On The Platter
PADINI (FV RM1.80 –
BUY) Company Update – Rising to The Occasion We had a follow up visit to
Padini, which is one of our Top Buys in 2012. We continue to like this stock
given its resilient performance amid a more turbulent operating environment.
Despite the volatility in cotton prices and intense competition in the retail space,
we are confident that it will still be able to do well thanks to its high
inventory level and wider retail outlet coverage relative to its peers.
Maintain BUY with a FV of RM1.80 based on 14x FY12 EPS.
REGIONAL TELECOM
(OVERWEIGHT) Sector News Flash –
Lower 3G Reserve Price?
IJM (FV RM6.55 – TRADING BUY) Corporate News Flash – Buys 20% of WCE Caretaker
Market Review
Cautiously optimistic. The FBM KLCI closed 0.73 pts lower to 1,564.02 on continued concerns over
the slowdown in China’s economy. Key corporate news today include: IJM Corporation
to buy a 20% stake in West Coast Highway, TNB remains confident that the Government
will resolve the gas subsidy issue soon, Ramunia has secured a RM23.6m oil and
gas contract, and MMC Corporation has asked for more time to complete the proposed
listing of Gas Malaysia Bhd. On the
global front, the Dow closed 217.97 pts higher on the back of
stronger-than-anticipated consumer data points and positive results reported by
large US banks for their capital adequacy stress tests. We expect our local bourse
to trade positively today amid an improvement in market sentiment globally.
MEDIA HIGHLIGHTS
Stocks record biggest
gains of year; Dow up 218 pts
Bank stocks turbocharged a rally across the financial
markets Tuesday, and all three major stock indexes posted their biggest gains
of the year. The Dow Jones industrial average rose 218 pts and closed at
13,177.68, its highest level since the last day of 2007. The Nasdaq composite
closed above 3,000 for the first time since Dec 2000, when dot-com stocks were
collapsing. There was already plenty of good news driving the market higher
Tuesday: Retail sales in Feb increased the most since Sept, and the Federal
Reserve said it expected the unemployment rate to keep falling. (Bloomberg)
MAS set for growth as
India JV gets clearance for take-off
Malaysian Airlines System (MAS) expects further growth
potential through its involvement in the Indian aviation maintenance, repair
and overhaul space through MAS GMR Aero Technic Ltd (MGAT) – a joint venture between MAS and GMR Hyderabad
International Airport Ltd. MAS senior vice president Khairuddin Hamzah said
MGAT received the approval of the European Aviation Safety Agency (EASA) last
week, enabling it to service all aircraft leased from European by Indian
operators. (Malaysian Reserve)
Notion VTec buys
RM17.5m land in Klang, acquires subsidiary
Notion Vtec subsidiary Notion Ventures SB (NVSB) has entered
into a sale and purchase with Dulon Industries SB for the purchase of a land in
Klang together with an industrial factory for RM17.5m. The proposed acquisition
would allow NVSB to expand its
manufacturing operations. It is a cost effective measure contributing to
enlarged economies of scale to expand and maintain the operations. (Malaysian
Reserve)
Nicorp to participate
in Shell LPG business buy
Naim Indah Corp (Nicorp) has been invited to participate in
the purchase of Shell Malaysia liquefied petroleum gas (LPG) business and
assets. Oman-based National Gas Company (NGC) recently won the bid to buy Shell
Malaysia Trading SB’s LPG business for an estimated RM275m. NGC in partnership
with Aspire SB set up a 40-60 special purpose vehicle to undertake the
proposal. (BT)
IJM buys 20% of West
Coast Expressway
IJM Corp is buying a 20% equity interest in West Coast
Expressway SB (WCE) for RM6.75m. In an announcement to Bursa Malaysia, IJM said
its wholly-owned subsidiary Road Builder (M) Holdings SB has entered into a
share sale and purchase agreement with Prominent Xtreme SB for the 20% in WCE,
consisting of 5.8m RM1 shares. In late January, WCE received an approval letter
from the Public Private Partnership Unit of the Prime Minister’s Department to
undertake the proposed privatization of the construction of the West Coast
Expressway. The approval was based on a build-operate-transfer basis.
(Financial Daily)
ECONOMIC
HIGHLIGHTS
South Korea:
Unemployment rate rose to 3.7% in february
South Korea’s unemployment rate unexpectedly jumped to the
highest level in almost a year as college graduates entered the labor market
and government job openings encouraged more people to seek work. The jobless
rate rose to 3.7% in February from 3.2% the previous month, Statistics Korea
said in Gwacheon today. The median estimate in a Bloomberg News survey of 11
economists was for the rate to stay at 3.2%. Policy makers are grappling with a
slowing economy by supporting the job market, accelerating spending and keeping
interest rates unchanged for a ninth month. The Bank of Korea said last week
the economy appears not to be slowing further and will likely return to its
long-term growth track, although downside risks persist because of Europe’s
debt crisis and higher oil prices. (Bloomberg)
Australia: Consumer
confidence slumps 5%, most in three months
Australian consumer confidence fell the most in three months
after the nation’s four biggest lenders raised mortgage rates even as the
central bank left the benchmark borrowing cost unchanged, a private survey showed.
The sentiment index for March dropped 5% to 96.1, the lowest level since
December, Westpac Banking Corp. and Melbourne Institute survey taken 5-9 March
of 1,200 consumers showed today in Sydney. (Bloomberg)
EU: German investor
confidence surges to a 21-month high
German investor confidence jumped to a 21-month high in
March after the European Central Bank flooded financial markets with cash and
the sovereign debt crisis showed signs of abating. The ZEW Center for European
Economic Research in Mannheim said today its index of investor and analyst
expectations, which aims to predict economic developments six months in
advance, advanced to 22.3 from 5.4 in February. That’s the fourth straight
increase and the highest reading since June 2010. Economists forecast a
gain to 10, according to the median of
36 estimates in a Bloomberg News survey. (Bloomberg)
US: Retail sales
climb by most in five months
Americans heartened by an improving labour market boosted
spending at stores and malls by the most in five months, adding to signs that
the world’s largest economy is gaining strength. The 1.1% advance followed a 0.6%
increase in January that was larger than previously estimated, according to
Commerce Department data issued yesterday in Washington. Sales rose in 11 of 13
categories, including auto dealers and clothing stores, showing gains in demand
were broad based. Stocks and bond yields rose as the report indicated that the
best six-month streak of employment growth since 2006 is bolstering spending
even as gasoline costs rise. Job gains have not been large enough to satisfy
Federal Reserve officials, who today reaffirmed a commitment to keep interest
rates low. (Bloomberg)
US: Fed says labour
market improves, leaves policy unchanged
Federal Reserve policy makers raised their assessment of the
economy as the labour market gathers strength and refrained from new actions to
lower borrowing costs. “The unemployment rate has declined notably in recent months
but remains elevated,” the Federal Open Market Committee said in a statement at
the conclusion of a meeting yesterday in Washington. It also said, “strains in
global financial markets have eased, though they continue to pose significant
downside risks to the economic outlook”. (Bloomberg)
Source: OSK188
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