On The Platter
DIALOG (FV RM3.07– BUY) Company Update: All is Well Recently,
we met up with Dialog’s management, from which we gather that the company is
making good progress in its Pengerang deepwater terminal and Balai marginal oilfields projects. Dialog has
reclaimed more than 150 acres of land to construct the terminal, which is more
than sufficient for Phase 1. Meanwhile, the Balai marginal oilfield’s
pre-development stage is slated for completion by 2013, if not this year.
Overall, we see the company’s prime projects being well on
track and progressing as scheduled. Maintain BUY.
CONSTRUCTION
(OVERWEIGHT) Sector News Flash: Jobs Galore From RM3.2bn MRT Projects
PADINI (FV RM2.13–
BUY) Company Update: "In-Vincci-ble"!
MHB (FV RM5.40–
NEUTRAL) 1QFY12 Results Review: Gradual Recovery Seen
SIA (FV Under Review
– NEUTRAL) FY12 Results Review: Missing The Mark
SUNWAY (FV RM3.31–
BUY) Corporate News Flash: MRT Job Well Expected
TIMECOM (FV RM0.870–
BUY) Corporate News Flash: Going ex Tomorrow
Market Review
Uncertainty in Europe. The FBM KLCI lost 5.70 pts to 1584.90
pts on the back of losses by Genting Malaysia, Maybank, IOI Corp and Petronas
Dagangan. With continued weakness in European and US markets and the political
uncertainty in Greece, we expect market sentiment to remain volatile. The
corporate headlines are Sime, CapitaMalls plan a RM500m mall, Felda eyes Louis
Dreyfus as its strategic partner in its upcoming IPO, and Mass Rapid Transit Corp (MRT Corp) has
awarded four more packages for the construction of the Sungai
Buloh-Kajang (SBK) MRT Line totalling RM3.22bn to Sykt Muhibbah Perniagaan
& Pembinaan SB (SMPP) and Sunway Construction SB. Overnight, the Dow Jones
closed 97.043 pts lower as political uncertainty in Greece raised the risk of unravelling of the bailout
package to the latter and sparking off a possible contagion across Europe.
MEDIA HIGHLIGHTS
Dow Falls 6th Day in
longest slump since August on Greece
The Dow Jones Industrial Average declined for a sixth
straight day amid concern Greece’s debt crisis is worsening as the nation
struggles to form a coalition government. The Standard & Poor’s 500 Index
fell 0.7% to 1,354.58, a two-month low while the Dow slid 97.03 pts, or 0.8%,
to 12,835.06. It had the longest slump since August last year, three days
before S&P stripped the US of its AAA credit rating. Global stocks fell as
Greece’s political turmoil looks set to enter a fourth day with coalition talks
deadlocked. The standoff has reignited concerns over its ability to hold to the
terms of its two bailouts negotiated since May 2010. With Parliament split and
policy makers in Berlin and Brussels urging Greece to stay the course, the
country at the epicenter of the debt crisis is again facing the risk of an exit
from the euro. (Bloomberg)
Shell Malaysia to
divest LPG ops to Oman’s National Gas
Shell Malaysia Trading SdnBhd (SMTSB) has signed a sale and
purchase agreement with Oman's National Gas Co SAOG (NGC) to divest its
liquefied petroleum gas (LPG) business in Peninsular Malaysia to the latter at
an undisclosed amount. SMTSB managing director Tuan Haji Azman Ismail said the
divestment was part of its strategy to concentrate on other businesses and
streamlined its downstream business. Azman said the divestment underwent a
thorough tender process for about a year and NGC succeeded based on its
competitive bid. He said the sale of its LPG business would not affect other
businesses and the handover would be a “seamless transition”. However, he said
the deal was still pending regulatory approval as any company looking to retail
petroleum products needed to obtain a licence. (StarBiz)
Sabah food, fruits
industry to see RM1bn American investment
Sabah is expected to receive an investment of more than
RM1bn from US-based company Dole, in the food and fruits industry. Sabah Chief
Minister Datuk Seri Musa Aman said further discussions are being held to
determine the best method of collaboration with one of the state government
agencies. “They (Dole), a major company in the food and fruits industry, have
expressed deep interest in a collaboration." Musa said foreign companies
were keen to invest in Sabah as it was known as a peaceful state and suitable
for investing. He said under the five years of the Ninth Malaysia Plan, Sabah’s
economy had expanded at the rate of 5% annually, with the agricultural sector
contributing RM7.24m to the 2010 GDP compared to RM3.8m in 2005. (StarBiz)
Sime, CapitaMalls
plan RM500m mall
Sime Darby Property, the country’s largest developer by
landbank size, plans to develop a RM500m shopping mall in the Klang Valley, in
partnership with CapitaMalls Asia Ltd. The mall, to be located on 242,000 sq-ft
freehold land in Taman Melawati here, is
expected to be completed in 2016. It will have a net lettable area of around
635,000 sqft and serve a catchment population of about 800,000 people within a
10-minute drive. For CapitaMalls Asia, the project will be its first greenfield
developments in Malaysia. The mall is surrounded by the residential areas of
Taman Melati, WangsaMaju, Taman Permata and Kemensah Heights. (BT)
Felda eyes Louis
Dreyfus
Global commodities trading powerhouse Louis Dreyfus has
emerged as the frontrunner candidate in Felda's search for a strategic partner
ahead of its USD3.3bn (RM10.13m) public offering. Industry executives said
soonto-be listed Felda Global Ventures Holdings (FGVH) wants the French trading
company as its cornerstone investor for its upcoming IPO. Louis Dreyfus is also
being touted as a strategic partner to bolster the downstream business of FGVH,
which is set to become the world's largest listed palm oil producer when its shares
are listed at end-June. (Financial
Daily)
Four companies get Sg
Buloh-Kajang MRT line contracts
Mass Rapid Transit Corp (MRT Corp) has awarded four
additional packages for the construction of the Sungai Buloh-Kajang (SBK) MRT
Line, totalling RM3.22bn. The big winners for the new contracts were Syarikat Muhibbah
Perniagaan & Pembinaan SB (SMPP) and Sunway Construction SB, which won jobs
worth RM1.09bn and RM1.17bn respectively. The packages, awarded after the
conclusion of the One Stop Procurement Committee
(OSPC) meeting yesterday, are for Viaduct 1, Viaduct 4, Viaduct 7 and Depot 1.
MRT Corp is expected to award more tenders over the next month. (Malaysian
Reserve) Please see accompanying reports
ECONOMIC
HIGHLIGHTS
Malaysia: Exports
unexpectedly fall, supporting case to hold rate
Malaysia’s exports unexpectedly fell in March as
manufacturers shipped fewer electrical and electronics products, bolstering the
case for the central bank to hold off from interest-rate increases. Overseas
shipments fell 0.1% to RM61.79bn (USD20bn) from a year earlier after gaining 14.5% in February,
according to a Trade Ministry statement yesterday. Malaysia’s imports rose 1.6%
in March from a year earlier. The trade surplus narrowed to RM10.45bn from
RM10.58bn in February. (Bloomberg)
China: China
Investment stops buying European debt on crisis concerns
China Investment Corp has stopped buying European government
debt because of an economic crisis on the continent, though it continues to
look for new investments there, said CIC President GaoXiqing.
“What is happening in Europe right now is of course of concern,” Gao
said yesterday in an interview. “We still have our people looking at
opportunities in Europe, even though we don’t want to buy any government
bonds.”European leaders are struggling to contain a debt crisis that has
entered its third year and led to bailouts of Greece, Portugal and Ireland.
(Bloomberg)
EU: Greece Euro-exit
debate goes public as officials air concerns
From the monetary fortress of the European Central Bank to the pro-European duchy of Luxembourg,
policy makers are beginning to air their doubts that Greece can stay in the
euro. Post-election tumult in Athens has put the once-taboo subject of an exit
from the 17-country currency union on the agenda, lifting the veil on possible scenario
planning afoot behind the scenes. After EUR386bn (USD499bn) in aid pledges for
Greece, Ireland and Portugal, EUR214bn in ECB bond purchases and another
trillion euros in low-interest loans for banks, plus 17 high-level crisis
summits, Greece’s political chaos thrust Europe into a perilous new phase.
(Bloomberg)
UK: Retail sales
plunge as BOE begins crucial meeting
UK retail sales fell the most in more than a year last month
as poor weather and consumer caution on spending curbed demand at stores. Sales
at stores open at least 12 months, measured by value, declined 3.3% from a year
earlier, the London-based British Retail Consortium said yesterday. That’s the
biggest monthly drop since March 2011. Including stores open less than 12 months, sales decreased 1%.
With Britain suffering its first double-dip recession since 1975, the Bank of
England’s Monetary Policy Committee will decide tomorrow whether to add more
stimulus to its existing GBP325bn (USD524bn) of bond purchases. (Bloomberg)
US: Job openings rise
to highest level since 2008
Employers in the US were seeking to fill more jobs in March
than at any time in almost four years, showing growing confidence in the US
economy. The number of open positions increased by 172,000 to 3.74m, the most since
July 2008, from a revised 3.57m the prior month that was larger than previously
estimated, the Labor Department said yesterday. Another report showed small
companies were more optimistic on their outlook. More vacancies are a sign
American companies were planning to expand at the end of the first quarter,
undaunted by the jump in fuel costs or concerns that global economic growth
will slow. (Bloomberg)
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