Stocks To Watch KLCI index stocks, aviation shares, Mah Sing, Karex, BHIC, Sime Darby, TAS

Business & Markets 2014
Written by Ho Wah Foon of   
Friday, 14 March 2014 20:00

KUALA LUMPUR (March 14): KLCI index-linked stocks may continue to respond negatively to the tensed situation in Ukraine on Monday (March 17) if political developments there worsens on Sunday.

Russia has made it clear it would veto a U.S.-drafted UN resolution to declare illegal Sunday's referendum in Crimea, and has launched new exercises near its Ukrainian border in the face of sterner-than-expected sanctions from the United States and the EU.

Today, Russia shipped more troops and armour into Crimea and repeated its threat to invade other parts of Ukraine, showing no sign of listening to Western pleas to back off from the confrontation, reported Reuters.

Russia's stock markets tumbled before pro-Moscow authorities in Crimea hold a vote to join Russia, a move all but certain to lead to U.S. and EU sanctions on Monday.

The Russian Foreign Ministry repeated President Vladimir Putin's declaration of the right to invade to protect Russian citizens and "compatriots".

Aviation-linked stocks such as AirAsia Bhd, Malaysia Airports Bhd and Malaysia Airlines System Bhd (MAS) may be affected if the current hot weather and haze continue to envelop the country unabated.

AirAsia today announced flight cancellations to and from Pekanbaru, Indonesia, for today and tomorrow due to the low visibility caused by severe haze.

"The presence of thick haze reduces pilot visibility to below 1,000 meters, which is the minimum level of flight visibility required for safe operations," said the low-cost carrier in a statement.

The cancellation of AirAsia flights from and to Pekanbaru involved six routes. AirAsia also said all affected flights are expected to resume on March 16, depending on visibility.

Mah Sing Group Bhd aims to increase its sales by 20 per cent to RM3.6 billion this year from RM3 billion last year, managing director Tan Sri Leong Hoy Kum told the media today.

He said projects, with a total gross development value (GDV) of RM4 billion to be launched this year, would help the company realise the target, reported Bernama.

At the EGM today, Mah Sing's shareholders voted in support of the group’s land acquisition in Pasir Gudang. The 1,352 acres of freehold land is expected to have an estimated GDV of RM5 billion. The land was acquired for RM411.16 million.

“With the acquisition of a plot of land in Shah Alam yesterday, and today's endorsement to buy land in Bandar Meridin East, Mah Sing’s total land bank now is 2,818 acres, with a GDV of RM26.82 billion.

“Today, Mah Sing has a total unbilled sales and remaining GDV worth RM31.26 billion, inclusive of RM4.44 billion unbilled sales or 2.6 times revenue from the property development in 2013,” said Leong.

Karex Bhd is spending about RM80 million to build a new factory in Pontian as part of its expansion plan. The company now has factories in Port Klang and Hat Yai in Thailand.

CEO Goh Miah Kiat said the new factory, to be built on a 7.28-hectare site, is slated for completion by year-end.

He said rising awareness of the importance of condom use and growing global population were driving demand for condoms going forward. Last year, a total of 22.8 billion pieces of condoms were sold.

The group has a combined production capacity of four billion condoms currently.

"We target to achieve a production capacity of six billion pieces by end-2015," Goh told Bernama after the company's extraordinary general meeting.

He said Karex, which has a 10 per cent share in the global condom market, is expected to show good growth this year.

For the six-month ended Dec 31, 2013, Karex posted a pre-tax profit of RM27.37 million from RM17.96 million in the same period last year, whilst revenue rose to RM147.58 million against RM118.69 million previously.

Boustead Heavy Industries Corporation Bhd (BHIC)’s subsidiary Boustead Penang Shipyard Sdn Bhd has secured a RM108 million contract from Murphy Sarawak Oil Co Ltd for the fabrication of offshore Belum topsides.

The BHIC unit announced that the project was for the provision of engineering, procurement, construction and commissioning of offshore topsides for Block SK309 Belum Satellite-A Platform, in phase two of the Sarawak Gas Development project.

The contract is targeted for completion by June 2015.  

The successful completion of the contract would further solidify BHIC's reputation in the area and enable it to tap more opportunities within the dynamic sector not only locally but abroad, said the company.

Sime Darby Bhd has acquired a controlling 70% stake in Australia’s mining maintenance services firm TFP Engineering Pty Ltd for A$3.2 million (RM9.5 million).

TFP's prized asset is its “Pakka Jacks” jacking-lifting system, used for the maintenance of mining equipment.

Sime Darby said its wholly-owned subsidiary Haynes Mechanical Pty Ltd purchased the stake from TFP's owners Gaylene Elaine Poke and Tony Francis Poke last month (February).

"The acquisition will enable Haynes to expand its labour hire opportunities from its existing geographical presence in Queensland and Western Australia to the New South Wales coal basin, Tasmania and South Australia," Sime Darby said.

According to Sime Darby, the firm has the call option to buy the remaining 30% in TFP for A$1.8 million.

TAS Offshore Berhad announced that its wholly-owned subsidiary has secured a contract for the sale of one unit of utility tug valued at RM13.2 million.

“The vessel was sold to one of our new foreign customers. The vessel is expected to be delivered in April 2015,” said TAS Offshore.

The company said the revenue generated from the contract would contribute positively to the earnings and net assets of TAS Group for financial year ending 31 May 2014 and 2015.