News Bits | 22 April 2013

IDEAS OF THE DAY (SEE SEPARATE REPORTS FOR DETAILS)

 

*        Sector Update: Media

*        Quick Bites: GAMUDA, MISC, WCT, UZMA

*        On Our Portfolio: All Eyes on the Election Campaign

*        On Our Technical Watch: Weekly Technical

 

 

 

NEWS HIGHLIGHTS

 

*        Petronas Dagangan gets sukuk approval

*        CIMB Thai Q1 net profit up 11.4%

*        Up to EPF to decide RHBCap privatisation, says group MD

*        Kamdar to sell land, building for RM26.0m

*        Datasonic awarded RM15.0m KDN service contract

*        Johan in talks to sell charge and credit card ops

 

FOREIGN NEWS HIGHLIGHTS

 

*        Sprint/SoftBank asks FCC to go ahead with deal review

*        Nestle's Nespresso Growth Hit by Swiss Contender Migros

 

 

ECONOMIC NEWS HIGHLIGHTS (MACRO BITS)

 

Global

 

*        IMF To Boost Oversight Of Bank Stimulus

 

Asia Pacific

 

*        G-20 Eyes Stimulus Fallout Even As Japan Bond Buying Praised

*        Japan Invited To Join TPP Trade Talks

*        PBOC's Zhou Says Slower Growth Needed For Restructuring

*        Australia Sees Wider Deficit As High Currency Hits Revenue

 

North America

 

*        Dealers Say No End To QE In 2013 As Hatzius Sees 2016 Rate Rise

*        Carney Says Next Canada Rate Move Needs Above 2% Growth

 

Europe

 

*        Greeks Have Lost A Third Of Their Disposable Income

 

Currencies

 

*        Dollar Gains Vs. Yen After G-20 Statement

 

Commodities

 

*        Oil Rebound After Week's Big Sell-Off

*        Gold Posts 5% Weekly Loss, Outlook Seen Volatile

 

News Bits | 5 March 2013

IDEAS OF THE DAY (SEE SEPARATE REPORTS FOR DETAILS)

l  Market Strategy: 4QCY12 Results Review

l  Company Update: MBMR

l  Quick Bites: GENTING, REDTONE, SENDAI

l  On Our Radar: Tracker Review

l  On Our Technical Watch: MBSB, UOADEV

 

NEWS HIGHLIGHTS

l  Celcom's RM100.0m capex for LTE rollout

l  MISC rises after EPF's expectations of higher takeover price

l  Foreign banks eye Hwang-DBS

l  Delima Oil eyes 20.0% overseas contribution to revenue this year

l  Japex partner Petronas in shale gas project

l  Daiman Development secures RM70.0m credit facility

FOREIGN NEWS HIGHLIGHTS

l  Carlsberg launches take-over offer for Chinese brewer

l  Repsol sells UD1.3b stake to Singapore’s Temasek

 

ECONOMIC NEWS HIGHLIGHTS (MACRO BITS)

Malaysia

l  Malaysia's 2013 Forecast Revised

l  Extra RM600m For Bumi Entrepreneurs

Asia Pacific

l  Kuroda Pledges Bolder Action As Bank Of Japan Governor

l  South Korea Inflation Eases, Gives Room For Rate Cut

l  Australia Building Permits, Profits Drop, Sending Currency Lower

USA

l  Job-hunt Time Shrinks In U.S. From Record High

l  Credit-Spurred Job Growth To Ease Blow Of U.S. Cuts

Europe

l  UK Construction Output Falls For Fourth Month

l  Euro Zone Sentiment Falls Sharply In March

l  Eurozone Confident On Cyprus Bailout

Currencies

l  Euro Dips Below $1.30; ECB Meeting In Sight

Commodities

l  Oil Falls On Slowing Chinese Economy, Ample U.S. Supply

l  Gold Eases As ETF Holdings Fall Again, U.S. Cuts Eyed

Market Roundup | 22 Oct 2012

 FBM30 1661.95   -4.40points (-0.26%)       Volume 1,276mil            Value 1,463mil      

1) KLCI fell following weaker DOW on Friday as weaker corporate earnings and a sharp drop in Japan's export dented investors risk appetite. Index however failed to recover inline with regionals which rose on optimism China's government will introduce measures to boost equities before a leadership transition next month. Market breadth was negative with decliners leading gainers 407:259. Futures closed 1664pts (2 points premium).

2) Heavyweights: MAYBANK-0.55% RM9.04, DIGI-0.73% RM5.44, CIMB-0.53% RM7.58, TENAGA-0.58% RM6.92, TM-0.99% RM5.99, PCHEM-0.76% RM6.51, PPB+4.29% RM13.14, PBBANK+0.4% RM14.94

3) DBT: IGBREIT 327.6mil @ RM1.25 (9.6% PUC, 8.7% discount), DGSB 15.5mil @ RM0.045 (1.1% PUC, 18% discount), BENALEC 5.5mil @ RM1.43 (2.7% discount)

4) Situationals:

EIG+15% RM0.495: Esthetics International Group (EIG) said it had received an unconditional mandatory takeover offer from Providence to acquire the remaining shares and warrants in the company not owned by the acquirer. Providence which already owns about 60% of EIG and 85% of the warrants, is offering 50sen per EIG share and 12sen per warrant.

BAT-0.22% RM63.86, JTI-1.28% RM2.32: all cigarette packs has been raised by 20sen effective today after cigarette manufacturers were notified by Royal Malaysian Customs on Thursday of a mandated uplift in the ex-factory pricing.

5) CSL/ Pelikan

CSL  entered into two (2) conditional sale and purchase agreements with the following vendors,Mahir Agresif (M) Sdn Bhd and PBS Office Supplies Holding Sdn Bhd; and Persada Bina Sdn Bhd to acquire acquiring a total amount of 50,000,000 ordinary shares of RM1.00 each in Pelikan, representing 9.79% of the equity interest in Pelikan for a total purchase consideration of RM50m equivalent to RM1.00/Pelikan Share, which is to be satisfied by the issuance of up to 47,169,812 new ordinary shares each in CSL at an issue price of RM1.06/ CSL shares.

CSL has opted for the issuance of up to 47,169,812 new CSL Shares as payment for the Purchase Consideration and additional 3,000,000 new CSL Shares as payment for the professional fees rather than other available financing alternatives.

The Proposed Acquisition represents a strategic move on the part of CSL and its subsidiary companies as it will immediately provide a pathway for both the CSL Group and the Pelikan Group to work together to grow the business in the sales, distribution and procurement of Pelikan's stationery products in the markets, and to fully leverage on the CSL Group's strong market network and access, namely China.The Proposed Acquisition will also enhance the value and recognition of CSL as a global stationery player.

It is also envisaged that the Proposed Acquisition will enhance the strategic collaboration between the two (2) groups and will provide and create synergy and value-added enhancement to the parties in terms of sharing of resources, market insights and networking, which will lead to the added benefit of cost effectiveness in the operation of the respective groups.

Comments : It remains to be seen how both companies plan to integrate as Pelikan historically have priced themselves more in the premium market while its acquirer CSL is more targeted at the mass market.

6) Market - With the global economy now showing some stability, we remain bullish for a strong performance in the equity market for 4Q and early 1Q 2013. We continue to advocate accumulation to laggard quality names, ie MISC, Waseong, Genting Msia, Bumi Armada.

Newz Bits 230212

Highlights of the day

§         Lafarge Malayan Cement (4QFY11 Results): Beat expectations (Upgrade to BUY, TP: RM7.97) [download report]

Lafarge’s FY11 result was commendable, beating both house and consensus full year estimates, mainly due to increased orders for cement, aggregate and concrete products coupled with better plant efficiency. A 10 sen interim single-tier dividend was declared for 4QFY11. We upgrade our FY12-FY13 EPS estimates to factor in potential margin expansion from cement demand pick-up as execution of domestic infrastructure construction projects gathers momentum, especially the Sungai Buloh – Kajang MRT civil works to be implemented from 2QFY12 onwards. After YTL Cement is delisted by end-Feb 2012, we expect investors to switch to Lafarge, as an indirect play on domestic construction.

§         MISC (4QFY11 Results): A watershed year, but longer term catalyst is in LNG (Maintain HOLD, TP: RM5.73) [download report]

MISC recorded a net loss of RM1.8bn for 12MFY11 largely due to vessels impairment provisions and a one-off disengagement costs to exit the liner business. Excluding (i) impairment provisions of RM750m; (ii) disengagement costs of liner (RM1,452.7m); (iii) gains from vessels divestment (RM114m); and (iv) gain from disposal of MMHE Engineering (RM36.4m), 12MFY11 net profit came in below expectations at RM335.5m (-73% y-o-y)--81% of our full-year forecast. Market consensus forecasted a net loss of RM466m in FY11. The variance from our results was mainly due to higher-than-expected bunker cost.  However, we maintain our FY12F earnings backed by LNG, oil & gas, and offshore and narrower losses at both chemical and liner divisions. We maintain HOLD with a RM5.73 target price based on 1.2x P/BV (multiple is below its historical average).

Other reports

§         Newz Bits [download report]

§         Kuala Lumpur Kepong (1QFY12 Results): Within expectations (Maintain HOLD, TP: RM24.59) [download report]

§         IJM Corporation (3QFY12 Results): On track for a strong finish (Maintain BUY, TP: RM7.02) [download report]

§         Economics (CPI): January 2012: The slowest inflation since a year ago [download report]

Other Malaysian news

§         WCT:  Unit secures RM331m construction deal  

§         CIMB Group: Bank CIMB Niaga 2011 profit jumps 25%

§         HeiTech Padu: Wins 20m project in UAE

§         Felda Global Ventures: To list without KPF, says Isa

§         Power: Ananda Krishnan mulls disposal of power portfolio

§         Power: Renewal of power pacts on

§         Property: Building on foreign interest in properties

Global news

§         US: Distressed properties help boost home sales

§         US: Construction jobs rebound amid home remodeling pick-up

§         US: MBA Mortgage Applications Index decreased 4.5% last week

§         Europe: BOE splits as Posen, Miles push for larger stimulus increase

§         Europe: Manufacturing, services unexpectedly contract

§         China: Manufacturing data show risk of deeper slowdown

§         Taiwan: 2012 GDP forecast cut as growth slows on exports

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Newz Bits 200212

§         MISC (Company Update): Lacks catalysts, better long term prospects in LNG segment (Maintain HOLD, TP: RM5.73) [download report]

We came back from MISC company visit feeling less sanguine about prospects over the medium term but positive over the long run. MISC excitement in the long run is expected to come from the LNG transportation business via its parent Petronas’ JV with Progress Energy to explore and develop production of large natural gas (LNG) of which MISC is expected to be the shipper. However, over the medium-term, the petroleum and chemical tanker market is in a tough operating environment hit by depressed charter rates due to oversupply of vessels and stubbornly high bunker cost. We maintain HOLD with a RM5.73 target price based on 1.2 P/B (multiple is below its historical average).

Other reports

§         Newz Bits [download report]

Other Malaysian news

§         SapuraCrest: Confirmed JV with Seadrill for the Brazilian job

§         Sime Darby: Close to sealing fruitful South Korean deal

§         Axiata: Unit signs deal with Broadway Media

§         Tenaga Nasional: Not raising stake in Integrax

§         AMMB: Indonesian subsidiary gets investment manager license

§         Petronas Chemicals: Upbeat on good demand

§         KEuro: To buy 15.8% of West Coast Expressway, up stake to 80%

§         Tanjung Offshore: An M&A target

§         Masteel: Aims for JB-Woodlands train service by end-2013

§         IPO: Felda settlers at crossroads

§         Automotive: Revised policy rollout in 2 months

§         Automotive: Lending rules hurting car sales

§         Banking: Banks get cautious                    

Global news

§         US: Consumer prices rose less than forecast in January

§         US: Leading indicators point to sustained growth

§         US: Payroll vote gives congress nine-month breather on tax decisions

§         Europe: ECB said to negotiate with Greece on investment portfolio bonds

§         Singapore: January exports drop as electronics shipments plunge

§         China: People’s Bank of China eases bank reserve requirement

§         Global: Japan, China to help Europe solve crisis via IMF

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