| Business & Markets 2012 |
| Written by Surin Murugiah of theedgemalaysia.com |
| Monday, 26 November 2012 18:19 |
The uncertainties of the eurozone debt crisis continues to keep global investor sentiment tepid, and led to the FBM KLCI closing lower for a fourth day on Monday, and leaving the index down 65.19 points to-date for November. European shares edged lower on Monday while the euro hovered near a one-month peak against the dollar on Monday as investors awaited the outcome of talks to provide emergency loans to Greece, according to Reuters. Eurozone finance ministers and the International Monetary Fund meet later to try to unfreeze the second bailout package for Greece, but first need to agree how to cut the country's massive debt pile to a more sustainable level, it said. MIDF Research head of research Zulkifli Hamzah in his fund flow report on Monday said that foreign investors sold Malaysian equity again after buying mildly the week before. He said that on a net basis, foreign investors sold RM173.4 million last week. However, cumulatively in the last four weeks, foreign portfolio investors were still net buyers, adding RM318 million of Malaysian equity from the open market, said Zulkifli. He said that as of last Friday, the KLCI had declined 3.5% in November, the worst in nine years. “As we enter the last week of the month, hope for a better November seems to be fading. The momentum of foreign selling has set in and local support has yet to be forthcoming. “In our opinion, a better bet for the market lies in December. Historically, the KLCI had always been well supported during this month. The index had registered gains during the month in the last seven years, and in 10 out of the last 11 years. Expect strong local support during this month,” he said. Zulkifli said that the FBM KLCI was only seven points above the 200-day moving average of 1,607. “This is the critical level for the market to hold. If this level can be maintained, our year-end target of 1,670 should still be in the horizon,” he said. Among the stocks that could be in focus on Tuesday are SIME DARBY BHD [], ZECON BHD [], Eversendai Corporation Bhd, Multi Sports Holdings Ltd, TRC SYNERGY BHD [] and COASTAL CONTRACTS BHD []. Sime Darby is slated to announce its financial results for its first quarter ended Sept 30, 2012 on Tuesday. Zecon Bhd posted net loss RM2.91 million for the third quarter ended Sept 30, 2011 compared with net profit RM1.91 million a year earlier. The company said on Monday that its revenue for the quarter dipped to RM31.67 million from RM36.81 million in 2011. Loss per share was 2.44 sen compared with earnings per share of 1.6 sen, while net assets per share was RM1.21. For the nine months ended Sept 30, Zecon posted a net loss of RM5.01 million compared with net profit RM679,000 a year earlier, despite a higher revenue of RM109.32 million versus RM85.48 million in 2011. Reviewing its results, Zecon said its overall performance was substantially affected by the additional cost related to one of its on-going projects. On its prospects, the company said it expects lower revenue for ongoing projects to be offset by the increase in revenue from the possible disposal of PROPERTIES []. It said the proposed Petra Jaya General Hospital with a contract value in excess of RM500 million was in the final stage of price negotiation. “The projection on our toll operation should be able to enhance its contribution to the group’s revenue targeting at least a 6% increase in 2013 arising from increased activities in the surrounding area. “Specific target will be on the increase in the collections for commercial vehicles besides the sales of toll cards,” it said. Eversendai Corp Bhd posted a 3.4% decline in net profit for the third quarter ended Sept 30 to RM25.51 million from RM26.44 million previously due to lower margins from its Indian and Malaysian projects. Revenue for the period suffered a 5.58% drop to RM240.2 million from RM254.4 million in the previous corresponding quarter. “With over 20 ongoing projects, the group’s revenue continued to be predominantly driven by its operations in the Middle East, which accounted for 68.9% of its revenue portfolio,” the group said in a filing Monday. Meanwhile, Eversendai’s net profit for the nine months ended Sept 30 grew marginally by 0.26% to RM83.25 million compared with RM83.03 million on the back of a 3.6% rise in revenue to RM746.9 million from RM720.3 million a year ago. “The group’s third quarter results came within our expectations, as Eversendai continues to establish a strong track record in the marketplace by securing lucrative contracts,” said the group’s executive chairman and managing director, Datuk AK Nathan in a statement today. Sports shoe sole manufacturer Multi Sports Holdings Ltd saw its net profit for the third quarter ended Sept 30 fall by 40.4% to RM14.46 million from RM24.29 million in the previous corresponding quarter on the back of a dip in revenue. Revenue for the period also declined 21.94% to RM91.4 million from RM117.1 million due to a change in sales mix. “The change in sales mix was mainly due to the market trend and demand. Gross profit margin for nine months ended Sept 30 has decreased to 27.6% from 29.8% for last year corresponding period as this was mainly due to the higher production costs arising from rises in labour and overhead costs,” it said in a filing today. Meanwhile, net profit for the nine months ended Sept 30 also dropped 19.6% to RM46.7 million from RM58.1 million on the back of a 8.1% decline in revenue to RM279.9 million from RM304.6 million last year. TRC Synergy Bhd — one of the recipients of the mass rapid transit (MRT) station packages — reported a 94.6% surge in its net profit for the third quarter ended Sept 30 to RM5 million from RM2.57 million previously on higher recognition of revenue. The group’s revenue for the period also grew 67% to RM158.8 million from RM95 million in the previous corresponding quarter while earnings per share improved to 1.05 sen per share from 0.55 sen previously. “The improvement in the results of the group is attributable to continued recognition of revenue from the ongoing major projects of the group, given that the stage of completion of the projects is progressing steadily,” TRC said in a filing today. Coastal Contracts Bhd posted a 16.7% drop in net profit for the third quarter ended Sept 30 to RM30.5 million from RM36.6 million in the previous corresponding quarter despite higher revenue contributions for the period. “This was a result of the narrower margins derived from the sale of vessels by shipbuilding division and the adverse impact of US dollar depreciation on foreign exchange transactions,” it said in a filing today. The group’s revenue was up 60.7% to RM177.1 million from RM110.2 million previously while earnings per share declined to 6.32 sen from 7.59 sen a year ago. |
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