News Bits | 30 Oct 2012

Highlights of the day

§  Gadang Holdings Bhd (Company Update): Meeting with management reaffirms Trading Buy (Maintain TRADING BUY, TP: RM1.00) [download report]

Our meeting with Gadang’s management yesterday reaffirms our Trading Buy and target price of RM1.00.  Despite yesterday’s weak 1QFY13 results, earnings should pick up strongly from 2QFY13 onwards, and our initial estimate of at least 10 sen EPS in FY13 from construction division alone is on track. (refer to report for details)

 

Other reports

§  Newz Bits [download report]

 

Other Malaysian news

§  Petronas Chemical: Discontinues vinyl business

§  DRB-Hicom: Proton to collaborate with Honda

§  Maybank: Indonesia operations post record profit

§  CIMB: CIMB Niaga records 30% rise in net profit

§  Petronas Gas: Delay in operations of RGT in Malacca

§  IOI Corp: To start China project next year

§  Aeon Co: May announce Carrefour buy this week

§  Sarawak Oil Palms: Mulls plantations abroad

§  Mudajaya: Wins RM65m contract

§  Scomi Group: Abu Sahid strengthening control 

§  O&G: Lundin makes third gas discovery offshore Sabah

§  O&G: Petronas to renew bid for Progress

§  Construction: More MRT jobs awarded 

 

Global news

§  US: Consumer spending rises by most in seven months

§  US: Treasury lowers borrowing estimate by US$29bn

§  US: Labor Department will wait to decide on employment report status

§  Europe: Germany supports ECB Greek debt buyback plan, rejects write-off

§  Europe: Rajoy counters bailout split with Monti urging banking union

§  Europe: Juncker calls extra finance chief talks as Greece showdown looms

 

  

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Newz Bits 160212

Highlights of the day

§         Construction (Sector Update): Construction to fare better in CY12 (Maintain OVERWEIGHT) [download report]

From the recent 8th Malaysian Construction Industry Review and Outlook seminar, we gather that domestic construction activity is likely to gain traction with projected construction GDP growth of 7% this year (CY11: 3.5%), underpinned by the implementation of pipeline government and private projects. We maintain our BUY call on IJM and WCT, for being potential beneficiaries of major projects like the West Coast Expressway and Gemas-Johor Bahru double tracking due to their strong engineering track record and healthy financial standing. Maintain OVERWEIGHT

§         Economics: 4Q2011: A respectable showing before an expected slowdown. [download report]

The Malaysian economy grew slower at 5.2% y-o-y in 4Q2011 compared to 5.8% y-o-y growth observed in 3Q2011. This allowed the economy to grow at an annual rate of 5.1%. The growth was primarily driven by the domestic economy while the trade channel continued to exhibit weak growth, reflecting the stark reality of a deteriorating global economy. Incorporating our expectation of a global economic slowdown, we project the economy to grow at a slower pace of approximately 4.0% in 2012.

Other reports

§         Newz Bits [download report]

Other Malaysian news

§         AirAsia: Plans low-cost airline for gulf region

§         AirAsia: Big jump in AirAsia X revenue on positive growth, affordable fares

§         SP Setia: London’s Battersea Power Station on sale again

§         Sapura-Kencana: To acquire Berantai Field Production

§         Mulpha International: Sells Mantra stake for RM111m

§         Shin Yang Shipping: Builds on fleet 

§         Can-One: Kian Joo stake sale impasse

§         Cypark Resources: Solar farming to be key earner

§         Compugates Holdings: Set to secure RM2bn solar jobs in Sabah

§         KYM Holdings: Unit inks reclamation deal in Perak

§         Banking: Indonesia’s withdrawal of ownership ruling to benefit Malaysian banks

§         Construction: Seven to bid for new highway

§         Construction:  Kesturi to expand highway

§         Plantation: CPO price seen fluctuating

Global news

§         US: A few on FOMC saw need for asset purchases ‘before long’

§         US: International demand for YS assets cooled in December

§         US: Factories churning out more goods buoy growth

§         US:  New York area factories expand at fastest pace since June 2010

§         Europe: Economy shrinks for the first time since 2009

§         Europe: Europe demands more Greek budget controls in bid to forge rescue

§         Europe: Jobless claims rise more than forecast as cuts bite

§         Singapore: Retail sales rise as jobs withstand weakening economy

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Newz Bits 140212

Highlights of the day

§         Construction (Sector Update): More awards yet to come (Upgrade from NEUTRAL to OVERWEIGHT) [download report]

After the initial awards of V5 and V6, MRT Co’s release of the schedule for the remaining packages last weekend shows that the next awards will start from April 2012 and will be concentrated in the April-September 2012 window. We believe there is thus still time for rotational play on 15 listed counters out of the 28 contractors prequalified. Our analysis of the contractors for the 18 elevated civil packages picks out 8 construction counters, which we opine are potential recipients of the remaining 16 packages to be awarded in CY12. Upgrade Construction Sector from NEUTRAL to OVERWEIGHT.

Other reports

§         Newz Bits [download report]

Other Malaysian news

§         CIMB: US-based asset manager to take control of CapAsia

§         AirAsia: AirAsia X in trouble again in Australia

§         MAS: Unions meet PM today

§         Proton: Denies plans to ditch Lotus

§         HSL: Received RM82m construction contract

§         Construction: SPAD performance monitoring hub project attracts 24 bids

§         Investment: PNB selling MNRB?

§         IPO: RM21bn market cap for Felda Global

§         Oil & Gas: Petronas discovers gas in two fields offshore Sarawak

§         Property: Brunsfield joins IWH to develop Johor project

Global news

§         US: Obama unveils big spending in election-year budget

§         US: Growth forecast in Obama budget exceeds economist estimates

§         Europe: Italy, Spain, Portugal ratings cut by Moody’s; UK downgraded to negative

§         Japan: Economy shrank at 2.3% annual pace in 4Q

§         Australia: December home loans jump by most in seven months

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Morning Commentary 060112

Good morning,

1) SapCrest: announced that TL Offshore SB, a wholly owned subsidiary, has finalized, executed and formalized 2 separate contracts with Cosco (Nantong) Shipyard Co Ltd for the construction of 2 units pipelay cum heavylift offshore construction vessel at a combined contract value of US227m (RM712m). One of the vessels was scheduled to be delivered in Q4 2013 whilst the other to be delivered in Q1 2014; +ve, this contract win to add to healthy existing OB of RM10.6b. Catalyst for stock remains it's merger with Kencana Petroleum which will create one of the largest O&G service provider in south-east Asia with a 4-year CAGR of about 23%, backed by many long-term contracts. Also, the merged entity's potential mid 2012 inclusion in the FBMKLCI component stock.

2) BHIC: Boustead Heavy Industries Corp yesterday denied being part of any on-going privatization talks. In a statement to Bursa to clarify media reports following the rise of it's share price, BHIC said it had not received any indication or direction from it's shareholders with regards to any major acquisition of shares in the company which might include a privatization. BHIC also reiterated that it's major shareholder Boustead Holdings had on Dec 21, 2011 publicly announced it was not considering any proposal to privatize BHIC - May dampen speculative interest in stock which price has added almost 20% over the last 3 trading days.

3) Construction: Tenders for the beautification portion of the River of Life (RoL) programme, potentially worth up to RM1b, could be called in the second half of this year, upon completion of the project's master plan. KL Mayor said a total of RM4b has been earmarked by the federal govt for the RoL programme, a project identified under the ETP, that involves cleaning of 110km stretch of river basin and beautification along a 10.7km stretch within the city centre. Of the amount, RM3b will be for river cleaning (which is already underway) and the remaining RM1b is for beautification works. Mayor said the master plan for the beautification portion would be ready within 6 months ; +ve. Last December, Ekovest-MRCB JV SB, a 60:40 JV between Ekovest Bhd & MRCB, announced that it had been appointed the project delivery partner (PDP) of the RM2.2b river rehabilitation & beautification project, and stands to receive 1% of the project's estimated value, or about RM22m, as compensation for managing/coordinating the project for 3 years.

4) Mkt: situationals & plantation counters expected to be the main focus in a positive bias market.

Morning Commentary 301211

Good morning,

1) Cypark: Cypark Resources Bhd has secured a RM14.71m job to upgrade a landfill site in Negeri Sembilan's Kok Foh enclave. Co said the project involves the closure of a portion of the landfill and the upgrading of another portion into a sanitary cell, and is expected to complete by Dec 2012; +ve, the contract will further strengthen Cypark's position as one of the country's leading specialist in solid waste management & integrated environmental solutions. Job is expected to boost earnings for FY12, in addition to other contracts previously awarded by the National Solid Waste Management Dept for the closure & remediation of 16 landfills.

2) RHB/OSK: RHB Capital may be paying as much as RM1.9b in shares for OSK Holdings Bhd's investment bank, according to sources with knowledge on the matter. Talks between the 2 parties were now centered on a price range of RM1.8b to RM1.9b. The 2 banks were expected to reach an agreement & seek approval from BNM by mid-January. RHB might issue new shares worth as much as 10% of it's existing equity to pay for the OSK unit ; Neutral for now. Buying OSK Investment Bank would allow RHB to overtake CIMB Investment bank as the biggest stockbroker in Malaysia, based on data from Bursa.

3) Construction: MRT Corp (unit initiated by the govt under it's ETP initiative) has sealed the Points of Agreement (POA) with owners of 21 plots of land in the Jalan Inai area affected by the MRT project. The agreements are expected to resolve all outstanding issues faced by land owners with the MRT project, which connects Kajang & Sungai Buloh. The POA addresses issues such as land acquisition, access to the land for tunneling works, compensation & the judicial review which some land owners have brought against the govt. It will form the basis for the mutual agreements, expected to be signed between MRT Corp & the land owners at the end of next month; +ve, the event marked a positive step towards resolving similar land issues at Jalan Sultan, Jalan Bukit Bintang & other affected areas.

4) Mkt: window-dressing to dominate activities today.