News

[richard188]

KLCI up with Hong Kong-listed companies generating interest




Shares on Bursa were higher in the morning session on Oct 18 with buying interest generated from call warrants on Hong Kong-listed companies, in line with the Hang Seng Index's 1% gain. The Hang Seng Index had also breached its 30,000 points mark early this morning.

The call warrants issued by OSK Investment Bank on Hong Kong-listed companies rose in active trade, with Sinopec-C1 gaining 7.5 sen to 44 sen. It was the most actively traded counter with 53.11 million units done.

China Life rose 6.5 sen to 37.5 sen, BOC-C1 added 2.5 sen to 32.5 sen, and Angang-C1 was up two sen to 31.5 sen.

At 12.30pm, the KLCI rose 0.31% or 4.2 points to 1,378.59, the FBM Emas gained 20.83 points to 9,306.29, while the Second Board Index lost 0.26 of a point to 109.01. The KLCI futures was unchanged at 1,375.

Turnover exceeded 980 million shares valued at over RM930 million. There were 332 gainers, 387 losers while 284 counters remained unchanged.

Light crude oil was trading at US$87.29 (RM296.79) per barrel for November delivery. The ringgit was slightly firmer against the greenback at 3.372 at midday versus 3.377 yesterday.

Overnight on Wall Street, the Dow Jones Industrial Average fell 0.15% or 20.4 points to 13,892.54 as the US market re-focused on the housing slump issue after last month's 50 basis points rate cut by the Federal Reserve.

MIMB Investment Research said the morning performance of the local bourse was driven by the rise in the Hong Kong market, which was now more exposed to China, and also given that the Hong Kong market is now a proxy to the Chinese market.

It said morning trade was focused on banking, construction and plantation counters with relatively thin trading volume, as the market shrugged off worries of record-high global oil prices.

"We expect consolidation in the local market in the coming months until the second quarter of next year, and we are looking forward to next year's theme as the market is expected to pick up further with foreign funds re-focusing on emerging markets," it said.

[richard188]

Swan Symphony offers RM2.90 per share for Putrajaya Perdana



KUALA LUMPUR: Putrajaya Perdana Bhd (PPB) received the notice of conditional mandatory offer from Swan Symphony Sdn Bhd (SSSB) to acquire its remaining 50.6% stake at RM2.90 per share after the latter’s agreement with Eastern & Oriental Bhd (E&O) became unconditional yesterday.

On Aug 8, 2007, SSSB signed a conditional sale and purchase agreement (SPA) with E&O and its wholly owned subsidiaries Matrix Promenade Sdn Bhd and Dynamic Degree Sdn Bhd to acquire their 68.6 million shares of 50 sen each in PPB at RM2.90 per share for a total of RM198.95 million.

As at Oct 12, the 68.6 million shares represented a 49.3% stake in PPB. In its notice of conditional mandatory offer, AmInvestment Bank, on behalf of SSSB, said the SPA became unconditional yesterday and the proposed share transaction was expected to be completed by Oct 31.

PPB told Bursa Malaysia that its board was not seeking an alternative party to make a takeover offer for its shares. PPB said it had appointed OSK Investment Bank Bhd as the independent adviser in relation to SSSB’s offer, subject to the Securities Commission’s approval.

SSSB said it had received a confirmation letter from Putrajaya Holdings Bhd that it would not accept the offer at RM2.90 per share. As at Oct 12, Putrajaya Holdings held 27 million shares in PPB.

SSSB’s offer is conditional upon the receipt of acceptances that would result in it holding in aggregate more than 50% of PPB. Since SSSB’s agreement with E&O group, PPB’s share price has surged and the stock closed 10 sen higher yesterday at RM4.18.

SSSB is 51% owned by Abu Dhabi-Kuwait-Malaysia Investment Corporation (ADKM) and the remaining 49% is held by Autron Investment Co Ltd, a 75% subsidiary of Australian Stock Exchange-listed and Singapore Stock Exchange-listed Autron Corporation Ltd. The remaining 25% of Autron Investment is held by IFS Capital Ltd, which is also listed on the Singapore Stock Exchange.

ADKM and Autron Corporation are the ultimate offerors in the mandatory offer in PPB.

[richard188]

M’sia on right track to be Asean petrochemical hub




KUALA LUMPUR: Growth in the country’s petrochemical industries is vital to complement the government’s aim to establish the country as the Asean hub for the industry, project director of Singapore Exhibition Services Pte Ltd (SES) Tee Boon Teong said.

In a statement yesterday to announce the ControlAsia, InstrumentAsia and AnaLabAsia 2007 exhibition (CIA2007) in Singapore organised by SES next month, he said Malaysian companies within the petrochemical, analytical and instrumentation industries should continuously invest and employ latest available technologies to boost their capabilities and services.

“Rapid development and increased technology investments in the multi-billion ringgit Malaysian petrochemical industry will be a boon to fuel expansion of the Asean petrochemical industry,” Tee said.

Currently, the country has 29 petrochemical plants nationwide producing 39 types of petrochemical products, generated from estimated investments of RM28 billion. The industry’s growth has transformed Malaysia from a net importer to exporter of major petrochemical products.

Additionally, the national oil and gas company Petronas is establishing itself to be a force in the global petrochemical industry with greater participation in both international and domestic petrochemical projects.

Reflecting the positive growth trend, five Malaysian companies — Bumi Netsys Sdn Bhd, Copens Scientific (M) Sdn Bhd, Etas Enterprise, Erlab, Kobold and Shulz DSL (Malaysia) — have confirmed their participation at CIA2007.

The leading exhibition in process engineering, instrumentation and scientific equipment, which will be held from Nov 27 to 30 at Suntech Singapore, will provide an extensive range of technological advances and solutions for Malaysian industry players to boost their productivity and efficiency, especially in the palm oil and petroleum industries.

CIA2007 will also include the ICS New Technology forum, a conference on responsible waste management and a half-day workshop on life sciences, as growth in the petrochemical industries might also trigger an incremental effect on waste generation.

Consequently, the government has placed further emphasis on environmental awareness by investing heavily in new and cutting-edge technologies for water and waste treatment.

Under the ninth Malaysia Plan, the government has allocated RM1.89 billion for the implementation of environmental preservation projects and RM363 million for a solid waste management programme, in efforts to address the issue of solid waste generated in the country, which is expected to reach 30,000 tonnes per day by 2020.

Apart from shutting down 33 open landfills and 16 open dumpsites in 2006, the government is also focusing on the reuse, reduction and recycling of materials, as well as ensuring a sustainable development of exhaustible and renewable energy resources.

[richard188]

Ringgit Surges To 10-year High On Strong Demand



The ringgit hit a 10- year high Friday, matching its December 1997 peak of 3.3600 against the greenback, as the U.S. dollar continued to fall globally.

Anthony Dass, research head at Inter Pacific Research Sdn Bhd, said the depreciation of dollar was just one of the factors pushing up the value of ringgit and encouraging more buying interest in the local currency.

The other factors included improvement in the local economic fundamentals and the weakening U.S. economy, he added.

"The ringgit is being supported by a healthy level of reserves, surplus current account in the balance of payments, net positive inflow of foreign funds and improving fiscal deficit, so we expect it to strengthen further against the dollar," he told Bernama.

The local equities market, which had succeeded in withstanding external shocks such as the rising crude oil prices, has been another impetus to the ringgit, Das said.

The stock market, which has been choppy this week in line with the regional markets, managed to close higher on both Wednesday and Thursday. The losses registered on Tuesday were minimal when compared with other markets.

Das said he expected the local unit to trade between RM3.33 and RM3.35 against the greenback by year-end if the depreciation of the dollar continues.

According to a forex dealer in a local investment bank, the ringgit's appreciation was also in line with that of other Asian currencies, such as the Thai baht, Singapore dollar and the Philippine peso.

The Singapore dollar also hit a 10-year high in line with other Asian currencies' performance. However the Philippine peso closed lower after its intra-day high following a bomb blast in a shopping mall in Manila.

The ringgit was pegged at 3.80 to the greenback in September 1998 after the Asian financial crisis began in 1997. The peg was dropped in July 2005.

[richard188]

CPO Futures Hit All-time High As Crude Oil Prices Rise



Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives hit all-time high today after crude oil prices surpassed the US$90 per barrel level for the first time, a dealer said.

He said expensive crude oil prices will encourage the use of crude palm oil which is used for biodiesel and this in turn will result in stronger demand for the commodity.

"Crude palm oil is in demand right now because it is still at a discount compared to crude oil and other vegetable oils. However, if the CPO prices continue to rise this way, soy oil may become much cheaper," he noted.

Oil prices remained at the US$90 per barrel range in Asian trade today and traders are not discounting the possibility of a further rise in the price.

Another dealer said there will be a possibility of profit taking activities next week if the crude oil prices ease.

However, he added that there is no worry that the palm oil market will drop significantly as demand continues to outstrip output.

At close, CPO futures for Nov '07 contract surged RM43 to settle at RM2,860 per tonne and Dec '07 increased RM39 to RM2,809.

Jan '08 rose RM30 to settle at RM2,765 per tonne and Feb '08 went up RM39 to reach RM2,750.

The day's volume stood at 10,651 lots, down from yesterday's 13,692 lots, while open interest increased to 51,369 contracts from 50,451 contracts.

On the physical market, October South was higher at RM2,900 compared with RM2,850 per tonne recorded yesterday.

 
 

[richard188]

KLCI to catch up with regional markets



KUALA LUMPUR: Bursa Malaysia Securities Bhd will likely play a catch-up game as Hong Kong’s Hang Seng Composite Index topped the 30,000-point mark briefly yesterday and other regional markets surged to new highs although analysts are mixed in their outlook on the local market.

Yesterday, the Kuala Lumpur Composite Index rose 1.93 points to 1,376.32, short of its all-time high of 1,392.18 on July 24. Over at Hong Kong, the Hang Seng touched 30,025.07 in early trade before pulling back to close 166.34 points higher at 29,465.05.

Comparing with regional markets, Inter Pacific Research head of research Anthony Dass said: “The regional markets are doing well, the ringgit is also doing well which is a good sign reflecting that foreign buying is coming in.”

He said the appetite for investment towards emerging markets was very strong due to reduced external vulnerabilities and there remained a lot of upside to the local bourse as the US dollar was still undervalued and the yuan was expected to be re-valued.

On the bulk of volume traded on the KLCI coming from call warrants of Chinese-related companies, Dass said investors were focused on this type of short-term trading due to the current jittery scenario in global markets.

“Going forward, this type of investments will fizzle out as the market goes back to the fundamentals,” he said.

Meanwhile, MIMB Investment Bank Bhd head of research Pong Teng Siew said the KLCI still lacked exposure to the Chinese market compared with other indices in the region, causing it to lag behind regional markets.

For example, the STI was highly linked to the Chinese markets as many of the latter’s companies were listed on the STI, he said.

Pong attributed the KLCI’s lacklustre performance to the exposure to the US market, the economy’s dependence on electrical and electronics exports, its concentration of resources towards the plantations sector and the completion of merger and acquisition activities.

“The general perception is that Malaysia might do worse in the case of a US slowdown,” he said.

He added that in the event the US entered a recession next year and interest rates eventually bottomed out, the KLCI would only see an improvement in the second half of 2008 or early 2009.

[richard188]

Hong Kong To Woo Malaysian Investors For 10 Infrastructure Projects



Hong Kong is inviting Malaysian investors particularly in the construction sector to participate in the country's 10 major infrastructure projects.

Director of Hong Kong Economic and Trade Office in Singapore, Lam Kam Kwong said the overall cost of the project was HK$250 billion over ten years to come from both the private and public sectors.

"We invite Malaysian contractors to put their bids in these projects," he told reporters at a dinner talk here Thursday on Hong Kong and China's 11th Five-Year Plan.

Lam said the project will have three main components including transportation, cross boundary, and new urban development.

He said the transportation project comprised the construction of the South Island Line and the construction of Sha Tin to Central Link which will connect the Northeast New Territories and Hong Kong Island via East Kowloon as well as the Tuen Mun Western Bypass and Tuen Mun-Chek Lap Kok Link which will link Deep Bay in Shenzhen, the Northwest New Territories and Hong Kong International Airport.

For the cross boundary project, Malaysian investors can participate in the construction of high-speed rail link between West Kowloon and Guangzhou, Hong Kong-Zhuhai-Macao Bridge, Hong Kong-Shenzhen Joint Development of the Lok Ma Chau Loop, he said.

He said under the new urban development, the projects comprised the establishment of West Kowloon Cultural District, a cruise terminal berth and new development areas in the northern New Territories.

"Infrastructure development can bring about huge economic benefits and the value added would be more than billion annually. In addition some 250,000 additional jobs would be created," he said.

 
 

[richard188]

Bank of America Earnings Skid, Surprising Investors



Bank of America's quarterly profit fell a much larger-than-expected 32 percent, hurt by mounting credit losses and poor trading results in its investment banking unit.

The news sent stocks lower and Treasury prices higher on expectations that slowing activity might prompt the Federal Reserve to cut interest rates. Bank of America shares fell sharply.

"It was a very disappointing number," said Michael Mullaney, who helps invest $10 billion at Fiduciary Trust in Boston and owns the bank's shares.


"We knew the credit situation was going to be bad, but this was worse than expected," he said. "What causes us concern is the increase in reserves doesn't appear aggressive, and the
bank may need to reserve more in the future, which hits earnings. The real surprise was investment banking"

Bank of America's third-quarter net income dropped to $3.7 billion, or 82 cents per share, from $5.42 billion, or $1.18 a share, a year earlier.

Excluding items, profit was 84 cents per share, according to Reuters Estimates, below the analysts' average forecast of $1.06.

Revenue fell 12 percent to $15.93 billion, the Charlotte, North Carolina-based bank said. Analysts on average expected $18.01 billion.

CEO Disappointed

"While the significant dislocations in the capital markets have hurt most participants, we are still very disappointed in our third-quarter performance," Chief Executive Kenneth Lewis said in a statement.

[richard188]

Economy May Show Slight Growth; Jobless Claims Jump



A gauge of future economic activity edged higher in September, suggesting the economy may continue to trudge forward at a modest pace despite a worsening housing slump.

This news follows a separate report that showed an unexpected jump in the number of workers filing new claims for jobless aid, potentially signalling a weakening labor market.

The Conference Board said Thursday its index of leading economic indicators rose 0.3 percent in September to 137.9, slightly below analysts' consensus forecast for a 0.4 percent rise. The modest growth follows a sharp 0.8 percent drop in August. The index has been erratic this year - rising one month and falling the next - but overall, growth has been flat.

The index is designed to predict economic activity in the coming three months.

Seven of the 10 data points tracked by the Conference Board increased last month, the strongest of which were vendor performance, the job market and stock prices. The housing market continued to lag.

Separately, the number of workers filing new claims for jobless aid jumped by 28,000 last week, far more than anticipated and the biggest increase for any week since February, the Labor Department said Thursday.

The higher claims data may increase the chances that the Federal Reserve will further reduce official interest rates to stimulate the economy.

Initial claims for state unemployment insurance benefits totaled 337,000 in the week ended Oct. 13 following an upwardly revised 309,000 in the prior week. Economists surveyed by Reuters had forecast a much lower total of 314,000 claims last week.

The weekly claims figures are volatile but the latest numbers add to other signs of a slowing economic pace, including reduced starts on new homes.

[richard188]

BCorp now 2nd largest shareholder of Silver Bird



KUALA LUMPUR: Berjaya Corporation Bhd (BCorp) has overtaken Datuk Jackson Tan Han Kook as the second largest shareholder of Silver Bird Group Bhd after it acquired another 7.5 million shares in the bread and confectionery maker last week.

A filing to Bursa Malaysia on Tuesday showed that BCorp’s indirect subsidiary Rantau Embun Sdn Bhd acquired the block of shares on Oct 10 from the open market, bringing BCorp’s total shareholding to 19.6% comprising 45.99 million shares in Silver Bird.

That also increased BCorp chairman and chief executive officer Tan Sri Vincent Tan Chee Yioun’s direct and indirect interests in Silver Bird to 19.81%. His direct stake comprises 487,500 shares or 0.21% in Silver Bird.

The 19.81% stake held by Vincent Tan and his Berjaya group is a notch away from the 23.72% or 55.65 million shares held by Lembaga Tabung Haji (LTH) — Silver Bird’s single largest shareholder.

Jackson Tan, who is the group managing director of Silver Bird, holds a 17.29% stake in the company. A filing on Oct 11 showed that he transferred six million shares to his wife Datin Ong Hooi Siang on Oct 5.

The other major shareholder of Silver Bird is Australian venture capital firm CVC Ltd, which holds 30.06 million shares or 12.81%. Its fund manager and joint-venture partner Perkasa Normandy Managers Sdn Bhd holds 10 million Silver Bird shares.

Yesterday, the share price of Silver Bird fell one sen or 0.9% to RM1.10, with 2.28 million shares transacted.

The counter has appreciated by 155% since a month ago, on speculation that LTH is mulling a takeover of Silver Bird, as the latter could be a cheap entry into the food industry for the pilgrim fund.

The intention of Berjaya group raising its stake in Silver Bird remained unknown, an analyst said, adding that it was uncertain if LTH would increase its stake in the company to strengthen its position as the largest shareholder.

[richard188]

DiGi 3Q07 net profit to grow 45% to RM263m



KUALA LUMPUR: DiGi.Com Bhd is expected to post a year-on-year net profit growth of 45% to RM263 million on the back of a 21% growth in revenue in its third quarter ended Sept 30, 2007 (3Q07), driven by continued strong subscriber growth and high usage stoked by higher wages, said CIMB Research.

The research house estimated the telecommunications provider had added about 300,000 to 350,000 subscribers in 3Q07 versus 471,000 in 1Q07 and 241,000 in 2Q07.

“Malaysia’s 1.6 million civil servants and pensioners enjoyed a 7.5% to 42% increase in pay from July 1, 2007, which should translate in greater mobile usage.

“Also, we believe the cut in DiGi’s prepaid domestic long distance (DLD) rates to match local call rates should boost revenue in the medium term by attracting more users and encouraging usage,” it said yesterday.

CIMB Research maintained its outperform recommendation on DiGi at RM22.40 and an end-2008 target price of RM30 for DiGi, based on discounted cash flow, 10.3% weighted average cost of capital and terminal growth 2.5%.

The research house said catalysts for re-rating include continued strong growth, market share gains and further capital management initiatives.

“Management may offer greater clarity on its capital management during the results release, in light of the country’s proposed introduction of a single-tier tax system. Our estimates are 6% to 18% above consensus, reflecting our optimistic view of its execution and competitive environment.

“We advocate accumulating on any weakness in the share price arising from concerns over Telenor’s mandated selldown from 61% to 49% by Dec 31, 2007,” it said, adding DiGi offered one of the best values among its regional cellular companies’ universe.

CIMB Research said it expected DiGi to continue clawing its postpaid market share due to its aggressive push in the small and medium-scale enterprise segment.

“The company offers free calls between two companies/organisations subject to a minimum monthly commitment whereas its competitors only offer free calls within a single company,” it said.

The research house said competition had been benign although it appeared to heat up in the middle of this year.

“We expect EBITDA (earnings before interest, tax, depreciation and amortisation) margin to be unchanged quarter-on-quarter at 47%, a little above management’s FY07 guidance of mid-40’s.

“In July 2007, DiGi and Maxis Communications Bhd were locked in a battle to offer the lowest call rates for selected plans but the war did not drag as earlier feared,” it said.

[richard188]

Rin’s exit from EON Bank will be a surprise



KUALA LUMPUR: EON Bank Bhd director Rin Kin Mei’s departure from the banking group would come as a “surprise” since he is believed to be the driving force behind its operations, said Aseambankers Equity Research.

In a note yesterday, it said Rin’s resignation, if it materialised, would come at a time when DRB-Hicom Bhd had received the go-ahead from Bank Negara Malaysia (BNM) to start talks with Primus Pacific Partners Ltd to dispose of its 20.2% stake in EON Capital Bhd.

“Rin’s resignation, if true, could be an indication of his next move as to his shareholding in EON Capital,” it added. Rin is also a non-executive director of EON Capital.

DRB-Hicom is the single largest shareholder of EON Capital with its 20.2% stake while Rin, via Kualapura (M) Sdn Bhd and Lintang Emas Sdn Bhd, holds a 15.4% stake.

The Edge Financial Daily reported yesterday that Rin was set to exit EON Bank in an apparent fallout with DRB-Hicom.

Sources said Rin had notified BNM of his intention to resign last month while another director Datin Dr Umikalsum Mohd Noh was believed to have informed the central bank of a similar intention.

However, Rin, who is a Singaporean with Malaysian permanent residence status, is not expected to sell down his stake in EON Capital.

Aseambankers Research said EON Capital remained “very much an M&A (merger and acquisition) story at this juncture.”

“Although the potential sale by DRB-Hicom would imply that there would be no general offer for the remaining shares in EON Capital, the impending price tag for the block of EON Capital shares from DRB-Hicom may lead to a re-rating of EON Capital,” Aseambankers Research said.

“Our target price of RM8.65 pegs EON Capital to a two times price-to-book (2006) valuation, in line with recent transactions of banking stocks,” it added.

[richard188]

More upside for Public Bank




PETALING JAYA: Public Bank Bhd’s higher-than-expected net profit of RM1.54 billion for the nine months ended Sept 30, 2007, has prompted analysts to maintain their Buy call, as their positive outlook is underpinned by the banking group’s strong loan growth and its potential to increase its market share in the lending business.

OSK Investment Research and Aseambankers Equity Research upgraded their 12-month target price for Public Bank to RM11.40 and RM12 respectively and forecast a dividend per share of 65 sen for the financial year ending Dec 31, 2007.

Aseambankers Research said Public Bank’s main attributes were its strong operational growth, efficiently run business, good asset quality and equity returns that were superior to its peers.

“The upward adjustments to our target price follows our raised dividend forecasts, while net dividends beyond 2008 would receive a further boost from the one percentage point reduction in corporate tax rate, which we now include in our dividend discount model (DDM),” it said.

Aseambankers Research said at current levels, Public Bank was trading at a prospective 2008 price-earnings ratio (PER) of 15.5 times while at its target price of RM12, it would trade at 2008 PER of 18.1 times which was justified due to its growth prospects and superior return on asset and equity (ROAE).

A good dividend yield of 6% to 7% should provide strong support to its share price, it added.

Meanwhile, OSK Research upgraded its target price for Public Bank to RM11.40, supported by stronger fundamentals with possible earnings upgrade and potential catch-up play between Public Bank and its foreign shares was trading at RM11.10.

It said the bank recorded 13.7% growth in domestic loans, driven by household and domestic business/commercial entities that grew 15.4% and 22% respectively.

“We believe the newly acquired loans should have more meaningful contribution in the coming financial years,” it said.

Public Bank’s venture into the Cambodian insurance market via its 55% stake in CampuBank Lonpac Insurance Plc was expected to contribute to non-interest income and unit trust funds. Public Bank’s unit trust funds under management surged 50% to RM24.5 billion in the January-September period from RM16.2 billion a year ago.

The bank posted a cost-to-income ratio of 33.2% which was vis-à-vis OSK’s target of 33.7%.

However, it said the ratio could be hard to maintain in the coming months, given Public Bank’s aggressive expansion plans to open more branches in Hong Kong, Cambodia and Laos by 2H07.

“All said, we believe the escalating cost could be cushioned by low loan loss allowances, (where) total provisions declined by 13.2% on an annualised basis due to its solid asset quality,” it said.

OSK Research also said it understood the group was tying up with a foreign party to explore business opportunity in bancassurance.

[gklau]

wa...richard...all good news one...sadly Mr Dow(n) is really down, closed down 367pts  . what's gonna happen on monday??? Black Monday or Blueblack Monday

[smallcap]

Aiya, 19/10/2007 is the 20th anniversary of super bear on 19/10/1987 mah, all analysts look down the market on this day + the crude oil price reaching US$100.
Monday should be very black, lets watch the reaction of ShangHai first n then HangSeng.

Please remember the FengShui talk also ya