FBMKLCI
1875.68 +3.30pts (+0.18%)
Volume 3.017b Value 2.206b
1) The KLCI saw
tepid trading thruout the day before closing up during the auction period after
selected blues led by CIMB, GENM, GENTING gapped up at close. In the regional
market, bourses were generally weaker as major indices closed lower, NIKKEI
-0.48%, SHCOMP -0.62%, HSI -0.71%, just before the release of US jobs/GDP data
tonight. In the local scene, TECHNOLOGY index -1.24% was the biggest loser
amongst the weaker broad market weighed down by MPI -4.64%, JCY -1.44%, INARI
-0.92%. Market breadth was negative with losers towering over gainers by 589 :
275. Futures closed at 1873 (2.5pts discount).
2) Heavyweights : CIMB +2.06% RM7.40, PETGAS +1.59%
RM23.00, MAYBANK +0.39% RM10.10, GENTING +0.41% RM9.70, PBBANK -0.31% RM19.28,
SKPETRO -0.91% RM4.33, TENAGA -0.32% RM12.44, MISC -0.86% RM6.92.
3) DBT : ARMADA 214.50mil @ RM2.96 (7.29% PUC @ 2.0%
discount), DESTINI 75.256mil @ RM0.66 (9.43% PUC), SNTORIA 7.1mil @ RM1.40
(1.61% PUC @ 9.7% discount).
4) Situational:-
IGB -0.34% RM2.86 - IGB Corp Bhd has teamed up with
Immortal Group Co Ltd, Theekharoj Piamphongsarn and Majestic Path Sdn Bhd
(MPSB) to joinly develop 19 lots of freehold land in Bangkok, Thailand. MPSB is
a wholly-owned unit of IGB Corp. Crystal Property Asia Co Ltd owns 13 lots of
the land, which were acquired for THB788m (RM77.7m). The intention is to
acquire another six lots at an estimated
THB185.7m.
5) WTK
Revenue -2% RM350.6m
Net +27.2% RM26.8m EPS 6.2 sen
14% below Cons (F) RM62.4m
Revenue was 2% lower y-on-y due to the 16% fall in the
revenue from the manufacturing division (foil products). Timber division
registered a 2% growth in revenue from higher sales of logs while sales of
plywood to Japan were lower due to higher stock holding as a result of the hike
in consumption tax in April 2014.
Profit before tax increased 22% y-on-y mainly arising
from the timber division where logs average price rose 11.5% coupled with 8.9%
increase in sales volume & favourable exchange rate. There was a reversal
of impairment loss of RM4.4m which was provided last year but no longer
required. The increase in PBT was tempered by the lower contribution from the
foil products manufacturing division where PBT dropped 36% from lower sales &
higher production costs.
Q-on-Q, timber division’s revenue rose 12.7% from
increased sales of logs as a result of improved demand. Excluding write-back of
impairment loss of RM4.4m provided previously, PBT from the timber division
increased 46%. While foil products manufacturing division was down 15% on sales
& 52% on PBT due to lower orders as a result of higher delivery in 1Q14.
Seasonally, WTK does better in the second half, hence its
results will likely meet expectations due to ongoing positive operation metrics
such as firm selling logs prices due to the export ban from Myanmar from
April’14, continued strong demand from India (its main market with 75% share in
2Q14) for infrastructure development and the tight log situation in Sarawak.
PER remained attractive at <10x, accumulate.
6) Market: lower liners likely to continue to languish,
digesting the huge volume of last week, while MSCI rebalancing dictates trading
of index stocks.
