Market Thoughts

US stocks shaved their gains in the final hour of trading Thursday, but still ended modestly higher with the Dow recovering from its worst one-day drop in nearly four weeks, as the latest round of tepid economic data suggested the Fed's bond-buying program would remain intact. Similarly, European shares pared gains but closed higher after a round of soft U.S. data. On the local exchange, the FBM KLCI fell 8.55 points to 1774.92 points. We expect the index to remain range bound following the optimism in the US coupled with the lower inflation data in Japan.

Stocks to watch are: Scomi Group and Scomi Engineering after the media reported that the latter is left in the running for the RM4.7b Chennai monorail job; and LBS as the media highlighted that the group is in early talks over possibly acquiring a few parcels of land in the Iskandar, Johor.

Malaysia News & Highlights

Oct listing for Westports? Plans to raise RM1.5bil

Westports Malaysia Sdn Bhd, the operator of the country's busiest port, would list on Bursa Malaysia in October in a deal that may raise up to RM1.54bil, two sources close to the deal said. The initial public offering (IPO) comes after the general election concluded with a win for Barisan Nasional on May 5, encouraging companies to move forward with their listing plans. (Source: The Star)

IGB to seal RM6bil Southkey Megamall deal soon

IGB Corp Bhd expects to ink its joint-venture agreement with Selia Pantai Sdn Bhd for the RM6bil Southkey Megamall in Johor's Iskandar Malaysia within the next 30 days. The deal to develop the 14.57ha in Plentong, Johor Baru, into a mix of offices, retail outlets and residences was announced in March last year, but was delayed due to general election-related uncertainties, company officials said. The project, which is still at the design stage, had received its development order, they added. (Source: The Star)

Malaysia's Scomi among only 2 firms left in bid for RM4.65bil Chennai monorail job

Only two companies India's IL&FS Transportation Network Ltd-Scomi Engineering Bhd consortium and Gammon India are left in the running for the 8,550 crore (RM4.65bil) 57.1km monorail project in Chennai, capital of the southern Indian state of Tamil Nadu. “Together with IL&FS, we are thankful and humbled for being one of the two consortiums qualified to participate in India's largest monorail network to be planned and tendered,” says Scomi group chief operating officer for transport solutions Kanesan Veluppillai. (Source: The Star)

Masterskill to sell freehold land for RM58.9mil

Masterskill Education Group Bhd unit Masterskill (M) Sdn Bhd will dispose 10 contiguous pieces of vacant freehold land for RM58.9mil after accepting a conditional offer. The said parcels of land are in Kajang, Ulu Langat district in Selangor. “Masterskill is in the process of finalising the terms and conditions of a sale and purchase agreement to be entered into with the purchaser,” the company said in its filing with Bursa Malaysia. It said that an announcement will be made when there are further developments on this proposed disposal. (Source: The Star)

Petronas job a catalyst for Petra Energy's growth

Integrated oil and gas services provider Petra Energy Bhd expects its newly-secured hook-up commissioning (HUC) and topside major maintenance services contract to contribute between 20 and 25 per cent to its total revenue by 2015. Executive director and chief executive officer Datuk Anthony Bujang said the five-year contract, awarded on May 21 by Petronas Carigali Sdn Bhd, is the biggest contract secured by the group thus far. "The project will commence in a few weeks and if everything goes on schedule, we will see turnover to flow in by 2015. (Source: Business Times)

SapuraKencana expected to be included in FBM KLCI

SapuraKencana Petroleum Bhd, Malaysia's biggest oil and gas services company, has emerged as the odds-on-favourite to be included in the FTSE Bursa Malaysia KLCI (FBM KLCI) index. The FBM KLCI, is capitalisation-weighted stock market index, restricted to 30 of the largest companies listed on Bursa Malaysia's Main Market. SapuraKencana has a market capitalisation of more than RM24 billion, making it the 15th largest public-listed company in Malaysia. (Source: The Star)

Astro’s NJOI sees higher viewership growth

Astro Malaysia Holdings Bhd’s subscription-free satellite TV service NJOI is expected to see positive viewership growth this year following the launch of additional channels via its latest prepaid offerings. Astro launched NJOI last year, giving viewers access to 19 TV and 20 radio channels with a one-time payment. While Astro is a pay TV service with a monthly payment basis, NJOI is subscription-free with budgeted programmes for which subscribers make a one-time payment of RM308 plus an installation fee of RM100. (Source: The Star)

AZRB unit to continue services

Ahmad Zaki Resources Bhd (AZRB's) unit Inter-Century Sdn Bhd will continue to provide marine high speed diesel bunkering services to Petronas Dagangan Bhd's customer vessels at the Port of Kemamam in Terengganu. The agreement for a period of five years from June 1 to May 31, 2018 will enable it to continue its bunkering activities at the Kemaman Supply Base, AZRB said in a filing with Bursa Malaysia. (Source: The Star)

Foreign News

U.S. Stocks Rise on Fed Stimulus Bets After GDP Report U.S. stocks rose, following the Dow Jones Industrial Average’s biggest drop in four weeks, as weaker-than-expected data on economic growth and jobless claims boosted speculation the Federal Reserve will maintain stimulus. The S&P 500 advanced 0.4 percent to 1,654.41 in New York. The Dow added 21.73 points, or 0.1 percent, to 15,324.53. About 6.5 billion shares traded hands on U.S. exchanges today, or 3.7 percent more than the three-month average.

Economy in U.S. Grew at 2.4% Rate, Less Than First Estimated The U.S. economy expanded less than previously estimated in the first quarter as slower inventory building and cutbacks in government spending overshadowed the biggest gain in consumer purchases since the end of 2010. Gross domestic product rose at a 2.4 percent annualized rate, the Commerce Department said today in Washington. The median forecast in a Bloomberg survey called for no revision from the 2.5 percent pace initially reported.

Japan’s Stocks Correction Raises Stakes for Abe’s Growth Plan This week’s slide of Japan’s stock market into a correction raises the stakes for Prime Minister Shinzo Abe’s planned revamp of business regulations as officials sought to sustain confidence in efforts to revive the economy. The Topix Index of shares yesterday tumbled 4.8 percent, a week after careening down 6.9 percent, the most since the March 2011 earthquake and tsunami. The index’s gains over the past six months were pared to 45 percent, from as much as 64 percent earlier this month.

Japan Consumer Prices Slide in Challenge to Abe Revival Campaign Japan’s consumer prices dropped for a sixth straight month in April, highlighting the challenge for Prime Minister Shinzo Abe in sustaining confidence in an economic revival.Consumer prices excluding fresh food fell 0.4 percent from a year earlier, the statistics bureau said in Tokyo today, matching the median estimate of 29 economists in a Bloomberg News survey.

(Source: Bloomberg)