On The Platter
REGIONAL PLANTATION (NEUTRAL) Sector Update: Indonesian Palm
Oil Pours in Malaysia’s palm oil inventory rose to 2.06m tonnes in February due
to the sharp increase in processed palm oil imported from Indonesia, without
which the inventory would have been flat m-o-m. We suspect this is temporary
and will only artificially suppress palm oil price. Although we believe palm
oil price can still scale higher due to potentially disappointing production in
the near term, we are concerned about a potential pullback in soybean price. On
further price strength, we would suggest a tactical sell on plantation stocks.
Maintain Neutral on sector.
KIMLUN (FV RM2.37 -
BUY) Company Update: Record Year in The Making
Market Review
Cautious trading. The
FBM KLCI ended at 1,564.75, down 14.25 pts, as investors unloaded their holdings on
continuing concerns over China's growth
outlook following a huge trade deficit. Losers led gainers 516 to 260 while 318
counters were unchanged. Among the key market news today are Malaysia’s IPI
grew at the slower pace in January 2012, Datuk Mohd Kamil Jamil strongly
tipped to head Proton, AirAsia X will
stop operating the loss-making Christchurch route, Khazanah sells stake in
Indian lender Yes Bank for USD105m, Kimlun bags RM151.6m jobs and Paramount
pays RM125m for industrial land in Selangor. Overnight, US blue-chip stocks
extended gains into a fourth session on Monday ahead of a monetary policy
decision from the Federal Reserve and a rush of economic releases this week.
The DJIA’s 37.69 pts climb to 12,959.71 may help to harness investor interest
in the local bourse today.
EPF goes on selling
spree
The Employees Provident Fund (EPF) sold a whopping RM441.09m
worth of Malaysia-listed equities on 7 March alone, in line with its trend of
active disposals over the last two weeks. Bursa Malaysia filings showed that on
7 March, the EPF along with its portfolio managers dumped a total 83.68m shares
on the open market, substantially more than the 7.4m shares it had acquired the
same day. The number of shares disposed of represents almost half the total
volume traded that day, which stood at 173.14m shares. Fund managers reckon that
the fund was merely taking profit but its aggressive selling had dragged the
FBM KLCI down from its all-time high last week. (StarBiz)
REDtone eyes
government projects worth RM800m
REDTONE International, a communications solutions provider, is bidding for government
projects worth up to RM800m. REDtone managing director Datuk Wei Chuan Beng
added that he expected revenue contribution from the public sector to be more
"balanced" over the next few years. Currently, contracts from the
government and related agencies contribute about 30% of the company's
revenue.(BT)
PFCE in RM300m deal
to transform into O&G player
Loss-making PFCE will transform into an oil and gas
(O&G) counter after DAT Group SB proposed to inject its wholly-owned unit,
PFC Engineering SB (PESB) into the former for RM300m. DAT, which is owned by
PFCE’s group executive chairman Datuk Abu Talib Mohamed and son Muammar Gadaffi,
will be issued 500m new PFCE shares priced at RM0.60 per share, which will
result in them controlling 91% of PFCE. In a statement yesterday, PFCE said the
deal will give it an immediate presence in the O&G industry. (Malaysian
Reserve)
Kimlun secures RM152m
job
Kimlun Corp has secured two construction projects in Johor
Bahru totaling RM151.6m, bringing the construction company’s estimated
outstanding orderbook to about RM1.5bil. The first project is the construction
of service apartments and ancillary buildings and the second, the construction
of 244units of houses. The first project’s total contract sum is RM114.7m and
is expected to be completed in Feb 2014. The second project total contract sum
is RM36.9m, with an estimated time of completion in Sept 2013. (Malaysian Reserve) Please see accompanying
report
1Bestarinet to kick
off soon
The government’s 1Bestarinet project is in the process of
being implemented by YTL Communications SB (YTL Comms), a unit of YTL Power
International. Although no official
announcement has been made by the government on the project award,
sources said that YTL Comms has already rolled out the service to a number of
schools in the Klang Valley, having started doing so from Dec 2011. (Financial Daily)
AirAsia X axes NZ
route
AirAsia X SB will stop flying the loss-making
KL-Christchurch route effective end-May due to volatile jet fuel prices.
Christchurch will be the fourth destination the long-haul low-cost carrier has
withdrawn from in recent months after announcing that it would stop flying to
London, Paris, Delhi and Mumbai. AirAsia X CEO Azran Osman-Rani told The Edge
yesterday that the capacity from Christchurch would be redeployed to Taipei,
Perth and other routes. He said in a statement that since the suspension of its
flights to Europe and India, the airline has increased flight frequencies to
Tokyo and a new route to Sydney. (Financial Daily)
ECONOMIC
HIGHLIGHTS
Malaysia: Moderate growth in Jan IPI Malaysia’s January
industrial production grew at a moderate pace, in line with market
expectations. It went up by 0.2% year-on-year in January, as polled by Business
Times. The increase was due to the growth by the manufacturing index (1.2%) and
electricity index (2.7%) while mining posted a decline of 2.7%. The
Statistics Department in releasing the data said weakness in January
could stem from fewer working days from an earlier Lunar New Year (versus Feb
2011). Considering January and February data in tandem will provide a better
read on industrial production growth, it said. (Bloomberg)
Vietnam: Cuts
benchmark rates to support growth amid slowdown
Vietnam cut its interest rates to support a slowing economy
even as the nation faces Asia’s fastest inflation. The State Bank of Vietnam
reduced the refinancing rate for the
first time since 2009 to 14% from 15%, effective today, it said in a statement
on its website yesterday. It also cut the discount rate to 12% from 13% and the
dong deposit cap for terms of one-month and above to 13% from 14%. (Bloomberg)
India: Industrial
output growth beats estimates
India’s industrial production unexpectedly rose at the
fastest pace in seven months in January, weathering the highest interest rates
since 2008 and weaker global growth. Output at factories, utilities and mines
advanced 6.8% from a year earlier, after a revised 2.5% climb in December, the
Central Statistical Office said in a statement in New Delhi yesterday. The
figure exceeded all 26 estimates in a Bloomberg News survey. A history of
swings in the data may prevent the report from easing concern that the cost of
credit and the impact of Europe’s debt crisis are dimming India’s economic
outlook. (Bloomberg)
EU: Ministers head
toward final approval of second Greek rescue
Euro-area finance ministers will move toward completing the
next Greek bailout this week as they meet in Brussels last night. Luxembourg
Prime Minister Jean-Claude Juncker, who heads the group of euro-region finance
ministers, said he had “no doubt” that a second bailout program for Greece
would be approved and he expected a final decision on 12 March. (Bloomberg)
EU: Italy GDP data
confirms 'technical' recession
Italy's gross domestic product declined by 0.7% in the
fourth quarter, compared to the three months in the prior quarter, Italy's
statistical office, ISTAT. Compared to the year-ago quarter, GDP fell 0.4%. The
figure was in line with expectations and confirmed a preliminary estimate
released in February. The data confirmed that Italy hasnow experienced two
consecutive quarters of shrinking GDP, the technical definition of an economy
entering recession. (Bloomberg)
US: Federal Reserve
to test 19 banks’ capital against US recession scenario
The Federal Reserve will show how the capital of 19 US banks
might fare through a deep recession and a second housing crisis when they
unveil stress-test results in three days. The tests will show results for
revenues, capital ratios and profits or losses
at each firm over a nine-quarter period, the Fed said in a paper
released yesterday in Washington. The results will be released on 15 March.
Templates included in the Fed release yesterday showed an array of categories
it plans to disclose, from trading and counterparty losses to credit cards and
first-lien mortgages. (Bloomberg)
Source: OSK188
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