FBMKLCI
1824.39pts +6.01pts (+0.33%)
Volume 2.105b Value 1.927b
1) The KLCI bucked the trend closing 6 pts above parity
following the stronger U.S market before the release of the Oct FOMC minutes
tonight. In the regional market, bourses were generally weaker today as the
NIKKEI -0.32% slipped into the red despite Yen weakening, SHCOMP -0.22% and HSI -0.66% continue its
losing streak just before the release of HSBC manufacturing PMI tomorrow. In
the local scene, trades were mixed today
as bluechips GENTING +1.48%, AXIATA+0.97% and TENAGA +0.73% outperformed in the
market while CIMB -2.25%, KLK -2.79% weighed the index down. Market breadth was
positive as gainers led losers by 438 :357. Futures closed at 1824 (parity).
2) Heavyweights : GENTING +1.48% RM4.09, AXIATA +0.97%
RM7.27, TENAGA +0.73% RM13.74, TM +1.81% RM7.30, GENM +1.48% RM4.09, IHH +1.23%
RM4.93, CIMB -2.25% RM6.06, KLK -2.79% RM23.00.
3) DBT : SUNWAY 16mil @ RM3.23, MEGB 10mil @ RM0.30
(2.44% PUC), REDTONE 5.8mil @ RM0.69 (1.11% PUC).
4) Situational:-
PMETAL +9.96%
RM3.42 - Press Metal has secured an additional 500MW of electricity for the
proposed Phase III expansion of its aluminium smelter, which will be next to
the current smelter in Samalaju Industrial Park, Sarawak. It had signed a term
sheet with Sarawak Energy Bhd's unit Syarikat Sesco Bhd which would lead to a
25-year power purchase agreement and a connection deal. Press Metal said the
power supply would be provided in two stages. Under the first stage, Sesco
would supply 330MW by end 2015 and the remaining 170MW by early 2018.
5) KLK
FYE 9/2014
Tover +22% RM11.13bn Net
+8% RM991.7m EPS 93.1sen Div 55sen
11% below
cons(f) RM1.11bn
Plantations sector posted a profit of RM1.011 billion which
was 27.8% above the preceding financial year's profit of RM791.2 million.
Despite the negative contributions from refineries and kernel crushing plants
and lower profit from rubber sector, the improved results was attributed to,
better CPO RM2396/mt +5.3% and PK RM1576/mt +42.6% selling prices, reduction in
production cost and increased sales volume of CPO and PK.
Manufacturing sector recorded a 14.2% decline in the
todate profit to RM274.8 million vs RM320.3 million YOY. The sharp drop of oil
prices in the 4th quarter had impacted margins and resulted in stocks
write-down. Mitigated by the better performance from European operations
through higher volumes.
The oleochemical division's profit slipped 13.9% to
RM263.2 million and the other manufacturing units' profit fell 21.1% to RM11.6
million.
Properties sector reported a 44.6% drop in the financial
year's profit to RM46.3 million due to the lower profit recognition from the
development project in Bandar Seri Coalfields.
With the counter trading above its historical 5year
average PE of 20x (currently 21.3x forward) with uncertain prospects for CPO
prices we recommend a trim and switch to SIME our favourite heavyweight in this
sector.
6) Market - The gradual recovery in market volume towards
the RM2bn and improve breath indicated that some semblance of confidence is
returning to the markets and we do expect a stronger close to the year end this
continue to recommend a buy on weakness.
