MONEY MASTER

KUALA LUMPUR (Jan 31): The FBM KLCI slipped 14.82 points or 0.88% today amid sluggish trade a day before the Federal Territories Day tomorrow, right after the Chinese New Year weekend. The KLCI ended at 1,671.54 points, dragged down by stocks such as Tenaga Nasional Bhd, British American Tobacco (Malaysia) Bhd (BAT) and Telekom Malaysia Bhd. Mercury Securities Sdn Bhd research head Edmund Tham said trading activity was passive as there was no catalytic news flow amid uncertainties in the market. "It is slightly down when people are not around. The volume is low because of the holiday session," he said when contacted by theedgemarkets.com. At market close, there were 367 decliners versus 354 advancers and 327 counters were unchanged. Across Bursa Malaysia, a total of 1.16 billion shares worth RM1.61 billion were traded. The top gainer was United Plantations Bhd while BAT led the decliners list. The most actively-traded counter was AirAsia Bhd. Acr...

KUALA LUMPUR (Jan 26): The FBM KLCI rose 8.29 points or 0.5% to its intraday high today, after the U.S.' Dow Jones Industrial Average breached the 20,000 level for first time, amid crude oil price gains. At 5pm, the KLCI settled at 1,692.22 points, following a hike in the final trading minutes on late buying of KLCI-linked Sime Darby Bhd shares. Sime Darby shares rose 12 sen to RM8.82 to become Bursa Malaysia's ninth-largest gainer. Across Bursa Malaysia, 1.41 billion shares, worth RM1.76 billion, were traded. There were 432 gainers versus 308 decliners. Mercury Securities Sdn Bhd research head Edmund Tham told theedgemarkets.com that the KLCI’s performance this week did not reflect the actual local market position. “We can notice that volume is not so good throughout this week, ahead of the long holiday. For Thursday as an example, the market mostly followed the external markets’ trend. Perhaps we can have a clearer picture of the market, after...

KUALA LUMPUR (Jan 24): The FBM KLCI climbed 9.38 points or 0.6% on a stronger ringgit against a weakening U.S. dollar, amid higher crude oil prices. At 5pm, the KLCI closed at its intraday high at 1,680.69 points. The ringgit strengthened to 4.4353 against the U.S. dollar at 5:36pm. Reuters  reported the dollar struggled in Asia on Tuesday, as U.S. President Donald Trump's focus on protectionism ahead of fiscal stimulus, fuelled suspicions his administration might be content to gain a competitive advantage through a weaker currency. It was reported oil prices rose on Tuesday, on evidence the global market was tightening, as lower production by the Organization of the Petroleum Exporting Countries (OPEC) and other exporters drained stocks, although an increase in drilling in the U.S. could keep a lid on prices. Benchmark Brent crude was up 40 cents at US$55.63 a barrel by 0840 GMT. U.S. light crude was 40 cents higher at to US$53.15. In Malaysia, Malac...

KUALA LUMPUR (Jan 23): The FBM KLCI closed 0.39% higher today on the back of better liquidity and a weaker US dollar. The benchmark index rose 6.42 points to close at 1,671.31. "The main factor for KLCI to perform well is improved liquidity. The local market seems to be moving in alternate directions for some time now, but generally it is quite bullish," said Interpacific Research's head of research Pong Teng Siew. "Volumes have improved, the banks are lending more, and money supply has moved away from the contraction phase. I am quite optimistic that it will continue to perform well in the first half of 2017," Pong said when contacted by theedgemarkets.com. "However, a better liquidity may signal the arrival of general election. We may see interference if there is a sudden announcement on election date," added Pong. A total of 1.53 billion shares worth RM1.81 billion changed hands. Decliners led gainers by 467 to 322, while...

KUALA LUMPUR (Jan 18): The FBM KLCI rose 1.99 points or 0.1% while the ringgit strengthened, after U.S. President-elect Donald Trump said the U.S. dollar's strength against the yuan did not bode well for the U.S. economy. The KLCI closed at 1,665.02 points, as Asian share markets rose. Japan's Nikkei 225 increased 0.43%, while Hong Kong's Hang Seng rose 1.13%. In Malaysia, Malacca Securities Sdn Bhd analyst Kenneth Leong told theedgemarkets.com that the KLCI's rise was due to the stronger ringgit against the U.S. dollar today. At 4:48pm, the ringgit strengthened to 4.4443 against the U.S. dollar. “The KLCI is also up in tandem with regional markets," Leong said. Bursa Malaysia saw 1.88 billion shares, worth RM1.64 billion traded. There were 431 gainers and 366 decliners. World markets took the cue from Trump's U.S. dollar comment. Reuters reported the dollar's recent weakness deepened, after Trump said the greenback's stre...

KUALA LUMPUR (Jan 17): The FBM KLCI rose 4.19 points or 0.3% on bargain hunting, after the index's 13.66-point drop yesterday. The KLCI fell yesterday on renewed concerns on the UK's planned exit from the European Union (EU) and after China shares dropped sharply. The UK's planned exit from the EU is popularly known as Brexit. The KLCI also dropped on news JP Morgan downgraded the Malaysian stock market to "neutral", from "overweight". Today, the KLCI closed at 1,663.03 points. Inter-Pacific Research Sdn Bhd research head Pong Teng Siew told theedgemarkets.com that the KLCI's decline yesterday was an opportunity for bargain hunting by institutional investors. “The underlying sentiment is still bullish. Liquidity will improve, but I don’t think it will last past late February or March. The market is cautious,” Pong said. Today, Bursa Malaysia saw 1.99 billion shares, worth RM1.68 billion, traded. There were 411 gainers an...

KUALA LUMPUR (Jan 16): The FBM KLCI fell 13.66 points or 0.8% on renewed concerns over the UK's planned exit from the European Union (EU) and after China's Shenzhen Stock Exchange Composite fell as much as 6.1% in intraday trade. The UK's planned exit from the EU is popularly known as Brexit. In Malaysia, the KLCI closed at its intraday low at 1,658.84 points. Bursa Malaysia saw 1.79 billion shares, worth RM1.61 billion, traded. There were 225 gainers and 611 decliners. The KLCI fell with Asian share markets. In China, the Shenzhen Stock Exchange Composite pared losses to close 3.62% lower, while Hong Kong's Hang Seng fell 0.96%. Elsewhere, Japan's Nikkei 225 declined 1%. Reuters  reported the sterling slid to three-month lows in Asia on Monday, with investors spooked anew by concerns over Britain's divorce from the EU, while US policy uncertainty lingered ahead of President-elect Donald Trump's inauguration. Meanwhile,  Bloo...

KUALA LUMPUR (Jan 12): The FBM KLCI extended gains today, rising 2.55 points or 0.2%, as the ringgit strengthened slightly against the U.S. dollar. The KLCI closed at 1,677.76, with gains in counters such as British American Tobacco (M) Bhd and Genting Bhd lending support to the index's advance. The ringgit strengthened to 4.4583 against the U.S. dollar in late afternoon trading, compared with yesterday’s close of 4.4722. Across Asia, Hong Kong's Hang Seng fell 0.46%; Japan's Nikkei 225 declined 0.58%; while South Korea's Kospi gained 0.58%. Reuters  reported the U.S. dollar nursed widespread losses today, after President-elect Donald Trump's long-awaited news briefing provided scant clarity on future fiscal policies, disappointing bulls wagering on major stimulus. Yet, neither did Trump mention possible tariffs against Chinese exports — a relief for Asian share markets that have feared the outbreak of a global trade war. Etiqa Insurance a...

KUALA LUMPUR (Jan 11): The FBM KLCI rose 3.16 points or 0.2% with Asian shares, as investors waited for US President-elect Donald Trump's press conference later today. Trump's press conference is closely watched for clues on the U.S.' policies, when he becomes president. Trump's inauguration will be held this Jan 20. At Bursa Malaysia today, the KLCI closed at 1,675.21 points lifted by stocks like Tenaga Nasional Bhd, which added 20 sen to RM14. KLCI entity Tenaga was Bursa Malaysia's fourth-largest gainer. Bursa Malaysia saw 2.76 billion shares, worth RM2.02 billion traded. There were 467 gainers against 324 decliners. Fund managers said they were mindful on the sustainability of Malaysian share gains, as trade volume was expected to drop due to the Chinese New Year, which falls on Jan 28 this year. “There is some recovery in the Malaysian market. But it is still unknown whether the recovery is sustainable. In the coming weeks, the tra...

The FBM KLCI index gained 4.15 points or 0.25% on Tuesday. The Finance Index increased 0.50% to 14696.66 points, the Properties Index up 0.69% to 1159.57 points and the Plantation Index rose 0.10% to 7900 points. The market traded within a range of 7.63 points between an intra-day high of 1673.57 and a low of 1665.94 during the session. Actively traded stocks include SUMATEC, HOVID, IFCAMSC, REACH-WA, HIBISCS, VIZIONE-OR, GPACKET, SUMATEC-WB, BIOHLDG-WA and SCOMI. Trading volume increased to 2683.74 mil shares worth RM2107.28 mil as compared to Monday’s 1804.35 mil shares worth RM1452.13 mil. Leading Movers were MAXIS (+17 sen to RM6.18), GENM (+10 sen to RM4.85), BAT (+86 sen to RM46.28), PPB (+30 sen to RM16.38) and HAPSENG (+15 sen to RM9.00). Lagging Movers were PETGAS (-42 sen to RM20.98), TENAGA (-12 sen to RM13.80), ASTRO (-2 sen to RM2.70), YTL (-1 sen to RM1.52) and PETCHEM (-3 sen to RM7.17). Market breadth was positive with 414 gainers as compared to...

Retain OUTPERFORM with an unchanged target price (TP) of RM1.90 SapuraKencana Petroleum’s (SAKP) wholly-owned subsidiaries have been awarded a combined value of c.USD300m (c.RM1.3bn) worth of contracts. The awards are for the engineering and construction (E&C) and drilling divisions. The Group’s orderbook wins to-date stands at RM5.5bn for FY17F. We continue to maintain our estimates however due to these new contracts being part of the replenishment for FY18 onwards, coupled with the nature of the contracts in which revenue is recognised on a progress billing cycle or call-out basis for instance. Our  Outperform  view on SAKP is nonetheless reaffirmed with an unchanged TP of  RM1.90  based on our blended SOP valuation. PETRONAS Carigali Sdn.  Bhd (PCSB) award. For a duration of 2 years and to be performed on a call-out basis, the Group secured a contract for the provision of underwater services located at the offshore waters of Peninsular M...

KUALA LUMPUR (Jan 5): The FBM KLCI gained 12.35 points or 0.7% with Asian shares after the U.S. Federal Reserve's latest meeting minutes indicated faster U.S. economic growth, when Donald Trump becomes president. Trump's inauguration as U.S. President will be held this Jan 20. Trump's election win has led to anticipation of higher U.S. inflation, due to his planned expansionary fiscal policies. At Bursa Malaysia today, the KLCI closed at its intraday high at 1,659.82 points. Bursa Malaysia saw 2.51 billion shares, worth RM1.85 billion traded. Elsewhere, Hong Kong's Hang Seng gained 1.46%. Reuters  reported minutes from the Federal Reserve's December meeting showed almost all Fed policymakers thought the U.S. economy could grow more quickly, after Trump becomes president. In Malaysia, JF Apex Securities Bhd senior analyst Lee Cherng Wee told theedgemarkets.com that from a technical viewpoint, the KLCI had broken away from its downtrend...

Retain NEUTRAL with a higher target price (TP) of RM24.90 We had a meeting with Kuala Lumpur Kepong (KLK)’s management recently and came away with a steady view on the company’s outlook. Despite seeing strong CPO price performance, we think current valuation remains unattractive at 23x forward PER. Hence, we maintain our  Neutral  call but with a higher  TP  of  RM24.90  (up from RM23.46) after rolling over our valuations to FY18. A rebound in FFB production.  After experiencing an 8.1% drop in FY16 FFB production, the company expects to see a recovery in FY17 with a 3-5% growth. The growth will mainly come from Kalimantan Tengah, which has seen a dip for 2 consecutive years. Malaysian production may be struggling to see a recovery due to a lagged effect of El Nino’s impact last year. Targeting a steady production cost.  Despite expecting an increase in fertiliser and labour expenses, the company targets to keep its prod...

Retain HOLD with higher target price (TP) of RM0.91 News UMW-OG has received a conditional Letter of Award from PETRONAS Carigali Sdn Bhd ("PCSB") for a contract for the Provision of Jack Up Drilling Rig Services for PCSB (“Contract”). The Contract is for the provision of Drilling Rig Services for PCSB, whereby UMW-OG Group will assign its UMW NAGA 7 for this contract. The Contract is for duration of up to eighteen (18) months. UMW NAGA 7 is a premium independent-leg cantilever jack- up rig that has a drilling depth capability of 30,000 feet and has a rated operating water depth of 375 feet. Financial Impact This contract win is positive surprise to us as we did not expect 3 rigs (Naga 6, 7 & 8) to be locked in for whole year of 2017. Expected charter rate for Naga 7 in this contract to be circa US$100,000/day, given its just 2 year old coupled with higher specifications. P&L breakeven of this rig would require at least 70% utilisation rate. Post th...

KUALA LUMPUR (Jan 4): The FBM KLCI rose 11.94 points or 0.7% as Japan shares rose substantially on a weaker yen. At Bursa Malaysia, the KLCI settled at 1,647.47 points on gains in stocks like Sime Darby Bhd and Petronas Chemicals Group Bhd. Bursa Malaysia saw 1.98 billion shares, worth RM1.65 billion traded. Japan's Nikkei 225 rose 2.51% as a weaker yen led to expectation of higher earnings for exporters.  Reuters  reported Japan's Nikkei share average started 2017 trading on a strong note on Wednesday, as investors cheered upbeat global economic data released during Japan's holidays, and a weaker yen boosted exporters. In Malaysia, Malacca Securities Sdn Bhd senior research executive Kenneth Leong told theedgemarkets.com that the KLCI's movement today was in line with key regional indices. Leong said "there is still upside in the KLCI, premised on higher crude palm oil (CPO) and crude oil prices”. Such CPO price sentiment followed the ...

Trading BUY with a target price (TP) of RM0.83 Highlights Now an O&G Junior.  Upon getting vote acceptance for QA on 16th Nov 2016, Reach will now become a full-fledged oil junior with final adjusted Purchase Consideration worth US$175.9m. Acquisition has been completed on 27th November 2016 with dissenting shareholders already being repaid. Emir-oil a balanced portfolio with high quality crude.  Situated in Kazakhstan, currently Emir-oil possesses 4 producing fields coupled with   2 development fields and 6 drillable prospects, pointing to high potential growth in pipeline of reserves. In addition, it also produces high value light and sweet crude oil and possesses high condensate yield in one of its producing fields, indicating more room to further monetize the acquired asset. Oil asset was bought at low.  While the oil market has been subdued for a long time, we believe the upstream asset acquired by Reach was at the lowest price possib...

Trading BUY with a target price (TP) of RM1.52  We believe PRTASCO is an undervalued gem,  especially for its niche business specialising in roadwork maintenance, which provides a steady income stream, as most of its maintenance works are based on concessions awarded by state and federal governments. Projecting steady earnings growth of 13-3% for FY17-18E backed by both its existing and maintenance orderbooks, and we also like them for their decent dividend yield of 6.1% for FY17. TRADING BUY with a TP of RM1.52 based on 11x FY17E PER. Contractor with a niche.  PRTASCO is a well-established player in the construction industry where its forte is in road maintenance works on top of several business divisions (refer to business segments). Its road maintenance division made up 52% and 69% of FY15 revenue and PBT, respectively; while pre-tax margins are superior at an average of 10-13% compared to the conventional construction pre-tax margin that averag...

Upgrade to OUTPERFORM with higher target price (TP) of RM5.00 from RM4.60 We met with Genting Malaysia’s (GENM) management recently. We are optimistic that the progressive completion of the Genting Integrated Tourism Plan (GITP) project would help to boost visitor arrivals, leading to higher earnings growth going forward. Meanwhile, its UK operations have turned around after adopting a new strategy to focus on the premium mass market. We raise our FY17-18F earnings forecasts by 12-13%, supported by higher visitor growth of 9-10% p.a at Genting Highlands. As a result, our SOTP-based TP is revised up to RM5.00 (RM4.60 previously). We upgrade the stock from Neutral to Outperform. GITP progressing well.  The new Awana SkyWay is fully operational since two weeks ago. With 4,500 parking bays at the Awana SkyWay Car Park, visitors could now cut short travelling time up to the peak. The Sky Avenue’s F&B and retail outlets are also opened for public but the premium...

Maintain OUTPERFORM with target price (TP) of RM1.00 Wah Seong has announced that its wholly-owned subsidiary, Syn Tai Hung Trading Sdn Bhd (STHT) has signed a JV agreement with Lesso Home Service Holdings Limited (LESSO) to carry out an integrated sales and service center business to provide quality imported products and home furnishing goods, facilitated by LESSO on-line e-commerce platform. We understand that this strategy supports STHT’s distribution network in Malaysia, while leveraging on LESSOs’ extensive supply chain network in China to expand its business of distribution of building materials, architectural products, and home furnishing goods. We cannot ascertain earnings contributions from this JV as yet, pending further information. Our Outperform view on Wah Seong is maintained based on its current fundamental strengths, with a TP of RM1.00 pegged to 8x PE and FY17F EPS of 12.5sen. LESSO is an indirect wholly-owned subsidiary of China Lesso Group Holdings Limi...

KUALA LUMPUR (Jan 3): The FBM KLCI fell 6.2 points or 0.4% as investors took profit in stocks like Axiata Group Bhd and Malayan Banking Bhd (Maybank), following 2016 year-end window-dressing gains. At 5pm today, the KLCI closed at 1,635.53 points. Axiata dropped 20 sen to RM4.52, while Maybank fell 19 sen to RM8.01. KLCI-linked Axiata and Maybank were Bursa Malaysia's seventh and eighth-largest decliners, respectively. Across Bursa Malaysia, 1.67 billion shares worth RM1.07 billion were exchanged. “The KLCI is seeing a correction after last week’s window-dressing gains," Areca Capital Sdn Bhd chief executive officer Danny Wong told theedgemarkets.com. "Blue-chip counters like Maybank and Axiata were pushed at the last minute last week, so now, it’s coming back down again,” Wong said. In currency markets today, the ringgit weakened to a fresh one-year level against a strengthening U.S. dollar at 4.4940. At 4:54pm, the exchange rate stood at 4.4938. ...