Business & Markets 2012
Written by Surin Murugiah of theedgemalaysia.com
Saturday, 08 December 2012 12:39
KUALA LUMPUR (Dec 8): The FBM KLCI could trend upward moderately next week on the back of improved global investor sentiment after US stocks rose on Friday.
Global shares rose modestly on Friday after a surprisingly strong US jobs report for November was tempered by a drop in American consumer sentiment amid a lack of progress in talks to avert the "fiscal cliff", according to Reuters.
The dollar edged up, though the currency was off its highs as investors parsed the details of the labour market report, one of the most closely watched economic indicators, it said.
However, global investor mood could be adversely affected if developments other than the US "fiscal cliff" remained unresolved, namely, the on-going civil unrest in Egypt as well the Israeli-Palestinian conflict.
Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said that he expects the FBM KLCI to trend higher in tandem with global strength on resolution of some important political uncertainties following the leadership transition in China and the USA election, as well as rotation play ahead of the year end window dressing. We note that the global sentiment improve slightly as positive global economic data and USA fiscal cliff progress kept traditional end-of-year bullishness in play.
Growing optimism toward the USA fiscal cliff will continue to be a positive force for global equity next week, with ideas that Republicans will agree to higher taxes and Democrats agreeing on less stifling tax on the rich and business community, he said.
Among the stocks that could be in focus next week are Scomi Group; UMW HOLDINGS BHD []; DAYANG ENTERPRISE HOLDINGS BHD []; and INGRESS CORPORATION BHD [].
Scomi unit Scomi Oiltools Sdn Bhd has won a RM93.6 million drilling fluids and waste management contract in Myanmar.
The contract, awarded by PTTEP International Ltd (PTTEPI), will commence in the fourth quarter (4Q) this year.
"This is indeed another acknowledgment of Scomi Oiltools's international presence in the global oil and gas sector," said Wan Ruzlan, president of market units for Scomi Oiltools in a press statement on Friday.
The Edge weekly in its latest edition reported that UMW Holdings Bhd was still keen to list its oil and gas unit but only after it disposes of its non-core assets and takes delivery or its fourth jack-up rig, citing a company executive with direct knowledge of the matter.
"UMW has approached a few investment bankers but talks are still preliminary. This is because the group is in the midst of privatisation talks for its 22.3%-owned associate WSP Holdings Ltd, which is expected to be finalised next year. In addition, UMWE will receive delivery of its fourth jack-up rig, the NAGA 4, early next year. The group wants to settle these matters first before it goes for listing," the Edge quoted the executive as saying.
The Edge weekly also reported that with Petroliam Nasional Bhd (Petronas) likely to announce a large number of hook-up CONSTRUCTION [] and commissioning jobs early next year, Dayang could generate much interest.
Citing industry executives, The Edge weekly reported that Dayang’s bids for jobs in projects in local offshore waters, known as the Pan Malaysia cluster, run into billions of ringgit, and the company stands a good chance of bagging some of them.
Ingress has secured a deal worth close to RM70 million to supply automotive components to national car manufacturer Perusahaan Otomobil Nasional Sdn Bhd (Proton) under two separate deals with its customer.
In a statement to Bursa Malaysia on Friday, Ingress said its wholly-owned subsidiary Ingress Engineering Sdn Bhd had recently received a letter of award with an aggregate value of RM69.7 million over a five year period.
The contracts are firstly to supply RM5.3 million worth of roof-drip moulding for a new vehicle model by Proton which is now wholly-owned by conglomerate DRB-HICOM BHD [].
Proton will also buy RM64.4 million worth of door sash and glass-guide parts from Ingress Precision Sdn Bhd (IPSB), another wholly-owned unit of Ingress, according to the statement.
The project is estimated to generate total revenue for Ingress of approximately RM64.4 million whilst the total investment is expected to cost approximately RM11.8 million, it said.
"The projects are expected to contribute positively to the earnings of the Ingress group," Ingress said.
Ingress said the contacts were as a result of a revision of an earlier letter of intent due to engineering enhancements.
Ingress, however, said the supply of the components will only begin by the second quarter of financial year ending January 31, 2015.
In calendar year terms, this indicates the period between May and July, 2014. Ingress said both projects have five-year duration from the date of commencement.
During the five-year period, Ingress said both projects will involve a collective investment of RM12.15 million.
Of that, RM350,000 will be earmarked for the roof-drip moulding project while the door sash and glass-guide parts contract will require an RM11.8 million outlay, the firm said.