FBM30 1578.41 +7.79pts (+0.5%) Volume 732.9m Value
1.37b
1) The KLCI got off to a strong start as it jumped more
than 11 pts higher at the opening, as investors speculated a bailout for
Spanish banks will help ease Europe's debt crisis & China's trade data grew
faster than expected. The index traded within a narrow 6 points range through
the sessions before closing at 1578.41
pt. Gas Malaysia Bhd made it's debut on the KLSE, closing the day with a 10%
gain on it's IPO price of RM2.20. Market breath was positive, with gainers
edging losers 418:262 on
slightly improved volume. Futures closed 1580 pts ( 1.59 pts premium) .
2) Heavyweights: SKPETRO +4% RM2.28, MISC +1.99% RM4.11,
BOUSTEAD +1.8% RM5.20, TENAGA+1.25% RM6.48, MAXIS+0.9% RM6.48, SIME +0.6%
RM9.75, CIMB+0.3% RM7.51, MAYBANK+0.3% RM8.73, GENTING+0.2% RM9.58.
3) DBT: BJASSET 10m @ 0.83, MEDAINC 1.5m @ 0.70
4) Situationals:
TENAGA +1.25% RM6.48 : On media reports that there would
be major rate cuts on 1st generation IPPs. The rate could be lowered by some
80%, according to industry sources. It was also suggested that although some of
the agreements will expire from 2016 onwards, if the IPPs were successful in
obtaining the extension, the cut in rates would commence immediately.
5) YINSON (YHB)
Announce that it had entered into a consortium agreement
with Petrovietnam Technical Services Corporation ("PTSC") in relation
to execution and performance of the engineering, procurement, construction and
installation contract and the bareboat charter contract for the provision and
charter of a floating production, storage and off-loading ("FPSO") facility
PTSC and YHB have agreed to jointly provide the FPSO to
PTSC under the terms of the Contracts, and PTSC will onward charter to Lam Son
Joint Operating Company. The Contracts will be negotiated by PTSC with the
participation of YHB. PTSC will lead all discussions, clarifications and
negotiations and shall keep YHB informed on the negotiations taking place.
The indicative value of the Bareboat Charter Contract is
as follows, the tenure of the contract is for a firm period of seven years
having the option to extend on an annual basis for a further period of three
years ; and the total contract value is USD737.30 million for ten years (ie. USD516.11 million for the Firm Period and USD221.19
million for the Extension Period).
The equity participation ratio of the Parties in the JVC
shall be in accordance with their proportionate share of PTSC : 51.0% and YHB : 49.0%
It is envisaged by the Parties that up to thirty percent
of the estimated project cost of USD400 million, or USD120 million shall be
contributed by the Parties in accordance with their Proportionate Share in the
JVC. In accordance with the Proportionate Share, the estimated funding from
each Party shall be as followed: PTSC (51%): Up to USD61.20m and YHB (49%): Up to USD58.80m.The remaining
balance of the Estimated Project Cost shall be funded by loans from financial
institutions.
The Proposed Joint Venture is not expected to have
material effect on earnings for the FYE 31 January 2013 as the Bareboat Charter
Contract is expected to commence in the month of June 2014.+ve as this contract now puts Yinson amongst the big boys
with and orderbook of above RM3bn but still trading at a sharp discount
to BUMI ARMADA's valuation of 21x vs Yinson of only (13x and 9x for FYE 2014
when contribution from its initial FSO kicks in). Long term BUY
6) Market - Technical bounce to continue with the initial
banking collapse in Spain averted but major problems still remain in hence we
expect this relief rally to be unsustainable until a long term solution is
found in dealing with sovereign debt and growth issues in the Euro Zone.
