Stocks To Watch: Taliworks, AFG, Petronas Chemicals Group, KLK, IOI Corp

Written by Levina Lim of  
Monday, 11 August 2014 19:28

KUALA LUMPUR (Aug 11): Based on corporate announcements and newsflow today, stocks in focus tomorrow could include: Taliworks, AFG, Petronas Chemicals Group, KLK and IOI Corp.

Taliworks Corp Bhd is establishing a joint venture with the Employees Provident Fund (EPF) to acquire recurring income-generating infrastructure assets, including highway concessions.

Taliworks announced today that it would — through its 84.62% owned subsidiary Pinggiran Muhibbah Sdn Bhd — own a 51% stake in Pinggiran Infrastructure Sdn Bhd, with EPF holding the remaining 49% stake.

Pinggiran Infrastructure’s prime asset is its 65% effective stake in highway toll operator Cerah Sama Sdn Bhd, which in turn owns Grand Saga Sdn Bhd — the concessionaire for the Cheras-Kajang Highway in the Klang Valley.

Alliance Financial Group Bhd (AFG) has reported a 5% decline in its net profit to RM130.8 million for the first quarter ended June 30, 2014, while revenue decreased 7.6% to RM336.7 million, from RM364.2 million.

According to AFG, other operating income (non-interest income) was lower than 2013’s by RM42.6 million or 33.9%, mainly due to a one-off sign-on fee of RM30 million from a bancassurance arrangement last year and lower gain from sale of financial investments, in view of the “sluggish treasury and capital market”.

Its net interest income grew by RM15.4 million or 8.3%, driven by year-on-year loans growth of 15.7% to RM32.8 billion as at June 30. Total customer deposits grew 10% to RM39.6 billion from a year ago, while current account, savings account (CASA) deposits increased by RM1 billion or 7.6% to RM13.7 billion.

Group chief executive officer Sng Seow Wah said that as a special dividend of 10.5 sen per share was paid on June 26, no interim dividend has been declared during the quarter, as the dividend announcement will now coincide with the announcement of the half year interim and year end results.

Petronas Chemicals Group Bhd reported a 42% drop in net profit to RM555 million for the second quarter ended June 30, 2014, from RM958 million in 2QFY13, due to heavy maintenance, which included several statutory turnarounds at a few of its plants.

Average realised product prices were lower as a result of lower average prices in its fertilisers and methanol segment, whilst the average realised prices for the olefins and derivatives segment is comparable.

Revenue was 13.7% lower at RM3.34 billion, compared to RM3.87 billion in the previous corresponding quarter.

PCG announced an interim single tier dividend of 8 sen per ordinary share.

Plantation stocks like Kuala Lumpur Kepong Bhd and IOI Corp Bhd may come under focus as the Malaysia Palm Oil Board (MPOB) announced that Malaysia crude palm oil (CPO) output beat market forecast, as it rose 6.11% month-on-month to 1.67 million tonnes in July, from 1.57 million tonnes last month.

Palm oil inventory, comprising CPO and processed palm oil, rose 1.47% to 1.68 million tonnes, from 1.66 million tonnes. However, palm oil exports fell 2.32% to 1.45 million tonnes, from 1.48 million tonnes.

Reuters, quoting market participants, has warned that the world’s no 2 producer could record a strong rise in output from August, potentially lifting palm stocks above the 2 million tonne mark in the next two to three months.

In a filing with Bursa Malaysia, KLK said that it will be releasing its third quarter results (April to June 2014) on Aug 20.