t need big companies to be with you. You can go direct to the very companies which the big companies use.

“We see big companies are more keen on swallowing us up. We feel we want to be independent. Therefore, we go to the small companies and we can now build and design cars of modern design by working through these small companies.”

On what’s needed to turnaround Proton’s fortunes:

“I think a good management. There is nothing wrong with Proton, but bad management has caused it to come down.

“There were times Proton was doing so well. It made so much money it managed to build huge facilities, including a big manufacturing center costing 1 billion ringgit. These were internally generated funds and not by borrowing from the banks or asking the government for money. It’s not usual for any car companies to be able to generate funds internally for expansion. So it’s not a failure.

“Today, it seems to be in a bad way. Of course, there were things done which should not have been done. For example, they allowed for the import of foreign cars, but these people under- declare and do all kinds of funny things. As a result, these foreign cars push out Proton from the market. So, we understand the problem. We have a chance to recover.”

Proton’s challenges:

“One time, we had a reserve of RM4 billion, which would able to finance the growth of the future. Unfortunately, due to things done by the wrong management we have lost the cash.

“In the automotive business you need a lot of money. Each model, just for the platform requires half a billion ringgit. We need that money. I hope the new investors will provide the money.”

On whether Malaysia really needs a national car:

“By itself, a national car is not a need. We could buy cheaper cars by importing them. An automotive industry generates a lot of engineering skills and it can give us a lot of the other businesses.

“Now we can manufacture components and produce a lot of other things. People who look at Proton may think of it as a failure, but we think it has helped Malaysia take many steps in the field of engineering.” -- Bloomberg



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KLCI dips in early trade ahead of extended weekend

KUALA LUMPUR (Feb 3): The FBM KLCI dipped in early trade on Friday on some mild profit taking ahead of the four-day extended weekend.

At 9.15am, the FBM KLCI was down 4.75 points to 1,532.34, weighed by losses at select blue chips.

Gainers trailed losers by 142 to 171, while 205 counters traded unchanged. Volume was 190.57 million shares valued at RM115.19 million.

Early decliners included Petronas Dagangan, KLK, BAT, PPB, DKSH, Hong Leong Bank, Genting PLANTATION []s, HLFG, Maybank and Hibiscus.



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Maxbiz active, down after Bursa Securities rejects application for time extension

KUALA LUMPUR (Feb 3): MAXBIZ CORPORATION BHD [] shares fell on Friday after the company’s application for extension of time to submit the regularisation plan to the authorities was rejected by Bursa Malaysia Securities Bhd.

At 9.05am, Maxbiz fell four sen to 5 sen with 7.31 million shares traded.

“The board is currently deliberating on the decision made by Bursa Securities and will announce the next course of action in due course,” the company said on Thursday.

Earlier, a Bursa Securities circular said trading of Maxbiz’s securities faces the threat of suspension from Feb 14 unless it can submit an appeal before Feb 13.

A Bursa Malaysia Securities circular said on Thursday that Maxbiz failed to submit its regularisation plan to the Securities Commission or Bursa Securities Bhd for approval within the timeframe stipulated.

Maxbiz, could still however, submit an appeal to Bursa Securities on or before Feb 13. Any appeal submitted after the appeal timeframe would not be considered by Bursa Securities.



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Hibiscus shares dip on amended financial statement showing losses

KUALA LUMPUR (Feb 3): Hibiscus Petroleum Bhd shares dipped in early trade on Friday after the company clarified that it had posted net losses of RM1.27 million for the quarter ended Sept 30, 2011 instead of net profit.

At 9.05am, Hibiscus fell four sen to RM1.51 with 601,500 shares traded.

In its amended financial statements on Thursday, Hibiscus said the net losses were due to the higher expenditure.

It also said it posted net losses of RM13,000 in the quarter ended Sept 30, 2010 instead of a net profit of RM13,000.



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RHB Research ups KPJ Healthcare FV to RM5.09

KUALA LUMPUR (Feb 3): RHB Research Institute has raised the fair value for KPJ HEALTHCARE BHD [] to RM5.09 (from RM4.71) after ascribing a higher CY12 target PER of 20.5 times.

In its research note on Friday, it also maintained an Outperform outlook on KPJ.

RHB Research said the anticipated listing of Integrated Healthcare Holdings (IHH) in mid-2012 is expected to stir up investor interest and drive a rerating of the healthcare sector.

“We expect KPJ’s valuations to move closer to the new benchmark set by IHH over the longer term. Furthermore, KPJ’s aggressive local expansion plans should help the company maintain its dominance in Malaysia over the longer term,” it said.

RHB Research said its FY11-13 earnings forecasts are tweaked by -1.1%, -10.0% and +1.0% respectively after adjusting for the rescheduled openings of the Bandar Baru Klang Specialist and Muar hospitals and updating for ESOS shares.



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CIMB Research ups Muhibbah to trading buy, TP RM1.63

KUALA LUMPUR (Feb 3): CIMB Equities Research said the Asia Petroleum Hub (APH) has taken a positive twist as a CIMB Bank-led restructuring is reportedly in the works.

The research house said on Friday that if successful, it would bring in the additional funds needed to complete the project.

“For Muhibbah, it would mean no provisions and possibly, additional APH works. We raise EPS and RNAV for a recent project award. Our target price goes up from RM1.24 to RM1.63 as we narrow our RNAV discount from 50% to 40%.

“We upgrade from Hold to Trading Buy given the possibility of a favourable outcome for APH in the next one to two months,” it said.

On Thursday, Singapore’s Straits Times reported that APH was set to get a financial lifeline from a consortium led by its main banker, CIMB Bank. CIMB has lent more than RM800 million to APH.

Local bankers involved in the restructuring of APH said that protracted shareholding disputes which hobbled the project have been resolved and CIMB has committed to providing the necessary funding to complete the project.

The news report said as part of the settlement hammered out in recent days, APH’s current shareholders have agreed to surrender their equity holdings.

It is unclear if they received any financial compensation. The project is about two-thirds completed and the new consortium hopes to finish it within 18 months.

The news report quoted a banker as saying that taking over a project for a bank is a little out of the box, but this is a very viable business and there is no reason why CIMB shouldn't own it as a major investment.



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