Malaysia - Equity
The stock market ended higher yesterday, ahead of the country's New Economic Model (NEM) scheduled to be announced today.
Dealers said the anticipation of more market liberalisation in the economic model, to be unveiled by Prime Minister Datuk Seri Najib Razak at the annual Invest Malaysia forum, prompted gains in both heavyweights and lower liners.
The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) ended 4.07 points higher at 1,319.21 after opening 1.16 points easier at 1,313.98.
The Finance Index advanced 55.62 points to 11,794.55, the Plantation Index increased 28.94 points to 6,439.82 and the Industrial Index rose 16.71 points to 2,681.64.
The FBM Emas Index added 38.69 points to 8,950.2, the FBM70 surged 45.42 points to 8,881.45 and the FBM Ace Index perked 63.9 points to 4,276.4.
Advancers outpaced decliners 472 to 307 while 239 counters were unchanged, 328 untraded and 27 others were suspended.
Turnover stood at 1.138 billion shares worth RM1.498 billion, up from last Friday's 1.25 billion shares worth RM1.706 billion.
Actives included TimeCom which rose 1.5 sen to 51 sen while SAAG Consolidated fell 1 sen to 13 sen and KNM dropped half-sen to 72.5 sen.
OilCorp was up 5 sen to 9 sen, Ramunia gained 2.5 sen to 31 sen and IRCB firmed 2 sen to RM1.17.
Among heavyweights, Maybank rose 8 sen to RM7.50, Sime Darby rose 2 sen to RM8.70, while Maxis and IOI Corp were up 1 sen each at RM5.39 and RM5.40.
Tenaga gained 5 sen to RM8.02, PPB was up 10 sen at RM18 and Kuala Lumpur Kepong jumped 12 sen to RM16.44.
PJI Holdings Bhd has proposed halving its paid-up capital to RM40.6 million comprising 406.05 million shares of 10 sen each and a subsequent renounceable rights issue of up to 203.02 million shares with up to 304.53 million free detachable warrants at an indicative price of 11 sen each. Its paid-up capital will be reduced from the current RM81.21 million or 406.05 million shares of 20 sen each via the cancellation of 10 sen par value of each share, while the rights issue will be on the basis of two rights shares with three warrants for every four shares held. The par value reduction would give rise to a credit of RM40.6 million, which would be used to reduce its accumulated losses that stood at RM44.9 million and RM60.1 million, as at Dec 31, 2009, at the company and group level, respectively.
The Employees Provident Fund (EPF) bought a further 22.8 million shares in Malaysian Resources Corp Bhd (MRCB) at an average price of RM1.50 each last Friday. With the latest purchase, EPF now owns 55.44 million MRCB shares. The EPF extended a conditional general offer (GO) for the 66.2% of MRCB that it does not own after it triggered the GO following its subscription of 171.47 million MRCB rights shares late last year.
RM
The ringgit closed at a 20-month high against the US dollar yesterday, supported by bullish local and regional equity markets.
The greenback gave up some of its recent gains against the basket of currencies as traders welcomed an European Union deal to provide Greece with a fiscal safety net.
One dealer said the ringgit continue to gain following the positive news.
At 5pm, the ringgit was quoted at 3.2700/2750 against the US dollar from 3.3050/3080 last Friday.
It was at its strongest since July 2008.
A dealer said the strengthening ringgit was also due to the weakening US dollar against a basket of currencies as the euro continued to recover on hopes that the European Union's plan will help debt-burdened Greece.
The ringgit gained against the Singapore dollar to 2.3350/3393 from 2.3526/3570 and the Japanese yen to 3.5293/5348 from 3.5707/5743 while against the euro, it climbed to 4.4020/4064 from 4.4185/4235.
The ringgit also fared well against the pound sterling, it rose to 4.8943/9007 from 4.9016/9081.
CPO
Crude palm oil futures on Bursa Malaysia Derivatives closed lower yesterday as traders were cautious ahead of export statistics to be released this week. Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance will submit reports on Malaysia's March palm oil exports on Wednesday.
April 2010 fell RM10 to RM2,589 per tonne, May 2010 declined RM12 to RM2,553 per tonne, June 2010 dropped RM14 to RM2,520 and July 2010 declined RM11 to RM2,510.
News
Edaran Otomobil Nasional Bhd (EON) shareholders yesterday approved of its biggest shareholder DRB-HICOM Bhd taking private the company.
While many minority shareholders voted against the corporate move, EON's second biggest shareholder Kualapura Sdn Bhd voted for the privatisation at RM1.55 apiece via a selective capital reduction (SCR). EON's privatisation is expected to be completed by the third week of August, said its chairman Tan Sri Marzuki Mohd Noor.
SP Setia Bhd, the country's biggest property developer in terms of sales, has bought a piece of land in Melbourne, Australia, for A$30 million (RM90 million). Its wholly-owned subsidiary, Setia International Ltd, signed a deal yesterday to buy the 4,340 sq m land, held under several certificates of titles, from S.L. Nominees Pty Ltd and Jonquil Pty Ltd. It plans to develop a high-density inner city integrated residential and commercial project on the land.
DIS Technology Holdings Bhd has appointed Messrs Wan Nadzir & Co as investigative auditors to look into the mistatement of the group and its subsidiaries’ financial results. The auditor is expected to come up with a preliminary report on the matter between two and four weeks from the date of appointment. DIS clarified that the investigation presently carried out by the solicitors Messrs Khor Ong & Co are confined to the aspect of legal issues.
Bolton Bhd yesterday entered into a deal with Intrapuri Sdn Bhd to acquire a piece of land in Jalan Peel, Kuala Lumpur, for RM39 million cash. It will develop medium high-end service apartments on the 2.2ha property, with an estimated gross development value and gross development cost of RM280 million and RM220 million respectively.
The Japan Bank for International Cooperation (JBIC) will, through regional banking group CIMB Group Holdings Bhd, provide US$300 million (RM984 million) in long-term financing to small- to mid-sized businesses in Southeast Asia. The two parties formalised the arrangement, said to be the largest the Japanese government-run JBIC has ever provided to a commercial institution, in Kuala Lumpur yesterday. The funds are meant to support firms in the region that have Japanese links. Loans will be channelled through CIMB Bank in Malaysia, CIMB Niaga in Indonesia and CIMB Thai.
Sarawak-based container and dry bulk shipping outfit Hubline Bhd is in negotiations to acquire a 560-twenty foot equivalent unit (TEU) container ship Grand Ocean from Japanese shipping company Yamamaru Kisen Co Ltd. International shipping publications are saying that Hubline is offering some US$6.6 million (RM21.6 million) for the 12-year-old ship. Officials from Hubline, when contacted by The Edge Financial Daily, neither confirmed nor denied the international news reports. The company's executive chairman-cum-CEO Dennis Ling Li Kuang was not available for comment.
Consumer goods giant Unilever says it will not cancel palm oil supply contracts with IOI Corp Bhd and that it is confident the planter will address concerns over logging forests raised by a green group. IOI, Malaysia's No. 2 planter, had dismissed the report by Friends of the Earth that it cleared rainforests on Borneo island to expand, saying the allegations were inaccurateIOI said in a statement last Friday, without going into the details, that it had set up a clear action list and time-frame to address Friends of the Earth's remaining concerns after meeting with the green group. Both Unilever and Neste Oil have said their supply contracts with palm oil firms include clauses that allow for termination of the agreement if the suppliers are found to be damaging the environment.
THAI pharmaceutical company The British Dispensary (L.P.) Co Ltd has signed a RM50 million collaboration with Chemical Co of Malaysia Bhd (CCM) to develop its manufacturing base and expand its product range.
The British Dispensary, which has 18 brands under its stable, wants to include halal based cosmetic and healthcare products in its fore.Company president Anurut Vongvanij said the collaboration covers three phases, tapping the strengths of both companies.
Bolton Bhd's subsidiary Bolton LYL Sdn Bhd is proposing to acquire a 5.5-acre piece of freehold land in Taman Maluri here from Intrapuri Sdn Bhd for RM39 million, funding it thorough internal funds and bank borrowings. In a statement, it said that the land was to be used solely for commercial purposes and at present, a considerable portion was occupied by squatters — both residential units and workshops. Currently, the land has no development approvals from the relevant authorities.
Any talks involving foreign equity participation in Proton Bhd will have to be based on a win-win situation, according to the Ministry of Finance Such discussions will also have to take into account the importance of the local automobile eco-system and the continued use of Proton as a branding in its own right The reply was read out by Deputy Finance Minister Datuk Wira Chor Chee Heung (Alor Star-BN) in Dewan Rakyat on Monday, March 29.
The board of Ho Hup Construction Company Bhd will meet with Malton Bhd today, to discuss the proposed joint-development agreement (JDA) between its subsidiaries Speaking to reporters after Ho Hup's extraordinary general meeting (EGM) here on Monday, March 29, director Hew Thin Chay said the board understood that negotiations between the former board and Malton's subsidiary Pioneer Haven Sdn Bhd had been ongoing for about a year.
The promoters of Asas Serba Sdn Bhd — the company that late last year proposed to take over all 22 toll roads in the country for RM50bil - is still waiting for an opportunity to make its presentation on the matter to the Government Among other things, Asas Serba is proposing to reduce toll rates by 20% That means highway users need only pay 11.97 sen per km for using the North-South Expressway over the next 18 years, which is the tenure of the concession period. There are 22 toll operators in the country, of which PLUS Expressways Bhd is the biggest.
Titan Chemicals Corp Bhd subsidiary in Indonesia, PT Titan Petrokimia Nusantara (TPN), is considering issuing two bonds amounting to 500 billion rupiah (RM180.4mil) via public offering The two proposed bonds – Obligasi Titan Petrokimia Nusantara I Tahun 2010 and Sukuk Ijarah Titan Petrokimia Nusantara I Tahun 2010 – were for amounts of 300 billion and 200 billion rupiah respectively.
The Employees Provident Fund (EPF) plans to increase its overseas investment to 10% over the next one to two years. Its CEO Tan Sri Azlan Zainol said the focus would be on investing further in equities of public-listed companies. The EPF’s current overseas investment is at about 6% to 7%, he told a press conference at the opening of the Technical Seminar on High Performance in Social Security by Innovation, Change Management and Risk Management here on Monday, March 29.
Lembaga Tabung Haji has no plans to change its investment process since it has helped the fund maintain its performance. Group managing director and chief executive officer Datuk Ismee Ismail said this in response to claims that Tabung Haji's recent investments were quite risky. Speaking to reporters after the signing of an agreement between Tabung Haji and AmanahRaya Bhd on property investment cooperation in Kuala Lumpur yesterday, he said that to decide on a particular investment, the proposal has to go through a complex but transparent process.
Bursa Malaysia may see some foreign currency exchange-traded funds (ETFs) on the local bourse later this year, its CEO Datuk Seri Yusli Mohamed Yusof said.He said a few investment banks were working on ETFs for launch this year although no details had been provided yet. Bursa introduced its multi-currency securities framework in the middle of last year to support listing, trading, clearing and settlement of securities in non-ringgit currencies. Nonetheless, things have been rather quiet in this area. Yusli noted that there had been no indication of foreign currency listing of companies.
Results
Poh Kong Holdings’s net profits grew 64.6% to RM7.49 million in the second quarter (2Q) of its financial year ending July 31, 2010 from RM4.55 million in the same period a year ago. 2Q revenue grew 7.4% to RM144.21 million from RM134.24 million in the same period a year ago. Second quarter earnings per share rose to 1.83 sen from 1.11 sen a year back. The increase in sales and profits were due to higher jewellery purchases during the festive seasons.
ECM Libra Financial Group Bhd posted net profit of RM13.13 million in its fourth quarter ended Jan 31, 2010 compared with net loss of RM3.55 million a year ago. Its pretax profit of RM16.13 million was largely contributed by net brokerage income of RM11.7 million, investment and trading income of RM15.4 million as well as net interest income of RM6.1 million; partially offset by operating expenses of RM22.7 million.
Revenue was RM46.79 million versus RM16.24 million a year ago. Earnings per share were 1.60 sen versus loss per share of 0.43 sen. It proposed dividend of 1.31 sen per share. For the year to date ended Jan 31, 2010, its net profit surged 700% to RM40.8 million from only RM5.1 million a year ago. Revenue rose to RM134 million from RM74.18 million.
ASIA
Strong Chinese corporate figures boosted sentiment in quiet Asian trade yesterday, while many dealers were in wait-and-see mode ahead of key economic data from the US and Japan.
Concerns over Greece's debt problems receded - and the euro clawed back some ground - after European leaders agreed a deal to help Athens with its debt problems.
Vietnam has extended the deadline for banks and companies to close their overseas gold trading accounts to June 30 from the end of this month, the government said in a statement. The central bank had ordered the closure of gold trading floors and offshore accounts by March 30 as part of measures to stabilise the country’s foreign exchange market. More time to close overseas positions would help traders keep in line with world gold prices, the government quoted the State Bank of Vietnam as saying.
SINGAPORE: THE Straits Times Index gained 0.8 per cent to 2,929.14 at close.
The following shares were active in the market:
Ascendas Real Estate Investment Trust, an industrial landlord, rose 1 per cent to S$1.97 and Cogent Holdings Ltd rose 2.9 per cent to 17.5 Singapore cents. The firm said it had net income of S$17.7 million in 2009, compared with S$7 million a year earlier.
HONG KONG: STOCKS closed up 0.88 per cent yesterday and the benchmark Hang Seng Index rose 184.32 points to 21,237.43.
Turnover was HK$54.59 billion. Trading firm Li & Fung rose 3.6 per cent to HK$38.50 on bargain hunting after falling 11.0 per cent in the previous two sessions. Bank of Communications gained 1.2 per cent to 8.73 and ICBC was up 0.9 per cent at HK$5.75.
TOKYO: Tokyo was flat, edging down 9.90 points to close at 10,986.47 as players cashed in following strong advances last week that saw the market break 11,000 for the first time since October 2008.
Toyota was down 0.54 per cent at 3,740 yen despite reporting global sales rose 13 per cent year-on-year in February. Canon fell 1.05 per cent to 4,220 yen and Nintendo was 2.8 per cent lower at 31,300.
Japan’s industrial production retreated in February, snapping an 11-month winning streak that helped to secure a recovery from the country’s worst postwar recession. Factoryoutput declined 0.9 percent from January, when it rose 2.7 percent, the most in eight months, the Trade Ministry said yesterday in Tokyo. The median estimate of 24 economists surveyed by Bloomberg News was for a 0.5 percent drop.
Japan’s unemployment rate held at a 10-month low in February, a sign the labor market is stabilizing as exports fuel the recovery. The jobless rate was unchanged at 4.9 percent, the statistics bureau said yesterday in Tokyo, matching the median forecast of 23 economists surveyed by Bloomberg News. A renewal in global trade is spurring corporate profits and making it easier for companies to retain workers, helping pull Japan out of its worst job slump in six decades. The gains haven’t been enough to stamp out falling prices that Prime Minister Yukio Hatoyama say are weighing on the world’s second- largest economy.
SYDNEY: Sydney closed flat, adding 0.40 points, to 4,897.3 on late buying after spending much of the day in the red.
SHANGHAI: Shanghai rose 2.24 per cent on expectations the launch of stock index futures, set for April 16, will boost demand for blue chips.
Shares were also lifted by expectations more firms will show solid growth in 2009 earnings after Bank of China last week reported a 26 per cent rise in profit, while Industrial Bank of China said its net profit was up 16 per cent.
Earlier yesterday energy giant Sinopec said profits rose 116.5 per cent.
SEOUL: Seoul ended 0.34 perc ent, or 5.73 points, lower at 1,691.99. Hyundai Engineering & Construction declined 3.1 percent to 63,100 won and Daewoo Engineering & Construction dropped 2.2 per cent to 11,150.
TAIPEI: Taipei closed up 0.90 per cent, or 70.59 points, at 7,947.45. Buying was focused on firms with close business ties to China ahead of high-level trade talks this week, dealers said.
MANILA: Manila was 0.10 per cent, or 3.12 points, lower at 3,177.56. Philippine Long Distance Telephone was off 1.2 per cent at 2,475 pesos although Energy Development Corp rose 5.2 per cent to 5.10.
WELLINGTON: Wellington rose 0.33 per cent, or 10.62 points, to end at 3,251.10. Infratil rose 3 cents to 1.68 dollars after saying its joint venture would buy Shell's New Zealand distribution and retail assets.
EUROPE
European shares ended higher yesterday, with miners supported by strong metals prices offsetting weaker banks, while Vodafone rose on reports of talks with US partner Verizon over dividend payments.
The pan-European FTSEurofirst 300 index of top shares closed 0.2 per cent higher at 1,079.24 points.
The index posted its fourth weekly gain last week, and is on track to post a rise of more than 7 per cent in March.
Analysts expected equities to be well supported as the end of the first quarter looms, but they warn that some consolidation could be expected in the coming weeks.
In London, the benchmark FTSE 100 index edged up 0.13 per cent to 5,710.66 points. In Paris, the CAC 40 added 0.29 per cent to 4,000.66 points and in Frankfurt, the DAX rose 0.60 per cent to 6,156.85 points.
UK financial-services companies will cut about 17,000 jobs in the first six months of this year even as confidence improves, Britain's biggest business lobby group said. About 10,000 jobs went in the first quarter and another 7,000 will go from April to June, Confederation of British Industry Chief Economic Adviser Ian McCafferty said in London ahead of a report published with PricewaterhouseCoopers LLP yesterday.
European confidence in the economic outlook improved to the highest in almost two years in March, beating economists’ forecasts and signaling the recovery is gathering strength as a weaker euro helps exporters. An index of executive and consumer sentiment in the 16 nations using the euro rose to 97.7 from 95.9 in February, the European Commission in Brussels said yesterday. That was the highest since May 2008 and topped the median estimate of economists in a Bloomberg News survey. The euro region’s recovery is gaining momentum after coming to a near-halt in the fourth quarter as companies boost output to meet export orders. Europe’s services and manufacturing industries expanded at the fastest pace in 2 1/2 years in March and economic confidence is now at the highest since four months before the collapse of Lehman Brothers Holdings Inc. The International Monetary Fund said on March 22 that it expects the global economy to “bounce back” in 2010.
Ireland’s bonds are poised to outperform those of every other euro member except Austria this quarter as investors bet it will be more successful than countries such as Greece in cutting its budget deficit. The nation’s debt returned 3.2 percent this year, according to Bloomberg/EFFAS indexes. Yields on 10-year Irish bonds fell to within 128 basis points of those on German bunds on March 12, a 14-month low. Credit Agricole Corporate and Investment Bank and Royal Bank of Scotland Group Plc anticipate that spread may drop to about 65 basis points by the end of 2010 as the bonds keep rising.
US
Stocks gained Monday, pushing the Dow to its highest point in a year-and-a-half, after a report showing a rise in consumer spending added to bets about the strength of the economic recovery.
The Dow Jones industrial average added 45 points, or 0.4%, ending at 10,895.86, the highest point since Sept. 26, 2008, when it closed at 11,143.13. The S&P 500 index gained 7 points, or 0.6%. The Nasdaq composite rose 9 points, or 0.4%.
Investors are also looking to get in ahead of a long weekend, with all financial markets closed Friday for Good Friday.
Stock gains were pretty broad based Monday, with 23 of 30 Dow components rising, led by Chevron and Exxon Mobil. Energy and other dollar-traded commodity stocks rose, initially responding to a weaker greenback. However, the sector maintained its advance even as the dollar seesawed.
The euro has strengthened and global market have gotten a lift over the last few trading sessions as worries about Greece defaulting on its debt have waned. Last week, the European Union and the International Monetary Fund (IMF) agreed to a loan package that Greece or other nations could access, should the need arise.
On Monday, Greece said it was moving forward with plans to issue a new seven-year bond.
Stocks have risen in six of the last seven weeks as investors have begun to factor in a stronger economic recovery, following a rough period between mid-January and early February. During that stretch, the S&P 500 lost over 9% and the Dow and Nasdaq lost more than 7% as investors worried that global debt woes and increased U.S. regulation of banks and financial markets might constrain growth.
Economy: Personal spending rose 0.3% in February, after rising 0.4% in January, the Commerce Department reported Monday. It was the fifth month in a row that spending rose. Results were in line with forecasts, according to a Briefing.com survey of economists.
Personal income was unchanged in February after rising 0.3% in January. Economists thought income would rise 0.1% in the month.
Company news: The Treasury Department said Monday that it is moving closer to selling its 27% stake in Citigroup, but didn't provide details about the timeline of any sale.
The government owns 7.7 million Citigroup shares, having acquired a controlling interest in the company after providing a $45 billion bailout in fall 2008 amid the height of the credit crisis. Citigroup shares fell 3%.
Ford Motor sold Volvo cars to Chinese automaker Zhejiang Geely Holding Group for $1.8 billion, the companies said Sunday. The deal is the largest purchase in history by a Chinese car manufacturer, but falls short of the $6.4 billion Ford paid for Volvo in 1999.
Avnet will buy Bell Microproducts in an all-cash deal valued at $594 million including the assumption of debt. Avnet distributes electronic components and Bell distributes data storage and other computer component products. Avnet rose just short of 5% and Bell Microproducts rose 28%.
The dollar and commodities: The dollar gained versus the euro and the yen.
U.S. light crude oil for May delivery rose $2.17 to settle at $82.17 a barrel on the New York Mercantile Exchange.
COMEX gold for May delivery rose $6.10 to $1,111.50 per ounce.
Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.86% from 3.85% late yesterday.