OSK188 - 29 March 2012: DAILY RESEARCH REPORT

On The Platter

GAMUDA (FV RM4.57 – BUY) 1HFY12 Results Review: Game On!

Gamuda’s 1HFY12 earnings of RM268.8m (+47.2% y-o-y) were in line with both our and consensus forecasts, making up 51.5% and 54.5% of the respective full-year estimates. Overall, we are encouraged by the progress in its execution of the KV MRT project after jointly clinching the tunnelling portion of the SBK line with MMC. We are now looking forward to more news on the Gemas-Johor Bahru EDT in 3Q12 worth an estimated RM8bn. Maintain BUY, with our SOP-based FV unchanged at RM4.57.

CENTURY (FV RM1.94  – NEUTRAL) Corporate News Flash: Scouting For More Warehouses

KASIKORNBANK (FV THB176.6 – BUY) Company Update: In Good Shape

Market Review

Stuck in a  range. The  FBM  KLCI  shed 4.35  pts to 1,583.7, weighed down by the downbeat  global sentiment, with blue chips like  CIMB, IOICorp, Tenaga and Petronas Gas losing ground. Corporate newflows includes: AirAsia targets the listing of its Thai and Indonesian operations by May and October this year respectively, Bandar Raya Development has appointed a legal and financial adviser for the open tender of its assets sale, and Gamuda reported a 45% jump in 2Q12 net profit. Meanwhile, IGB has formed a JV with Selai Pantai SB to build a RM6bn megamall in South Key Johor Bahru and Bintai Kinden  has secured a SGD166.2m construction contract for one of the Singapore MRT line extension. On the global front, the  Dow  lost 71.5  pts driven by  concerns  over the sustainability of the US economic recovery.

MEDIA HIGHLIGHTS

IGB Corp, Selia Pantai JV project to kick start next year

The estimated RM6bn Southkey Megamall development in Johor by IGB Corp through a JV with a Johor-based property developer is expected to start next year, according to IGB Corp group MD Robert Tan Chung Meng. Tan said a full planning and study of the project will be conducted first before signing a definitive agreement within the next one to two months which will be undertaken between IGB Corp and Selia Pantai SB.  (Malaysian Reserve) Please see yesterday’s report

May listing for Thai AirAsia

A listing in May is what Tan Sri Tony Fernandes is looking at for Thai AirAsia and sometime in October for Indo AirAsia. And he has not given up hopes of trying to list AirAsia X this year too. “There will be two listings this year. If we can add AirAsia X, and I am confident we can, we will have three listings this year,” the group CEO said. (StarBiz)

Bintai Kinden JV bags RM405m Singapore MRT jobs

Bintai Kinden Corp secured a SGD166.23m (RM405.2m) worth of contracts via a joint venture for Singapore’s MRT line extension, the Downtown Line Stage 3 project. The contract will be for the supply and installation of electrical services worth SGD78.23m as  well as the supply and installation of tunnel ventilation and environmental control systems worth SGD87.94m. (Financial Daily)

Key West acquires Manjung Niaga for USD52.5m

Key West Global Telecommunication, together with Maryland International Offshore Ltd, has acquired Manjung Niaga SB (MNSB) for USD52.5m (RM160.65m) as part of Key West’s plans to position itself as an oil and gas player. Key West has 78.9% equity interest and Maryland 21.1%. Key West executive director Stephen Ng said MNSB owns 95% of PT Formasi Sumatera Energi, which owns a 15-year Kerja Sama Operasi concession to reactive and optimize the production of petroleum resources in the Tanjung Time Timur field in South Sumatera, Indonesia. (Financial Daily)

Cypark units in green energy pact with TNB

Cypark Resources, via two wholly-owned subsidiaries, has signed renewable energy power purchase agreement with TNB for a feed-in-tariff concession period. The 21-year concession is for electricity generated from Cypark’s 8MW solar park in Pajam, Negri Sembilan. (BT)

ECONOMIC HIGHLIGHTS

Vietnam: Trade gap narrows in March, supporting currency

Vietnam’s trade deficit narrowed in March as exports rose, supporting the currency. The gap fell to USD150m from a  revised USD279m in February, based on preliminary figures released by the General Statistics. The shortfall totalled USD251m in the first three months of the year. (Bloomberg)

Myanmar: To float currency

Myanmar announced an overhaul of its antiquated currency system as part of burgeoning reforms to modernize an economy left in disarray by decades of military rule and isolation. The impoverished nation will adopt a managed floating exchange rate from 1 April, allowing market forces to determine the value of the kyat, while leaving room for the central bank to influence its value, state media said. It described the move as the first step towards unifying the nation's various exchange rates. (BT)

South Korea: Returns to current-account surplus in February

South Korea returned to a current- account surplus in February as exports rose amid signs of an improving US economy and as the euro zone debt crisis eased. The surplus was USD639m, compared with a revised USD969m deficit in January, the Bank of Korea said in Seoul. The current account is the broadest measure of trade, tracking goods, services and investment income. (Bloomberg)

EU: European loan growth slowed in February on faltering economy

Growth in loans to households and companies in the 17-nation euro area slowed in February as a cooling economy curbed demand for credit. Loans to the private sector grew 0.7% from a year earlier after gaining an annual 1.1% in January, the ECB said. The rate of growth in M3 money supply, which the Frankfurt-based ECB uses as a gauge of future inflation, increased to 2.8% from 2.5%. (Bloomberg)

UK: Economy shrinks more than first estimated

The UK economy shrank more than previously estimated in the 4^th quarter as services companies from airlines to banks cut output amid concerns about the euro region debt crisis. GDP fell 0.3% from the  third quarter, compared with a previously estimated 0.2% drop, the Office of National Statistics said.(StarBiz)

US: Orders for durable goods in US show sustained demand

Orders placed with US factories for durable goods rose in February for a fourth month in the last five,  signalling manufacturing will remain a source of strength for the expansion. Bookings for goods meant to last at least three years advanced 2.2%, less than projected, after a revised 3.6% decline in January, data from the Commerce Department showed. Orders excluding transportation equipment increased 1.6%, in line with the median forecast in a Bloomberg News survey of economists. (Bloomberg)

Source: OSK188