FBM30 1556.73 -2.31 points (-0.15%) Volume 1,727mil Value 1,588mil
1) Cautious sentiment prompted by high oil prices and ahead of the second round of ECB lending saw the KLCI drift lower with selling mainly in 2nd liners spreading into bluechips: YTLPOWR-1.6%, MAXIS-1.5%, PCHEM-1.5%, AXIATA-1%. Companies announcing results were also rewarded or punished accordingly: JTINTER-3.5%, TGOFFS-5.4%, ZELAN+11%. Market breadth was negative with losers overwhelming gainers 511:309.
Futures closed 1556 (1 point discount).
2) Heavyweights: PCHEM-1.5% RM6.80, AXIATA-1% RM5.10, TENAGA-0.8% RM6.20, MAXIS-1.5% RM5.89, YTLPOWR-1.6% RM1.85, MAYBANK-0.1% RM8.74,CIMB-0.1% RM7.13, GENTING+1% RM10.54, YTL+2.6% RM1.58, HLBANK+1.71.
3) DBT: YTLPOWR 26mil @ RM1.87, JCY 10.3mil @ RM1.22, CSL 10mil @ RM1.04.
4) Situationals:
KIMLUN+0.7% RM1.51: Share price rose to as high as RM1.53 (+2%), its biggest gain in 3 weeks after its wholly-owned subsidiary, Kimlun Sdn Bhd had accepted the LoA from Tanah Sutera Development Sdn. Bhd. for construction of extension building and ancillary building to; and alteration of existing building of a shopping mall in Johor Bahru. The contract sum for the project is RM71.9mil. The construction work is expected to be completed by end November 2012. In a separate filings,Kimlun's 4Q net income rose to RM11.7 million from RM10 million a yearearlier.
5) MAYBULKFYEDec2011 Tover -37% RM256.3m Net -61% RM91.3m 9.13sen 8% below cons(f) RM99m
The dip in revenue was mainly attributable to revenue from dry bulk segment falling 39% to RM214.4 million vs RM349.2 million YOY as a result of the lower charter rates earned. Average charter rates earned by our dry bulk carriers were down by 36% to USD16,519/day, in line with the falling BDI (average of 1549 points in 2011 versus 2010's 2758 points) due to overcapacity. Revenue days from dry bulk segment was 113 days higher due to lesser docking days compared to 2010.
The tanker market remained stagnant in 2011 with BCTI (Baltic Clean Tanker Index) averaging at 720 points, down 2% from 2010's average of 732 points. Although tankers' average charter rates improved 2% to USD12,269/day in 2011, tanker segment's revenue declined 24% to RM35.0 million due to lower revenue days. Factors contributing to the lower revenue days are the disposal of a tanker in February 2011, the scheduled docking for 3 tankers and downtime awaiting employment.
Earnings was thus affected by the lower charter rates as the Group's operating profit fell 57% to RM84.0 million.Current year's "other operating income/(loss)" of RM3.4 million loss, comprises gains on foreign exchange and disposal of vessel totaling RM9.1 million, mark-to market losses on investments of RM13.2 million, an accounting adjustment for foreign exchange to comply with MFRS 121 and the reversal of a provision for a UK lease.The company declared a 3sen final dividend.The group is scheduled to take delivery of 3 more new vessels in 2012 (129,000 DW handysize and two superamaxes, all which are long termcharters). FYE 2012 earnings are expected to remain flat which keeps valuation high at 19x PE. Sell into strength.
6) Market - prices have retraced significantly to levels which warrant a trading buy. The rally could be triggered by a push in the DJIA above the psychological 13000 mark and an orderly injection by the ECB of fresh funds into the European banking system. Top trading ideas include DRBHcm, Gamuda, MAS, Mudajaya, UEMLand