1) KLCI fell for 5th consecutive days as investors remains cautious ahead of the planned "BERSIH" rally this weekend. Index rose in the morning to a high 1585.93 (+3.65pts) on improving US housing market and healthy demand for Eurozone sovereign debt before seeing heavyweights succumbing to selling pressure led by TENAGA and GENTING. Broader market stayed negative with losers leading advancers 405:315. Futures closed 1576.5 (3 points discount).
2) Heavyweights: TENAGA-1.07% RM6.46, GENTING-0.95% RM10.46, AIRASIA-2.93% RM3.31, YTL-2.35% RM1.66, MMCCORP-4.38% RM2.62, CIMB-2.7% RM7.41, DIGI+0.76% RM3.96, UMW+1.96% RM7.80
3) DBT: TDEX 9.8mil @ RM0.125, FABER 2.2mil @ RM1.72
4) Situationals:
PRESBHD+5.4% RM0.98: Company is looking to expand into
higher education. The company has secured the rights to establish a private
institute which will offer degrees for the ICT industry according to a
financial executives close to PRESBHD.5) Digi: Q103/12 Rev+10% RM1.57b Net-3% RM320.6n EPS 4.12s Div 5.9s Results 9% behind cons RM1.41b
Higher revenue recorded as data continued to grow with
higher contribution from mobile internet revenue & higher handset sales.
EBITDA margins was stable @ 47%, with key drivers being higher revenue &
continuous good cost management. However, Digi only added 16k new customers in
Q1/12 (Q4/11: 303k), due to higher churns (Market was expecting 120k). Qoq, Net
was 19% lower at RM321m against an exceptional RM394m in Q4/11, mainly due to
tax incentives resulting in significantly lower tax in Q4/11. Group declared a
1st interim dividend of 5.9s per share (on track to meet FY cons of 19.6s).
Inline with group's commitment in returning excess cash to shareholders, it has
proposed a capital reduction on a subsidiary & plan to return RM495m to
Digi shareholders at a later date. Management continues to guide for mid to
high single digit revenue growth, sustainable EBITDA & operational cash
flow margin & capex spend of RM700-750m for the year 2102; Hold.
6) Market - will continue to drift as investors'
sentiment is fragile from domestic politics while the external front remains
supportive with the better-than-expected US corporate earnings season. FOMC
will be releasing their monetary policy tonight with expectations of status quo
on interest rates. More important to markets are for hints on continuation of
Operation Twist on expiry and/or any possibility of QE3 if economic conditions
deteriorate from here.
