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.

 

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

 

Newz Bits 240212

Highlights of the day

§         Malaysia Market Strategy : Re-rating of FBMKLCI from PLUS is over [download report]

On 13 December 2011, we came out with a Malaysia Market Strategy report entitled “Delisting of PLUS to benefit others”.  Since then, the big cap stocks with dividend yield that we highlighted have appreciated in share price.  Given that their total increase in market cap of RM26.7bn is much higher compared to the RM9.1bn cash that was returned from the privatization of PLUS, this source of liquidity in pushing the FBMKLCI higher appears to have completed.  While there remains excess global liquidity which could continue to take the FBMKLCI higher, this lends credence to our view that at close to 1600, the FBMKLCI is toppish.

§         WCT (4QFY11 Results): Within expectations (Maintain BUY, TP: RM3.07) [download report]

WCT’s full year FY11 net profit was spot-on with respect to both house and consensus expectations. Although the group’s FY11 results were disappointing, we remain optimistic that WCT, backed by RM5bn tenderbook, will do much better in securing new construction jobs in FY12, having secured 2 contracts worth RM631m back-to-back this year in just one month. Maintain BUY, with sum-of-parts (SOP) target price raised slightly to RM3.07 from RM3.02 previously, to account for the group’s net debt position as at end-FY11 which was better than what we expected.

Other reports

§         Newz Bits [download report]

§         Malayan Banking (2HCY11 Results): stronger showing than expected (Maintain HOLD, TP: RM8.25) [download report]

§         Axiata (4QFY11 Results): Dividend surprise! (Maintain HOLD, TP: RM5.19) [download report]

§         IOI Corporation (2QFY12 Results): Strong plantations performance (Downgrade from Trading Buy to HOLD, TP: RM4.64) [download report]

§         Media Prima (4QFY11 Results): High dividend yield! (Maintain HOLD, TP: RM2.35) [download report]

Other Malaysian news

§         MMC: Dishing out RM5bn power-plant deal to a consortium

§         SP Setia: Eyes RM60bn in development value

§         Berjaya Corp: Vincent Tan retires from Berjaya Corp

§         Green Packet: To invest RM300m capex in 2012

§         Hibiscus Petroleum: Holds EGM on March 21

§         Construction: Mudajaya, Eversendai win RM 1.4bn Tanjung Bin expansion works

§         Oil & Gas: Gas Malaysia inks new gas supply agreement with Petronas

§         Oil & Gas: Petronas awards contract for LNG Train 9

§         Power: Ananda Krishnan mulls disposal of power portfolio

Global news

§         US: Jobless claims point to improving labor market

§         US: Home prices declined 2.4% in 4Q2011

§         Europe: IMF said to limit exposure to Greece at EUR30bn after second loan

§         Europe: Greece sets stage for Friday bond swap

Visit ECM Libra at https://www.ecmlibra.com/ecmlsmy

Our on-line trading portal at www.ecmmoney.com

Market Roundup 220212

FBM30 1560.52, -3.26 points (-0.21%), Volume 2,230.8mil, Value 1,937.1mil

1) Regional markets were cautious as investors remained nervous about Greece's ability to execute its austerity plan, as the KLCI traded sideways to negative throughout the day. Profit taking in Plantation (-0.9%) heavyweights dragged down the index with PPB-2.8%, IOICORP-1.8%, KLK-1.5%. Although market volume was relatively higher, total value remained low suggesting penny stocks were still the market's flavor: TMS-4.4%, GOCEAN-7.7%, IFCAMSC+7.4%. Market breadth was negative with losers overwhelming gainers 541:302. Futures closed 1557 (4 points discount).

2) Heavyweights: IOICORP-1.8% RM5.34, PPB-2.8% RM17.14, CIMB-0.7% RM7.24, GENM-1.8% RM3.87, KLK-1.5% RM23.64, AXIATA-0.6% RM5.01, AIRA-1.4% RM3.65, YTL-1.4% RM1.45, GENTING+0.9% RM10.84, TM+2% RM5.03.

3) DBT: TRINITY 20.3m @ RM0.07, XDL 16mil @ RM0.38, JCY 12mil @ RM1.20.

4) Situationals:

SENDAI+1.8% RM1.67: Share price rose as high as RM1.70 (+3.7%, the biggest intraday gains since Feb 13) after the company won contracts valued at RM 185 million in Malaysia and the Middle East, it said in a filing to the exchange.

5) WCT

Accepted a contract awarded by Riverson Corporation Sdn Bhd for the Construction and Completion of the Proposed Mixed Commercial Development with Purpose Built Medical Centre and related Facilities at Coastal Highway, Kota Kinabalu, Sabah, Malaysia. The Contract sum is RM331m.

The scope of works under the Contract comprises the construction and completion of a 9-storey hospital with 200 beds (Block A), a 10- storey Complex with SOHO, Office Suites and 3 levels of retail space (Block B), and 1 level of basement car park with a completion date of August 2014.

+ve The company's efforts to realign their attention from the Middle East to the domestic market continues to gain traction with current order book now up to RM2.7bn. BOW

6) Market - Consolidation with rotational play to continue, stocks at attractive levels incl TimeComm, Perisai, KEuro, Gamuda

Market Roundup 090212

FBM30 1565.32, +12.14 points (+0.78%), Volume 3,314mil, Value 2,974mil

1) Index held steady even as key regional markets were mixed, as investors remained cautious over the terms of the 130bn Euro rescue package for Greece. KLCI continued its positive streak for the fifth day, upheld by buying support in select heavyweights (AXIATA+4%, PCHEM+1%, CIMB+1.3%, AMMB+2.4%). Index jumped 8 points during the auction period on late push on plantation stalwarts: IOI, KLK and heavyweights: IJM, GenM. Focus also shifted to water related stocks led by PUNCAK+30.3% (limit up) pulling up JAKS+24%, KPS+24%, SALCON+10% backed by heavy volume. Market breadth however turned mixed with losers edging gainers 456:447. Futures closed 1558.5 (7 points discount)

2) Heavyweights: AXIATA+4% RM4.97, IOICORP+2.4% RM5.60, CIMB+1.3% RM7.20, MAYBANK+0.% RM8.47, AMMB+2.4% RM6.10, KLK+2.3% RM25.50, PCHEM+1% RM7.00, MMCCORP+4.2% RM2.98, GENM+1.1% RM3.85, TENAGA-1.3% RM6.30.

3) DBT: CNOUHUA 30.3mil @ RM0.255 (4.5% PUC), BJTOTO 25mil @ RM4.35 (1.9% PUC), MSPORTS 20.4mil @ RM0.395 (3.8% PUC)

4) Situationals:

WCT+7.8% RM2.78: Share price rose after company secured a RM300.5 million construction contract from the government; the company says in an exchange filing the contract includes the design and construction of the headquarters of the Ministry of International Trade and Industry (MITI) - a 31-storey office tower, a two-storey car park, a three-storey podium and other related works. Completion is expected by February 2015.

5) Bursa  FYE12/11,  Rev +16% RM420.1m, PAT +29% RM146.1m,  EPS  27.5c

Div for 4Q 13c bringing total div decl 26c-yielding 3.5%, 

95% profit distribution v 2010 20c div decl. 

6% below ann cons RM154.6m

Better set of results came from improved trading rev from securities segment +15% to RM193 million v RM167.9 million in 2010. Average daily trading value (ADV) increased 14% to RM1.79 bn v RM1.57 bn. Market capitalisation stood at RM1.29 trillion as at end of 2011, a slight increase from the RM1.28 trillion recorded at the end of 2010. Market velocity was constant at 33%. Despite the weak global market conditions, Bursa Malaysia attracted 28 new listings in 2011 compared with 29 in 2010.

"On the derivatives front, Trading revenue +36% to RM51.2 m breaking records in terms of contracts traded for both Bursa Malaysia Derivatives and crude palm oil futures and celebrated the first-year anniversary of our migration onto the CME Globex(r) trading platform in September last year. Total derivatives contracts traded increased by 37% to 8.45 million in 2011, from 6.15 million a year earlier, while foreign and domestic participation in the market grew by 57% and 30% respectively. Contracts traded for the FTSE Bursa Malaysia Kuala Lumpur Composite Index Futures (FKLI) was up 24% to 2.48 million, compared to 1.99 million in 2010.

Qoq PAT -15% due to 3Q heavy selldown following downgrade of USA by S&P in Aug 2011 whilst investors adopted cautious stance in 4Q on deepening Eurozone crisis.

Comments: Co expects 2012 financial performance to at least mirror that of, if not better than, 2011 performance despite persistent global uncertainty, supported by strong domestic fundamentals. The divestment of assets by GLCs will further contribute to the liquidity and vibrancy of the market. YTD daily vol traded has been increasing culminating in achieving highest vol traded on 8/2/12 of 4.3bn will support another qtr of +ve rslts. HOLD

6) Mkt - continue to rotate amongst situationals and sectors to trend higher as mkts await resolution of Greece debt probs. Trading buy UEM, TimeCom

Newz Bits 190112

Highlights of the day

§         WCT (Initiating Coverage): Time to play catch up (BUY, TP: RM3.02) [download report]

We initiate coverage on WCT with a BUY call. Despite the stock selldown last year, we think the worst is over for WCT and investors can look forward to sunnier days in FY12 with the potential doubling of its outstanding orderbook to RM4.4bn should it secure jobs from its current tender book of RM5.0bn. Property sales at its mature township Bandar Bukit Tinggi, Klang and upcoming mixed commercial developments in Medini Iskandar is also likely to gain traction. Future recurring income from KLIA2 Integrated Complex and Paradigm Mall is forecast to spearhead 23% average 2-year earnings growth over FY12-13. Our target price of RM3.02 is based on sum-of-parts (SOP), implying a forward P/E of 11.7x on CY12 earnings. (refer to report for details)

§         Economy (Consumer Price Index): December 2011: Inflation loosens up as the world slows down [download report]

The December inflation rate grew slower at 3.0% y-o-y compared 3.3% y-o-y in November. This confirms the suspicion that inflation has been moderating for the past several months. The slowdown is likely due to weaker demand growth pressure exerted on prices as the world economy braces for slower economic growth. We expect the inflation to slow further to 2.8% y-o-y in January 2012 as the weakening global economy will loosen up demand-pull inflation worldwide. (refer to report for details)

Reports

§         Newz Bits [download report]

Other Malaysian news

§         IOI Corp: Targets project at Singapore

§         DRB-Hicom: To pay for Proton stake with loans, internal funds

§         DRB-Hicom: Keeps options open on Lotus, no plans to re-list Proton

§         Malaysia Building Society: Targets RM8bn retail financing in 2012

§         HELP International Corp: To invest RM20m for international school

§         Xidelang Holdings: Plans share placement, bonus issue

§         CI Holdings: Mulls new investment opportunities

§         Brahim's Holdings: Offered 60% stake in Admuda

§         IPO: China Stationery inks underwriting agreement

Global news

§         US: Wholesale prices unexpectedly decreased in December

§         US: Factory production climbs by most in a year

§         US: Confidence among homebuilders climbs to highest since 2007

§         US: Obama rejects Keystone XL permit as TransCanada plans to file

§         China: Foreign direct investment drops for a second month

§         China: Treasury holdings fell in November as yields declined

§         China: Government said to let biggest banks boost lending by 5% this quarter

§         Indonesia: Second rating upgrade in a month

§         Global: IMF seeks to raise lending capacity by up to US$500bn

Visit ECM Libra at https://www.ecmlibra.com/ecmlsmy

Our on-line trading portal at www.ecmmoney.com

Market Roundup 271211

FBM30 1500.91, +4.76 points (+0.32%), Volume 993.8mil, Value RM743.8mil       

1) The KLCI managed to inch higher to close at the psychological level of 1,500 as it kicked off the last trading week on the back of an expected Santa rally driven by continued improving US economic data. Late closing action on some select heavyweights helped push the index to close day's high: UMW+5.8%, TM+4.2%, MHB+1.3%. Plantation (+1%) related stocks advanced despite palm oil futures dropped from one-month highs as investors lock-in gains: IOICORP+1.4%, KLK+1.6%, TWSPLNT+2.4%, RSAWIT+1.2%. Broader market however was mixed with gainers edging losers 378:341. Futures closed 1503.5 (3 points premium)  

2) Heavyweights: TM+4.2% RM5.00, IOICORP+1.4% RM5.26, UMW+5.8% RM6.98, DIGI+1.1% RM3.78, PETGAS+1.8% RM14.40, KLK+1.6% RM22.56, GENTING+0.6% RM10.94, AMMB+0.7% RM5.97, AIRASIA+0.8% RM3.73, CIMB-0.6% RM7.05  

3) DBT: MENANG 21mil @ RM0.20, TENAGA 14mil @ RM5.80, SUNWAY 7.1mil @ RM2.45 

4) Situationals: 

INGRESS+3.4% RM0.77: Stock reached its intra-day's high of RM0.79 (+6%) after the company said it secured a RM55 million power line project. Ingress said in an exchange filing a letter of intent for the project has been issued to an unincorporated joint venture between its two subsidiaries, Multi Discovery and Ramusa Engineering, for the project by Tenaga Nasional. The project is expected to start within 1Q of FY13, which comprise the establishment of PMU 132kV Kota Setar Applied Innovative Services Rehab and 132kV Lines Diversion at PMU Kota Setar and the proposed 275kV Bulk Supply to Bahru Stainless (Extension of 2 x 275kV Overhead Line Bays at PMU275/132/22 kV Cahaya Baru). This comes hot on the heels of a LOA from Proton worth RM84.8mil. 

5) WCT

Has been awarded an Investment Certificate by the People's Committee of Ho Chi Minh City to undertake a residential and commercial mixed development on a piece of land measuring approximately 46,577 meter square located at the development corridor of Nguyen Van Linh Expressway at the New Urban Development Area of Saigon South, approximately 10km from the Central Business District of Ho Chi Minh City. 

The Project is earmarked for the development of mid-high class residential apartments and commercial properties for the purposes of lease and/or sale. With a plot ratio of 6, the Project is planned for commercial shoplots and condominium units complete with a garden and full-fledged facilities for modern living. 

The duration of the Project is fifty (50) years from the date of receipt of the Investment Certificate.

Concurrent with the issuance and award of the Investment Certificate, the People's Committee of HCMC has also approved the establishment of a limited liability company namely, WCT-DPN Company Limited ("WCT-DPN"), a 70%-owned subsidiary of the Company.  The remaining 30% equity of WCT-DPN will be held by Southern Land Corporation ("SLC"), a joint stock company duly established and existing under the Laws of the Socialist Republic of Vietnam on 26 March 2001.

WCT-DPN's initial charter capital is USD25.15m. Its principal business activity is the development and management of the Project. 

Neutral as most Malaysian developers that have ventured into property development in Vietnam have yet to show any significant contribution to their bottom lines. The market's focus will remain on order book replenishment as the company significantly lags behind its original guidance of RM2bn new contracts.

6) Market - Investors will continue to seek guidance from the US market to lead global equities higher as hopes of a stronger than expected recovery in the US may counter the slowdown in Europe.