Market Thoughts

US and European stocks ended in record highs yesterday buoyed by supportive comments from central banks around the world and a pair of upbeat economic data.

On the local market, the FBM KLCI rose 9.03 points to 1776.16 points yesterday. Following the bullish sentiment in the US and Europe, we expect the local market to continue its bullish momentum today. The FBM KLCI is expected to climb towards its resistance of 1800 points.

Stocks could lure investor interest are: KNM after the group secured an oil & gas service contract worth RM307m; and Mah Sing as the group plans to acquire land in Klang Valley and Iskandar for RM438m.

Malaysia News & Highlights

Sale of JCorp prized asset Pusat Bandar Damansara to Malton to go ahead within six months

Johor Corp's (JCorp) chief executive officer has announced that the deal involving the sale of its prized real estate asset Pusat Bandar Damansara (PBD) to Malton Bhd would go ahead as planned within six months, subject to conditions being met. Datuk Kamaruzzaman Abu Kassim also replied in the affirmative when asked if he was happy with the conditions of the sale of PBD to Malton. (Source: The Star)

Mah Sing buys more land, GDV rises by RM5.5bil to RM26.4bil

True to its aggressive stance of growing its land bank, Mah Sing Group Bhd has acquired two parcels of land, one in Senibong, Iskandar Malaysia, and the other in Taman Wahyu in Kepong, Kuala Lumpur.The property developer was paying RM366mil and RM73mil, respectively, for these assets, which increased its gross development value (GDV) by RM5.5bil to RM26.4bil, the company said. The land in Senibong measures 14.16ha and is priced at RM238 per sq ft (psf), while the Taman Wahyu land measures 4.86ha and is priced at RM135 psf. Thus, to date, Mah Sing has announced three land acquisitions in 2013, including D'Sara Sentral in Sungai Buluh last month (Source: The Star)

KNM secures RM308mil orders

KNM Group Bhd has secured additional new order intakes totalling RM308.6mil from Public Stock Company TAIF-NK, a filing with the stock exchange showed. The company said this would bring its total order book excluding Peterborough and Orizon to RM2.4bil to-date. (Source: The Star)

UEM Land earnings almost quadrupled in Q1

UEM Land Holding Bhd's net profit for the first quarter ended March 31 almost quadrupled to RM211.1mil from RM54.2mil in the previous corresponding quarter due to windfall from the Puteri Harbour land sale. Meanwhile, its revenue surged some 134% to RM711.5mil from RM303.7mil a year ago. A filing with Bursa Malaysia showed that the developer pocketed about RM180mil in net profit from the two parcels of freehold land in Puteri Harbour, Nusajaya, Johor, which was sold to Liberty Bridge Sdn Bhd for RM400.75mil. (Source: The Star)

JCorp may relist KFC, QSR

Johor Corp Bhd (JCorp) plans to relist KFC Holdings (M) Bhd and QSR Brands Bhd on Bursa Malaysia under a new entity in the next four to five years. JCorp president and chief executive Datuk Kamaruzzaman Abu Kassim said it will do so once the two firms are leaner and on a better financial position. "It is our plan to bring both entities closer to JCorp. We want them to achieve higher profitability so that they can be relisted and fetch a higher premium. "A new initial public offering framework will be made for both companies. Just like the relisting of Maxis Bhd, we want to repackage and relist them on Bursa Malaysia," Kamaruzzaman said yesterday after signing a memorandum of understanding with Perbadanan Hal Ehwal Bekas Angkatan Tentera (Perhebat). (Source: Business Times)

Vincent Tan raises stake in REDtone

Tycoon Tan Sri Vincent Tan Chee Yioun has raised his equity stake in REDtone International Bhd to 13.13% from 10.13% as at October last year. Berjaya Phillipines Inc, a unit of Berjaya Sports Toto Bhd, had bought 13.1 million shares on May 22 and 23 on the open market (Source: The Edge)

Gabungan AQRS to launch more projects in Iskandar

Integrated engineering and construction services provider Gabungan AQRS Bhd will launch more property projects in Iskandar Malaysia this year. Gabungan AQRS chief executive officer Ng Chun Kooi said the company will focus on Iskandar Malaysia as it positions itself to capturing potentials in the property sector. The company had recently launched its first high-rise residential development called "The Peak" in Johor Baru. It will soon be launching its commercial development in Permas Jaya, Johor. The combined gross development value of the projects is about RM654 million. (Source: Business Times)

Foreign News

U.S. Stocks Rise as Home Prices, Consumer Confidence Jump

U.S. stocks rose, with the Dow Jones Industrial Average returning to a record, after data showed consumer confidence climbed to the highest level since 2008 and home values jumped the most in seven years. The Standard & Poor’s 500 Index rallied 0.6 percent to 1,660.06 in New York. The benchmark equity gauge pared gains after earlier rising as much as 1.5 percent. The Dow added 106.29 points, or 0.7 percent, to 15,409.39 today. About 6.32 billion shares traded hands on U.S. exchanges today, in line with the three-month average.

European Stocks Rise Most in a Month as AstraZeneca Gains

European stocks advanced, with the Stoxx Europe 600 Index climbing the most in more than a month, as U.S. and U.K. markets reopened following a public holiday. The Stoxx 600 increased 1.3 percent to 308.23 at the close of trading, extending its rally this month to 3.9 percent. The gauge has climbed for 12 consecutive months, its longest winning streak since 1997. The equity benchmark has rallied 10 percent so far in 2013, its best start to a year since 1998, as central banks around the world maintained a combination of monetary stimulus and low interest rates.

Confidence at Five-Year High as U.S. Housing Climbs: Economy

Consumer confidence climbed to the highest level in more than five years and home prices advanced by the most in seven as the housing rebound gives the U.S. economy a lift. Rising property and stock values are boosting household finances, helping Americans cope with an increase in the payroll tax and wage gains that have barely kept up with inflation. Stocks climbed as the reports underpinned the outlook for consumer spending and earnings at companies ranging from retailers such as Williams-Sonoma Inc. to homebuilders including PulteGroup Inc.

Bank Outlook to Stable by Moody’s 5 Years After Cut

Moody’s Investors Service changed its outlook for the U.S. banking system to stable after keeping it negative since 2008, saying the country’s economy poses less of a threat. Gross domestic product will grow by 1.5 percent to 2.5 percent through next year, helping lenders avoid losses, the New York-based credit-rating company said today in a report. Banks have raised capital to protect against potential deterioration in the economy, while low interest rates have buoyed the values of their real-estate portfolios, Moody’s said. Moody’s is becoming more optimistic about U.S. lenders a year after it downgraded 15 banks in a review of the global financial system. The change didn’t affect its negative outlooks for Bank of America Corp. and Citigroup Inc. (C), both of which are rated Baa2, two levels above junk.

Emerging-Market Stocks Advance a Third Day as Oil Shares Rally

Emerging-market stocks gained for a third day as higher oil prices boosted energy producers and reports in the U.S. spurred confidence in the global recovery. South Africa’s rand dropped to a four-year low versus the dollar after the economy slowed more than forecast. The MSCI Emerging Markets Index climbed 0.2 percent to 1,030.82. The gauge is down 0.8 percent this month following last week’s 1.8 percent slide. U.S. home prices rose in March by the most in seven years and confidence among American consumers climbed in May to the highest level in more than five years, data showed today.

(Source: Bloomberg)