Market Roundup 180112

FBM30 1517.38, -1.98 points (-0.13%), Volume 1,490mil, Value 1,599.8mil

1) KLCI was lower after World Bank cut its global growth forecast by the most in three years as probable recession in the euro region threatens to exacerbate a slowdown in emerging markets. Market was also drifted lower after Fitch said Greece would probably default in March resulting in profit taking among heavyweights which saw index reach a low of 1513.38pts (-5.98pts) before late push up of MAYBANK, GENTING, and RHBCap salvaged 4 points at close. Broader market was mixed with advancers edging decliners 368:364. Futures closed 1516.5 (1 point discount).

2) Heavyweights: TENAGA-2.09% RM6.10, AXIATA-1.22% RM4.87, CIMB-0.7% RM7.11, AMMB-1.03% RM5.78, TM-1.04% RM4.75, PCHEM+2% RM6.64, PBBANK+0.45% RM13.24, YTL+2.04% RM1.50

3) DBT: DBE 12mil @ RM0.08, OLDTOWN 5mil @ RM1.22

4) Situationals:

BPURI+1.64% RM0.93: its subsidiary Bina Puri Pakistan (Private) Ltd has entered into a concession agreement worth RM864m with the National Highway Authority of Pakistan. The agreement is for the construction of the 136km four-lane Karachi-Hyderabad superhighway (M-9 highway) on a build-operate-transfer basis. The concession period is for 28 years and the construction, upgrading and rehabilitation of the motorway are expected to be completed over 30 months.

BRAHIMS+0.7% RM0.72: Share price of BRAHIMS which has risen 50% YTD, announced that the Company will subscribe for an up to 60% equity interest in Admuda Sdn Bhd (Admuda) for a consideration of up to RM20m to be satisfied via a combination of cash and issuance of the Company's shares. Admuda holds a licence from the Ministry of International Trade and Industry (MITI) to operate as a licensed manufacturer of refined sugar and molasses in East Malaysia.

5) Dayang - announced acquired and taken delivery of an offshore accommodation workboat named Dayang Topaz. Expected but +ve as adds to current fleet of 7 which is fully utilised. Enhances chances of RM3bn bids for 2012 to add to current orderbk of RM1.4bn which can last till 2016 (mainly from Petronas Carigali RM800m). Co recently acq 10% Perdana which is synergistic as adds another 8 vessels to fleet. Trades at PER 11x-Trading buy.

6) Mkt - consolidation above 1500pts as vol quietens down ahead of long wkend. Stks at attractive buy lvls: Pos, MAS, Integrax, Timecom, MRCB, Perdana.

Morning Commentary 130112

Good morning,

1) SapCrest: Sapura Crest Petroluem Holding's wholly owned units TL Offshore PLSV1 Ltd and TL Offshore PLSV2 have entered into contracts with IHC Ofshore and Marine BV for the construction and purchase of two 550-tonnes pipelay support vessels. The 1st & 2nd vessels would be completed & delivered within 30 months (May 2014) and 33 months (Aug 2014) respectively from Nov 2011. The company will finance the construction and purchase of the vessels via internal funds & borrowings. After delivery, the vessels will be slotted to carry out the services under the Petrobas contracts; +ve, but value of the contract was not disclosed.

2) AirAsia: The Thai unit of AirAsia said it would submit a filing for it's IPO to the Thai market regulator this month and planned a Bangkok listing in the 1st quarter. The company delayed it's submission due to flooding last year, it's CEO told Reuters; +ve and expected.

3) Proton: Khazanah has asked the interested bidders for it's 42.7% block in Proton to show proof of funds next week, sources familiar with the matter said. It is learnt that Khazanah has set aside the whole of next week to assess the funding mechanism of the various bidders. While the dates are not certain, it is understood that DRB Hicom will meet Khazanah in the middle of the week while Datuk Seri Mohd Nadzmi is likely to meet earlier in the week. It is not clear if Khazanah has set other appointments, apart from these 2. While the outcome is still not known, it is widely speculated that DRB Hicom is the front runner to bag the stake; Neutral on news.

4) BPuri: Bina Puri Holdings yesterday confirmed a financial daily report that it is in the process of finalizing a deal to upgrade & operate a highway in Pakistan. In a filing with Bursa, Co said it had received a LOI dated Nov 11, 2011 from the National Highway Authority in Islamabad, Pakistan. The LOI was for the conversion of the existing 4 lane Karachi-Hyderabad super highway into a 6 lane motorway, Motorway 9, on a build, operate & transfer basis; +ve & expected. Share price added 5%    on report yesterday.

5) Mkt: despite positive news from Spainish & Italian refunding exercise, range trading is expected to persist ahead of CNY break starting from next week.

Market Roundup 120112

 FBM30 1525.56, +3.27 points (+0.21%), Volume 1,515mil, Value 1,579mil

1) KLCI continued to track higher recording 4 straight days of gains, ignoring regional markets which closed in -ve territory as easing inflation in China failed to overcome worries over fresh worries in Europe's economy. Index managed to close at day's high due to firm buying seen in select bluechip names: GENTING+1.9%, TENAGA+1.1%, Gamuda +1.9%, Bursa 2.48%, MISC +1.6%, Proton +3.4%. TECHNOLOGY (-1.6%) led the losers with JCY-4.2%, DATAPRP-5.4%, GPACKET-1.7% as profit taking set in on recent outperformers. Market turning 2 tiered as losers edged gainers 418:351. Futures closed 1524.5 (1 point discount).

2) Heavyweights: GENTING+1.9% RM10.96, TENAGA+1.1% RM6.23, MAYBANK+0.4% RM8.25, MISC +1.65% RM6.15, PETGAS+0.5% RM15.44, DIGI+0.3% RM3.92, GENM-1.3% RM3.85, KLK-0.7% RM24.52, PBBANK-0.2% RM13.18.

3) DBT: SCOMI 14.8mil @ RM0.15 (1.2% PUC, 47% discount), TMS 12.4mil @ RM0.09 (2.5% PUC, 14% discount), IPMUDA 10mil @ RM0.54 (13.8% PUC, 21%discount).

4) Situationals:

BPURI+5% RM0.945: Stock gained as much as 10% after company confirmed it is finalizing terms with the National Highway Authority of Pakistan for a concession to upgrade and operate the Hyderabad-Karachi highway. Executive Director Matthew Tee said, "Our team is currently negotiating with the authorities on finalizing the concession agreement," in a telephone interview today, confirming an Edge Financial Daily report. Bina Puri aims to conclude negotiations before the Lunar New Year holidays which start this year on Jan. 23. The construction cost is estimated at 18.2 billion Pakistani rupees ($202m).

5) Takaso: Takaso Resources (TRB) today announced that it had executed a Heads Of Agreement (HOA) with Kayu Emas (PNG) Ltd to set forth the general understanding reached between the 2 parties & they are desirous of entering into more detailed definitive Agreements to formalize the arrangements. Among the terms of the general understanding, TRB shall conduct it's independent due diligence findings to verify the presentation by Kayumas ( so far including it's concession timber licence and a representation of loggable area of up to 40,000 ha of timber in Papua New Guinea), including the projected profits from the said concession. The 2 parties also aim to enter into formal agreements within 3 months from the date of the HOA. TRB may acquire 100% of Kayumas if it so wishes; +ve but expected.

6) Mkt - upward momentum to continue as mkt heads towards CNY with rotational interest amongst lower liners and sectors. Sime-heavyweight laggard and cheapest big cap plantation stock, trading at PER'12 14x against industry average of 16x. Expectations of higher CPO and possible spillover interest from FELDA listing in April to buoy interest in stk-BUY.

Morning Commentary 120112

Good morning,

1) Proton: Both Tan Chong Motors & UMW have denied that it was joining the race to bid for Khazanah's 42.7% stake in Proton Holdings. Tan Chong's announcement to Bursa was made in response to press reports that quoted a broking house on the matter. Yesterday Tan Chong announced to Bursa that it has neither received any formal invitation nor has any plan to bid for the stake in Proton. Meanwhile, UMW has reiterated that it will not be making a bid and that they are committed to their partner Toyota in enhancing it's business here in Malaysia and making Perodua self reliant pre & post National Automotive Policy (NAP); Expected.

2) BPuri: Bina Puri Holdings is close to securing the privatization concession for the Motorway 9 (M-9) highway in Pakistan, sources said. The M-9 links Hyderabad to Karachi. It is understood that BPuri has already received the LOI from the National Highway Authority of Pakistan but is still negotiating the finer points of the contract. According to the source, BPuri will have a 28-year concession to operate the highway, 3 years of which will entail BPuri upgrading the M-9 from 4 lanes to 6 lanes, at a cost of some RM600m. Pakistan is not unfamiliar to BPuri. In Sept last year, Co completed the construction of 174 villas in Lahore     for RM194m. In 2010, it completed construction of the Nippon Paint Factory    in Lahore for RM340m. If BPuri bags the Pakistan contract, it will be the second highway concession after the KL-Kuala Selangor Expressway (Latar) in which it has 50%. Watch this space.

3) MMC: Keretapi Tanah Melayu Bhd (KTMB) has been asked to assist MMC Corp to conduct due diligence on the national railway company starting this month, said it's president. The due diligence is important for MMC to decide if it wants to privatize KTMB. It was reported in Dec that MMC plans to pump in RM1b into KTMB & take over it's operations. Speculation has been rife that the govt is planning to put the plan on ice following protests by the Railwayman Union of Malaya (RUM). RUM argued that it won't be right for KTMB to hand over it's operations to a private party & worried that it would see many of it's 5,500 workers retrenched. The due diligence is likely to take 6 months to complete & estimates that it may take up to 18 months or more before the operations of KTMB can be handed over to MMC, given the complexity involved - Neutral.

4) Mkt: mixed trading with focus on situationals & lower liners.