Tuesday, May 8, 2012

Market Roundup | 7 May 2012

FBM30 1584.87    -6.17points (-0.39%)  Volume 963mil     Value 1,194mil

1)KLCI snapped its winning streak, as global markets led by Nikkei-2.7% and HSI-2.6% dropped on concerns about the impact of the weekend election in France and Greece over the Eurozone debt crisis and weaker US job data numbers. Index dipped to a low of 1579.74 (-11.30pts) before buying support of key heavyweights led by GENTING, IOICORP, CIMB pared losses. Broader market turned negative with losers outnumbering gainers 540:208. Futures closed 1578 (7 points discount).

2)Heavyweights: TENAGA-1.52% RM6.50, PCHEM-1.50% RM6.55, GENTING-0.75% RM10.56, AIRASIA-2.75% RM3.54, HLBANK-1.29% RM12.20, UEMLAND-3.77% RM2.04, IOICORP-0.38% RM5.25

3) DBT: SCABLE 20.7mil @ RM1.70 (15.4% PUC, 11% discount, matching Leaders Universal stake), RPB 12.9mil @ RM0.38 (1.5% PUC)

4) Situationals:
MEGB+1.87% RM1.09: Newspaper reported company could be rewarding shareholders as much as 27sen from the balance of its unutilised funds raised from its IPO in 2010. There are RM73.66mil remaining from IPO proceeds and a plot of land in Kajang intended for the Masterskill University College but is now on the backburner worth RM38.8mil.

5) Armada
Announced that its subsidiary, Bumi Armada Navigation Sdn Bhd, has signed a five-year charter and operations contract with a Mexican company, Tecnologias Relacionadas con Energia y Servicios Especializados S.A. de C.V.(TRESE) for its accommodation workboat, Armada Firman 3.

Armada Firman 3 will provide accommodation and offshore services to support oil field activities in the Mexican territorial waters. The 75 m long vessel with DP2 (dynamic positioning) capability is classed by ABS to safely accommodate 218 non-industrial personnel as per SOLAS requirements. It is equipped with 600 m2 deck space and a 40 tonne SWL (single wire line) deck crane for maintenance and installation activities. This five-year contract is estimated to be worth approximately USD 65 million and comes with an option for extension of a further 5 years. The contract is expected to be effective 7 May 2012. +ve but market is still expecting the group to secure two sizeable FPSO contracts this year to justify the current rich valuation.

6) Market - Risk off trades due to weaker US economic data and European political issues coupled with domestic GE concerns will see the current cautious trend continue with investors looking to sell into bounces until a clearer trend emerges.