On The Platter
TSH (FV RM2.65-BUY)
Company Update: The Indonesian Dream
TSH Resources (TSH) joined us in hitting the road in
Singapore recently to meet 9 institutional funds. FFB production growth was
spectacular last year, surging by m ore than
40% y-o-y, with its young Indonesian estates being the key growth
driver. Management is looking to quicken the pace of new planting over the next
few years and also shed light on why the company is further expanding in
Kalimantan. TSH continues to have one of the best tree age profiles, with 75.0%
of its trees below peak. Maintain BUY, with FV of RM2.65.
KURASIA (FV
RM0.82-TRADING BUY) Corporate News Flash: KIMB Sold!
AMMB (FV RM6.20–
NEUTRAL) Corporate News Flash: Kurnia Joins The Stable
TNB (FV RM7.68-BUY)
1HFY12 Results Review: A Brighter Future
Market Review
Powers ahead. The FBM KLCI closed at 1,601.27, up 4.1 pts with buying interest on selected blue chips. However, decliners
led advancers 366 to 360 while 321 counters were traded unchanged and 481 were
untraded. Among the key market news today are, AmG Insurance inks deal to buy
entire Kurnia stake for RM1.55bn, TNB back in the black with 1Q net profit of
RM2.8bn, Malayan United Industries to dispose
of insurance operations to Tokio
Marine, CIMB and RBS sign cooperation agreement, Johor Corp to raise RM3bn via
issuance of Islamic bonds, Kim Hin Industry buys Aussie building for RM28m and
Kejuruteraan Samudra in rig-lease deal. Meanwhile, Axis REIT buys industrial
assets for RM26.5m and fire in K-One Technology may cost the company
RM13m. On the global front, US stocks rallied as investors entertained thoughts
of further stimulus from global central banks, and embraced lower borrowing
costs in Europe and the assumption that China’s economy is headed for a soft
landing. We expect the local bourse to
be well-supported by the higher Dow that rose 181.1 pts, or 1.4%, to 12,986.5.
MEDIA HIGHLIGHTS
US: Stocks post
biggest two-day rally in 2012 on Fed comment
US stocks rose, giving the S&P’s 500 Index its biggest
two-day rally in 2012, on policymakers’ signals that interest rates will remain
low. Commodity shares gained the most among 10 S&P 500 groups. The Dow
Jones Transportation Average, a proxy for the economy, added 2.2%.
Hewlett-Packard Co. surged 7.2%, the biggest advance since 2009, after Gartner
Inc. said the global personal-computer industry grew in the first quarter as
the company remained a market leader. Google Inc. added 1.8% as profit beat
estimates. The S&P 500 advanced 1.4% to 1,387.57 rising 2.1% in two days.
The Dow Jones Industrial Average climbed 181.19 points to 12,986.58. About 6.3
billion shares changed hands on US exchanges yesterday. (Bloomberg)
Putrajaya backs JCorp
debt refinancing
The Federal Government has thrown debt-laden Johor Corp
(JCorp) a financial lifeline by guaranteeing a fundraising exercise that will
help the state agency meet its immediate debt obligations. JCorp, the strategic
investment are of Johor, announced that it planned to issue a sukuk wakalah
Islamic finance instrument worth RM3bn to be directed at redeeming the
state-owned corporation’s outstanding bonds worth RM3.2bn maturing at end-July.
The guarantee, approved by the Cabinet, represents a major department from the
Government’s treatment of loans by state agencies. (Financial Daily)
AmG buys Kurnia for
RM1.5bn
AmG Insurance, the general insurance arm of AMMB Holdings,
has wholly acquired Kurnia Insurans for RM1.5bn cash, making it the country's
number one general and motor insurance firm. In a statement yesterday, AMMB
directors said the purchase would elevate the company into becoming Malaysia's
largest general insurer with over RM1.7bn in gross written premium. AMMB and
AmG chairman Tan Sri Azman Hashim said the acquisition would enable AmG to
achieve its objective of being among the top three domestic general insurers. "The
combined businesses of AmG and Kurnia will see it emerge as the largest
domestic general insurer and the market leader in motor insurance," said
Azman. He added that this acquisition complemented AmBank Group's medium-term
aspiration and strategic priorities of growing income from profitable
segments. (BT) Please see accompanying
report.
MUI to dispose of
insurance ops to Tokio Marine
Malayan United Industries (MUI) has proposed to sell the
insurance assets and liabilities of MUI
Continental Insurance Bhd (MCI) to Tokio Marine Insurans for a premium
of RM180.23m. MUI told Bursa Malaysia that it had applied to Bank Negara for
its approval of the proposed sale on 10 April. MCI is a 52.2% owned subsidiary of
Novimax SB, which is a wholly-owned subsidiary of MUI. “The value of the
insurance assets to be transferred to Tokio Marine shall be equal to the value
of the insurance liabilities assumed by Tokio Marine as at the transfer date,
to be determined,” said MUI. (StarBiz)
CIMB and RBS sign
cooperation agreement
CIMB Group and Royal Bank of Scotland (RBS) have entered
into a cooperation agreement which covers potential collaboration in capital
markets activities, mergers and acquisitions, equities, derivatives, loan
markets, trade advisory and trade financing solutions, cash management services
and agent or custodian bank arrangements. “We're extremely pleased to be able
to do this so quickly after announcing our acquisition of RBS' investment
banking and cash equities businesses in Asia-Pacific last week. This will
provide a framework for our ex-RBS team to continue to work together with their
ex-colleagues in areas of mutual interest between RBS and CIMB,” said CIMB
Group CEO Datuk Seri Nazir Razak. The deal would see CIMB emerge as the largest
investment banking franchise in Asia-Pacific, excluding Japan. Nazir said the
cooperation agreement would allow both CIMB Group and RBS Group to leverage off
each other in key Asia-Pacific markets. (StarBiz)
TNB back in the black
Tenaga Nasional (TNB) has posted its first quarterly profit
after three consecutive quarters in the red. For its 2Q ended 29 Feb, the
national utility recorded a net profit of RM2.82bn, almost 340% higher y-o-y.
This was largely because of a RM2.02bn compensation paid to it by the
Government and Petronas under a cost-sharing mechanism agreed to last year,
following a shortfall in gas supply which crippled TNB's electricity generation
and forced it to spend RM2.1bn to burn costly oil and distillates. It has also
approved an interim dividend of 5.09 sen per ordinary share less income tax of
25%. (StarBiz) Please see accompanying report
TM proposes final
dividend of 9.8 sen
Telekom Malaysia (TM) is proposing a final single-tier
dividend of 9.8 sen per share for the financial year ended 31 Dec 2011. The
company said in a filing with Bursa Malaysia that the dividend would go ex on
22 May. The entitlement date would be 24 May subject to shareholders’ approval
in the upcoming AGM on 8 May, it added (StarBiz)
Axis REIT buys
industrial assets
Axis Real Estate Investment Trust (REIT) is proposing to
acquire two leasehold industrial properties near Nilai, Negri Sembilan, from
LRS Property SB for RM26.5m. The REIT manager said in an announcement to the
stock exchange that the proposed acquisition would be paid for in cash and that
the properties were tenanted with various term leases. (StarBiz
ECONOMIC
HIGHLIGHTS
Indonesia: Extends
pause in rate cuts
Indonesia’s central bank left its benchmark interest rate
unchanged for a second month as inflation risks persist even after the
government was forced to postpone an increase in subsidized fuel prices. Bank
Indonesia kept the reference rate at 5.75%. Inflation in March rose for the
first time in seven months, and lawmakers have rejected an immediate fuel-cost
increase while giving the government power to act if Indonesian crude exceeds the
budget assumption of $105 a barrel by 15% over six months. (Bloomberg)
Australia: Employers
added more workers than forecast
Australian payrolls rose more than economists forecast in
March, capping the best quarter since 2010, led by financial and manufacturing
states Victoria and New South Wales. Payrolls rose by 44,000, almost seven
times the median estimate for a 6,500 increase in a Bloomberg News survey of 24
economists. The jobless rate stayed at 5.2%, compared with expectations for a
rise to 5.3%. (Bloomberg)
India: Factory output
rises 4.1%
India reported a smaller-than-expected expansion in February
industrial production and sprang a surprise by sharply slashing the previously
reported January data, reviving worries that an economic upturn may not happen anytime
soon. Industrial output rose 4.1% from a year earlier in February, missing the
6.6% median estimate in a poll of 15 economists, as manufacturing growth
remained weak. For January, it revised the output growth number to 1.1% from
6.8%, blaming inflated sugar production data in the previous print. (Bloomberg)
China: New yuan bank
loans surge, point to easing
China's new yuan loans were the most in a year and
money-supply growth quickened after Premier Wen Jiabao moved to bolster the
economy by cutting banks' required reserves and helping smaller businesses get
financing. Local-currency-denominated loans were CNY1.01tn in March, up from
CNY710.7bn in February. M2, the broadest measure of money supply, grew 13.4%
from a year earlier. Its foreign exchange reserves, the world's largest, rose
to a record USD3.31tn as of 31 March after dropping for the first time in more
than a decade in the fourth quarter. (Bloomberg)
EU: Euro-area
industrial output unexpectedly increased in February
European industrial production unexpectedly rose in
February, led by France and Netherlands, adding to signs of economic
stabilization after a fourth-quarter contraction. Production in the 17-nation
euro area increased 0.5% from January, when it remained unchanged. From a year
earlier, production decreased 1.8%. (Bloomberg)
UK: Trade gap widened
as car exports to US and China dropped
UK trade deficit widened to the most in three months in
February as exports of cars and heavy machinery fell, especially to the US,
China and Russia. The goods-trade gap widened to GBP8.77bn from a revised
GBP7.88bn in January. Exports fell 3.4 percent while imports were unchanged.
(Bloomberg)
US: Trade gap narrows
sharply in February to USD46bn
US trade deficit narrowed unexpectedly in February as
exports hit a record high, imports from China and other key suppliers declined
and oil import volume fell to the lowest in 15 years. The monthly trade gap
shrank 12.4% to USD46.0bn, the biggest month-to-month decline since May 2009.
Exports edged slightly higher to a record USD181.2bn, led by record exports of
services and capital goods, such as civilian aircraft and industrial machines
while imports dropped 2.7% to USD227.2bn, the biggest monthly drop in three
years. (Bloomberg)
US: Unemployment
claims rose to two-month high
More Americans than forecast filed applications for jobless
benefits last week, reinforcing concern among Federal Reserve policy makers
that the labour-market recovery will be slow to develop. Unemployment claims increased
13,000 in the week ended 7 April to 380,000, the highest since 28 Jan.
(Bloomberg)
Source: OSK188
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