KLSE Bursa Malaysia Blog One-Stop

Talam Corp Bhd and its adviser, RHB Investment Bank Berhad, are still collating the necessary information/documents as requested by Bursa Securities and expect this to be done by early June 2010. This is pursuant to the application made to Bursa Malaysia Securities Berhad for its approval to uplift the company from the PN17 status. (Bursa Malaysia)

Rubber: Prices likely to remain high on robust demand.  Faster-than-expected global economic recovery and acceleration in the demand for natural rubber (NR) will likely keep rubber prices high in the short and medium term, said the Association of Natural Rubber Producing Countries (ANRPC). The high NR import and consumption in China, India and Malaysia in the first quarter of this year were clear indications of acceleration in NR demand.
(Source: The Star)

Local stocks extended gains a fifth day on Thursday in line with regional markets which climbed on higher technology earnings and as concerns over the Euro-zone debt crisis eased.  The FBM KLCI added another 2.82 points to close at 1,346.92, off an early low of 1,344.27 and high of 1,348.09 on improving market breadth as gainers led losers 396 to 253 on better trade totaling 905.8mn shares worth RM1.04bn.

Break Above 1,349 to Test 1,354, Next Hurdle at 1,380
The better-than-expected 1Q GDP numbers and OPR rate hike by Bank Negara should provide a lift to banks and hence the KLCI, but the substantially higher-than-anticipated near RM1bn provisions by Sime Darby could cap gains today.  Immediate resistance is retained at 1,349, the 4 May pivot high, with a breakout to test 1,354, the 76.4%FR of the 1,525 to 801 sell-down, and next upside hurdle at 1,380.  Immediate support remained at 1,337, matching the 30-day moving average, then 1,330 and next at 1,320, representing the 23.6%FR an…

BCorp To Acquire 70 Per Cent Stake In Ascot Sports For RM525.0 Million Cash Berjaya Corp Bhd (BCorp) is set to acquire the 70 per cent majority stake in Malaysia's first legalised sports betting operation, Ascot Sports Sdn Bhd, for RM525.0 million in cash. The company has entered into a conditional sale and purchase agreement with Tan Sri Vincent Tan Chee Yioun, a major shareholder of BCorp for the 56.0 million shares in Ascot Sports. Tan owned 70 per cent of Ascot with the balance held by his son, Datuk Robin Tan Yeong Ching, BCorp said in a filing to Bursa Malaysia Wednesday.

To underscore the value of Ascot Sports, Tan has agreed  to guarantee that the company will make cumulative profit after tax of at least RM375.0 million for the first three years of operations. To back this profit guarantee, Tan has offered to deposit RM81.25 million worth of listed securities and Berjaya Corp will withhold RM125.0 million cash from the total consideration of RM525.0 million, which will…

Pos Malaysia Bhd does not rule out a possibility to take over the debt-ridden air-cargo transporter Transmile Bhd but this will only happen after a proper business plan is carried out first, said chairman Tan Sri Aseh Che Mat. “This is one of the proposals being forwarded by our shareholders during the AGM and the board will take note of the proposal and deliberate the issue carefully at the next board meeting,” he said. Aseh said a proper business plan was required  for this matter as Transmile’s debt was very huge, at about RM500m. (StarBiz)

China Tightening and EU Debt Concerns to Dampen SentimentThe local stock market extended gains Tuesday following the USD1tn EU rescue loan package to contain the Euro-zone debt crisis, ignoring regional losses sparked by concern rising inflation and housing prices will force China to tighten credit further.  The FBM KLCI rose 6.75 points to close at 1,340.72, off an opening low of 1,332.38 and high of 1,341.88 on negative breadth as losers beat gainers 399 to 302 on slower trade totaling 781.7mn shares worth RM1.34bn. Immediate Resistance at 1,341, Higher at 1,349/1,354
Increased volatility on global markets, amid uncertainties over the effectiveness of the EU rescue package in solving the Euro debt crisis, should dampen sentiment for the immediate term.  Immediate resistance for the index stays at 1,341, with more formidable hurdles at 1,349 and 1,354.  The immediate support is retained at 1,320, representing the 23.6%FR and 50%FR of the rise from 1,224  low of 9 February and 1,292 lo…

The Malaysian American Electronics Industry (MAEI) sees the total export sales of electrical and electonics goods to be lower  this year at RM57.3bil, compared with RM70bil in 2009. MAEI governor Datuk Wong Siew Hai said the total export sales was expected to be lower this year as manufacturers change from internal to external oursourcing. However, this expected drop (in export sales) should not be viewed as negative as the move is in line with the Government‘s initiatives via the New Economic Model and 10th Malaysia Plan) to encourage high technology and high value operations in all sectors, including the manufacturing industry, he told reporters at the MAEI 2009/10 annual survey yesterday. (Star)

UMW Holdings Bhd  may list its oil and gas (O&G) division by year end, said president Datuk Abdul Halim Harun. He said the firm is still hopeful to see the proposed listing take off after three postponements. “We would like to see it happen, but it will depend on several factors, which include the economic condition,” he said. Abdul Halim said UMW wants to see its investments in India pay off first before any concrete decision can be made. The group derives a fifth of its revenue from O&G activities and has operations in 12 countries. (BT)

Naim Holdings Bhd (NAIM),  Cahya Mata Sarawak Bhd (CMSB) and Bintulu Development Authority (BDA) have formed a joint venture (JV) to develop the proposed Samalaju new township, which is estimated to cost at least RM1.5bil. Located within Sarawak Corridor of Renewable Energy, the project will comprise residential developments, schools, clinics, commercial centres and recreational facilities for about 50,000 people. Naim has a 60% stake in the JV while CMSB and BDA hold 30% and 10% respectively. BDA is the state agency tasked with the planning and development of Bintulu. (Star)

CIMB Group (CIMB) has obtained approval-in-principle to offer banking services in Cambodia by its central bank, the National Bank of Cambodia. It said the approval  allowed CIMB Bank to establish and operate a 100%-owned subsidiary to offer banking products and services to the nation of 14 million people. The approval also requires the group  to set up operations within six months. The group plans to establish its headquarters in Phnom Penh as soon as possible, the company said in a statement yesterday. (Star)

The FBM KLCI rose 1.08 points to close at 1,333.97. Its resistance areas at 1,335 and 1,350 will cap market gains, whilst the obvious support areas for the FBM KLCI are located at 1,315 and 1,333. Due to the Dow’s major overnight rise of 404.71 points, we expect the FBM KLCI to gap up initially to be followed by some profit taking activities later today. 

We believe that the FBM KLCI was supported by local funds and might be resilient amidst global adversity. The bearish divergent signals suggest that the FBM  KLCI had stalled at 1,349.92.

Short-term intra-day trading or scalping the market would be the best market strategy. For now, we believe that the market will be very volatile and wild. Therefore, trade with a very short-term horizon. In the longer term, we  believe that the FBM KLCI has peaked at 1,349.92 (near the 75% retracement level measured from its 1,524.69 high to its low of 801.27). The risk-reward ratio is high (for risk) and low (for reward). Therefore, investors s…

Batu Kawan: To gain RM83m selling Bard
Batu Kawan Bhd is selling its entire 15% stake for a capital gain of RM83.2m in Bard Sdn Bhd after holding it since 1987. US-based Bard Inc, which owns the other 85% in Bard Sdn Bhd offered to purchase the shares back from Batu Kawan.

“The disposal would realize capital gains on this investment since a 15% stake does not allow Batu Kwan to equity account Bard Sdn Bhd’s results,” said Batu Kawan. Following the disposal, Batu Kawan’s earnings per share would be increased by 19.52 sen. (Malaysian Reserve)

Known for its shrewd land acquisition and fast project turnaround strategies, Mah Sing Group Bhd wants to leverage on its local success by venturing into new markets overseas. The group aims to launch its maiden project in China by the first half of 2011. Group managing director cum chief executive Tan Sri Leong Hoy Kum says going offshore is one of the steps needed to realise the group’s aim to be a regional property player. Within the next five years, Mah Sing is targeting sales from overseas to contribute 30% of its sales. It may also consider other countries like Singapore, Indonesia and Australia if there are opportunities. (StarBiz)

Sime: Claims additional RM700m from government for Bakun. Sime Darby Bhd has put in a claim of RM700m in relation to the Bakun Hydroelectric Dam project, sources said. If the claim is approved, the total cost of civil works portion of the Bakun project will rise to RM3.2b from the original RM1.8b. This does not include the electrical and mechanical works and other related works such as land clearing prior to the flooding of the dam.  (Source: The Edge Weekly)

Early Sell-Off to 1,309/1,300 Likely Before Market Stabilize
The overnight tumble on Wall Street, with the Dow Jones average plunging almost 1,000 points at one point before bouncing back, should spillover and spark losses in the region and locally as global markets undergo renewed downside volatility amid jittery sentiment.  Immediate support is seen at 1,320, the 50% retracement of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347, matching the 50-day moving average, but an early sell-off to better supports at 1,309 to 1,300 is likely before stocks stabilize.  Immediate resistance will be at 1,341, the upper range of the gap-down, next at Tuesday’s high of 1,349, with stronger hurdles at 1,354 and 1,360. Buy on Dip Adventa & Supermax for Rebound
Nonetheless, investors are alerted to bargain blue chips which are trading below their lower Bollinger bands on any further sharp dips, specifically Gamuda, Genting Malaysia, IOI Corp, Public Bank and Sime Darb…

Immediate Support at 1,324, Resistance at 1,341
Stocks should stay range bound with downward bias today as US and European markets dip further overnight with concern over sovereign debt crisis spreading in Europe offsetting stronger economic data, breeding uncertainty which discourages firmer investor participation.  Immediate support is revised to yesterday’s low of 1,324, and then 1,320, the 50% retracement of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347, matching the 50-day moving average.  Immediate resistance will be at 1,341, the previous day’s low and the upper range of the gap-down, and next at Tuesday’s high of 1,349, with stronger hurdles at 1,354, 1,360 and then 1,380.

Buy on Dip IRCB & Latexx
Revert to Buy on Dip Axiata, Genting Bhd, Genting Malaysia, Maybank, RHB Capital and Sime Darby as some closed below the lower Bollinger band, which should attract buyers to cushion downside.  Most lower liners that we track also closed below their lo…

Main Market-bound Masterskill Education Group Bhd has successfully priced its initial public offering (IPO) at the top end of its indicative range – RM3.80 for the institutional tranche and RM3.50 for the retail portion. Masterskill, which slated for listing on May 18, said the IPO was priced after a book-building exercise for the institutional offering. It said the total proceeds raised pursuant to the IPO amounted to about RM771m. Masterskill said the retail offering of 25.5m shares to the Malaysian public, eligible Masterskill employees and graduates is closed at 5pm on May 17. The IPO comprises of 41m new shares, and 164m existing shares offered by major shareholders Datuk Edmund Santhara and Masterskill Holding Ltd. (Financial Daily) Masterskill IPO below fair fairvalueMalaysia 2010 biggest ipo is linked with Jews

Limited Downside With Support at 1,329/1,320
Increased downside volatility on global markets, triggered by contagion fears from the European sovereign debt crisis, should spread to the region and hence dampen sentiment
on the local market.  Nonetheless, the downside risk should be muted given the low foreign participation, with immediate cushion seen at 1,329 and 1,320, the 50%FR of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347.  Stronger support is expected at the 1,300 psychological level. Immediate resistance is at yesterday’s high of 1,349, with stronger hurdles at 1,354, 1,360 and then 1,380.

Buy on Dip MRCB & UEM Land
Due to negative external leads, blue chips should extend consolidation with a downward bias as buying momentum dwindle. Continue to Sell on Rally Axiata and Maybank as share price should fall back below the upper Bollinger band, and RHB Capital given the overbought RSI reading. Lower liners on focus today are construction relate…

Cement: Semen Gresik on the hunt for Malaysian company.   Indonesia’s biggest cement producer, PT Semen Gresik, said yesterday it is in talks to acquire a Malaysian cement maker this year and has set aside more than Rp3.5t for the deal.  (Source: Business Times)   PT Semen Gresik said that it is in talks to acquire a Malaysia cement maker this year and has set aside more than Rp3.5trn for the deal.Sources say the group is in talks with Cement Industries of Malaysia Bhd (CIMA), a unit of UEM Group.

Dubai Group LLC may no longer be keen to sell its 30.5% stake in Bank Islam Malaysia Bhd, sources said. The Middle Eastern group had hired investment bank Rothschild to look for potential buyers but has since been dragging its feet on the matter. "They may not sell after all because they see value in the bank," a source said. Sources had said in February that a deal could be concluded in June or July. Now, however, there are doubts as to whether the group still plans to sell. Dubai Group was not immediately able to comment on the matter. (BT)

Sime Darby: Bakun losses may balloon to RM1.7b.  Sime Darby has incurred around more than RM1b in total cost overruns from carrying out the civil works contract for the Bakun hydro-electric project, sources said. One estimate puts the total cost overrun figure in the region of a whopping RM1.7b, almost the same size as the Sime Darby’s actual Bakun contract of RM1.8b that it had secured back in 2002. In an emailed reply, the company merely said that it had made provisions to the tune  of RM130m for its share of the cost overruns in the Bakun project. (Source: The Star) More commentary here:   SIME DARBY Bakun: Review by HWDBS

The FBM KLCI closed higher by 0.51 of a point at 1,346.89. Its resistance areas at 1,348 and 1,360 will cap market gains, whilst the obvious support areas for the FBM KLCI are located at 1,328 and 1,346. Due to the Dow’s major overnight rise of 143.22 points, we expect the FBM KLCI to inch up initially to be followed by profit taking and liquidation later today. 

We believe that the FBM KLCI is supported by local funds and is resilient amidst adversity. The bearish divergent signals suggest that the FBM KLCI may be stalling as it rises. Short-term trading or scalping the market would be the best market strategy. For now, we believe that the market could be very volatile. Therefore, trade with a very short-term horizon.

Some stocks that we like are: AMFIRST, ATRIUM, CSCENIC, GKENT, HUPSENG, JOHAN, LPI, MAGNI, P&O, PROTON, TEJARI, VITROX, YEELEE and ZHULIAN. 
FBM KLCI: Key Points
  ZHULIAN – Poised to rise further 
  FBM KLCI – Resilient in adversity
  Obvious support…

Generally, technical indicators for the KLCI have improved somewhat following last week's gain, suggesting further upside in store for the coming weeks.  What is crucially lacking is resurgent buying momentum in excess of one billion shares on a daily basis to sustain a bullish breakout from current consolidation, especially for lower liners and small caps.

The weaker lead from the tumble on Wall Street last Friday should have limited impact on the local stock market, as domestic financial institutions are unencumbered by the problems on US banking institutions.

The KLCI had staged a bullish breakout to close at a new 26-month high last Friday, which must see strong following buying interest to sustain breakout toward 1,354, the 76.4% Fibonacci Retracement (FR) of 1,525 to 801. Higher upside targets going forward are at 1,380, 1,392 and then

1,400, where stronger selling on strength interest should cap upside.Immediate support is retained at 1,329, with 1,320, the 50%FR…

Ho Hup Construction Co Bhd  says it has appealed to Bursa Malaysia for an
extension to the deadline to submit its audited financial statements (AFS) that
expired yesterday by another week. The expected earliest date of issuance of the
AFS for the period ended Dec 31, 2009 is May 7. (Bursa)

JCorp Bhd (JCorp) and Johor Logistics Sdn Bhd, together with parties acting in concert, are undertaking a conditional takeover exercise of Damansara Realty Bhd and are offering 80 sen per share for stakes that the parties do not currently own. As of April 26, JCorp held a 30.8% stake while joint offeror Johor Logistics held no shares in the firm. The parties acting in concert hold a negligible amount respectively. The takeover was triggered following JCorp’s acquisition of 1.63m Damansara Realty shares in open market trade last Friday, which took the joint offerors’ and parties acting in concert’s stake in the latter to 33.6%. (Malaysian Reserve)