Stocks To Watch Index stocks, Time Eng, Farlim, Iris, Versatile Creative, plantations, JCY, Glomac

Business & Markets 2013
Written by Ho Wah Foon of   
Monday, 23 September 2013 19:50

KUALA LUMPUR (Sept 23): Based on news flow and announcements today, stocks that may catch eyeballs tomorrow include KLCI index-linked stocks, Time Engineering, Farlim, Iris, Versatile Creative, PLANTATION [] groups, JCY and Glomac.

Index-linked stocks may be in focus if a clearer indicator on the U.S. tapering of quantitative easing (QE) is given later tonight.

St. Louis Federal Reserve Bank President James Bullard said last Friday that a start to winding down the economic stimulus program was possible in October, depending on coming economic data.

Some clarity might come later today when New York Fed President William Dudley speaks. He is thought to be close to Chairman Ben Bernanke, who has indicated that QE tapering could be postponed. Bernake’s guidance sparked a rally in global markets last week.

But on Friday, Bullard’s remarks jolted US commodity and stock markets.

TIME ENGINEERING BHD [] (TEB) said the loss of a court case by a subsidiary would have a negative impact of RM2.5 million on the results of the company (TEB) for the year ending Dec 31, 2013.

The RM2.5 million will be in addition to the RM4.5 million provision made for financial year 2012.

In its filing with Bursa Malaysia, TEB said the Court of Appeal has ruled in favour of a sub-contractor that had filed a suit against a subsidiary of Time Engineering.

The subsidiary’s appeal was heard by the Court of Appeal on September 9, 2013, and appeal was dismissed after the hearing, it said.

“TEB has decided that the subsidiary company would take necessary steps to comply with the decision of the Court of Appeal,” said Time Engineering.

FARLIM GROUP (M) BHD [] is selling 47ha (116.89 acres) of land within Penang's Bandar Air Itam area to 1Malaysia Development Bhd (1MDB) for RM112.5 million cash.

"The proposed disposal will enable the company to unlock the value of the disposal land and realise a gain on disposal of approximately RM46.11 million upon completion of the proposed disposal.

"The proposed disposal will also enable the company to raise funds for future development projects to be undertaken by the company," Farlim said.

Farlim expects to finalise the transaction by the second quarter of next year.

Iris Corp Bhd (ICB) is offering to buy the remaining shares in packaging product manufacturer VERSATILE CREATIVE BHD [] (VCB) for 50 sen each.

In separate statements today, ICB, a digital-identity specialist, and VCB said the offerors comprise ICB's wholly-owned unit Iris Healthcare Sdn Bhd (IHSB), Datuk Tan Say Jim and Datuk Lee Kwee Hiang.

The joint offerors collectively hold 25% or 27.54 million shares in VCB .They are acquiring the remaining 75% stake comprising 83.1 million shares in VCB which has an issued base of 110.64 million shares.

"As the ICB Group is not equipped with the required expertise in food packaging and distribution, the proposed acquisition of VCB Group will be a strategic fit into the proposed business plan of ICB Group in the food distribution division,” ICB said.

At 50 sen, the offer is a 14% discount to VCB's latest reported book value of 58 sen a share.

ICB, which intends to delist VCB, said the proposed takeover is due for completion by the fourth quarter of this year.

Plantation stocks may be upset by an international expert’s views that palm oil may slump to the lowest level since 2009 by January 2014 as global supplies of edible oils expand and crude oil weakens.

Dorab Mistry, director at Godrej International Ltd, said at a conference in Mumbai that palm futures will probably retreat to 2,000 ringgit a metric ton if Brazil and Argentina, the largest soybean growers after the U.S., harvest bigger crops and Brent crude drops below $100 a barrel.

However, prices will not slide below 2,200 ringgit in the next few weeks and will trade from 2,200 to 2,400 ringgit, he said.

“The fundamentals of the oilseed and vegetable oils complex are clearly bearish,” said Mistry. “We cannot expect a bull market in vegetable oil prices any time in 2013-2014 unless we have adverse weather.”

JCY International Ltd may attract some interest after more than a quarter of Thailand's provinces have been inundated by floods since last July.

Thai officials issued landslide warnings and began evacuation measures today.

Devastating floods in 2011 killed more than 800 people and caused massive disruption to industries. Operations of HDD makers and other electronic companies in Thailand were forced to close down for at least two quarters after the 2011 floods.   

As the major rivals of JCY were badly affected at that time, Malaysia-based JCY reaped tremendously in the disaster as it received more job orders. Its profits soared and share price surged subsequently.

Currently, at least 10 provinces in Thailand's central plains, the main rice-growing region, have been affected by the floods.

But Plodprasop Suraswadi, a deputy prime minister, said he was confident there would not be a repeat of the 2011 floods, which at one stage threatened to engulf Bangkok. "Water levels in our dams are low enough to handle any extra rainfall," Plodprasop said.

GLOMAC BHD []’s net profit rose 14.9% year-on-year to RM24 million in the first quarter ended July 31, 2013.

In a filing to the stock exchange, the property developer attributed the profit increase to record sales in the last financial year, with earnings contribution derived from the steady CONSTRUCTION [] progress in Glomac’s key ongoing projects.

Meanwhile, group 1Q revenue rose 0.7% to RM162 million from RM161 million in the previous corresponding quarter.

For the current financial year, the group is planning to launch RM1.38 billion worth of new projects including the maiden launch of its shop offices in Puchong’s Lakeside Residences and Centro V.

“Performance in the current year is expected to excel further, driven by high unbilled sales. Our strong pipeline of new launches should also translate to higher projects sales for the year,” said Glomac.