Thursday, January 12, 2012

Newz Bits 120112

Highlights of the day
§         Kossan Rubber (Company Update): Set to bounce (BUY, TP: RM4.02) [download report]
We came back from a visit to Kossan Rubber (Kossan) feeling optimistic with the new capacity expansion plans. Buyers have been secured for more than 85% of the new capacity. Valuations are undemanding with Kossan trading at 9.7x FY12 EPS (vs Top Glove’s 24x and Supermax’s 11x FY12). The valuation gap should narrow as: (i) Kossan moves up the value chain by offering higher margin surgical and clean room gloves; and (ii) Kossan’s product mix contains less natural rubber glove which is sensitive to movements in latex price. Recommend BUY with RM4.02 target price based on 11x FY12 EPS, in line with its historical average.

Reports
§         Newz Bits [download report]

Malaysian news
§         CIMB: Philippines next frontier for Malaysian banks
§         RHB-OSK: RHBCap awaits nod on merger with OSK unit
§         AirAsia: AirAsia X to start KL-Sydney route
§         MMC: Plan to privatise KTMB on track
§         UMW: Expects to sell 93,000 cars in 2012
§         UMW: Not interested in Proton stake
§         Kulim: Board to discuss MCCM’s counterbid
§         Tan Chong: No plan to bid for Proton stakes
§         Supermax: To set up Supermax Healthcare in UK
§         Supermax: To meet FY2012 profit target on lower rubber prices
§         Esso Malaysia: San Miguel to invest in ExxonMobil’s Malaysia downstream business
§         Bina Puri:  To bag Pakistan highway deal?
§         Economy: Malaysia's Jan-Nov trade up 8.7% to RM1.16trn

Global news
§         US: Obama proposes tax incentives for returning jobs
§         Europe: Economy grew less than first estimated in 3Q2011
§         UK: Trade deficit widens more than forecast as exports fall
§         Greece: Greek bond swap falling short, governments may fill gap
§         India: Government lifts some limits on foreign retailers
§         Vietnam: Central bank to adjust interest rates, weaken currency

Visit ECM Libra at https://www.ecmlibra.com/ecmlsmy
Our on-line trading portal at www.ecmmoney.com
at