Stocks To Watch PPB, TM, Ho Hup, AirAsia, plantation stocks, Johan, Texchem, Damansara Realty

Business & Markets 2014
Written by Ho Wah Foon of   
Thursday, 06 March 2014 19:07

KUALA LUMPUR (Mar 6): Based on news flow and corporate announcements up to 6.30 pm today, the following companies may be in focus tomorrow:

PPB Group Bhd is allocating RM440 million for capital expenditure in the next two to three years to strengthen its core businesses, said Managing Director Lim Soon Huat today.

"The amount will increase depending on the requirements of the new projects," he told a media briefing on the group's full-year financial performance ended Dec 31, 2013.

The group's major operations include flour and feed milling, grains trading, marketing, distribution and manufacture of consumer products, film distribution as well as property investment and development.

Meanwhile, the group’s environmental engineering, waste management & utilities unit has set its sights on opportunities in the water business arising from the consolidation of the water concessionaires in Selangor.

chemQuest Sdn Bhd’s group managing director Leong Yew Weng said the Selangor government would have expansion plans for the water sector after consolidation.

chemQuest is a subsidiary of PPB which is involved in environmental engineering, waste management  and utilities. It is keen on jobs relating to upgrading the pipe network to reduce non-revenue water and upgrades of treatment plants, particularly in the multi-billion ringgit Langat 2 water treatment plant.

Telekom Malaysia Bhd (TM) said it will be signing an agreement tomorrow with telecommunications companies from around the world to form a consortium for a new continental submarine cable system.

The agreement for the establishment of the South East Asia – Middle East – Western Europe 5 (SEA-ME-WE 5) submarine cable will be signed tomorrow (March 6, 2014), TM said in a press statement.

The new submarine cable will link the continents of Asia, Africa and Europe.

The previous submarine cable, the SEA-ME-WE 4, was completed by a consortium of 16 telecommunications companies in December 2005, for a total estimated project cost of RM1.63 billion (US$500 million) then.

It is not known how much this fifth cable system will cost but it has to be billions at current rates. TM could not be reached for comment at the time of writing.

Ho Hup Construction Company Bhd announced at mid-afternoon it has applied to Bursa Securities for an early upliftment of its PN17 status.

At 5.00 pm today, the company's share closed 5 sen up at RM1.54 with some eight million shares traded.

Ho Hup said for the last quarter of the financial year ended 31 December 2013, the group recorded a profit after tax (PAT) of RM16.5 million. For the full year of 2013, PAT was RM 27.7 million

As at December 2013, the company had achieved six consecutive quarters of profit. 

AirAsia Bhd’s unit AirAsia India said it was unperturbed by various attempts to stop it from taking to the skies and now aimed to start operations in May 2014, having missed earlier targets since September last year, Bernama reported.

“We may get the air operator permit (AOP) in about three weeks. Thereafter, we may commence operations in two months from Chennai,” CEO Mittu Chandilya told the The Hindu in an interview in Chennai.

Among others, the Federation of Indian Airlines has opposed the entry of AirAsia India stating it might force other airlines to run into further losses.

On Wednesday, the Delhi High Court sought the response of the central government and AirAsia India to the FIA's opposition to approvals for the airline to begin its flight operations in the country.

Chandilya said the Chennai-based airline's fares could be 25 per cent to 30 per cent less than others.

AirAsia India is AirAsia’s joint venture with Tata Group and Telestra Tradeplace Pvt Ltd.

Plantation stocks, which had risen sharply today and in previous days, could succumb to profit-taking tomorrow if investors go for short-term gains.

Genting Plantations Bhd, PPB Group Bhd and Kuala Lumpur Kepong Bhd and Sarawak Oil Palm Bhd led the rise in plantation stocks today, after leading international commodity analysts presented their bullish views on crude palm oil (CPO) price outlook for this year at a conference.

The other major plantation risers were IJM Plantations Bhd, TSH Resources Bhd and Keck Seng Bhd.

But plantation stocks could still be boosted by a news report that palm oil stockpiles in Malaysia probably tumbled last month to the lowest level since September as production declined to a one-year low.

A Bloomberg survey of five major plantations groups showed that inventories fell about 7 percent to 1.8 million metric tons from 1.93 million tons a month earlier.

Johan Holdings Bhd is selling its loss-making Diners Club credit and charge card franchise in New Zealand and other South Pacific island nations for NZ$3.1 million (RM8.6 million) cash.

Johan said it was selling its 100% stake in Diners Club (NZ) Ltd to New Zealand’s The Warehouse Group Ltd.

"The proposed disposal would effectively remove the current liabilities and losses of the company that the group reflects on its consolidated balance sheet. It also has the effect of lowering the gearing of the group, resulting in a healthier balance sheet," Johan said.

Johan said the sale proceeds would finance the group's working capital needs. The disposal is expected to be completed this Tuesday.

Texchem Resources Bhd is expected to make an exit offer for shares in its 70.48%-owned Singapore-listed subsidiary Texchem-Pack Holdings (S) Ltd.

This follows a Singapore Exchange Securities Trading Ltd's delisting notification to Texchem-Pack after the latter failed to rejuvenate its financials within the time frame specified by the bourse regulator.

The deadline for the regularisation was March 5, 2014.

"In the delisting notification the SGX-ST (Singapore Exchange) has advised that TXPHS (Texchem-Pack) or its controlling shareholder(s) must comply with the listing manual which requires TXPHS or its controlling shareholder(s), i.e. TRB (Texchem Resources), to make a reasonable exit offer to shareholders.

"The SGX-ST has given TXPHS one month from the date of the delisting notification to make an exit offer proposal," Texchem Resources told Bursa Malaysia today.

According to the food processing, restaurant and chemical-trading company, Texchem-Pack had failed to regularise its financials within two years since the firm was placed on watch list on March 5, 2012.

Bursa Malaysia has issued an unusual market activity (UMA) query on Damansara Realty Bhd following recent rise in the stock's price and volume.

Damansara Realty shares had risen substantially today. The stock rose as much as 21 sen or 32% to 87 sen in intraday trade.

At 5pm, the stock rose 20 sen or 30% to close at 86 sen with some 23 million shares done.

The stock had gained 110% so far this year, outperforming the FBM KLCI's 1.51% decline.

Bloomberg data showed Damansara Realty's share price has risen from a one-year intraday low of 27 sen seen on May 27, 2013.