FBMKLCI 1541.03 DJ-93.28 CRUDE OIL 99.53 RM 2.9870

BURSA Malaysia is likely to be lower this week with the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) expected to drift between 1,530 and 1,540-point level. Affin Investment Bank head of retail research, Dr Nazri Khan, said rising inflation, the start of interest rates upcycle, the unexpected commodity bubble burst and the uninspiring overnight session on Wall Street were likely to be important forces to influence the broad market's direction. The economic situation also remains uncertain for the Group of 3 (US, Europe and Japan) following the untimely resignation of International Monetary Fund chief last week. However, he said, the local market was likely to find footing from stable ringgit, oil and gold price. Nazri said the local market was also likely to get support from the potential listing of Felda Sugar, the launching of Financial Sector Master Plan and the start of the third round of banking consolidation next month. Further, the news that the local giant construction MMC Corp planned to list its energy and port units, with an estimated market capitalisation of up to RM14bil, would also create some excitement, he said.

Mah Sing Group Bhd will launch RM2.5bil to RM3bil worth of projects in the Klang Valley, Penang and Johor this year to meet its sales target of RM2bil for the current financial year ending Dec 31. Group managing director and chief executive Tan Sri Leong Hoy Kum said the projects would comprise an array of commercial, residential and industrial properties.

Analysts still bearish on sector due to weak global chip sales

PETALING JAYA: Research analysts are still bearish on the semiconductor sector in the country.

Last month, analysts downgraded their calls on Malaysian Pacific Industries Bhd (MPI) and Unisem (M) Bhd following weaker-than-expected financial numbers for the first quarter of this year. Research houses said the earnings of both semiconductor companies were impacted due to inventory adjustment among clients following a supply pile-up in the second half of 2010. TA Securities Research recently downgraded the semiconductor sector from “neutral” to “underweight”. “We foresee global chip sales remaining weak in the second quarter of this year as many semi-device makers are moderating production after the earthquake in Japan,” said the report. The continuous strengthening of the ringgit against the US dollar will be tough for local semiconductor manufacturers as revenue is denominated in the US dollar, according to the report.

Melati Ehsan was awarded a RM148.63 million project from the Public Works Department to build a road stretching from Gua Musang in Kelantanf to Kampung Relong in Pahang. Melati’s unit Pembinaan Kery Sdn Bhd accepted a letter of award from the PWD for the road CONSTRUCTION [] project which starts on June 15 this year until Dec 10, 2013.

TSH Resources has allocated RM100 million or more per year as PLANTATION [] development capital expenditure (capex) for new planting of oil palm trees, the bulk of which will in Kalimantan, Indonesia. Bulk of the RM100 million capex would be for new planting in Kalimantan where it has about 58,000 ha of land which is still unplanted. The Indonesian operations, with the trees maturing by next year, would underpin TSH’s fresh fruit bunches output, productivity and revenue.

KPJ Healthcare reported a set of unimpressive earnings at RM27.51 million in the first quarter ended March 31, 2011 (1QFY2011) compared with RM27.24 million a year ago. Revenue rose 16.4% to RM437.75 million from RM376.04 million a year ago while earnings per share were 5.09 sen compared with 5.19 sen. It declared 2.4 sen dividend per share. However, KPJ expected the group’s performance would continue to improve in line with increasing demand, hospital capacity and activities.

MK Land Holdings Bhd’s net profit rose more than two-fold to RM7.22 million in the third quarter ended March 31 versus RM2.02 million a year ago, underpinned by its strong property performance. Revenue rose to RM165.15 million from RM94.74 million. Net asset per share was 87 sen.

Can-One Bhd has taken court action KIAN JOO CAN FACTORY BHD [] over the latter’s proposed one-for-two bonus issue and the proposed renounceable rights issue of 166.56 million 2five-year warrants 2011/2016 on the basis of one warrant for every four KJCF shares held after the proposed bonus. Can-One claimed the proposals breached the rights of Can-One under the shares sales agreement dated March 13, 2009 and in breach of the Order of the Court of Appeal dated Aug 25, 2010 and the order of the Federal Court dated Feb 21, 2011.

The Edge weekly reports that crane manufacturer Handal Resources has been on an expansion trail since it was listed two years ago, and the strategy has borne fruit.

FBMKLCI 1525.92 DJ-117.53 CRUDE OIL 105.93 RM 2.99

Land & General Bhd’s EGM will be at the Sri Damansara Club, KL at 10am. The company proposes to acquire 10 parcels of land with 27-hole golf course and clubhouse and several plots of vacant land in Seremban for RM25 million. MSWG said the proposed acquisition is a related party transaction involving at least four directors on the board and major shareholders.

OSK HOLDINGS BHD [] AGM will be at Plaza OSK, KL at 2.30pm. MSWG to raise questions about the reasons for the allowances of impairments losses on investments classified under Securities HTM of RM7.6 million and Securities AFS of RM38.7 million as disclosed in Note 37 on page 152 of the annual report. MSWG to also ask as the group loans and financing segment was the third biggest contributor, accounting for 23% of the group's pre-tax profit. In 2010, OSK loans and financing segment achieved pre-tax profit growth of 40% to RM45.5 million. What are OSK's plans to expand this segment, especially since the group was able to amass substantial deposit base of RM4.5 billion?

The Edge FinancialDaily reports the gaming sector is in the spotlight once again, with the focus on Berjaya Sports Toto Bhd (BToto).According to a Reuters report, tycoon Tan Sri Vincent Tan was mulling the sale of a 49% stake in BToto's unlisted numbers forecast operator (NFO) for about US$1 billion (RM3.03 billion).

ExxonMobil Exploration and Production Malaysia Inc has extended Handal Resources Bhd’s contract to provide crane services for a further one year, from May 1 to April 30, 2012.

Its unit Handal Offshore Services Sdn Bhd had received an extension of contract which it said would contribute to the group’s earnings for the financial year ending Dec 31, 2011. The contract was initially awarded to Handal Offshore in May 2006 for a five-year term expiring in April 2011.

Eastern & Oriental Bhd has received the Penang Government’s in-principle approval for its master plan to undertake a mixed integrated project on a proposed reclaimed site on the island. The company said the approval was for the development on the site, which is to be reclaimed under phase two of its Seri Tanjung Pinang in Tanjong Tokong, Penang.

Favelle Favco Bhd’s units have secured contracts worth a combined RM89.5 million for the supply of four offshore cranes. Favelle Favco Cranes Pte Ltd was to supply Keppel Fels Ltd with an offshore crane, which was expected to be delivered from end 2011 to early of 2012.

MAH SING GROUP BHD [] is buying nine parcels of land in Tanjung Kupang, Johor Bahru measuring 205.72 acres for RM54.7 million for an industrial park. The land was acquired at about RM6.10 per sq ft and it plans to develop into an integrated industrial and business park named Mah Sing i-Parc. “Based on preliminary plans, Mah Sing i-Parc will comprise semi-detached factories, detached factories and shop offices with an estimated gross development value of approximately RM610 million,” it said.

Press Metal Bhd and three foreign companies, which together plan to invest some RM9.5bil in energy-intensive industries in Samalaju Industrial Park, Bintulu, have signed separate power purchase agreement (PPA) term sheet with Sarawak Energy Bhd (SEB). SEB,Asia Minerals Ltd and Tokuyama Corp – would require a long-term supply of 1,300MW to power their plants. The electricity will be supplied by the 2,400MW Bakun hydroelectric dam, which is expected to produce its first 300MW in three months.

FBMKLCI 1514.13 DJ-30.88 CRUDE OIL107.43 RM 2.994

CIMB Bank and CIMB Islamic Bank will maintain their base lending rate and base financing rate at 6.3%. The two banks backtracked on their decisions in less than 24 hours after having announced a rise of five basis points on lending rates on Wednesday.

TIME DOTCOM BHD [] is teaming up with Measat Broadcast Network Systems Sdn Bhd (MBNS) to provide IPTV and broadband services across the Klang Valley and Penang., TT dotCom Sdn Bhd (TTdC) had signed a collaboration agreement with MBNS, which takes effect from Dec 20, 2010 and continue for 10 years from April 1. The collaboration agreement supersedes and replaces the principal terms of collaboration signed by the parties on Dec 20, 2010.

Glomac’s net profit for the third quarter ended Jan 31, 2011 rose 55.2% to RM16.52 million from RM10.65 million a year earlier, mainly due to stronger contribution from higher margin projects such as Glomac Tower, Glomac Damansara and Glomac Cyberjaya. Revenue for the quarter surged 124% to RM176.53 million from RM78.76 million in 2010. Earnings per share were 5.65 sen, while net assets per share was RM2.01. Glomac proposed an interim dividend of 4.5 sen per share. For the nine months ended Jan 31, Glomac’s net profit rose to RM47.96 million from RM28.29 million a year ago, on the back of revenue RM443.74 million.

There has been no indication from the Employees Provident Fund (EPF) that it will pare down its stake in MBSB, said its CEO Datuk Ahmad Zaini Othman. MBSB targets to grow its personal loans to account for 50% of its overall loan portfolio from about 30% presently and this should translate to an additional RM5 billion in fresh disbursements.

Perisai revealed that if it acquired Garuda Energy, it would assume a debt of RM120mil of the latter. Analysts had earlier said it was difficult to ascertain if Perisai was paying a fair price for Garuda Energy, considering there were no details on the latter's debt levels. Perisai also said its total borrowings would balloon from RM251.2mil as at Dec 21, 2009 to RM600.4mil post-acquisition of Garuda Energy. Aside from the RM150mil debt at Garuda Energy, Perisai said it may raise another RM150mil via external borrowings to fund the cash consideration needed for buying Garuda Energy. The projected total borrowings also include a consolidation of borrowings of RM91.4mil from its January 2011 acquisition of another company, Intan Offshore Group

SAM Engineering & Equipment (M) Bhd has proposed to acquire an engine casing manufacturing division from Singapore Aerospace Manufacturing Pte Ltd for RM135mil and restricted issue of irredeemable convertible unsecured loan stocks (ICULS) of up to 33.75 million ICULS to minority shareholders of SAM.

Nam Fatt Corp Bhd, a Practice Note 17 (PN17) status company, has entered into a heads of agreement with Tan Sri Ta Kin Yan to undertake a series of proposals with the ultimate aim of regularising the financial condition of the company. “Ta will participate in the proposed regularisation of Nam Fatt subject to the terms and conditions of the heads of agreement and the terms and conditions of a definitive agreement to be agreed and executed between the company and Ta,” it said. Nam Fatt also appealed to Bursa Malaysia not to de-list its securities and to allow the company to submit its regularisation plan.

Handal Resources Bhd’s rights issue of 60 million ordinary shares together with 60 million free warrants have been oversubscribed by 76.26%. At the close of acceptance and payment of the rights issue and free warrants on March 25, applications were received for 105.76 million new rights shares together with warrants, an excess of 45.76 million shares, Handal said in a statement yesterday. The rights issue of 60 million ordinary shares priced at 52 sen per share was offered together with 60 million new free detachable warrants on the basis of two rights shares and two free warrants for every three existing Handal shares. Together with the rights issue, Handal also made a bonus issue of 10 million shares on the basis of one bonus share for every six right shares subscribed.