Market Thoughts

US stocks finished higher in light, tight tug-of-war trading Thursday as Wall Street cheered Bank of Japan's aggressive new stimulus measures, but a disappointing weekly jobless claims report kept a lid on gains. Meanwhile, European shares closed sharply lower after comments made by the Mario Draghi, president of the European Central Bank (ECB), curbed investor sentiment. On the local exchange, the FBM KLCI closed 3.06 points higher at 1688.46 pointa after hitting an intraday high of 1700 points. Given its resilience and recovery ability from a recent 50-point drop, we expect the index to re-test its resistance of 1700 points.

Stocks to watch are: Bina Puri, as it has won RM1.3bil GDV mixed-property development project in Brickfields; Boustead Heavy Industries Corp (BHIC), following management is confident that BHIC will return to the black this year; glove counters, amid a potential bird flu outbreak in China.

Malaysia News & Highlights

Bina Puri wins RM1.3bil GDV mixed project in Brickfields, KL

Syarikat Prasarana Negara Bhd has named Bina Puri Holdings Bhd as the winner of a RM1.3bil gross development value (GDV) mixed development in Brickfields, confirming an earlier report by StarBiz. Industry sources had told StarBiz in January that builder-cum-developer Bina Puri was one of the three frontrunners for the job. The other two were privately-held TH Properties Sdn Bhd and NPO Development Sdn Bhd. This would be Prasarana's fourth property joint venture on land adjacent to LRT stations after similar arrangements were inked with Crest Builder Holdings Bhd, TRC Synergy Bhd, and Naza TTDI Sdn Bhd. (Source: The Star)

TM revokes RM92.5m Opcom deal

Telekom Malaysia (TM) revoked its RM92.5 million contract to Opcom Holdings Bhd that was awarded last October to supply and deliver single-mode optical fibre cables and other cables. In a statement yesterday, Opcom said its subsidiary, Opcom Cables Sdn Bhd, has received a letter of revocation from TM and is currently in discussion with TM to negotiate a reinstatement of the award. Opcom Cables was awarded the contract for a period of three years, commencing from September 2012 to September 2015. (Source: Business Times)

Boustead Heavy Industries returning to the black

Boustead Heavy Industries Corp Bhd (BHIC) is confident it will return to the black this year on growth driven by the oil and gas (O&G) industry and improved maintenance, repair and overhaul (MRO) services. Aside from these two growth paths, managing director Tan Sri Ahmad Ramli Mohd Nor said BHIC stood to gain from services and expertise it would offer in the building of six littoral combat ships (LCS) by associate Boustead Naval Shipyard Sdn Bhd (BNS). The RM9bil contract from the Defence Ministry to BNS should also support BHIC's financials for the next five to six years. (Source: The Star)

AirAsia India eyes flights to the Gulf, Europe, US and South-East Asia

AirAsia India is keen to fly international routes and has drawn up plans to recruit pilots for its wide-bodied, long-haul aircraft, Mail Today reported. It said although domestic aviation rules restricted new airlines from operating domestic routes for the first five years of their operations, AirAsia India had sounded the government that it wanted to fly to major overseas destinations, including the Gulf, Europe, United States and several South-East Asian countries. (Source: The Star)

CMMT gets shareholders nod to buy more malls

Armed with a fresh mandate to issue more shares, CapitalMalls Malaysia Trust (CMMT) is on the prowl to acquire more shopping malls to increase its portfolio of retail centric assets. Its CEO Sharon Lim Hwee Li told shareholders at the AGM yesterday that the company was always on the lookout for new acquisitions and had not confined their search to any particular area. (Source: The Edge)

Maybank aims for higher SME loan growth this year

Malayan Banking Bhd (Maybank) is targeting for its retail small and medium enterprise (SME) loan to grow between 18% and 20% this year. Its deputy president and head of community financial services Datuk Lim Hong Tat said the segment grew about 10% last year. “In the last three months, the annualised growth for this segment was about 18% and we expect to maintain this momentum for this year to about 18% to 20%,” he said. (Source: The Star)

Foreign News

U.S. Stocks Rebound While Yen Plunges on Stimulus Efforts

U.S. stocks advanced, rebounding from yesterday’s drop, as central banks in Japan and Europe reassured investors that they will keep economies awash in cash to bolster growth. Commodities slid for a fifth day and the yen weakened the most since October 2011. The Standard & Poor’s 500 Index added 0.4 percent at 4 p.m. in New York, rebounding from yesterday’s 1.1 percent retreat from a record.

Stabilizing Confidence Shows U.S. Claims Jump Temporary

Confidence among U.S. consumers stabilized last week, easing concern the latest jump in jobless claims signals a setback in the job market. The Bloomberg Consumer Comfort Index increased to minus 34.1 in the week ended March 31 from a six-week low of minus 34.4 in the prior period as measures of the state of the economy and buying climate improved. The number of people filing applications for unemployment benefits unexpectedly jumped last week to a four-month high, according to Labor Department data.

European Stocks Drop for a Second Day on Draghi Comments

European stocks retreated, posting the biggest two-day slump in more than four months, as European Central Bank President Mario Draghi said that the economic recovery in the euro area remains subject to downside risks. The benchmark Stoxx Europe 600 Index declined 1.1 percent to 291.71 at the close in London. The equity benchmark slid 0.9 percent and the Standard & Poor’s 500 Index retreated from a record high in New York as U.S. services and jobs data missed forecasts.

Kuroda Leads Japan Down Bernanke Path With Unprecedented Easing

Haruhiko Kuroda followed in the footsteps of Ben S. Bernanke and Mario Draghi as he swung the Bank of Japan from incremental moves to unprecedented stimulus in his first policy meeting as governor. The BOJ will double the monetary base by the end of 2014 through buying government bonds, the central bank said in Tokyo, in Japan’s biggest round of quantitative easing. JPMorgan Chase & Co. said the Japanese and U.S. central banks are now “in the same camp” when it comes to monetary stimulus.

Gold Slumps Toward Bear Market as Investors Cut Holdings

Gold dropped to the lowest since May, nearing a bear market, on signs that investors are seeking higher returns in equities as the global economic recovery cuts demand for haven assets. Palladium fell the most since October. Global holdings of exchange-traded products backed by gold are down 7.4 percent this year, data compiled by Bloomberg show. Prices have fallen 7.4 percent this year, while the MSCI All- Country World Index of equities advanced 5 percent. The metal may continue to decline as the resilience of the financial system to recent developments in Italy and Cyprus suggests reduced risk of a so-called major meltdown, Credit Suisse Group AG said.

(Source: Bloomberg)