Business & Markets 2014
Written by Ho Wah Foon of theedgemalaysia.com
Tuesday, 17 June 2014 19:55
KUALA LUMPUR (June 17): Based on news flow and corporate announcements today, the following stocks may be in focus tomorrow (June 18):
Oil and gas companies may attract attention after Reuters reported that Iraq's biggest oil refinery in Baiji has been shut down and its foreign staff evacuated.
Refinery officials said on Tuesday local staff remain in place and the military is still in control of the facility.
Militants from al Qaeda splinter group Islamic State of Iraq and the Levant (ISIL) seized Iraq's second-biggest city of Mosul last week and other Sunni armed groups have advanced into the town of Baiji and surrounded its refinery.
The refinery shut down overnight, the sources said.
Baiji is one of three oil refineries in Iraq and only processes oil from the north. The other two are located in Baghdad and the south and are firmly under government control and operational.
Iraq is OPEC's second-biggest crude oil producer.
Plantation companies may also be in focus if crude oil prices surge following the shutdown of the refinery.
Malaysian palm oil futures stretched gains into a fourth session today, lifted by firm crude oil prices and concerns that the onset of dry weather could curb palm yields, although poor export data dragged on prices, Reuters reported.
The benchmark September contract had edged up 0.1 percent to 2,431 ringgit per tonne by Tuesday's close.
Although oil futures dipped towards $112 per barrel on Tuesday, with investors booking profits after a rapid spike in prices, market players saw scope for further gains if violence in Iraq threatened production.
Firm crude makes palm oil a more attractive feedstock option to produce biodiesel.
Palm prices were also supported by worries there would be drought if El Nino emerges in Southeast Asia, where most of the world's palm oil is cultivated.
Berjaya Sports Toto Bhd’s (BToto) net profit fell 8.3% year-on-year (y-o-y) to RM69.4 million in the fourth quarter ended Apr 30, 2014, from RM75.6 million.
But revenue jumped 46% y-o-y to RM1.36 billion from RM930.9 million.
BJToto declared a fourth interim dividend of 7 sen per share in respect of the financial year ended Apr 30, 2014.
For the full-year period, net profits totalled RM323.9 million versus RM391.1 million in the previous year, while revenue registered RM4.34 billion from RM3.63 billion from a year ago.
“The gaming sector in Malaysia is expected to remain resilient and the directors expect the group to maintain its market share in the number forecasting operations business,” said BToto on future prospects.
Top Glove Corporation Bhd said its net profit for third quarter to end-May 2014 rose 5.2% year- on-year to RM42.37 million, up from RM40.27 million in similar quarter a year ago.
“This increase in profit was due to aggressive cost-discipline and cost-optimisation practices, via continuous automation,” said the world’s top glove maker in a press statement.
Lower raw material prices and stronger US dollar vs ringgit also helped, it added.
But revenue for the third quarter fell to RM574.00 million, from RM604.08 million, due to lower average selling prices of gloves from declining raw material prices.
The group declared an interim dividend of seven sen per share, payable on July 17, 2014.
For the nine months to May 2014, total profits fell to RM134.20 million from RM148.08 million in previous nine months. Total revenue also fell to RM1.70 billion from RM1.77 billion.
On outlook of the glove sector, Top Glove said it expects the glove business environment to continue to be challenging.
Lafarge Malaysia Bhd (LMB) said the company and Singapore based LMCB Holdings Pte Ltd have been served with a writ of summons in respect of a claim in the High Court of Singapore by the Comptroller for, among other things, the repayment of the sum of SGD9,589,816.84, damages to be assessed, tracing, interest and costs.
“LMB and LMCBH consider that there is no basis for the legal action. LMB and LMCBH have appointed lawyers,” said LMB in a filing with Bursa Malaysia.
MBM Resources Bhd (MBMR) said that its expansion plans remain on track despite a challenging financial year, due to the May 2013 General Election, intense competition in the automotive market and operational cost pressures.
“We have made the necessary investments to secure our future. For example, we saw tremendous opportunities in the aftersales business and have moved decisively to add capacity by upgrading existing service centres and adding three new ones for a total of 46 in 2013,” said Looi Kok Loon, group managing director, in a statement after the company’s annual general meeting.
However, Looi said that some of the investments will require a gestation period before they start contributing to the group, such as MBMR’s new alloy wheel plant.
Meanwhile, MBMR’s investments in network expansion has increased its capacity and geographical reach, and has allowed the group to leverage on the strong growth in new car sales in the past five years through income from the aftersales business.
“With capital expenditures tapering off, we are looking forward to an exciting 2015 when we will be seeing full-year contributions from OMI Alloy, the new Hino Motors Manufacturing plant in Sendayan and the new Perodua plant in Rawang.
“Hirotako, whose airbag sales grew by 13 per cent last year and seat belts are fitted in 68% of vehicles produced in Malaysia, should also remain a major revenue contributor,” said Looi.
Narra Industries Bhd’s shareholders passed the resolution for the furniture firm to diversify into the concrete and cement business at a quick and boring extraordinary general meeting (EGM) this morning.
The EGM held today was to allow Narra to gain shareholders’ approval for its diversification into the concrete and cement industry via the acquisition of Hume Industries (M) Sdn Bhd, Hume Cement Sdn Bhd and the irredeemable convertible preference shares of Hume Cement for RM448 million from Hong Leong Industries Bhd.
The acquisition will be satisfied by the issuance of new shares in Narra.
Narra's share price surged yesterday ahead of the EGM today and this prompted an unusual market activity query from Bursa Malaysia.
At market close, Narra’s share price erased some gains to end at RM2.44 with a rise of 2%, after hitting a high of RM2.59 earlier.
Dagang Nexchange Bhd (Time Engineering) said it will suspend trading in its shares tomorrow pending a material announcement.
In a statement, the formerly Time Engineering Bhd said that trading in its shares will be suspended with effect from tomorrow at 9 am onwards.