FBMKLCI
1871.36 -6.98pts (-0.37%)
Volume 2.510b Value 2.526b
1) The KLCI dipped to a low of 11.8pts before closing
just -6.9pts weighed by selected core blues after Fed's statement offered a
mixed view on the economy yesterday. In the regional market, major indexes were
boosted by China after SHCOMP +0.93% & HSI +0.10% rose amid optimism that
the government stimulus will boost the economic growth just before they release
manufacturing data tomorrow. In the local market, profit taking was seen across
the board especially amongst Government linked counters such as MISC-1.8%,
PCHEM -1.92%, PETDAG -1.79%, PETGAS -0.50% and SIME-1.5%. Market breadth was
negative with losers beating gainers by 515 : 349. Futures closed at 1867 (4
pts discount).
2) Heavyweights : SIME -1.45% RM9.50, PCHEM -1.92%
RM6.64, IOICORP -1.38% RM5.00, MISC -1.80% RM6.52, DIGI -0.69% RM5.69, FGV
-1.95% RM4.02, MAXIS +1.34% RM6.76, GENM +1.14% RM4.40
3) DBT : TALAMT 56.2mil @ RM0.07 (1.33% PUC @ 44%
discount), NEXGRAM 45mil @ RM0.11 (2.65% PUC), PELIKAN 5mil @ RM1.15 (7.3%
discount), TMAKMUR 3mil @ RM2.16, GTRONIC 1.3mil @ RM4.62.
4) Situational:-
SCOMIES -4.71%
RM1.01 - Scomi Energy Services Bhd has proposed to undertake a renounceable
rights issue of up to RM140.5m of five-year redeemable convertible bonds. The
exercise would be on the basis of RM6.0 in nominal value of convertible bonds
for every 100 ordinary shares held in Scomi Energy on an entitlement date to be
determined later. The issue price of the convertible bonds, it said, would be
determined and announced prior to the date of issuance of the convertible bonds
by the board. Scomi Energy said that proceeds raised from the rights issue
would be used in part to repay its bridging loan of up to RM45.0m that was
incurred following its acquisition of a 30.0% stake in Ophir Production Sdn
Bhd, which is a joint venture with Vestigo Petroleum Sdn Bhd, and
Australian-based Octanex Pte Ltd.
5) GKENT
Group chairman indicated that GKent may make a comeback
to the oil & gas industry where the company had previously been involved in
selling of valves and bar code pumps. He also said that they are “looking
closely for the right space and targets” to enter the oil &gas industry.
Commenting on the RM1.08b Ampang LRT extension project
which was awarded to the company in July 2012 to provide system works, it was
disclosed that GKent has completed about one third of the work. This is
generally in line with planned schedule.
The chairman also announced that GKent is currently
bidding for construction jobs worth between RM10b – RM15b with the focus on
water infrastructure construction projects & railway construction projects.
The company is focusing on their mainstay of building water treatment plants
and dams.
Management has also guided that the company has set up an
engineering division to look into “smart water meters” & “polymer meters”
to enhance their competitive advantage of its metering businesses.
GKent shareholders today approved a 1:3 bonus issue
(earlier proposed on 30/6/14) which is expected to be completed & listed by
the end of August 2014.
GKent is one of the potential beneficiaries of Penggerang
RAPID project & other government ETP projects. It trades at an attractive
historical PER of 11.2x. However, in view of the recent run up in price, we
would advocate a buy on weakness.
6) Market: fear of contagion from weakness in Portuguese
banks & further sanctions on Russian interest, exacerbated by retaliations
will keep markets in check in the near term.
