FBM30 1548.25
+8.54points (+0.55%) Volume
817mil value 1,311mil
1) KLCI was resilient, bucking the regionals which fell
on worries Greece will exit Eurozone with no immediate relief plan for Spain
during yesterday's EU meeting. China HSBC manufacturing data also showed
contraction for the seventh month. Local market ended at day's high with strong
support for key heavyweights led by Tenaga and Maybank. Broader market was
positive as advancers led losers 274:386. Futures closed 1541.5 (7 points discount).
2) Heavyweights: TENAGA+2.03% RM6.54, MAYBANK+0.83%
RM8.50, PCHEM+1.55% RM6.55, TM+1.72% RM5.32, SIME+0.53% RM9.50, AIRASIA+2.06%
RM3.46, HLBANK+1.33% RM12.20, GENM+1.13% RM3.58
3) DBT: COMPUGT 3.3mil @ RM0.09, AGLOBAL 2.3mil @ RM0.17
(21% premium)
4) Situationals:
DELEUM: Company expects to secure contracts worth RM1
billion this year. He said the company had submitted proposals since the
third quarter of last year to secure contracts for all three business segments
-- power and machinery; oilfield services; and maintenance, repair and overhaul
(MRO). Orderbook stands at RM650 million which will last us until 2018.
5) KLK
1H MAR 2012 Tover
+15.8% RM5.55bn Net -18% RM588.4m 52sen
25% below cons(f) RM1.57bn The net earnings for the half year slipped
18% to RM588.4 million despite the 15.8% improvement in the Group's revenue to
RM5.55 billion.
Plantations profit of RM692.4 million was largely
flat. The average selling prices
(ex-mill) achieved for CPO and PK had softened to RM2,777/mt and RM1,613/mt
(Todate 2QFY2011: RM2,850/mt and RM1,997/mt) respectively which had been
diluted by the Indonesian export duties.
Cost of production, owing to higher wages, had increased
and the fair value changes on outstanding derivative contracts was a loss of
RM6.0 million (Todate 2QFY2011: gain RM32.7 million) However, the improvement
in FFB production and the higher contributions from refinery operations due to
better margins had mitigated the decline in profit.
The group was however brought down by the oleochemical
division's profit dropping 71.4% to RM46.6 million (Todate 2QFY2011: profit
RM163.0
million) although revenue had improved. Impact of the
changes in fair value on outstanding derivative contracts amounted to a loss of
RM10.0 million (Todate 2QFY2011: gain RM18.6 million). The persistent weak
global macro-economic climate and the stiff competition from Indonesian
producers offering at cheaper cost-base products had continued to squeeze
margins. Retailing sector incurred a slightly higher loss of RM28.4 million but
Crabtree & Evelyn has since been sold in Mar for USD155m which will reap a
gain on disposal of USD41m once completed in June.
Company likely to struggle to meet consensus numbers as
its CPO prices continue to trend lower and its oleochemical business continues
to face strong competition from Indonesian players who have the huge export
duty advantage on the downstream raw materials. This scenario will continue
until their downstream facilities in Indonesia, currently in progress, are
commissioned in the next financial year.
6) Market - Short term month end closing could see
markets firmer but funds will continue to take upticks as selling
opportunities. Bumi Armada is showing signs of reversing its current downtrend
with a possible rebound target of RM4.20 especially if it announces the
expected FPSO contracts. BUY
