Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Wednesday, 15 May 2013 20:33
KUALA LUMPUR (May 15): The stock market as a whole tomorrow may test new highs if investors respond positively to the new “Transformation” cabinet of Prime Minister Datuk Seri Najib Razak.
Lower liners and speculative stocks may dance along with blue chips, government-linked and politically-connected stocks if the market welcomes the new line-up.
Najib, in announcing his list of Cabinet members today after leading Barisan Nasional to win the May 5 general election, has roped in technocrats and respected critics in his line-up.
These include the president of Transparency International Malaysia Datuk Paul Low and Maybank president Datuk Seri Abdul Wahid Omar.
The inclusion of Low is seen as responding to voters’ call to eliminate corruption in the country. And with Wahid, it shows Najib’s resolve in continuing the implementation of the national economic transformation agenda.
However, the worse-than-expected economic growth figures for the first quarter this year may weigh on the market.
But if market response to the Cabinet is overwhelmingly positive, the latest economic data might be ignored.
The central bank said today Malaysia's economy grew 4.1% in the first quarter of 2013 (1Q13) as domestic demand growth mitigated the impact of weaker exports.
The domestic services sector grew 5.9% in 1Q13 while the manufacturing and agriculture industries expanded 0.3% and 6% respectively. The CONSTRUCTION [] sector was up 14.7% while the mining industry contracted 1.9%.
The central bank also said the country's GDP is expected to grow between 5% to 6% this year.
On the corporate front, companies that may attract some investor attention include the following:
APM AUTOMOTIVE HOLDINGS BHD [] suffered from competitive pricing among original equipment manufacturers (OEMs) as its net profit for the first quarter fell by 14% from a year earlier despite an increase in revenue.
In a filing with Bursa Malaysia, the company reported net profit of RM28.14 million for the three months ended March 31, 2013 (1QFY13), down from the previous corresponding quarter’s RM32.57 million.
Its revenue, however, inched up by 3% to RM285.33 million from 1QFY12’s RM277.09 million.
Shell Refining Company (Federation of Malaya) Bhd was sent into red in its first quarter by shrinking oil refining margins and lower product prices.
The oil and gas (O&G) company reported a net loss for its first quarter ended March 31, 2013 (1QFY13) which amounted to RM24.51 million on a revenue of RM3.61 billion.
In the previous corresponding quarter, Shell made a net profit of RM14.62 million with a higher turnover of RM3.7 billion.
“The decrease (in revenue) is attributable to lower product prices in the first quarter of 2013,” said Shell in the filing. It said its loss was mainly due to weak refining margins.
UOA Development Bhd's first quarter net profit almost tripled from a year earlier on higher revenue, property revaluation and disposal gains.
UOA said it posted a net profit of RM119.14 million in the quarter ended March 31, 2013 (1QFY13) versus RM40.95 million previously.
Net profit for 1QFY13 had included a property revaluation gain of RM4.23 million. "The disposal of the group’s inventories at Bangsar South, Binjai 8 and Kepong Business Park during the quarter under review also contributed to the increase in revenue and profits," UOA said.
The company’s revenue more than doubled to RM381.86 million from RM148.08 million.
The company said the launches for the year are expected to generate strong sales for the company. Total unbilled sales as at 1QFY13 stood at some RM1.1 billion.
TOMEI CONSOLIDATED BHD [] hopes to achieve a bigger profit growth in the current financial year ending December 31, 2013, on the back of the recent plunge in gold prices.
At a press conference after the company’s annual general meeting (AGM) today, the group’s managing director, Ng Yih Pyng, said that Tomei’s jewellery sales have increased since the gold price plunge.
The group recorded a net profit of RM14.2 million for its financial year ended December 31, 2012, compared to RM33.1 million the previous year.
DIALOG GROUP BHD []’s net profit for the third quarter ended March 31, 2013 (3QFY13) grew by 12% year-on-year with the increased engineering, procurement, construction and commissioning (EPCC) activities.
Dialog declared an interim dividend of 1.1 sen per share in the quarter, the same amount as last year.
The oil and gas (O&G) service provider reported net profit for 3QFY13 was RM46.76 million, up from RM41.39 million in the previous corresponding period. Its revenue, meanwhile, was 51.6% higher at RM636.57 million.
PHARMANIAGA BHD [], in its first quarter ended 31 March 2013, posted a profit after tax (PAT) of RM25.2 million compared with the loss after tax of RM7.5 million recorded in its preceding quarter.
The company delivered these results on the back of an improved turnover of RM500.3 million, a 3.7% increase compared with the fourth quarter of 2012.
The board of directors has declared a dividend of 7.5 sen per share.
UEM LAND HOLDINGS BHD [] and IJM Land Bhd may see their share prices stir after Credit Suisse recommended an “outperform” rating on these two stocks.
The investment house has a target price (TP) of RM4.20 for UEM Land and RM3.40 for IJM Land. Both stocks are now trading below their TPs.
In a short report, Credit Suisse noted that out of Malaysia’s 83 listed developers, 70% by number are trading below book value “which could provide an opportunity for investors, although the book values are not totally comparable”.