Market Roundup | 10 February 2015

 FBMKLCI
 1811.12    -0.46pts (-0.03%)      Volume
2.473b   Value 2.292b

1) The KLCI pared gains to close flat today following the weaker US market overnight as investors retreated to the sidelines amid Greece default concerns. In the regional scene, bourses were mixed as the SHCOMP +1.50% gained after weak inflation data raised speculation of more monetary policies to spur the economy, the NIKKEI -0.33% closed lower while the HSI +0.03% closed flat. In the local market, penny stocks hogged the limelight today as, PERISAI+19.81%, ASIABIO -3.33%, SUMATEC +2.22%, KNM +0.79% tops the most active list while the CONSUMER index+0.45% outperformed the CI boosted by BAT +2.19%, UMW +0.54%. Market breadth was positive today as gainers outpaced losers by 434 : 373. Futures closed at  1805.5(5.5pts discount).

 

 2) Heavyweights : AXIATA -0.97% RM7.10, GENM -1.44% RM4.08%, KLK -1.31% RM22.50, PCHEM -0.76% RM5.22, DIGI -0.46% RM6.43, MAYBANK +1.11%, SKPETRO +3.53% RM2.93, BAT +2.19% RM70.00.

3) DBT: WINTONI 24.8mil @ RM0.08 (4.83% PUC), INSTACO 15mil @ RM0.15 (1.48% PUC), TGOFFS 8.944mil @ RM0.40 (2.38% PUC @ 25.3% discount).

 

4) Situational:-

TENAGA  -0.13% RM14.86 - Tenaga is making recommendations to the government to lower electricity tariffs in view of the soft crude oil prices. A source close to TNB said should the government agree, consumers were set to see a reduction in tariffs by as early as June, or in the third quarter.

 

IHH -0.76% RM5.22 - IHH Healthcare Bhd and U.S. private equity firm TPG Capital Management are vying to buy a controlling stake in India's Global Hospitals in a deal that would value the privately owned chain at US$350m, two people with direct knowledge of the matter said. The acquisition talks come as private companies benefit from growing numbers of more affluent Indian patients who are willing to pay for better-equipped clinics given the poor state of public hospitals.

 

5) HARTALEGA

9mths Dec 2014                      Tover +1.7% RM840.9m                    Net -16% RM155.2m              EPS19.97sen

                                    9% below  Cons(f) RM227m

The increase in revenue is due to increase in sales volume. Last qtr weakening of the Ringgit has mitigated the effect of lower average selling price from declining raw material prices and more competitive selling price. The operating profit margin reduced from 29.4% to 24.8% for the current year-to-date compared with the corresponding year-to-date of the preceding year. This is due to lower average selling price from declining raw material prices, more competitive selling price, and increase in electricity and natural gas costIn the current quarter.

The company remains confident in the resiliency of the industry as they move forward with its ambitious  Next Generation Integrated Glove Manufacturing Complex. Hartalega targets to add another 28.5 billion pieces aggregating to total installed capacity of over 42 billion pieces per year upon completion of the NGC project. The total budgeted project cost including land cost about RM2.26 billion over 8 years.

 We recommend a trim at this juncture as the stock has enjoyed a strong run and valuations are now pricing in earnings from its ongoing NGC plants.

6) Market – Traditional rotational play on penny/mid cap names to continue with no firm leads. 4Q GDP numbers on Feb 12 will be closely watched as this could be a guide as to the likelihood of the government’s guided 2015 GDP of btw 4.5-5.5%.