FBM30 1583.24 +0.71 points (+0.04%) Volume 2,860mil Value 1,572mil
1) KLCI ended mixed inline with the cautious regionals as preliminary March PMI numbers by HSBC indicate contraction in China’s manufacturing may be accelerating sinking to a four months low. Local market was weaker in last hour trading led by RHB, PPB, PETGAS after Eurozone PMI manufacturing contracted more than expected at 47.7. Broader market was marginally negative as decliners edged advancers 397:363. Futures closed 1584 (1 points premium).
2) Heavyweights: TENAGA+2% RM6.71, KLK+1.71% RM23.82, MAYBANK+0.34% RM8.77, GENTING+0.56% RM10.76, IOICORP-1.67% RM5.29, CIMB-0.26% RM7.61, PPB-0.95% RM16.62
3) DBT: AIC 17.7mil @ RM1.40 (10% PUC, 7% discount), RPB 17.6mil @ RM0.36 (2% PUC, 16% discount), MTRONIC 12.7mil @ RM0.12 (2% PUC, 53% discount)
4) Situationals:
MHC+10.62% RM1.77: Share price rose to its highest after announcing plans to undertake a 2 for 5 bonus issue plus 2 free warrants to reward its shareholders. Indicated exercise price for its warrants is RM1.33.
KNM-1.12% RM0.885: MARC rating has downgraded the long-term ratings to A+ID from AA-ID, and revised the outlook of the ratings to developing from stable and concurrently affirms the short-term ratings at MARC-1ID. The rating action affects RM190.0 million of outstanding notes issued by only KNM Capital as there has been no issuance by KNM.
5) SPSetia
1Q Jan 2012 Tover -5% RM491.6m Net +19.3% RM74m EPS 4sen
18% below cons(f) RM358m
Lower turnover due to slower progress of works during the festive season during the qtr, however higher earnings were recorded as gross profit margins increased from 25% to 30%. This was mainly derived from property development where PBT margins rose 3% to 21% from its success in steadily increasing the selling price of its product through value creation. Construction, although a small contributor to earnings, enjoyed a recovery in margins from 4.5% to 19%.
Going forward, 1st four months of current FY has seen sales of RM1.23bn and looks well on the way to delivering its target RM4bn yearly sales. The company will be launcing new projects in 2012 , incl Setia EcoStates Cyberjaya, KLEC Residential Tower, 18 Woodsville Spore, 11 Brook Residence Penang.
Buy for a recovery to historical valuations ie target of RM4.50 (pre GO average)
6) Market – Rotational play to continue, with quality mid caps sought after, BUY Gtronics, Uzma