Journey to Wealth
OSK188 - 10 Apr 2012: DAILY RESEARCH REPORT
On The Platter
TELECOMMUNICATION(NEUTRAL) Sector Update: IPTV Battle Lines Drawn The battle for viewership andeyeballs is heating up within Malaysia's nascent IPTV space. TM recently addedfresh content to HyppTV, its IPTV service offered together with Unifi. AsianBroadcasting Network (ABN), a cable pay-tv operator is slated to roll out itsservice in 2Q2012, taking on Astro which is reportedly seeking to re-list. We expectthe IPTV theme to pick-up in support of the triple-play propositions offered byTM and Maxis as broadband becomes increasingly commoditized. TM is well placedto benefit from the shift as it has crafted a good strategy to build up itsinternet and data businesses, and is executing well on Unifi. We think Astro'shomecoming IPO will spice up the convergent theme in the telco industry andincite talks of a merger with Maxis again. TM presents one of the best ways toplay the convergent theme in our opinion and is a beneficiary of the rekindledinterest in the fixed line business. We keep our BUY call on TM based on higherFV of RM5.90 (previously RM5.70) following the 2-4% upgrade to our FY12/13forecasts. We maintain our NEUTRAL call on Maxis based on FV of RM5.50.
CENSOF (FV RM0.570 ' BUY) Corporate News Flash: Nets Contracts Worth RM33.5m
LPI (FV RM15.40 ' BUY) 1QFY12 Results Review: aSlow Start
UEMLAND (FV RM3.17' TRADING BUY) Corporate NewsFlash: Buying Back Land
Market Review
Correctionsets in. The FBM KLCI gave up 7.59 pts to 1591.28 at the close, taking the cuefrom the sell-down across the regional bourses on weak jobs data out of the US.Today's headlines include the government mulling raising the minimum floorprices of houses foreigners are allowed to buy to RM1m from RM500,000 to stemthe rise in property prices, LPI's 1QFY12 net profit falling 18% y-o-y onhigher claims incurred and lower investment income and UEM Land to acquire 49.9hectares of freehold land in Johor Bahru. Overnight, US investors reactednegatively, albeit late due to the long weekend,to the weaker non-farm payrolls data by selling down and taking profit on theirinvestments, pulling down the Dow to below the 13,000 level. We expectsentiment on the local bourse to remain relatively muted with further downsidepressure.
MEDIA HIGHLIGHTS
US stocksdecline as employment report misses estimates US stocks fell, dragging theStandard & Poor's 500 Index lower following its worst week of 2012, afteremployers added fewer jobs than forecast in March. The S&P 500 slumped 1.1%to 1,382.20 after losing 0.7% last week.
The DowJones Industrial Average dropped 130.55pts, or 1%, to 12,929.59. Equity marketswere shut for Good Friday on 6 April, when the employment report was released.Equities slumped last week after the Federal Reserve signaled it will refrainfrom further monetary stimulus and concern about Europe intensified. The US LaborDepartment said 6 April that employers added 120,000 jobs, the fewest in fivemonths and less than the median economist forecast of 205,000 in a Bloombergsurvey. (Bloomberg)
RM1m floor price?
TheGovernment is considering raising the minimum floor prices of houses foreigners are allowed to buy to RM1mfrom the current RM500,000 in an effort to control the rise in property prices,sources said. They said such a decision was 'in the pipeline' and theimplementation would be made by the economic planning unit (EPU) under thePrime Minister's Department currently headed by Minister Tan Sri Nor MohamedYakcop. Another source said the revised guidelines would also consider aslightly lower base price threshold of RM800,000 for residential properties inselected economic corridors such as Johor's Iskandar Malaysia to ensure thedevelopment and success of these corridor hotspots. (StarBiz)
Century Software secures RM33m contracts
CenturySoftware Holdings secured two contracts valued at RM33.5m from the PertubuhanKeselamatan Sosial for the social security information management systems. Itsaid on Monday the first contract was for the social security informationmanagement system valued at RM24.5m while second contract was for the Perkesosocial security information management system valued at RM9.0m. "The scopeof work for the projects are to design, develop, supply, deliver, install,integrate, testing, deployment, commissioning, training and to maintain the Perkesosocial security information management systems," it said. (StarBiz) Pleasesee accompanying report
UEM Land unit to buy Johor land for RM93m
UEM LandHolding's wholly-owned subsidiary Nusajaya Premier SB (NPSB) has proposed toacquire 49.5ha of freehold land in Johor Bahru from Tanjung Bidara Ventures SBfor RM93.2m cash. "The land is adjacent to Kota Iskandar and the company'sexisting prime development in Nusajaya, Puteri Harbour," UEM Land said. Itsaid the proposed acquisition would allow the group to realize its originaldevelopment vision for Puteri Harbour, where high density urban waterfrontprecincts at heart of public and private marinas are balanced with landed andhigh-rise residential precincts on both sides. (Malaysian Reserve) Please seeaccompanying report
I&P eyes repeat of RM1.4bn revenue
I&PGroup SB, a wholly-owned subsidiary of Permodalan Nasional Bhd (PNB), aims to repeat the RM1.4bn revenue it chalked uplast year, despite the more challenging time this year. Its managing directorDatuk Jamaludin Osman said properties with gross development value of aboutRM3bn were expected to be put into the market this year. I&P hassuccessfully developed several major and well-known projects, such as Bukit Damansara,Bandar Kinrara, Alam Damai,Alam Impian, Alam Sari, Temasya-Glenmarie, BandarBaru Seri Petaling, Taman Pelangi and Taman Perling. It is learnt that thegroup has 3,622ha of land in the KlangValley and Johor Baru, with 1,195ha still undeveloped. (BT)
SILK bags RM10.8m contract
SILKHoldings' subsidiary Jasa Merin (M) SB has clinched a contract extension worthRM10.8m from Petrofac Ltd. The contract, which commenced in July 2009, had aprimary period of two years with the extension options of 1+1+1 year, is to begiven the second extension from 23 July 2012 to 22 July 2013. The contractextension is expected to contribute positively to SILK's earnings and assets forthe financial year ending 31 July 2012 and 31 July 2013, the company said in afiling to Bursa Malaysia yesterday. (Financial Daily)
Dijaya gets 8% yield boost from new assets
Dijaya Corpis poised to get an income boost after an amalgamation exercise where its majorshareholder Tan Sri Danny Tan would inject assets with long-term leasearrangements and rental yield of at least 8% yearly. Dijaya said in a statementyesterday, as part of the deal, Tan has irrevocably agreed and covenanted with Dijaya,via a letter of undertaking, to procure the relevant parties to be identified,on or before the completion of the proposed acquisitions, to enter into thelong-term lease. Dijaya last month proposed an amalgamation exercise whereTanwill inject 73 of his privately held assets worth RM1.1bn into Dijaya, makingit one of the largest property firms in the country by market capitalization.(Financial Daily)
Syed Zainal resigns from Proton
ProtonHoldings managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir hasresigned, raising concerns over the future of the national car maker which wasrecently being taken over by conglomerate DRBHicom. His departure, which couldpresage resignations from other senior management staff in coming weeks, is dueto differences with the new owners over Proton's future direction, closeassociates of the Proton chief and industry executives said. (Financial Daily)
Guan Chong seeks secondary listing on MainBoard of SGX
Guan Chong,one of the largest cocoa processors in the region, is seeking a secondarylisting on the Main Board of Singapore Exchange Securities Trading Ltd (SGX).In a statement yesterday, its managing director/ chief executive officerBrandon Tay Hoe Lian said the dual listing is to facilitate the company'saccess to the capital market of Singapore, giving the group the flexibility totap into additional sources of equity funding for its expansion. (MalaysianReserve)
ECONOMIC HIGHLIGHTS
Japan: Current account moving to surplus adds support for Yen
Japan swungto a current-account surplus in February after a record deficit in January,lending support to a currency that officials have sought to weaken to aidexporters and economic growth. The excess in the widest measure of trade wasJPY1.18trn (USD14.5bn) the Ministry of Finance said in Tokyo yesterday. Themedian estimate of 25 economists surveyed by Bloomberg News was for a surplusof JPY1.12trn. The yen is rebounding even after interventions by the financeministry and monetary easing by the Bank of Japan helped to bring the currencydown from October's post World War II high against the dollar.. (Bloomberg)
Russia: Holds interest rates as inflationpressures increase
Russia'scentral bank refrained from cutting interest rates for a fourth month aftersignaling that 'medium-term' inflation risks are increasing. Bank Rossii leftthe refinancing rate at 8%, as predicted by 21 of 22 economists in a BloombergNews survey. The overnight auction-based repurchase rate was kept at 5.25% andthe overnight deposit rate will remain at 4%. The world's largest energyexporter is keeping borrowing costs unchanged even after the inflation ratefell to the lowest in two decades. Current market interest rates are'acceptable for the coming months,' Bank Rossii said. China may ease policy toboost faltering growth and Brazil has cut its benchmark rate five times sinceAugust. (Bloomberg)
China: Cautious on easing after inflationpickup
China'sinflation accelerated more than forecast in March on a pickup in food prices,signaling that policy makers may exercise caution in adding stimulus to boostgrowth. Consumer prices rose 3.6% from a year earlier, the National Bureau ofStatistics said yesterday. That was more than the median 3.4% estimate in aBloomberg News survey of 33 economists. Food-related costs gained 7.5%. PremierWen Jiabao's officials may need to remain alert to the risk of inflationbouncing back even after price increases stayed below the government's 4% target for a second month. China'seconomy may have expanded last quarter at the slowest pace in almost threeyears, showing the limits of the nation's contribution to global growth as USjob growth weakens and concern mounts about Europe's sovereign-debt crisis.(Bloomberg)
EU: ECB financing for Portuguese banks rose torecord in March
TheEuropean Central Bank's financing for Portuguese lenders rose to a record inMarch, the Bank of Portugal said. ECB financing climbed to EUR56.3bn (USD74bn)from EUR47.6bn in February, the Bank of Portugal said yesterday on its website.ECB financing previously peaked at EUR49.1bn in August 2010. In April lastyear, Portugal became the third euro-area country after Greece and Ireland torequire aid and will receive EUR78bn under its agreement with the InternationalMonetary Fund and the European Union. The aid plan earmarks EUR12bn forPortugal's lenders, if needed. As part of the plan, those lenders were requiredto raise core Tier 1 capital ratios to 9% by the end of 2011 and 10% by the endof 2012. (Bloomberg)
ECONOMIC HIGHLIGHTS
Japan: Current account moving to surplus adds support for Yen
Japan swungto a current-account surplus in February after a record deficit in January,lending support to a currency that officials have sought to weaken to aidexporters and economic growth. The excess in the widest measure of trade wasJPY1.18trn (USD14.5bn) the Ministry of Finance said in Tokyo yesterday. Themedian estimate of 25 economists surveyed by Bloomberg News was for a surplusof JPY1.12trn. The yen is rebounding even after interventions by the financeministry and monetary easing by the Bank of Japan helped to bring the currencydown from October's post World War II high against the dollar. (Bloomberg)
Russia: Holds interest rates as inflationpressures increase
Russia'scentral bank refrained from cutting interest rates for a fourth month aftersignaling that 'medium-term' inflation risks are increasing. Bank Rossii leftthe refinancing rate at 8%, as predicted by 21 of 22 economists in a BloombergNews survey. The overnight auction-based repurchase rate was kept at 5.25% and theovernight deposit rate will remain at 4%. The world's largest energy exporteris keeping borrowing costs unchanged even after the inflation rate fell to thelowest in two decades. Current market interest rates are 'acceptable for the comingmonths,' Bank Rossii said. China may ease policy to boost faltering growth andBrazil has cut its benchmark rate five times since August. (Bloomberg)
China: Cautious on easing after inflationpickup
China'sinflation accelerated more than forecast in March on a pickup in food prices,signaling that policy makers may exercise caution in adding stimulus to boostgrowth. Consumer prices rose 3.6% from a year earlier, the National Bureau ofStatistics said yesterday. That was more than the median 3.4% estimate in a Bloomberg
News surveyof 33 economists. Food-related costs gained 7.5%. Premier Wen Jiabao'sofficials may need to remain alert to the risk of inflation bouncing back evenafter price increases stayed below thegovernment's 4% target for a second month. China's economy may have expandedlast quarter at the slowest pace in almost three years, showing the limits ofthe nation's contribution to global growth as US job growth weakens and concernmounts about Europe's sovereign-debt crisis. (Bloomberg)
EU: ECB financing for Portuguese banks rose torecord in March
TheEuropean Central Bank's financing for Portuguese lenders rose to a record inMarch, the Bank of Portugal said. ECB financing climbed to EUR56.3bn (USD74bn)from EUR47.6bn in February, the Bank of Portugal said yesterday on its website.ECB financing previously peaked at EUR49.1bn in August 2010. In April lastyear, Portugal became the third euro-area country after Greece and Ireland torequire aid and will receive EUR78bn under its agreement with the InternationalMonetary Fund and the European Union. The aid plan earmarks EUR12bn forPortugal's lenders, if needed. As part of the plan, those lenders were requiredto raise core Tier 1 capital ratios to 9% by the end of 2011 and 10% by the endof 2012. (Bloomberg)
Source: OSK188
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
