Tuesday, December 22, 2009

Happy DongZhi and Merry Christmas to ALL

BURSA is in holiday mood so is me :)
The market share price is consolidating, hold your fundamental stock, expect some rally prior CNY ^^

Thursday, December 10, 2009

KLCI Market Trend: Look for break in either direction.

Since Nov, Malaysia’s KLCI has been trading sideways, possibly in a triangle formation consolidation. Look for a breakout in either direction for its next medium-term trend, but more likely upwards. The main support levels remain the 50-day SMA at 1,254 and 1,261pts, the 61.8% Fibonacci retracement of the 1,524-836pt 2007-09 downtrend.

Stocks to watch: Petra Perdana, SP Setia, BToto, LCL

KUALA LUMPUR: Trading  on Bursa Malaysia may be quiet with some mild upside bias on Friday, Dec 11 following the firmer overnight close on Wall Street but overall trading volume may be thin due due to the holidays in Selangor in conjunction with the Sultan's birthday.

On Wall Street, US stocks rose as signs of improving trends in the job market and a decline in the U.S. October trade deficit reassured investors the economy was on a steady growth path, according to Reuters.

The Dow Jones industrial average was up 68.78 points, or 0.67 percent, at 10,405.83. The Standard & Poor's 500 Index ended up 6.40 points, or 0.58 percent, at 1,102.35. The Nasdaq Composite Index closed up 7.13 points, or 0.33 percent, at 2,190.86.

Stocks to watch on Friday are PETRA PERDANA BHD [], PETRA ENERGY BHD [], SP SETIA BHD [], BERJAYA SPORTS TOTO BHD [] Toto and LCL Corp Bhd.

Petra Perdana may have found a buyer for a block of its 55% stake in Petra Energy, according to documents obtained by The Edge Financial Daily.

S P Setia Bhd, Malaysia's largest property developer in terms of market value, is targeting at least RM1.6 billion worth of real estate sales for its current fiscal year as pent-up demand for big-ticket items may be unleashed on the back of an economic recovery.

The developer's target for the financial year ending Oct 30, 2010 (FY10) could be deemed modest considering it had already raked in some RM300 million in November 2009, being the first month of FY10.

BToto posted a net profit of RM102.54 million in the second quarter ended Oct 31, 2009 (2Q10), a decline of 9.8% from RM113.74 million achieved in the corresponding quarter of FY08.

Revenue for the three months fell 9.0% to RM857.10 million from RM941.79 million in 2Q09, which had seen strong sales due to the high jackpot of the Mega Toto 6/52 game.

Earnings per share were 7.62 sen from 9.06 sen previously. The lower prize payout in the quarter under review helped mitigate the decrease in profit as a result of lower revenue.

LCL Corp Bhd has defaulted on payments due to its bankers totalling RM72 million due to the fallout from the Dubai financial crisis.

LCL Furniture Sdn Bhd was RM69.4 million in arrears on general line credit and blanket contract financing facilities with Affin Bank Bhd, and RM2.6 million in arrears on Murabahah working capital financing with Bank Islam Malaysia Bhd.

The interior fit-out company said the company and its subsidiaries had been unable to meet its repayment obligations as the group had been severely impacted by the recent financial turmoil in Dubai.

MAGNA PRIMA BHD [] (Magna Prima) unit Twinicon (M) Sdn Bhd has entered into a sale and purchase (S&P) agreement to acquire a 22,280 sq m parcel of land in Bukit Jalil from Santari Sdn Bhd (Santari) for RM10.7 million cash.

MTD CAPITAL BHD [] is awaiting further advice from the Philippine government after its 30% associate company Manila Toll Expressway Systems, Inc (MATES) was prevented from taking over the operation of the South Luzon Expressway (SLEX).

KENCANA PETROLEUM BHD [] is bidding for RM4 billion worth of projects around the world. It submitted bids for 15 projects in resource rich locations such as Malaysia, India, Australia, the Middle East and Indochina, and expected the results of those bids to be revealed in four months.
Its order book of RM800 million that would keep it busy until 2010.

EMAS KIARA INDUSTRIES BHD [] unit  Emas Kiara Geo Services Sdn Bhd has accepted a RM49.76 million contract from WCT CONSTRUCTION [] Sdn Bhd for sub-contact work on the new LCC Terminal at KL International Airport.

SIME DARBY BHD [] subsidiary Sime Darby Property Bhd (SDPB) is selling Caring Skyline Sdn Bhd (CSSB) to Green Ridge Enterprises Ltd for US$20 million (RM68 million).

Sime Darby said the parties had entered into a share sale agreement for the disposal of the 100% interest in CSSB, an investment holding company which has a 49% stake in PT Bhumyamca Sekawan, whose principal activity was in the renting of commercial and industrial space.

Written by Loong Tse Min

US Market Commentary (After Market Close): Despite Choppy Trade, Stocks Make Solid Gains

Stocks spent the session in a sideways chop, but managed to settle with solid gains. The advance came in the face of modest strength in the U.S. dollar, weakness among financial issues, and a mixed weekly jobless claims report. Participation lacked for most of the session, though.

Trade was choppy for the entire session, but that didn't take stocks out of a relatively narrow range, nor did it derail a broad-based advance. There was a flurry of selling late in the session that caused stocks to surrender some of their gains, but the broader market was able to garner support as the S&P 500 came in contact with the 1100 mark.

In the end, advancing issues outnumbered decliners by more than 2-to-1. As broad as the advance was, it was even more impressive since it came despite a stronger dollar. Gains by the greenback have most often led to selling in the stock market, due to the drag of a stronger dollar on commodity prices and repatriated profits from multinationals, but stocks were able to hold their gains as the Dollar Index worked its way to a 0.1% gain.

Though the broader market showed resolve, financials lagged for the entire session. The sector settled with a 0.2% loss as ongoing chatter about a potential equity raise by Citigroup (C 3.87, +0.01) to repay its TARP funds failed to attract support for the sector. Citi has yet to unveil an official plan.

On a related note, Treasury Secretary Geithner appeared before the Congressional Oversight Panel to make a case for extending the $700 billion TARP plan. Geithner expressed that TARP will help the U.S. maintain the capacity to address potential threats to its financial system and decrease the need for future intervention.

Some market watchers consider it unclear why Treasury wants to extend TARP, but has reportedly let some financial outfits entertain the prospect of TARP repayment.

Initial jobless claims for the week ending December 5 totaled 474,000, which is worse than the 455,000 initial claims that had been widely expected and is up from the previous week's tally of 457,000 initial claims. However, continuing claims made a sharp move down to 5.16 million from 5.46 million. The consensus had called for 5.45 million continuing claims.

The trade deficit for October totaled $32.9 billion, which is less than the $36.8 billion deficit that had been widely expected. It is also an improvement from the upwardly revised $35.7 billion deficit that was registered in September. Meanwhile, the November Treasury Budget was expected to show a shortfall of $131.6 billion, but it was less steep at $120.3 billion.

An auction of 30-year Bonds attracted a bid-to-cover ratio of 2.45, which is largely in-line with the recent average of 2.41. A lot of commentary focused on the fact that yield had to reach 4.52% to spur interest, but half the bidders were willing to take a yield below 4.42%. Still, Treasuries turned lower in the wake of the announcement. The benchmark 10-year Note finished roughly 14 ticks lower, but the 30-year Bond dropped more than one full point. Their yields stand at 3.49% and 4.49%, respectively.

Stocks came under a bit of pressure following the midday announcement, but the move was contained as buyers continued to provide support.

Shares of retailers (+1.5%) were among the best performers; that helped the consumer discretionary sector post a 1.4% gain, which was the best of any major sector.

Health care stocks were close behind with an impressive 1.2% gain, which came even though Eli Lilly (LLY 35.02, -1.54) showed considerable weakness after it reaffirmed downside guidance for fiscal 2009 and in-line guidance for fiscal 2010.

Participation had lacked for most of the session, but a late surge in trading volume sent the number of shares exchanged on the NYSE above 1 billion. Still, that level is well below the 50-day moving average of 1.2 billion.

Wednesday, December 9, 2009

Stocks to watch: Puncak, Astro, GBH, BAT

KUALA LUMPUR: Sentiment among investors may be firmer on Thursday, Dec 10 following the stronger overnight close on Wall Street and at Bursa Malaysia, investors' interest may perk up a bit.

However, the undertone of the local market is expected to be cautious, especially after the late selloff the previous day, which saw the FBM KLCI slide 5.9 points to 1,255.

On Wall Street, stocks ended higher on Wednesday, Dec 9 as the U.S. dollar fell and investors' appetite for risk returned, lifting shares of financial, TECHNOLOGY [] and natural resource companies.

Stocks rebounded after falling two days in a row as the dollar rose. The greenback has been inversely correlated with equities since the S&P 500 stock index hit bottom in early March, according to Reuters.

The Dow Jones industrial average ended up 51.08 points, or 0.50 percent, to 10,337.05. The Standard & Poor's 500 Index rose 3.95 points, or 0.36 percent, to 1,095.89. The Nasdaq Composite Index gained 10.74 points, or 0.49 percent, to 2,183.73.

At Bursa Malaysia, stocks to watch include PUNCAK NIAGA HOLDINGS BHD [], Astro All Asia Network PLC, British American Tobbaco Bhd (BAT), GOH BAN HUAT BHD [] (GBH), Hwang DBS (Malaysia) Bhd and MALAYAN BANKING BHD [] (Maybank).

Puncak Niaga  and its consortium partners STX Heavy Industries Co Ltd (STX) and Pembinaan Kekal Mewah Sdn Bhd (PKMS) have failed in their bid for a pre-qualification on PETRONAS GAS BHD []’s Kimanis power plant project.

This development may cause Puncak shares to extend its losses after closing 2 sen lower at RM3.04 yesterday.

Astro shares may gain back its losses after announcing improved quarterly results and plans for its high-definition TV services yesterday.

The pay-TV operator posted a net profit of RM133.08 million in 3Q ended Oct 31, 2009 from a net loss of RM250.3 million a year ago. It declared a 2.5 sen tax-exempt interim dividend.

Astro said it would launch high-definition TV this month and rollout infrastructure upgrade worth RM200 million, and spend RM150 million on marketing and operating costs over next fiscal year.

GBH, which is now under the control of Tan Sri Robert Tan Hua Choon, is aiming to raise up to RM74.3 million via a proposed renounceable two-call rights issue of up 123.84 million shares priced at RM1 each towards repaying bank borrowings and for working capital.

BAT  stock price extended its decline yesterday, falling 1.81% or 78 sen to close at RM42.42 with 128,000 shares traded. Its shares have been impacted after the company announced that it could lose up to RM80 million from the proposed withdrawal of packets below 20 in June next year.

Hwang-DBS may continue to draw investors interest today after its net profit soared to RM16.3 million in its first quarter (1Q) ended Oct 31, 2009 from RM2.98 million a year ago.

Maybank shares may see movement after the nation’s biggest lender by assets announced a target to increase its deposits by RM3.25 billion during the current four-month period with its "Maybank Extra Rewards" deposit campaign.

Isabelle Francis

US Market Commentary (After Market Close): Mixed Trade Finishes with Modest Gains

Frequent swings by the U.S. dollar caused stocks to spend most of the session chopping along in a relatively narrow range, but some late support helped the major equity averages make modest gains. Still, the action hasn't provided any clarity to the market's near-term direction.

Stocks slipped in early trade as the greenback trimmed its losses against competing currencies. The dollar's move came as word surfaced that Standard & Poor's revised its outlook for Spain to negative from stable. The news release came a day after Greece's credit rating was cut by Fitch and Moody's made cautionary comments regarding the potential consequences of the ballooning deficits of the U.S. and U.K.

Reports indicated that the U.S. government is not yet ready to leave the financial system completely to itself when word surfaced that the $700 billion financial bailout plan, TARP, will likely be extended until October 2010.

In other political news, Senate Democrats reached a tentative agreement to remove the government-run insurance portion of their health care reform plan. The announcement gave an early lift to shares of managed care providers, but the group rolled over to settle with a 0.2% loss.

Though the Dollar Index looked like it got a lift from an early flight to safety, it was unable to trade with any clear direction. Each of its attempts to pare losses was met with resistance at the neutral line. It finished with a 0.3% loss.

The greenback was unable to make a gain this session, but commodities still fell under a stiff bout of selling pressure. That caused the CRB Commodity Index to drop 1.5%, its worst showing this month.

Oil prices were a primary drag on the CRB. Contracts for crude closed pit trade with oil priced 2.6% lower at $70.70 per barrel, near fresh two-month lows. The move came even though weekly inventory data showed a surprise draw of 3.82 million barrels.

Gold prices slid for a fourth straight session. In the latest round of pit trade prices for the yellow metal fell 2.0% to settle at $1120.90 per ounce.

Despite such weakness, gold stocks garnered particular support. The group gained 2.8%. That helped make the materials sector put together a 1.3% gain, which was the best of any major sector.

Semiconductor stocks had a relatively solid session. They advanced 0.6%, according to the Philadelphia Semiconductor Index, even though Texas Instruments (TXN 25.99, -0.34) fell sharply after it issued an increased earnings forecast.

While Texas Instruments traded with weakness, many large-cap tech issues showed strength for the second straight session. That helped the Nasdaq 100 gain 1.0%, more than double the gain seen by the headline indices.

A weak session for Treasuries concluded with he benchmark 10-year Note down roughly 11 ticks, which put its yield back above 3.4%. Its weakness was worsened by softer-than-expected demand in an auction of 10-year Notes. The auction produced a bid-to-cover ratio of 2.6, which was right at the average for the year, but down from the previous auction's ratio of 2.8.

Consistent with recent trade, action in the broader market this session was largely mixed and lacked clear direction. Though stocks have struggled to hold fresh highs for 2009 in recent weeks, their dips have been short and shallow as many continue to step in and provide support as they try to chase the easy gains that have been made since March.

Tuesday, December 8, 2009

New Listing: DSCSOL surge 250%

Kuala Lumpur– DSC Solutions Berhad (DSC), which is en route to a listing on the ACE Market of Bursa Malaysia Securities Berhad in December 2009, is confident that there will be rising demand in Asia for its products and solutions that use the latest advances in AIDC (Automatic Identification and Data Collection) scanning and computer processes to capture information quickly and accurately in an automated manner.

Speaking to reporters after launching its prospectus today, DSC's Chairman, Dato' Dr Ibrahim Wahid noted that as a one-stop Automatic Identification and Data Capture (AIDC) solutions provider, DSC has been exporting more than 70% of its products and solutions.

"DSC is an established and stable regional software and engineering solutions company providing AIDC tracking solutions. We already have a strong presence in Malaysia and Singapore and our immediate focus is to deepen penetration in China, Indonesia and Thailand. We may also move into other foreign markets outside ASEAN e.g. Europe and US when the time is right", he said.

Mr Seah Liang Chiang, DSC's Founder and Group Managing Director noted that globally, the AIDC market has been experiencing excellent growth in the first decade of the 21st century, largely linked to increasing automation within the retail, manufacturing and automotive industries and heightened security focus worldwide.

"AIDC is revolutionizing the way we live. In Malaysia, auto identification first made its mark in the 1980's with bar codes and ID cards that are widely used in the form of loyalty cards in various retail outlets. Then came Smart Cards, which are still very much in use by our Government in the form of "MyKad" and other applications; there is also wide use of smart cards by the banking, telecommunications and transportation sectors. While new technologies like RFID and biometrics are now available, we believe that the growth of the AIDC market in Malaysia will be driven by the expanding use of bar-code technology", said Mr Seah.

He pointed out that DSC's strong point is that its products and solutions are created to be industry-specific, yet equipped with the flexibility to accommodate processes that are unique to individual companies.

"In addition, we provide innovative and cost-effective solutions that are comparable to US based products, but with a competitive price point. The fact that we have integrated DSC's proprietary software, TrekNet, into our AIDC products and solutions ensures the technology platform is scaleable for our customers", said Mr Seah.

In its initial public offering (IPO), DSC is offering 12.578 million new ordinary shares of RM0.10 each at an issue price of RM0.50 each, of which 1.0 million shares have been allocated to the general public. Another 0.5 million shares are being made available for application by eligible directors, employees and business associates of DSC, with 11.078 million shares set aside for placement to selected investors.

DSC's IPO also includes a one-for-one bonus issue after the public issue. As such, ex-bonus price for the IPO is RM0.25 each.

The IPO exercise is expected to net RM6.289 million for the company, with Research and Development being earmarked the largest portion.

For its 9 months Financial Period Ended 30 June 2009, DSC posted a net profit of RM1.792 million on the back of revenue of RM11.218 million. According to its prospectus, Singapore comprised approximately half of the Group's revenue for this period. Generally, an average of 50% of DSC's business is derived from recurring businesses from existing customers.

""I can calculate the motions of the heavenly bodies, but not the madness of the people.’” Isaac Newton

Stocks to watch: Ramunia. Sime Darby, DSC, Vastalux, SILK

KUALA LUMPUR: Key Asian markets will see volatile trade with more downside pressure on Wednesday, Dec 9 after US markets closed lower overnight on rising investors' fears about obstacles still facing the global economy.

Global markets fell as worries over Dubai's debt problems hit bank shares and the dollar rose against the euro after Fitch Ratings agency downgraded Greece's credit, according to Reuters.

The Dow Jones industrial average closed down 1% at 10,285.97. The Standard & Poor's 500 Index fell 1.03% at 1,091.94, and the Nasdaq Composite Index weakened 0.76% at 2,172.99.

Stocks to watch today include SIME DARBY BHD [], Ramunia Bhd, SILK Holdings Bhd and DSC Solutions Bhd, which will make its debut on the ACE Market. Also on the investors' radar screen would be VASTALUX ENERGY BHD [].

Oil and gas companies, especially those listed companies related to the Petronas group could attract some attention.

Unlisted Petroliam Nasional Bhd posted a 47.5% decline in net profit to RM20.3 billion in the first half of its fiscal year to Sept 30, 2009 (1HFY10) from RM38.65 billion a year earlier due to an overall drop in product prices and lower sales volume.

Sime Darby's offer to acquire Ramunia's Teluk Ramunia fabrication yard and assets for RM530 million is a premium of 21.92% over an independent valuation of RM434.69 million in the open market.

As for DSC, its offer price was 50 sen per 10 sen share. Subsequently, it undertook a one-for-one bonus issue after the public issue and the reference price is likely to be 25 sen.

Vastalux vice chairman and executive director Mohamad Nor Abdul Rashid has continued to reduce his stake in the company. Since Dec 2 to 3, he has sold 26 million shares in the company which was listed in September 2008.

He disposed of 13 million shares or 6.3% at 16 sen each on Dec 2. The share price closed at 23 sen that day.

He sold another 13 million shares for 16.5 sen each on Dec 3, reducing his total shareholding to 14% or 28.94 million shares.

SILK Holdings Bhd's 1Q net profit rose 60% to RM3.51 million from RM2.19 million a year ago, underpinned by contributions from its O&G division.

Revenue increased 54.3% to RM48.81 million from RM31.64 million while earnings per share improved to 1.61 sen from 1.22 sen. SILK said the higher revenue and earnings was mainly due to the commencement of three new vessels subsequent to that period.

Harn Len Corp Bhd plans to buy a PLANTATION [] in Sarawak for RM14 million. It proposed to acquire the entire stake in Gemilang Bumimas Sdn Bhd (GBSB) for RM13.99 million cash, paving the way for Harn Len to expand its oil palm plantations' landbank in Sarawak.

DELLOYD VENTURES BHD []'s subsidiary Delloyd Electronics (M) Sdn Bhd is teaming up with Germany's Brose International GmbH to manufacture and supply window regulators to the Ford group in Thailand and Argentina.

Delloyd Electronics and Brose had inked a deal to set up the JV to produce window regulators for the Ford T6 and C 346 models. The plant would be in Rayong, Thailand.

SUNWAY HOLDINGS BHD [] is teaming up with Hoi Hup Realty Pte Ltd to develop a 19,264.70-sq metre parcel of land in Jalan Senang, Singapore.

Sunway Developments Pte Ltd had subscribed for a 30% stake comprising 300,000 shares in Hoi Hup Sunway Property Pte Ltd for S$300,000 (RM730,778). The remaining 70% stake in HHSP is held by Hoi Hup Realty.

Broking and property concern, TA ENTERPRISE BHD [] (TAE), recorded a 54% drop in net profit to RM17.59 million in its third quarter ended Oct 31, 2009 (3QFY10) from RM38.23 million a year earlier, due to a fall in property development revenue.

Although brokerage income and gain on disposal of investments were higher in 3QFY10, TAE group recorded a drop in revenue from property development as compared to previous year's corresponding period.

Written by Loong Tse Min

US Market Commentary (After Market Close): Stocks Fall as Participants Question Market's Direction

Stocks spent the entire session mired in weakness as cautionary comments about the U.S. debt rating and strength in the U.S. dollar weighed on the minds of participants. Broader sentiment remains mixed, though, as participants continue to assess the market's near-term direction.

Sellers were stirred to action amid word from The Wall Street Journal that Moody's Investors Service believes the U.S. and U.K. need to trim their respective deficits in order to help protect against a downgrade to their triple-A ratings. Meanwhile, analysts at Fitch stripped Greece of its A-rated status. It wasn't apparent whether Greece's downgrade was referenced by European Central Bank member Stark when he suggested that there may be more surprises beyond the debt debacle in Dubai, but the comment raised eyebrows nonetheless.

Despite concerns for a mounting U.S. deficit, President Obama suggested that the U.S. needs to continue to spend its way out of recession as he called for new infrastructure projects and tax breaks for small businesses that will help temper unemployment. Concerns for the financial health of the U.S. have weighed on the U.S. dollar for many months, but support for the greenback this session lifted the Dollar Index 0.7% to a fresh one-month high.

Per usual, the greenback's gain weighed on the broader stock market, but its impact was most considerable against energy and materials stocks. Broad-market pressure and lower commodity prices conspired to take both sectors to losses of 1.7%.

Commodity prices, as measured by the CRB Commodity Index, fell 0.8% -- its fourth loss in five sessions. Oil prices were a primary detractor of the CRB; crude oil futures finished at $72.74 per barrel as they fell 1.6% in their fifth straight loss.

There were a handful of corporate announcements from some relatively widely held names, but they didn't cause much of a stir among participants.

Dow component 3M (MMM 77.11, -0.80) reaffirmed that it expects adjusted earnings for fiscal 2009 to range from $4.50 to $4.55 per share, but that remains below the consensus forecast for $4.57 per share. The company expects earnings in fiscal 2010 to range from $4.85 to $5.00 per share, which brackets the $4.94 per share consensus estimate.

FedEx (FDX 89.88, +2.36) issued last evening a forecast for $1.10 per share in the second quarter. That is below the $1.58 per share that it earned in the same period of the previous year, but it is up markedly from the company's previous guidance, which called for earnings to range from $0.65 to $0.95 per share. It also exceeds the consensus call of $0.85 per share for the quarter.

McDonald's (MCD 60.61, -1.32) recorded a 0.6% dip U.S. sales during November. That undercut global comparable sales, which increased a modest 0.7% during the month.

Though stocks were mired in weakness for the entire session, Treasuries garnered moderate support as the benchmark 10-year Note climbed just seven ticks. Treasuries came under closer focus midsession as news that a $40 billion auction of 3-year Notes produced a bid-to-cover ratio of nearly 3.0, which is better than the 2009 average ratio of 2.7, but not as strong as the ratio of 3.3 that came about in the previous auction.

Weakness in the broader market handed the S&P 500 its second straight loss and its fourth decline in eight sessions. The split between advancing sessions and declining sessions comes as participants try to determine the near-term direction of trade after stocks repeatedly failed to hold new 2009 highs last week. The most notable rollover came as stocks faltered after an impressive monthly payrolls report. That move suggested that the positive economic news had already been priced into the stock market and that something more was needed to help stocks hold gains amid a simultaneous advance by the dollar.

Monday, December 7, 2009

Stocks to watch: Plantations, ECM Libra , Sime Darby, Cymao

KUALA LUMPUR : Investors' focus will be on PLANTATION []s on Tuesday, Dec 8 after the plantation index chalked up strong gains, as crude palm oil prices rallied while a weakening US dollar spurred commodity rates.

On Wall Street, the major indices closed mostly in the red after comments by Federal Reserve Chairman Ben Bernanke sparked jitters about the economic recovery.

The Dow Jones industrial average ended up 1.21 points, or 0.01 percent, at 10,390.11. The Standard & Poor's 500 Index lost 2.73 points, or 0.25 percent, at 1,103.25. The Nasdaq Composite Index fell 4.74 points, or 0.22 percent, at 2,189.61.

At Bursa Malaysia, the Kuala Lumpur Plantation Index advanced 0.47% or 30 points to finish at 6,314.06, its highest in 16 months, helping to cushion the decline on Bursa. The FBM KLCI fell 0.38% or 4.84 points to 1265.36.

IOI Corp Bhd rose two sen to RM5.45, IJM PLANTATIONS BHD [] eight sen to RM2.58 and KUALA LUMPUR KEPONG BHD [] which added four sen to RM16.04.

Malaysian palm oil for February 2010 rose as high as RM2606 a tonne before settling lower at RM2559, down RM3 from a day earlier.

CIMB Equities Research analyst Ivy Ng Lee Fang said CPO prices might reach RM3,000 a tonne in 1Q next year due to less supply of the commodity. She anticipates CPO production will be stifled by dry weather due to the El Nino phenomenon, and crude oil rates will soar to between US$90 and US$100 a barrel.

"After considering all the bullish and bearish factors that could influence the CPO (crude palm oil) price in the coming year, we cannot help but feel that CPO prices will stay volatile in 2010," she wrote in a note to clients.

Prices of palm oil tend to rise in tandem with crude oil rates due to demand for food-based commodities as feedstock for production of biofuel, deemed a cheaper alternative to hydrocarbon resources.

As crude oil is transacted in US dollars, a weaker US currency, essentially, makes the commodity more attractive to global traders, hence, higher demand and prices for the hydrocarbon resource.

Other stocks to watch are SIME DARBY BHD [], CYMAO HOLDINGS BHD [], ECM Libra Financial Group Bhd and CB INDUSTRIAL PRODUCT HOLDING [] Bhd.

Sime Darby Bhd has acquired Nature Ambience Sdn Bhd for RM16.81 million which has rights to develop 26,211 ha of native customary rights (NCR) land in Sarawak.

Sime Darby said had acquired 50,000 shares in Nature Ambience from Common Enhance Sdn Bhd for RM16.81 million, financed from its own funds.

Cymao Holdings Bhd's subsidiary was awarded a log extraction licence covering 5,454ha in Bonggaya Forest Reserve, Beluran, Sandakan.

ECM Libra said its 3Q net profit more than quadrapled from a year earlier, helped, mainly by higher non-interest income during the period. Net profit of RM7.34 million in the quarter ended October 2009 compared to RM1.59 million previously. Revenue climbed 46.6% to RM29.76 million from RM20.3 million.

CB Industrial secured a USD8.6 million job to build a palm oil mill for Sime Darby Bhd's Indonesian unit PT Bhumireksa Nusasejati.

On Monday, ECM Libra closed unchanged at 63 sen while CB Industrial added 13 sen to RM3.05.

Maxis Bhd may boost the size of its loan as much as 33% to US$2 billion (RM6.8 billion) after gaining commitments from up to 12 banks.

Sunday, December 6, 2009

Picture of Day: Stock Rally when FED lower interest rate?

Common believe: Stock rally when FED rates are low, the picture above shows the relations between DJ and FED rates from 1990 to 2009 tells different story.

Stocks to watch: BAT, SAAG, Pharmaniaga, Sunway, Vastalux

KUALA LUMUR: The market is expected to continue to put up a lacklustre performance this coming week, starting Monday, Dec 7 as investors stay on the sidelines and in the absence of strong external leads, including from the US.

On Wall Street, US stocks closed higher on Friday, Dec 4 as data showed the economy shed far fewer jobs than expected last month, brightening the outlook for the economy and profits.

The Dow Jones industrial average gained 22.75 points, or 0.22 percent, to end at 10,388.90. The Standard & Poor's 500 Index added 6.06 points, or 0.55 percent, to finish at 1,105.98. The Nasdaq Composite Index rose 21.21 points, or 0.98 percent, to close at 2,194.35.

At Bursa Malaysia, the FBM KLCI futures were also weaker, ending last Friday’s session below the key 1,270 level.

It is also apparent the 30-stock FBM KLCI has been unable to stage a convincing break above the 1,270 level since early November while overall trading volume has also shrunk.

The FBM KLCI rose to 1,274 on Nov 10 but since then it has been range-bound around 1,270. Year-to-date the FBM KLCI is up 44.88%. It is trading at a price to earnings of 22.39 times which is in line with Singapore's Straits Times Index's 22.37 times, Hong Kong's Hang Seng Index's 23.53 times and South Korea's KOSPI at 22.14 times.

Shanghai's Composite Index is at 35.25 times, Taiwan's TAIEX 196.4 times and Australia's S&P/ASX 200 Index at whopping 320.49 times.


BAT is bracing for RM80 million losses over 12 months, with effect from June 1 next year, when the Health Ministry's directive to withdraw cigarette packs of less than 20 sticks takes effect.

The country’s largest cigarette manufacturer says the smaller packs have higher margins due to higher stick pricing.

As for SAAG, it has secured two projects to build power stations in Bangladesh with a total contract value of US$120 million. The projects involved six 6MW power plants and two 34MW combined cycle plants to be built at the zone.

Pharmaniaga’s privatisation concession for the Medical Laboratory and Store of the Health Ministry has been extended by another 10 years, with effect from Dec 1. However, the terms and conditions will have to be negotiated over six months from Dec 1, 2009.

Sunway Holdings landed a RM23.44 million contract from Damansara Assets Sdn Bhd for piling and substructure works in Johor Baru. The company expects the project to contribute positively to the group’s earnings for FY ending Dec 31, 2010 onwards.

Vastalux was on investors’ radar screen on Friday, falling to its lowest since its listing in September last year. It fell four sen to 17.5 sen, sharply lower than its offer price of 75 sen under its IPO.

Bad news were the net losses of RM17.72 million in the third quarter ended Sept 30, compared with net profit of RM7.25 million a year ago. Of concern to investors are the amounts RM163 million owed by customers and trade receivables of RM69.7 million.

Revenue was RM32.13 million which was sharply below its cost of sales of RM51.42 million.

In the latest announcement, Vastalux vice chairman and executive director Mohamad Nor Abdul Rashid disposed of 13 million shares or 6.3% at 16 sen each on Dec 2. The share price closed at 23 sen that day.

Written by Joseph Chin

Thursday, December 3, 2009

Stocks to watch: Green Packet, Ranhill, plantations, Sime Darby

KUALA LUMPUR: Investors are expected to stay cautious on Friday, Dec 4 in the absence of fresh corporate news to spur buying interest and also ahead of the weekend.
On Wall Street, stocks closed weaker after the vast US services sector unexpectedly shrank in November.

The weaker close was led by a slide in financials, as Bank of America Corp's massive equity offering spurred concerns that other banks could sell new shares and dilute existing shareholders' equity, according to a Reuters report.

The Dow Jones industrial average fell 86.53 points, or 0.83%, to end at 10,366.15. The Standard & Poor's 500 Index  slipped 9.32 points, or 0.84%, to close at 1,099.92. The Nasdaq Composite Index fell 11.89 points, or 0.54%, to finish at 2,173.14.

At Bursa Malaysia, the 30-stock FBM KLCI is expected to show some weaknesses, as indicated by the KLCI futures. The December futures fell 5.5 points to 1,267.50 despite the spot market saw the FBM KLCI close slightly higher on late buying. The market is also consolidating and unable to break past the 1,270 convincingly.

Stocks to watch include Green Packet, RedTone, Ranhill, PLANTATION []s and Sime Darby.

GREEN PACKET BHD [] garnered three separate contracts with companies from Georgia, Armenia and Ukraine to provide its modems. It did not reveal the value of the contracts.

Meanwhile, REDTONE INTERNATIONAL BHD [] said it would increase the number of locations of its free Wi-Fi hotspots.

Ranhill president and CEO, Tan Sri Hamdan Mohamad has said its second 190MW combined cycle gas turbine power plant in Sabah is expected to be completed by end-2010.

Meanwhile, Standard & Poor's Ratings Services revised the outlook on Ranhill to stable from negative and affirmed the 'B' long-term corporate credit rating on the company.

It also affirmed the 'B-' issue rating on the US$220 million five-year senior unsecured notes due in October 2011.

"We revised the outlook and affirmed the ratings to reflect the improvement in Ranhill's financial risk profile due to lower debt following the transfer of its water assets to the Malaysian government," said Standard & Poor's credit analyst Andrew Wong.

S&P also said Ranhill was moving away from risky ventures by exiting oil exploration projects and focusing on the stable utilities businesses. This alleviated the downward pressure on the rating.

However, it did caution Ranhill's near-term liquidity is weak. The company had unrestricted cash of  RM355 million as at June 30, 2009 was not enough to cover the RM506 million of debt facilities that are due for repayment over the next 12 months. However, most of these maturities are performance guarantees, which will naturally end as projects get completed.

Top plantation analyst, Dorab Mistry, who heads vegetable oils trading at Godrej International said Malaysian palm oil stocks would peak at 2.1 million tonnes in December before declining next year. Yields would be affected by the El Nino.
Separately, Affin Research upgraded the domestic plantations sector to overweight on the back of trading opportunities in the next six months.
Sime Darby said its 75%-owned Sime Darby Water Resources (Perak) Sdn Bhd had executed a groundwater resource development agreement with the Perak government.

US Market Commentary (After Market Close): Stocks Surrender Gains as Financials Fall and Jobs Report Looms

For the second straight session stocks failed to hold fractionally improved 2009 highs. This session's reversal came as financials fell out of favor and concerns mounted for tomorrow's jobs report. A disappointing ISM reading didn't offer any help.

Bank of America (BAC 15.76, +0.11) helped put stocks on an upward path with news that it will repay its $45 billion TARP loan with $26.2 billion in excess liquidity and $18.8 billion in proceeds from the sale of common equivalent securities. That prompted several brokerage firms to issue upgrades on the stock, while analysts at Fitch upgraded the company's credit ratings.

In light of Bank of America's announcement, FDIC Chairman Bair stated that regulators are being very careful and very measured about letting banks repay TARP funds, Reuters reported. Meanwhile, Fed Chairman Bernanke felt the need to defend initial bank bailouts during his reconfirmation hearing. Bernanke didn't offer any new insights into the health of the financial system or the broader economy, though.

Conversely, European Central Bank President Trichet provided an increased 2010 GDP forecast for Europe, but also made dovish comments regarding policy. That caused the euro to slide and the U.S. dollar to gain ground. Initial weakness in the greenback had helped support a positive tone among participants in the early going. The dollar finished with a 0.1% gain against other currencies.

Financials also failed to provide steady support. The sector had been up as much as 1.8% early on, but it tumbled to a 2.1% loss. Principal Financial Group (PFG 22.52, -3.46) proved to be a heavy drag on the sector. Its shares endured their worst single-session percentage slide in more than six months after the company issued downside guidance for fiscal 2010.

The broader market was also undercut by concerns about the government's official nonfarm payrolls report, which is due tomorrow morning, even though White House representatives stated that they have no figures that suggest an increase in the unemployment rate. Unemployment already stands at a 25-year high.

A disappointing ISM Service Index for November added to selling pressure. The sub-50 reading of 48.7 suggests that last month's service sector activity contracted, which is a surprise since the consensus estimate had been pegged at 51.5 following the October's reading of 50.6.

After sellers knocked stocks from their early perch, the market spent most of the afternoon moving sideways in a narrow range. However, pressure mounted late in the session to hand stocks a broad-based loss—telecom (+0.2%) and utilities (+0.3%) were the only two sectors to advance.

Due to a generally disappointing batch of monthly same-store sales results, retailers struggled for the entire session. They finished with a 1.2% loss. Macy's (M 15.81, -0.49), JC Penney (JCP 28.35, -0.82), and TJX Companies (TJX 37.31, -1.08) were among the worst performers in the group. November same-store sales for Macy's slid 6.1%, while JC Penney said its monthly sales fell 5.9%. TJX Companies actually logged an 8.0% increase in its same-store sales, but that was disregarded when the company reaffirmed its downside guidance.

Comcast (CMCSA 15.91, +0.97) had a strong session, however. It announced that it has entered a definitive agreement to take majority control of NBC Universal from General Electric (GE 16.00, -0.07). Comcast will pay GE $6.5 billion to secure that stake, while GE will have the option to sell its remaining stake in coming years.

Wednesday, December 2, 2009

Stocks to watch: WCT, PLUS, BHIC, Jerneh, Harvest

KUALA LUMPUR: Key Asian markets are expected to put up a lacklustre performance on Thursday, Dec 3 after the cautious overnight close on Wall Street.

At Bursa Malaysia, there could be some buying interest in selected stocks including WCT BHD [], BOUSTEAD HEAVY INDUSTRIES CORP []oration Bhd (BHIC) and JERNEH ASIA BHD []  but the overall breadth of the market is expected to be relatively quiet. HARVEST COURT INDUSTRIES BHD [] could see some mild profit taking.

The Nasdaq rose on Wednesday, Dec 2 as strong online holiday sales boosted shares of retailers, including Amazon.com, and relieved some concerns about the consumer, according to Reuters.

The Dow edged lower as falling oil prices prompted investors to sell energy shares, while the Standard & Poor's index finished flat.

The Dow Jones industrial average declined 18.90 points, or 0.18 percent, to end at 10,452.68. The Standard & Poor's 500 Index inched up just 0.38 of a point, or 0.03 percent, to finish at 1,109.24. The Nasdaq Composite Index gained 9.22 points, or 0.42 percent, to close at 2,185.03.

At Bursa Malaysia, WCT is the stock to watch after it accepted a contract from Malaysia Airports Holdings Bhd valued at RM363 million for the proposed building of a new low-cost terminal at the KL International Airport.

The scope of works under the contract comprises of site preparation, earthworks and main drainage which are expected to be completed on Jan 1, 2011.

In PLUS EXPRESSWAYS BHD [], Khazanah Nasional Bhd disposed of 92.03 million shares on Nov 20 and 25, reducing its total stake to 57.9% or 2.89 billion shares. This is part of the government investment arm's strategy to reduce its stake in government-linked companies.

BHIC could continue to see extended interest after it closed at a one-month high of RM4.82on Wednesday following an announcement that its associate Boustead Naval Shipyard Sdn Bhd had sealed a RM703.82 million contract with the Ministry of Defence for the service life extension programme of the latter’s corvettes.

Bank Negara has given Jerneh Asia Bhd the approval to start preliminary talks with the relevant parties keen to acquire its entire 80% of its insurance arm Jerneh Insurance Bhd. The remaining 20% equity interest in Jerneh Insurance is held by Paramount Global Assets Sdn Bhd, a unit of PARAMOUNT CORPORATION BHD [].

The securities of Harvest Court Industries Bhd rose in active trade on Wednesday ahead of Bursa Malaysia Securities’ announcement that it would be uplifted from Practice Note 17 of the Main Market Listing Requirements.

The shares rose 5.5 sen to 32 sen with 39.26 million shares done while the warrants, Harvest-WA, climbed eight sen to 21 sen. The warrants were the most actively traded with 59.38 million units done.

Market Commentary (After Market Close): Early Gains Surrendered Amid Lack of Support

Some early buying sent the S&P 500 up to a fractionally better 2009 high, but a lack of support left stocks to roll over and settle at the neutral line. A firmer U.S. dollar also dragged down interest in stocks.

Despite a tepid tone to premarket trade, stocks made their way to solid gains in the early going. Materials stocks (+1.1%) were leaders, yet again, as precious metals prices continued to push higher. In fact, gold hit a new record high near $1218 per ounce overnight. It closed pit trade slightly off of that mark with a 1.1% gain at $1213 per ounce.

Gold managed to hold its gains in the face of a modest rebound by the greenback. The Dollar Index had traded near 52-week lows in the previous session, but managed to make its way to a 0.3% gain this session.

The dollar's advance helped undercut the stock market's gains, which had already begun to fade from fractionally improved 2009 highs as buyers took a breather. Stocks were left to surrender their gains and spend the afternoon with modest losses until some moderate support helped the broader market finish with a fractional gain.

Amid the broader market's fractional gain, the major sectors finished in mixed fashion. The defensive-oriented utilities sector saw the strongest gain. It advanced 1.3% after analysts at Deutsche Bank initiated shares of American Electric (AEP 33.94, +0.90) and Edison International (EIX 35.18, +0.58) with Buy ratings.

Meanwhile, analysts at Credit Suisse upgraded shares of regional banks BB&T (BBT 26.19, +0.59) and SunTrust (STI 23.29), which helped win support for the group (+1.3%) despite a report from analysts at Oppenheimer that suggested regional banks have reported only 36% of net charge-offs expected in this credit cycle.

Still, strength among regional banks wasn't enough to give the broader financial sector a lift out of negative ground. Instead, the financial sector finished with a 0.1% loss as it lagged for the second straight session.

Energy was the worst performing sector this session, though. It surrendered 0.8%, primarily due to markedly lower crude oil prices, which fell 2.3% to close pit trade at $76.60 per barrel. Sellers stepped up their efforts against oil after weekly inventory tallies showed a build of 2.09 million barrels. A draw of 400,000 barrels had been expected.

This session's headlines were limited in quantity and impact. Participants had a muted reaction to the latest ADP Employment Change Report, which showed that 169,000 private payrolls were shed in November. That figure is down from the 203,000 job losses reported in the October ADP Report, but it is worse than the 150,000 job losses that had been widely expected.

Though the ADP figures don't always match those of the government's official nonfarm payrolls report, which is due Friday morning, it is often directionally accurate relative to expectations. The consensus currently calls for a loss of 123,000 private jobs.

On a similar note, the Fed's latest Beige Book stated that employment conditions remain generally weak. However, it did indicate that economic conditions have generally improved modestly, while consumer spending improved moderately.

Corporate headlines had little lasting impact on the broader market. Boeing (BA 53.78, +0.06) benefited early from news that competitor Northrop Grumman (NOC 55.27, +0.01) will not pursue certain tanker contracts, but shares of BA eventually rolled over.

Meanwhile, General Motors CEO Fritz Henderson announced his resignation. The announcement comes after the company said its November U.S. vehicle sales fell an unadjusted 2% year-over-year, while its retail sales increased 1% for the month.

Green Packet's P1 wins RM41.5m project

KUALA LUMPUR: GREEN PACKET BHD [] has secured a contract worth RM41.5 million from the government to provide broadband to underserved areas in Malaysia. The company said on Wednesday, Dec 2 the universal service provision project tender from the Malaysian Communications and Multimedia Commission was to roll out broadband services using 4G WiMAX in Perak and Kedah.

"The contract will not have any material effect on the earnings of Green Packet Group for the financial year ending Dec 31, 2009 but is expected to contribute positively to the earnings of group in the future," it said.

Written by Joseph Chin

 Another great day for contrarian tomorrow....

Book to share part#2: 炒股的智慧





2 interesting stories:

這是則老故事。中國以前流行賭骨牌。骨牌共有36 個數字,從1到36。賭客任押其中一個數字,莊家開牌只開一個數字。如果被你壓中的話,1賠35。 且說有位老賭客,很久都沒有贏過。有一天,他拿了36 個賭注入場,告訴莊家說:“我不想再賭了,但在我收手之前,我一定要贏一次。今天我拿了36個賭注入場,從1壓到36,我不可能一個數字都壓不到,明天我就收手。”講完他去上廁所,途中從他的懷中掉了一個紅布包好的賭注,莊家乘賭客沒注意,偷偷地把這一注收起來,打開一看是12。 賭客從廁所回來,把他的賭濟全部擺上臺面,但只有35注,另外一注怎麼都找不到。他搔著頭皮說:“奇怪,我明明帶了36 注來,另一注掉到什麼地方去了?會不會留在家裏沒帶來?”但因莊家開牌在即,回家一趟已來不及,他便說:“算了,只差一個數字,應不會有大關係。”莊家不願失去這位賭客,便決定這一次開12。賭臺上的人全注視著擺在臺面上的35個小紅布包,打開第一個包,壓12,第二個包,壓12,……35 個小紅布包全壓12!莊家就此破產。

從前,有人以偷為生。小偷的兒子有天對爸爸說:“爸爸,我要像你一樣以偷為生,你教我怎麼偷東西吧!”小偷看著兒子那副尖嘴猴腮的模樣,好逸惡勞的個性, 心想若不學偷,這個孩子日後或許會餓死,便答應了。 一天晚上,小偷帶著兒子到了一幛大房子前,在牆上挖個洞,爬進大房子。他們找到儲存間,小偷便叫兒子進去找些值錢的東西。兒子一進去,小偷便在外面將儲存 間的門鎖上,同時跑到天井大喊大叫,吵醒這家人,隨即,小偷便從牆上的洞溜了出去。這家人知道遭了盜竊,全家都出來查看。當他們看到牆上的洞,便以為小偷 已經溜走了。此時主人便叫傭人點上蠟燭到儲存間看看不見了什麼。小偷的兒子在儲存間千萬遍地咒?他的爸爸,當他聽到有人要到儲存 間查看,更是嚇得腿都軟了。但他沒有什麼辦法,只好躲在儲存間的門後。傭人一打開儲存間的門,小偷的兒子沖出來,一口所吹熄蠟燭,推開傭人,撥腿就跑。這 一家人便大呼小叫地在後面開始追。在逃跑的路上,他看到有口池塘,便拾起一塊石頭丟到池塘裏,在這家人圍在池塘邊尋找偷兒“屍體”的時候,小偷的兒子已回 到家裏。 他正想指責爸爸的殘忍,爸爸已先開口了:“兒子,告訴我你是怎麼回來的?”聽完兒子的故事,小偷說:“孩子,你已學會怎麼偷東西了。”


炒股是頭腦與人性的雙修, 何以为故?下回分晓 ^^

Tuesday, December 1, 2009

Stocks to watch: BTM, JAKS, KNM, water stocks, Proton

KUALA LUMPUR: Key Asian markets are expected to start off on a firmer note, encouraged by the gains on Wall Street as worries about the Dubai debt situation and the Vietnamese dong devaluation dissipate.

On Wall Street, the Dow Jones industrial average climbed to its highest close in 14 months on Tuesday, Dec 1 as a weak dollar boosted natural resource companies' shares and economic data reinforced hopes for a sustainable recovery.

The DJIA jumped 126.74 points, or 1.23 percent, to end at 10,471.58. The Standard & Poor's 500 Index rose 13.23 points, or 1.21 percent, to 1,108.86. The Nasdaq Composite Index advanced 31.21 points, or 1.46 percent, to close at 2,175.81.

At Bursa Malaysia, stocks to watch include BTM Resources, JPK Holdings, KNM, water-related counters and Proton Holdings.

BTM resumes trading on Wednesday after the implementation of its proposed rights issue. The reference price for the BTM ordinary share is 14 sen and the trading limit will be 500%. The 500% limit is only applicable for the first day of requotation.

JPK Holdings will be suspended from 9am on Tuesday, Dec 8 until further notice. It failed to submit its quarterly report for financial period ended Sept 30, 2009 to Bursa Securities for public release within the stipulated timeframe.

Water players, in particular Puncak Niaga Bhd and GAMUDA BHD [], should see some trading interest after Selangor's KUMPULAN PERANGSANG SELANGOR [] Bhd said its offer to buy the assets of the water suppliers in the state, Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) and Syarikat Bekalan Air Selangor Sdn Bhd’s (Syabas) has lapsed without agreement.

However, this should not come as a surprise due to the difficulties faced by the Selangor government in acquiring these assets.

Proton plans to export its Exora model to Australia and the Middle East next year, launch its first model in India in 2011 and export 50% of its total production within three years.

According to Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir, Proton expected to export 26,000 cars or about 24% of its production by the end of its current financial year in March 2010 and hoped to raise it to 40,000 units in FY2011.

In KNM Group, the company said its memorandum of agreement with Societe Des Hydrocarbures Du Tchad S.A. of Chad has lapsed.

 Written by Tony Goh

US Market Commentary (After Market Close): Broad Buying Follows Dollar's Decline

Tempered concerns related Dubai's debt debacle prompted participants to put pressure on the U.S. dollar as they rotated into riskier plays. The move favored stocks, which logged impressive, broad-based gains.

Affirmations from Dubai World that it is working to restructure a smaller load of debt than initially feared helped calm concerns about a potential default by the state-owned conglomerate. On Monday afternoon word had begun to circulate that Dubai wanted to renegotiate the terms of $26 billion in debt, rather than the $60 billion that was first rumored.

The news helped give a lift to global indices and caused currency traders to step away from the greenback. With the dollar drooping again, the Dollar Index returned to 52-week lows before paring losses to finish with a 0.5% loss.

The pullback in the greenback stirred broad interest in both equities and commodities. That combination proved particularly beneficial for materials stocks and energy stocks, which finished with respective gains of 1.6% and 1.4%.

Materials stocks were led by gold plays, which advanced 3.8% as gold prices climbed to a new record high near $1204 per ounce before they closed pit trade with a 1.5% gain at $1200.20 per ounce. Newmont Mining (NEM 55.66, +2.02) was a primary leader while Kinross Gold (KGC 21.10, +1.08) also provided support. Shares of KGC had the added benefit of an upgrade from analysts at JPMorgan.

Oil prices also fared well. Crude contract prices closed 1.5% higher at $78.46 per ounce. That favored oil and gas exploration outfits (+2.1%).

Retailers rebounded to a 1.8% gain after a slip in the previous session. Better-than-expected earnings and a strong revenue forecast from Guess (GES 41.82, +4.77) helped the company's shares outperform the rest of the pack and log their best single-session percentage gain since March.

Though all 10 major sectors finished in higher ground, financials lagged. The sector settled with a mere gain of 0.1% as consumer finance stocks (-0.8%) dragged. Bank stocks (unchanged) also had a lackluster session, even though analysts Citigroup upgraded shares of regional lenders Fifth Third (FITB 10.18, +0.10) and BB&T (BBT 25.60, +0.70). Banking issues had been one of the best performing industry groups in the previous session.

There were only a few corporate headlines this session, including news from CNBC that General Electric (GE 16.17, +0.15) has reached a deal to sell NBC Universal to Comcast (CMCSA 14.97, +0.31). Many of GE's investors have long called for the divestment in favor of higher growth opportunities. NBC Universal accounted for less than 10% of GE's revenue in 2008.

Ford Motor (F 8.88, -0.01) surrendered its gains following news that its November sales were flat, which is short of the 4.1% increase that many had come to expect. Meanwhile, Toyota Motor (TM 81.45, +2.91) said its U.S. division saw sales increase 11.5% in November. Honda Motor (HMC 32.36, +1.37) saw November North American sales increase 5.5%.

Economic data did little for participants. The ISM Manufacturing Index for November came in at 53.6, which is below the 55.0 that was widely expected and down from the 55.7 that was registered in October.

Construction spending for October was flat month-over-month. It was expected to decline 0.5%. The previous month's 0.8% increase was completely reversed to reflect a 1.6% decline.

Pending home sales for October made a month-over-month jump of 3.7%, which is better than the 1.0% decline that many had expected. The increase for October wasn't quite as strong as the 6.0% increase that was registered in September.

Advancing Sectors: Utilities (+1.8%), Telecom (+1.7%), Materials (+1.6%), Energy (+1.4%), Industrials (+1.4%), Consumer Discretionary (+1.3%), Consumer Staples (+1.3%), Health Care (+1.3%), Tech (+1.3%), Financials (+0.1%)Declining Sectors: (None)

Monday, November 30, 2009

Autos Update: IMPORT duty removed for vehicles from Asean countries under AFTA

The government is planning strategic joint ventures between Proton Holdings and original equipment manufacturer(OEM) in a move to increase the national car maker's long-term competitiveness, International Trade and Industry Minister Datuk Mustapa Mohamed said.

On duty for cars imported from Asean countries, Mustapa said it would be abolished on January 1, 2010 under the Asean Free Trade Agreement (AFTA). Import duties would also be reduced or abolished under the Free Trade Agreements which the government has negotiated or signed with several countries.

More reading: TheStar
Duty structure (from MAA): Here

The conclusion from CIMB research test drive of Perodua’s new MPV, the Alza, is that it should expand the MPV pie and not eat much into the sales of other MPVs except Toyota Avanza. Considering the size, pricing and capacity of the Alza, we think that the Avanza 1.3L and 1.5L are likely to be the models more affected by Alza’s launch. The Alza should not pose head-on competition for Proton’s Exora as it is not as spacious as the Exora and targets a somewhat different market segment.

Stocks to watch: Axiata, Maxis, Wah Seong, LCL

KUALA LUMPUR: Stocks on Bursa Malaysia are expected to kick off the new month on a firmer note on Tuesday, Dec 1 after a choppy session as investors are encouraged by the latest development in the debt-laden Dubai and also a firmer close on Wall Street.

The volatile trading, which was evident among blue chips, especially those in the top 100 stocks could be due to some funds restructuring their portfolios. Companies with exposure to Dubai and Vietnam also saw some selling pressure but this could ease off.

On Wall Street, US stocks rose on Monday, Nov 30, helping the Dow post its fifth straight monthly gain, on hopes that possible fallout from Dubai's debt woes will be contained, according to Reuters.

Shortly before market close, Dubai's largest company said its planned restructuring of some units involved US$26 billion in debt, easing some concerns about the size of Dubai's financial problems.

The Dow Jones industrial average rose 34.92 points, or 0.34%, to end at 10,344.84. The Standard & Poor's 500 Index was up 4.14 points, or 0.38%, at 1,095.63. The Nasdaq Composite Index was up 6.16 points, or 0.29%, at 2,144.60.

The rout at Dubai came about after its government had announced last week that state-owned conglomerate Dubai World and its primary property subsidiary Nakheel wanted banks to delay debt repayment for six months. Dubai World had US$59 billion of liabilities as of August.

Stocks to watch include Axiata Group Bhd, Maxis Bhd, WAH SEONG CORPORATION BHD [] and LCL Corp Bhd

Axiata's net profit for the third quarter ended Sept 30, 2009 surged 118.9% to RM503.67 million from RM243.89 million a year ago, boosted by higher contributions from Celcom (Malaysia) Bhd and its overseas operations.

The company reported on Nov 30 that its revenue for the period, which rose 3.1% to RM3.38 billion from RM3.27 billion a year earlier, was due to higher contribution from Celcom and Axiata (Bangladesh) Ltd (AxB). Clcom and PT Excelcomindo Pratama Tbk (XL) continued to be the main contributors of the group for the quarter.

Maxis reported net profit RM615 million in the 3Q and a 2% increase in revenue on-quarter to RM2.15 billion. It declared an interim single-tier tax exempt dividend of six sen per share, payable on Jan 15, 2010. Its entitlement date is Dec 31, 2009.  Total mobile subscriptions rose to 11.7 million, contributing to the increase in revenue.

Wah Seong Corp's pipe coating business unit secured a US$162.86 million (RM551.15 million) contract from Chevron Australia Pty Ltd to provide pipeline coatings for the Gorgon project. The contract involves coating some 850 km of pipes, with completion expected in 2012.

The Gorgon project is a joint venture between the Australian subsidiaries of Chevron (Operator), ExxonMobil and Shell, to develop the Greater Gorgon gas fields, located between 130km and 200km off the north-west coast of Western Australia.

Interior fit-out company LCL Corp posted net loss of RM25.39 million in the 3Q, compared to net profit RM9.74 million a year ago due to continuous costs overrun for its Dubai projects.  Its revenue fell 61% to RM57.78 million from RM147.9 million in 2008;

LCL reported its trade receivables amounted to RM221 million while monies due for contract works from customers totalled RM154 million.

Since it was not tendering for new jobs in Dubai, LCL had incurred additional cost in right-sizing its operations, which were workers' compensation, logistics and premature termination of accommodation arrangement.

It said delayed payment from clients could also worsen the situation as it would need to bear additional operational and financing costs associated with project financing facilities procured for the projects.

YTL Corp could show some recovery after the 42 sen fall to RM7.05 on Monday in the absence of any negative news.

Written by Surin Murugiah 

US Market Commentary (After Market Close): Market Makes Late Move to Higher Ground

Stocks spent the afternoon trading with modest losses after rolling over in the early going, but they managed to make a late push into positive ground during the final hour of trade. The move was led by the financial sector, which actually had been unable to provide a lift to the broader market for most of the session.

Financial stocks outperformed the broader market with relative ease for the entire session. The sector settled with a 2.7% gain, which is more than triple the gain of the next best performing sector, utilities (+0.8%). The financial sector's strength came as banks (BKX 44.48, +1.44) rebounded from the previous session's slide, which came amid concerns regarding the exposure of banks to possible defaults by Dubai World, the corporate flagship of Dubai. Concerns over the matter persisted this morning as reports indicated that the central bank of the United Arab Emirates did not say that it would provide support specifically to Dubai.

However, Dubai World released word this afternoon that its talks with banks revolve around the treatment of roughly $26 billion in debt, a number that is much smaller than what had previously been considered. That recognition propelled financials higher so that they closed at their best levels of the session. The news also quelled some of the broader market's concern and helped it climb out of the red to settle near its own session highs.

The greenback oscillated amid concerns coming from Dubai. However, the Dollar Index surrendered its midsession gains and fell to a fractional loss, which also helped give support to the broader market.

Retailers still struggled, though. Their weakness stemmed from word that sales were soft during "Black Friday." As a group, retailers finished 0.5% lower, dragging the consumer discretionary sector to a 0.4% loss.

Sunday, November 29, 2009

Picture of Day: Stock Pulse

Stocks to watch: KNM, GBH, Favelle Favco, Mamee

KUALA LUMPUR: Investors will again have to brace for a volatile week ahead starting Nov 30 as investment sentiment is expected to be impacted by the worries about a possible default from a Dubai state-owned conglomerate.

On Wall Street, stocks fell as investors sold financial and commodity-linked sectors which were most sensitive to economic uncertainty.

The Dow Jones industrial average dropped 1.48% to end at 10,309.92. The Standard & Poor's 500 Index fell 1.72% to 1,091.49. The Nasdaq Composite Index lost 1.73% to 2,138.44.

At Bursa Malaysia, the last batch of the corporate results for the quarter ended Sept 30 will be released on Monday

Last Thursday, the 30-stock FBM KLCI lost 0.39 point to close at 1,270.61 as investors took profit ahead of the long weekend. Market breadth was weaker, as losers beat gainers 401 to 267 gainers.

Stocks to watch on Monday include KNM Group, Goh Ban Huat, Favelle Favco and Mamee-Double Decker.

KNM's third quarter net profit fell 69.1% to RM31.92 million from RM103.42 million a year ago, while revenue declined 38.6% to RM458.35 million from RM746.2 million.as revenue shrank amid a slower global economic landscape.

It attributed the weaker performance due to the global economic slowdown and the full effect of intangible asset amortisation after acquiring Borsig.

KNM also said the memorandum of agreement with Sofinter SpA to set out the commercial terms for its boiler business joint venture had lapsed as mutually agreed by the parties.

In Goh Ban Huat, it sank deeper into the red with net loss of RM11.26 million against RM335,000 a year ago due to one time stock write off of RM1.2 million, stocks provision of RM4.3 million and higher administration expenses.

Favelle Favco's net profit jumped to RM7.168m versus RM2.311m a year ago. The improvement in net
profit was mainly contributed by improvement in margin from sales of cranes.

As at Nov 20, its outstanding order book is RM495 million of which 58% is from oil and gas cranes for the offshore oil and gas exploration and production activities. The rest are from the shipyard, CONSTRUCTION [] and wind turbine industry.

Favelle Favco, which had cash of RM95.7 million, said it would  continue to execute and deliver its existing order book secured in hand. However, it cautioned the outlook appeared challenging although it expected to maintain market share from its diversified customer base.

Mamee-Double Decker reported its net profit rose nearly 86% to RM12.1 million from a year ago, underpinned by improved consumer spending and also favourable sales mix. Revenue rose only 2.84% to RM113.86 million.

As for Guinness Anchor, its net profit fell 43.5% to RM26.75 million from RM47.32 million a year ago due to lower demand for its malt liquor beverages during the difficult economic conditions. Revenue fell 17.7% to RM300.97 million from RM365.8 million.

Written by Joseph Chin

Friday, November 27, 2009

DUBAI Crisis: Panic Sell or Weakness Buy?

Dubai World, with $59 billion of liabilities, is seeking to delay debt payments, sending contracts protecting against default rose 116 basis points to 434 basis points yesterday, the most since they began trading in January, ranking it the sixth highest-risk government borrower, according to credit-default swap prices from CMA Datavision in London. 

The swap contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements. A basis point is 0.01 percentage point and is equivalent to $1,000 a year on a contract protecting $10 million of debt.  

Back in BURSA, we saw construction companies which have projects in Dubai being sold off last week (Gamuda, IJM, Zelan ...). Besides, it also drag down the other construction stocks as well (SUNWAY, E&O, SPSETIA ...)

BURSA may require few days to absorb the bad news (which actually started last week on construction sector). However, UBS AG, Switzerland’s largest bank, said it expects the U.A.E. will prevent a default by Nakheel. Dubai is one of seven sheikhdoms in the U.A.E. that includes Abu Dhabi, which holds 8 percent of the world’s oil reserves and bought $5 billion of bonds sold by Dubai on 25 Nov through state-controlled banks.

Therefore, the risk of contagion and new credit crunch was low as Middle East is not the vital engine of growth to drive the recovery of global economy. Dubai World’s more than 70 creditors face the prospect of writedowns on as much as $60 billion of debt if they haven’t unloaded their holdings and the state-owned company fails to win additional support from Abu Dhabi. The number of banks impacted is not global and wide scale as been seen in the sub prime crisis. Those banks should be able to write down safely.

Like the old saying: Greed when people fear. It will be good strategy to buy on weakness if you see oversold signal in stocks provided there is no more "shocking" news release from finance sectors in coming days.

Thursday, November 26, 2009

Picture of Day: 认清自己, 方能克敌

Know the purpose of your investment and types of stock going to buy are utterly essential.

Book to share part#1: 炒股的智慧

华尔街有两位炒手不断交易一罐沙丁鱼罐头,每一次甲方都用更高的价钱从乙方手里买 进,这样双方都赚了不少钱。一天,甲决定打开罐头看看:一罐沙丁鱼为什么要卖这么高价钱?



有一個記者靠拋硬幣在十字坐標上畫線,正面就升一格,反面就降一格,拋了幾十遍後畫出一條曲線。他稱這是一隻股票的走勢圖,請一位著名的技術分析專家研 究。該專家非常興奮:此股極具上升潛力!他再三詢問股票名稱,記者如實相告;專家盛怒之下,拂袖而去。後來,這個回味無窮的故事上了《華爾街日報》。 

什麼時候會高興?什麼時候會生氣?大體來說,受到讚揚會高興,受到批評會生氣。股票也差不多吧?被追捧時會升,被拋售時會跌。人們為什麼買股票?因為股票 在升,在升!人們為什麼賣股票?因為股票在跌,在跌,跌! 所以股票看上去很簡單:不是上,就是下,否則就是不動。有第四種運動方式嗎?暫時還想像不到。可如果炒股真的簡單到“二十天均線穿過五十天均線是最佳買入 點”的話,大家還起早貪黑地上班幹嗎?全民皆股算了,呵呵。炒股就是鬥爭,與天鬥其樂無窮,與地鬥其樂窮,與莊鬥其樂無窮;經驗和技巧固然重要,站在人性 高度上戰天鬥地更是其樂無窮。

性討厭風險,所以小賺就跑,小賠時卻不忍割肉;人發財心太急,所以下注大,賠光也快;人好自以為是,所以執著於自己的分析,忽略了股票真實的走向;人好跟 風,所以常常丟掉自己的原則;人好報復,所以猶如賭徒一般,輸了一手,下一手下注就加倍,再輸,再加倍,於是剔光頭的時間又加快了。 

有辦法嗎?有!不然那些專以炒股為生的同類豈不要餓死? 聽聽索羅斯的話:市場是愚蠢的,你也用不著太聰明。你不用什麼都懂,但你必須在某一方面懂得比別人多。

A really nice book, just finish the first part.
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