Friday 6 April 2012

OSK188 - 6 April 2012: DAILY RESEARCH REPORT


On The Platter
GENP (FV RM10.13 - BUY) Company Update: Steady Long Term Grower We are maintaining our Buy call on Genting Plant with our FV unchanged at RM10.13. Genting Plant is a core Malaysian plantation holding and one of the biggest, best managed and most highly focused. While its PE valuation looks stretched, this is due to the stock pricing in the value of its landbank in Iskandar Region, which we estimate to be worth between RM1.71 and RM2.13 per share. Knocking off the Iskandar land, Genting Plant is trading at 14.7x CY12 and 13.6x CY13 earnings.

SEG (FV RM2.17– BUY) Corporate News Flash: Imminent GO For SEGi?

TNB (FV RM7.68 – BUY) Corporate News Flash: CFO Resigns

Market Review
Profit taking continues. The  FBM KLCI declined 5.83 pts to 1,583.75 amid continued profit-taking and weak sentiment in  regional markets. Decliners thumped advancers 352 to 342 while 317 counters were unchanged. Among the key market news today  are:.Navis may increase  its  stake in SEG  International to over 33% that could  trigger a general offer, China’s CSR Zhuzhou Electric Locomotive Co Ltd wins RM530m LRT deal, Favelle Favco secured RM102.1m worth of contracts, Xian Leng reported irregular capex amounting to RM90.7m and Felda Global Ventures Holding will soon submit its IPO prospectus to the SC. Meanwhile, TDM secures nod on land for Terengganu hospital, Yung Kong unit sells land for RM12.2m, TNB’s CFO resigns and the government postpones Lynas rare-earth mine licence. On the global front, US stocks closed with weekly losses as investors weighed Europe’s return to the headlines against positive weekly claims data. With the Dow declining 14.61 pts  to 13,060, local investors  are expected to continue staying on the sidelines, pending any fresh lead.

MEDIA HIGHLIGHTS
SEGi GO may be imminent
A general offer may be announced for SEGi by as early as the end of next week should issues between interested stakeholders and Navis Capital Partners, which recently became the second largest shareholder, be ironed out. Sources said while nothing had been confirmed, a GO is a very real possibility and would depend on several factors, including board-level representation, level of management control by Navis and key performance indices. Sources also did not rule out Navis bringing in SEGi MD Datuk Seri Clement Hii, EPF or another GLIC as a joint offeror in the GO. (StarBiz) Please see accompanying report

Irregular capex amounting to RM90.7m at Xian Leng
Three former directors of Xian Leng Holdings Bhd did not follow the group’s accounting procedures in capital expenditure (capex) amounting to RM901.7m between FY05 and FY08, a special audit of the company has found. According to filling with Bursa, the group said the three former directors and substantial shareholders former managing director Ng Huan Tong, his wife Lim Wan Hong and Chua Chong Seng were the signatories of cash cheques amounting to RM85.7m given out under questionable circumstances to pay four contractors for the construction of fish ponds. (Financial Daily)

Favelle secures 5 contracts worth RM102m
Favelle Favco has secured 5 purchase order contracts worth RM102m through three of its wholly-owned subsidiaries. It said the contracts were secured through Favelle Favco Cranes (M) SB (three contracts), Favelle Favco Cranes Pty Ltd and Kroll Cranes A/S (one contract each). “The contracts secured are for the supply of three offshore cranes and spare parts,” it said. (Financial Daily)

Hitachi plans to acquire Malaysia headquartered eBworx to expand network
Hitachi Ltd has initiated take-over proceedings to acquire eBworx, a financial IT solutions company headquartered in Malaysia. Hitachi intends to expand its system solutions business in South-East Asia and China, by gaining access to eBworx's extensive customer base, software products, and development base, including highly-skilled human resources. The share acquisition proposal is subject to approval from regulatory authorities. Hitachi also aims to establish a one-stop service framework targeting Japanese and local financial institutions that were increasing their investments in global operations especially in Asia. By acquiring eBworx, Hitachi would have a business platform to provide comprehensive system solutions to financial institutions as eBworx has  an extensive track record and established reputation with leading banks in South-East Asia and China. (StarBiz)

Navis buys stake in cinema operator
Navis Capital Partners has bought a majority stake in the country’s 3rd largest cinema operator MCAT Box Office SB (MBO) at a price of RM104m. The investment was done via a combination of existing shares from the current sole shareholder, Tan Sri Abdul Rashid Abdul Manaf, and new shares issued for a substantial capital injection from Navis. Upon completion of the exercise, Navis and Rashid will emerged as the majority shareholder of MBO. (StarBiz)

Rafique resigns as TNB CFO
Tenaga Nasional’s CFO has resigned yesterday to pursue career opportunities elsewhere, according to a Bursa Malaysia filling. The 47-year-old chartered accountant Mohd Rafique Merican resigned “to pursue better opportunity and career advancement,” leaving  without any disagreement with the board of directors nor any issues to be highlighted to TNB’s shareholders. (StarBiz) Please see accompanying report.

Terengganu approves land for new hospital
The Terengganu state government has approved  the lease of land in Batu Burok to build and operate a new 130-bed specialist hospital which is operating at or near maximum capacity,” said its chairman, Datuk Roslan Awang Chik, said in a statement. “The hospital, on a 23,424 sq m land, will be the city’s flagship specialist hospital that will serve the approximately 338,000 people of Kuala Terengganu.” (StarBiz)

Naza TTDI’s listing agenda
Naza TTDI SB is eyeing a listing on the local bourse in the next 3-5 years to achieve its aim of becoming one of the largest property developers in the country. Deputy executive chairman-cum-group MD SM Faliq SM Nasimuddin said although internally the company was “all set to go”, it would be more prudent to wait for the right time to undertake the listing exercise. “We want to ensure the company realizes the right value from the listing and will wait for the right market conditions and external factors before proceeding,” Faliq told StarBiz. He said the local market would be quite challenging these few years given the high number of projects coming onstream, especially high-rise residential and commercial projects. To address the market uncertainties, Faliq said Naza TTDI would be launching projects with good demand including terrace houses, shop lots, and also its “bread and butter” township products. (StarBiz)

ECONOMIC HIGHLIGHTS
China: Wen signals easing as yield drops to 11-month low
China’s one-year central-bank bill yield dropped to the lowest level in 11 months on  speculation Premier Wen Jiabao will ease monetary policy to revive growth in Asia’s biggest economy. The yield declined 17bps last month to 3.31%, the fastest decline since Oct, compared with similar-maturity U.S. Treasuries that rose 1bps to 0.16%. Speculation that Wen will reduce banks’ reserve requirements or interest rates has increased since he said policy should be fine-tuned “as soon as possible” in comments reported 3 April by state media. [Bloomberg]

Taiwan: Inflation quickens, limiting scope for rate cuts
Taiwan’s consumer prices rose in March on costlier fuel, limiting the central bank’s scope to cut interest rates. The consumer-price index climbed 1.21% from a year earlier, compared with a revised 0.23% increase in Feb, the statistics bureau said in Taipei. Taiwan joined Asian nations including China and Vietnam in raising fuel prices this year as crude oil costs climbed. The island’s industrial output recovered in February for the first time in four months and exports rebounded, prompting the central bank to say it would focus on inflation after leaving borrowing costs unchanged for a third meeting on 22 March. [Bloomberg]

UK: Manufacturing unexpectedly drops for second month
UK manufacturing output unexpectedly declined for a second month in Feb, indicating the economy’s return to growth may be uneven. Factory output fell 1% from Jan, the most since Apr last year, the Office for National Statistics said in London. Manufacturing, which accounts for 10% of the economy, was revised to a 0.3% decline in Jan from a 0.1% increase. Reports this week showed expansion in services, manufacturing and construction accelerated in March, suggesting the economy probably returned to growth in the first quarter. [Bloomberg]

EU: Monti labor market overhaul ready for parliamentary review
Prime Minister Mario Monti’s bill to overhaul the country’s labour market, his latest effort to spur Italy’s economic growth, will be sent to parliament today for review after President Giorgio Napolitano signed the draft law. Monti presented the bill yesterday after watering down some measures easing firing rules to secure support of his political allies in parliament. Mont backed away from his original goal of allowing companies to fire workers for economic reasons without fear of reinstatement, and in the draft labour courts will still have a limited right to reverse those dismissals. [Bloomberg]

US: Payroll gain in US probably exceeded 200,000 for fourth month
Employers probably added more than 200,000  workers to payrolls in March for a fourth straight month as US companies gained confidence  that  sales will keep improving, economists said before a government report. Hiring increased by 205,000 after rising by 227,000 in Feb, according to the median projection of 80 economists surveyed by Bloomberg News. The last time employment advanced at a similar pace for as many months was late 1999 into 2000. The jobless rate probably held at a three-year low of 8.3%. [Bloomberg]

US: New York Fed Markets Group Chief Brian Sack to resign
Brian Sack, markets group chief at the Federal Reserve Bank of New York, is resigning this year after leading operations  in  implementing the central bank’s monetary policy since June 2009. Sack, 41, will remain at his current post until 29 June, the district bank said in a statement on its website. He will then be placed on leave until his resignation from the New York Fed effective 14 Sept, according to the statement. As head of the markets group, Sack oversaw the record expansion of the Fed’s balance sheet while policy makers turned to unconventional tools such as two quantitative-easing programs in the aftermath of the credit crisis. [Bloomberg]

Source: OSK188

No comments:

Post a Comment