Market Roundup | 22 August 2013

FBMKLCI   1720.37  -24.48pts  (-1.40%)   Volume  2.435b   Value RM3.443b

1) The KLCI gapped down -20pts at the opening following weaker 2Q GDP numbers and release of FOMC minutes that showed support for QE tapering. Index touched a low of 1710.17 (-34.68pts) after midday before some bargain hunting saw markets recovered to close down 25pts. Regional markets bounced off low after HSBC PMI came in better than expected. In the local market, BANKING stocks continue to see plenty of liquidity as CIMB, MAYBANK and  AMBANK lead in volume among the bluechips. Market breadth was negative with losers once again towering over gainers by 904 : 76. Futures closed 1713pts (7 pts discount).

2) Heavyweights : TENAGA -3.83% RM8.52, PBBANK-1.40% RM16.90, MAYBANK-1.30% RM9.87, MAXIS-2.08% RM7.00, IOICORP -1.88% RM5.20, AXIATA -1.05% RM6.58, GENM -2.41% RM4.05, CIMB -0.78% RM7.56, RHBCAP-5.2% RM7.30.

3) DBT : TIGER 5mil @ RM0.245 (1.295% PUC @ 6.5% premium), TECFAST 4.939mil @ RM0.10 (3.168% PUC @ 13.1% discount), AFG 2.3mil @ RM5.40 (6.9% premium)

4) Situational:-

KIMLUN -1.01% RM1.95: Kimlun announced its unit, Kimlun Sdn Bhd, had secured a contract to construct two towers of serviced apartments and ancillary buildings in Johor Bahru. The job, awarded by Wealthy Growth Sdn Bhd, a subsidiary of IOI Properties Berhad, is worth RM296.4mil, with work expected to be completed by May 2016.

5) WCT

1H June 2013   Tover +32% RM973.5m   Net +25.6% RM99.9m   EPS 9.5sen

                        In line with cons(f) RM202m

The better numbers were attributable to civil engineering and construction which recorded revenue of RM666m and op profit of RM89m due to higher contribution from the local div. Property development and investments saw revenue grow 54% to RM307m and op profit of RM62m due to higher sales recorded from property launches. Company declared an interim div of 3.5sen.

Outstanding order book of RM2.8bn and the best local proxy for exposure to Qatar World cup contracts. BOW

6) Market - Current sell off momentum could see the market test the 1700pts level with a stronger support at 1680pts.

 

Market Roundup 080212

FBM30 1553.18, +14.41 points (+0.94%), Volume 4,388mil, Value 3,296mil

1) KLCI rallied and held above 1550pts mark as investors remained optimistic Greece debt will be resolved while regional markets led by HSI+1.5% and SHCOMP+2% were buoyed by China Central Bank's decision to support first home buyers. Trading volume surged to 4.3bil with heavy volume seen in penny stocks led by NICORP+172%, COMPUGT+39%, SAAG+20%. Index closed near its high of 1554.06 (+15.29pts) following buying support of TENAGA+6.5% at close while GENTING-5%, GENM-5% waere sold down after the bill to allow mega casinos in Miami was withdrawn by its legislative sponsor. Market breadth was positive with advancers thumping decliners 593:322. Futures closed 1548.5 (4.5pts discount).

2) Heavyweights: TENAGA+6.5% RM6.38, SIME+2.33% RM9.68, PBBANK+1.45% RM13.96, CIMB+1.57% RM7.11, MAYBANK+0.96% RM8.41, PCHEM+2.06% RM6.93, PPB+3.02% RM17.72, GENTING-4.55% RM10.50, GENM-5% RM3.81

3) DBT: NICORP 170.1mil @ RM0.08 (24.23% PUC, 83% discount), SUNREIT 46mil @ RM1.29 (1.7% PUC), PREMIER 10mil @ 0.48 (3% PUC, 6.6% premium)

4) Situationals:

KIMLUN+5% RM1.67: Mass Rapid Transit Corporation Sdn Bhd has appointed SPC Industries Sdn Bhd, a wholly-owned subsidiary of the Company, a RM223.18mil contract as the designated supplier for the supply of segmental box girders to certain packages of the Klang Valley MRT for the Sungai Buloh to Kajang stretch. The contract is expected to spread over a period of 40 months.

NICORP+172% RM0.49: Share price hit limit up RM0.49 with 270mil shares traded. Buying interest heightened in NICORP after Crest Energy Sdn Bhd which owns 22.8% stake comprising 160mil shares was said to be in discussion to dispose off its shares. Today 170mil shares traded off market at 8sen per share.

5) JCY: Q1 12/12  Rev +27%RM559m  Net +2060% RM162.5m   EPS    7.94s   Div 2c Results 180% above ann  cons RM230m.

For Q1 yoy, the higher Rev was due mainly to higher average selling prices (ASP) as a result of shortage in HDD mechanical components after the Oct 2011 Thailand floods & appreciating USD exchange rates. Net improved by more than 20x, mainly due to the aforesaid increase in ASP/appreciating USD, coupled with effective product mix and continuing effective cost management. For the Malaysian segment, Rev+29.9%, Net+285% while the Thailand segment recorded Rev+35% but recorded a net loss of RM0.7m this year, due to unfavourable exchange rate of the Thai baht & higher labour cost. Qoq, Rev+27%, PBT+535%, due to reasons mentioned earlier. Ahead, the Thai floods have significantly changed the landscape of the HDD industry supply chain. Increase in ASP should continue to benefit JCY in the next 12 months. JCY's Thailand factories were not affected by the Thai floods and together with the soon-to-be-ready China factories (Suzhou & Foshan), Co expects to increase output in the near future.

Comments: Strong set of results, surpassing even the company's guidance to Bursa in early Jan of between between RM121-143m net profit for Q1 is +ve but expected as stk has outperformed, gaining 32% ytd.

6) Mkt - continued buying momentum to carry KLCI higher with rotational interest in mid-small cap stks. Stks at buy lvls: TMCLife, MRCB, Timecom, Waseong.

Morning Commentary 170112

Good Morning,

1)ARMADA: Bumi Armada's subsidiary, Bumi Armada Navigation Sdn Bhd, had signed a contract with Petróleo Brasileiro S.A. (Petrobras) for the provision of one anchor handling towing support (AHTS) vessel valued at RM155mil. The AHTS vessel will be supporting research activities as well as hydrocarbon and mining activities developed by Petrobras in the Brazilian continental shelf. The Contract is for a period of four years with an extension option of another four years. The Contract is expected to be effective by the first quarter of 2012, when Petrobras is anticipated to formally accept delivery of the vessel, +ve.

2)IOICORP: IOICORP is said to have won the bidding for a prime piece of land in Singapore near the Clementi MRT station to build high-rise public housing with development valued at RM1.7-1.9bil. According to Singapore's Housing and Development Board InfoWEB, IOICORP's wholly owned subsidiary MultiWealth (S) Pte Ltd's bid of S$408mil (RM988.39mil) or S$554 per sq ft was the highest for the project in Jalan Lempeng with the second highest bid coming in at S$360.97mil. Based on an average selling price of S$1,000-1100 per sq ft, IOICORP should enjoy pretax margins of 10-18% assuming construction cost of S$350 per sq ft plus its land cost of S$554 per sq ft.

3)KIMLUN: KIMLUN's wholly-owned subsidiary, Kimlun Sdn Bhd (KLSB) had accepted the letter of award from Ikatan Flora Sdn Bhd, a sub-subsidiary of IJM Land Berhad for the construction of 2 blocks of service apartment and ancillary buildings in Mukim Plentong, Johor Bahru. The contract sum for the Project is RM82.1mil and is expected to be completed by May 2014, +ve.

4)KULIM: Kulim has rejected the offer from Dewan Perniagaan Melayu Malaysia (DPMM) which made an offer to acquire all the shares of QSR Brands Bhd (QSR) held by Kulim at RM6.90 per share. Kulim noted that its holding company, Johor Corporation, said that it would not support any proposal to dispose off the QSR Shares, expected.

5)Mkt: consolidation within a narrow trading range ahead of long CNY weekend.