Market Thoughts

US stocks held near session highs across the board Wednesday, with the Dow and S&P 500 rallying to new record highs, led by strong gains in techs. The Dow Jones Industrial Average jumped nearly 150 points, led by Cisco and Intel. Similarly, European shares extended gains to close sharply higher, with investor sentiment boosted by U.S. stocks reaching record highs, and a successful Italian bond auction. On the local market, the benchmark FBM KLCI rose 5.93 points to 1696.20 points. Given the positive momentum, the index could be re-testing its resistance of 1700 points and achieve a new record high.

Stocks to watch are: UMW as the group has won a contract worth US$157.7m for the provision of its jack-up drilling rig Naga 4 To Petronas Carigali; TH Plantations as the group has proposed a bonus issue on the basis of 1 bonus share to every 5 existing shares; LBS following the group disposed its two properties in China for HK$1.65b which would be satisfied by a combination of cash and shares with a disposal gain of RM240m;

Malaysia News & Highlights

Malindo Air take-off from Skypark in June?

MALAYSIA'S newest low-cost airline Malindo Air will operate from Skypark Terminal in Subang starting June this year to serve passengers in Malaysia and Indonesia. It is understood that Malindo Air is in the final stage of negotiations with the Department of Civil Aviation for approval to fly from the airport. Skypark Terminal is now operated by general aviation companies such as Berjaya Air and FireFly. It also serves turboprop flights. Sources said Malindo Air is expected to obtain the approval to fly from Skypark Terminal next month. "The idea is to bring people from small cities in Indonesia to Kuala Lumpur, and connect them to international flights via its parent company, Lion Air," one source said. He added that Malindo Air is targeting Sumatra due to its market size. (Source: Business Times)

UMW unit wins US$157.68m Petronas job

UMW Holdings Bhd’s unit UMW Standard Drilling Sdn Bhd has won a US$157.68 million (RM477.7 million) job from Petronas Carigali Sdn Bhd to supply a Jack-Up Drilling Rig “NAGA 4” for use within Malaysian waters. In its filing to Bursa Malaysia yesterday, the group said the three-year contract, which started from yesterday, is renewable for another two years. (Source: Business Times)

Majuperak Bio, Tetap Murni in joint venture

Majuperak Holdings Bhd’s unit Majuperak Bio Resources Sdn Bhd will partner Tetap Murni Sdn Bhd to produce bamboo toothpicks, bamboo skewers, bamboo chopsticks, bamboo blinds, bio char, pulp and activated carbon. Majuperak has a concession to extract bamboo from Hutan Simpan Hijau in the district of Hulu Perak and its factory is located at the Bandariang Industrial Area, Gerik. The initial cost for project amounts to RM7.5 million. (Source: Business Times)

Cash-rich IJM Land plans domestic, London expansion

As one of the few big boys in the property sector sitting pretty on a pile of cash, IJM Land Bhd is preserving its funds to expand both on the local front and in London. The property player, which has a market capitalisation of RM3.8bil, has seen its share price on an uptrend since March, hitting a one-year high of RM2.67 yesterday. In an exclusive interview with StarBiz, group managing director and chief executive officer Datuk Soam Heng Choon said the company was still growing and would put the money into working capital, notably for its project in London. “The build-then-sell concept in London requires us to be financially ready,” said Soam. The company was in the midst of resubmitting the building plan to the London authorities, added Soam. The property player has a 51% stake in the mixed-development project on Royal Mint Street, comprising one block of five-star hotel-cum-residential apartments and three blocks of residential apartments with a total gross built-up of 650,000 sq ft. He hopes to launch the project, which has a gross development value (GDV) of RM1.5bil, by the end of the year. (Source: The Star)

AirAsia X to restart KL-New Delhi, KL-Mumbai routes

AirAsia X will re-start KL-New Delhi and KL-Mumbai routes soon, group chief executive officer Tan Sri Tony Fernandes said. “AirAsia X will be re-starting routes to India very soon. KL-Bombay and KL-New Dehli are around the corner,” he wrote on social media site Facebook yesterday.The long-haul budget airline axed flights to Mumbai and New Delhi on Jan 31 last year, citing high operating costs. Both routes were commenced in 2010. The routes could serve as a feeder for its latest venture in India, given that domestic aviation rules did not permit new airlines to operate international routes for the first five years of operations. (Source: The Star)

LBS Bina to sell two units to Zhuhai, raise RM538mil in cash and emerge substantial shareholder

Property developer, LBS Bina Group Bhd via indirect subsidiary Dragon Hill Corp Ltd, has signed a conditional sale and purchase agreement with Zhuhai Holdings Investment Group Ltd to dispose of the entire equity interest in two of its subsidiaries in a RM657.7mil cash and share deal. (Source: The Star)

EPF now minority in UEM Land

The Employees Provident Fund (EPF) has ceased to be a substantial shareholder of UEM Land Holdings Bhd after its stake fell to below 5%. In a filing with Bursa Malaysia, UEM Land said the EPF sold 2.1 million of the company’s shares in the open market, reducing its interest to 216.40 million shares. As at end-2012, the EPF had a 5.71% stake in the property developer. (Source: The Star)

Steady take-up rates for properties in Cyberjaya

In a recent survey conducted by eight major property developers in Cyberjaya, the average take-up rate for the various developments there was approximately 78% in 2012. “This year, we foresee the buyer take-up rate improving further compared to last year, as there is a lot more interest and enquiries from discerning investors on the various developments as they continue to recognise and accept the Cyberjaya brand. “With the announcement of Cyberjaya's new mosque and Chinese primary school, Cyberjaya will definitely be one of the preferred places to work or reside,” pointed out Setia Haruman sales and marketing assistant general manager Liew Yeon Keong. Eight major property developers, namely, Setia Haruman Sdn Bhd, Mah Sing Group Bhd, MCT Consortium Bhd, SP Setia Bhd, UEM Land Holdings Bhd, the Emkay Group, Paramount Property Development Sdn Bhd and Glomac Bhd will be joining forces for the “Cyberjaya Premier Property Showcase” to be held on April 13 and 14 at Cyberview Resort and Spa, Cyberjaya. (Source: The Star)

OSK expects to maintain dividend payout

OSK Holdings Bhd is cautiously optimistic of performing well this year and hopes to maintain its dividend payout to shareholders, says group managing director and chief executive officer Tan Sri Ong Leong Huat. Last year, the group paid out 10 sen a share to investors, more than double the 4.5 sen a share paid out in 2011. In outlining the prospects of OSK Holdings, Ong said the group will focus on organic growth and stable profit from RHB Capital by virtue of its investment in the enlarged group. (Source: Business Times)

TH Plantations to issue 149.73m bonus shares

TH Plantations Bhd will issue of up to 149.73 million bonus shares on the basis of one for every five existing shares. In its filing to Bursa Malysia yesterday, the group said this move is to reward loyal shareholders and to improve trading liquidity of TH Plantations shares. (Source: Business Times)

Maxis quadruples high-speed 4G LTE coverage

Maxis Bhd has quadrupled its high-speed 4G Long-term Evolution (LTE) coverage, allowing about 100,000 customers access to the service.It plans to expand the coverage to Penang and Johor Baru by September, joint chief operating officer (COO) Mark Dioguardi said. "We are extremely encouraged by the take-up of our 4G LTE service and in response, will expand 4G LTE coverage to more areas in the Klang Valley, Penang and Johor Baru by the third quarter of 2013," he said in a statement. (Source: Business Times)

Foreign News

Stocks Advance While Treasuries Retreat With Gold, Yen

Stocks jumped, sending the Standard & Poor’s 500 Index to a record, as China’s imports grew, Japan reiterated its stimulus plans and investors speculated earnings will beat estimates. Treasuries fell after minutes showed the Federal Reserve debated the end of its bond purchases. The S&P 500 advanced 1.2 percent to 1,587.73 at 4 p.m. in New York and is up 2.2 percent this week, its best three-day rally since the beginning of January. National benchmark indexes climbed in all of the 18 western European markets except Iceland. The 10-year Treasury yield rose five basis points to 1.80 percent. Gold slid 1.8 percent after Cyprus said it plans to sell the metal to raise money. The yen fell to the weakest level versus the dollar since 2009 as Bank of Japan (8301) Governor Haruhiko Kuroda reiterated a pledge for all necessary steps to meet a goal of 2 percent inflation in two years.

Obama Proposes $3.8 Trillion Budget to Revive Debt Talks

President Barack Obama sent a $3.8 trillion budget to Congress today calling for more tax revenue and slower growth for Social Security benefits in a political gamble intended to revive deficit-reduction talks. The president is proposing to replace across-the-board budget cuts known as sequestration with what White House budget officials say is $1.8 trillion in additional deficit reduction over 10 years that includes collecting more taxes from the wealthy and trimming some federal programs.

Kuroda Says BOJ Has Taken All Possible Monetary Actions for Now

Haruhiko Kuroda said the unprecedented stimulus announced by the Bank of Japan (8301) at his first meeting as governor last week is enough to achieve a 2 percent inflation goal. The central bank has taken all “necessary” and “possible” measures, Kuroda told reporters in Tokyo yesterday. While officials will change policy as needed, he doesn’t expect adjustments each month, he said. The BOJ chief reiterated a pledge to do what’s needed to meet the target in two years.

FOMC Minutes Show Several Members Saw QE Over by Year-End

Several Federal Reserve officials said the central bank should begin tapering its quantitative easing program later this year and stop it by year end, minutes of their March meeting showed. The Federal Open Market Committee members “thought that if the outlook for labor market conditions improved as anticipated, it would probably be appropriate to slow purchases later in the year and to stop them by year-end,” according to the record of the March 19-20 FOMC meeting released today in Washington ahead of the regularly scheduled 2 p.m. time.

European Stocks Rally Most in Month as Bank Shares Rise

European stocks gained the most in a month, with the Stoxx Europe 600 Index posting its longest winning streak since January, as banks advanced and a report showed Chinese imports beat forecasts in March. BNP Paribas SA, Frances’s largest lender, and Banco Santander SA, Spain’s biggest, led a gauge of European banking shares to their largest advance in almost five months. SMA Solar Technology AG (S92), Germany’s biggest solar-energy company, and Wacker Chemie AG (WCH) added at least 5.8 percent. Gerresheimer AG rose 2.5 percent after reporting first-quarter revenue that beat analysts’ projections.

(Source: Bloomberg)