FBM30 1561.66, -3.66 points (-0.23%), Volume 3,355mil, Value 2,812mil
1) KLCI finally clsd in the red as investors locked in profits ahead of wkend as European finance ministers held back its approval of rescue package for debt-laden Greece until it passes its latest austerity package into law and identify EUR325mil in further spending cuts. Selling pressure on select heavyweights: TENAGA-3%, GENTING, IJM -1.5%, IOI -2%, snapping its 5 days of consecutive gains. Rotational plays saw buying interest in steel sector led by ANNJOO+11.5%, LIONIND+9%, KINSTEEL+5% and o&g sector: Kencana +2%, Alam +4%, Perdana +1% as market breadth managed to stay positive with gainers leading losers 566:371. Futures closed 1553 (7.6 points discount)
2) Heavyweights: TENAGA-3.02% RM6.11, IOICORP-2.32% RM5.47, GENTING-1.53% RM10.30, YTL-2% RM1.48, MAYBANK+0.59% RM8.52, GENM+1.3% RM3.90, PBBANK+0.3% RM14.00, AXIATA+0.4% RM4.99
3) DBT: EXTOL 10.8mil @ RM0.19 (10.3% PUC, 24% discount), ASIABIO 9mil @ RM0.065 (2.3% PUC), OLDTOWN 3mil @ RM1.25 (3.8% PUC)
4) Situationals:
MAHJAYA+13.7% RM0.83: Company received a conditional takeover offer from its major shareholders to acquire the remaining 25.57% shares not own at 85sen each
XOX+3.85% RM0.27: Share price was firmer after Mara Inc Sdn Bhd raised its shareholding to 19mil shares or 6.29% after recent acquisitions from open mkt
5) Gamuda/MMC-announced the salient terms of PDP agreement for Sg Buloh-Kajang MRT proj. It states PDP's responsibilities:
The PDP shall be responsible for delivering to the Owner the Project as a fully functional and operating railway system within the agreed target cost and completion date.
The PDP is responsible for the design of the Railway in accordance with the Owner's Requirements and the approved Railway The main responsibilities of the Owner under the PDP Agreement are:
(a) to obtain the necessary approval for the Railway Scheme
(b) to obtain the EIA approval in respect of this Project;
(c) to deliver site possession to the PDP (in order for the PDP to deliver the same to the contractors) in accordance with the agreed schedule in the PDP Agreement; and
(d) to make payments for the works done by the contractors (in order for the PDP to make onwards payment to the contractors) in accordance with the terms of the PDP Agreement.
- PDP is not allowed to participate in any of the tender for the works comprised in the Project except for the underground works package.
Target Cost and Completion Date
The agreed target costs is the aggregate of all the awarded works packages, the amount of contingency allowed and the amount of reimbursables incurred by the PDP in performing its services.
The allowed contingency is agreed at 15% of the aggregate of the awarded works packages. Both the Owner and the PDP are allowed to utilize the contingency.
The reimbursables include the PDP's overheads, fees for engineering consultancy, quantity surveyors and system integration works and fees for site investigations and topographical survey. The amount of the reimbursables is fixed at RM2.85 Billion.
The target completion date for the entire Project is 31 July 2017.
The PDP shall be paid a fee which is equivalent to 6% ("Fee") of the aggregate of all the awarded works contracts (excluding the value of the underground works package if the PDP wins the Swiss Challenge).
If the Project exceeds the agreed target cost, the PDP shall be liable for the cost over-run by the reduction of the Fee based on an agreed formula.
Any liabilities arising from claims brought by or disputes with Contractors shall be fully borne by the PDP after the contingency has been exceeded and the PDP has no recourse to the Owner in respect of such excess.
In the event that the PDP fails to complete the Project by the agreed completion date, the PDP is liable to pay to the Owner agreed liquidated damages of RM500,000.00 per day.
Comments: Gamuda/MMC is the only pure local party to submit a bid for Phase 1 tunnel works (RM7-8bn). Four other contenders incl: Japan's Taisei, China's Sinohydro, China Railway and Hyundai-Gadang have been pre-qualified to tender (on a Swiss Challenge basis). Award of the project should take place by April 2012. Believe Gamuda-MMC has a huge competitive advantage given its superior knowledge of soil conditions and price preference granted to local bidders of up to 7.5%.
6) Mkt - all eyes this wkend on Greek Parliament's attempt to vote through austerity measures to enable them to obtain necessary rescue funds. Barring anything -ve, uptrend of mkt intact with stks at buy lvls: TNB, Genting, MRCB, TImecom, UEMLand.
