FBMKLCI
1798.78 -8.83pts (-0.49%)
Volume 1.206b Value RM1.734b
1) The KLCI continue to slip today as investors weighed
corporate earnings and consumer confidence before the ECB meeting next week as
well as FOMC meeting on Weds. In the regionals, Japan lead the bearish
sentiments after Yen was firmer causing the NIKKEI -3.32% while SHCOMP -1.72%
fell most in 3 weeks after industrial companies reported slower profit growth.
In the local market, TECHNOLOGY index fell -1.14% weighed by JCY -3.62%,
D&O -5.08% and GPACKET -4.22%. Market breadth was negative with losers
outpacing the gainers by 583:214. Futures closed 1799.5 (1 pts premium).
2) Heavyweights : CIMB -1.65 RM8.31, PETGAS -1.86%
RM21.00, IHH -2.65% RM4.03, TENAGA -0.74% RM9.09, MISC -2.41% RM5.65,
GENTING-0.79% RM9.94, PPB -1.18% RM15.08, YTL +1.19% RM 1.70
3) DBT : SERSOL 4.331mil @ RM0.425 (2.248% PUC @ 13%
premium), PRTASCO 3.3mil @ RM1.32 (1.005% PUC @ 4.7% premium), LUSTER 3mil @
RM0.09 (10% discount)
4) Situational:-
KPJ -7.31% RM6.72 - the Group had been ordered by the
Johor Bahru High Court to pay RM70.5m in damages in relation to a civil case
filed by Hospital Penawar's chairman and managing director. The news comes as
an unpleasant surprise as the Group had not disclosed any ongoing litigation in
its financial reports. We understand from the management that no provisions
have been made for the claims. The JV agreement, signed on May 30, 1995, stated
that KPJ would own a 30% stake in Hospital Penawar in return for its expertise
and resources for the mutual benefit of both parties. The High Court Justice ruled
that KPJ‟s action breached the terms of the agreement and hence ordered the
Group to pay RM70.5m in damages to Hospital Penawar, in addition to RM150,000
for legal costs.
For 12 months YOY, PBT increased 59%, attributable mainly
to the higher sales volume & the overall reduction in PET raisin prices.
Management’s effort to increase production and operational efficiency has resulted
in economies of scale which lowered costs. The group’s manufacturing segment
revenue improved 13% due to the overall increase in sales volume and ASP due to
an increase in sales of big pack size products. Revenue from trading segment
also improved 15% due to increase in sales volume. Qoq, Revenue-12% while
PBT+16%. Higher revenue was seen in the preceding quarter due to the festive
season, but the higher PBT in current quarter was due to sales of higher margin
products as well as better selling prices on products sold for the 13th General
Election. Improvement in operational efficiency & productivity also
contributed. The group’s long-term prospect remains intact. We believe Malaysia
population is poised to consume more mineral water on per capita basis due to
rising disposable income. In addition, increasing tourist arrival to Malaysia
should bode well for mineral water sales too.
6) Market: The market is likely to drift lower with the
current lacklustre trading and the breaching of KLCI 1,800 - the immediate term
psychological support. Sentiment has also been further dampened by the weak
regional markets. Favourable US ISM & jobs data, and China manufacturing
PMI (to be released in the later part of the week) is critical to stem the
current down draft.
