Wishing Selamat Hari Raya & Happy Holidays to bro Hawk, abang duit, sis connie & all i3 supporters ......cheers!!!

Kheesan (6203 – Main Market) had on 15 July 2015 crossed over the RM0.77 hurdle to reach a high of RM0.79 before settling at RM0.775
(+RM0.035, +4.73%).
Next Potential Immediate Upside Target : The crossover of the RM0.77 hurdle would likely see Kheesan trading upward with the next upside
target pegged between RM0.85 and RM0.90.
Indicative Entry Level : Risk taking traders can establish a buying position at RM0.765 on a small pullback.
Stop Loss Level : Once a buying position is established, a stop loss at RM0.75 level must be placed for risk capital protection, and this RM0.75 is
to be followed by a trailing stop loss strategy.

- Alliance Investment Bank

Logistics sector looks good on growing e-commerce

We remain “overweight” on the logistics sector. GD Express Carrier Bhd (GDEX) ( Financial Dashboard), still our top pick given its growth potential in e-commerce activities, may book its strongest earnings growth (37.4% year-on-year [y-o-y]) in financial year 2016 (FY16) when pitted against the other logistics counters in our coverage. Moving into 2016, earnings could be promising for export- and import-oriented players like Tasco Bhd ( Financial Dashboard) and Freight Management Holdings Bhd ( Financial Dashboard), on which we also have “buy” recommendations.

Courier players such as GDEX (“buy”, target price [TP]: RM1.98) and Pos Malaysia Bhd ( Financial Dashboard)’s (“buy”, TP: RM5.44) Pos Laju display promising growth in the logistics sector. The rise of online retail shopping — from business-to-consumer and customer-to-consumer businesses — has driven the burgeoning courier delivery industry. Another driving force that could propel the growth of the industry is if traditional brick and mortar retail outlets start to expand their distribution channels into online platforms.

We note the emergence of new online shopping websites. These entities help to enable fierce competition in the market, not only among the online peers but also for traditional brick and mortar players. While rising competition among online shopping players could put pressure on costs and consequently squeeze courier service providers’ margins, it could also lead to greater volume for couriers and encourage more players to enter the fray.

China could make a bigger entry into Asean eventually. Various Chinese government initiatives and incentives for small and medium enterprises to tie up with e-commerce providers for cross-border transactions could eventually expand into Asean. This could drive up demand for courier services for last-mile deliveries. While the moderating economic landscape poses near-term challenges for export-import trade-oriented logistics players such as Tasco (“buy”, TP: RM4.76) and Freight Management (“buy”, TP: RM1.87), in the mid to longer term, we remain optimistic on the earnings outlook for these two companies, and estimate earnings to grow 19% and 17% y-o-y respectively in FY16, on the back of their ongoing expansion plans.



We maintain our “overweight” stance on the logistics sector, and keep GDEX as our top pick given the growth potential in e-commerce. We expect GDEX to book the strongest earnings growth (37.4%) in FY16, against the rest of the logistics counters in our coverage universe. Given its expected earnings growth, superior returns on equity and strong free cash flow growth trajectory, we deem its high price-earnings ratio as reasonable. — RHB Research Institute, July 14

http://www.theedgemarkets.com/my/article/logistics-sector-looks-good-growing-e-commerce

Politics unlikely to affect credit ratings in next two years

Standard & Poor’s Ratings Services (S&P) does not expect political developments in Malaysia, such as Prime Minister Datuk Seri Najib Razak being besieged by allegations of misuse of funds at a government-owned investment vehicle recently, to affect the country’s sovereign ratings in the next one to two years.

However, it said in its report, “Asia-Pacific Sovereign Rating Trends Mid-Year 2015”, published yesterday that such developments reduce the likelihood of new structural reform initiatives and could also hurt the responsiveness of the government to unexpected shocks.

This was essentially the same for countries like South Korea, the Philippines, Thailand and Pakistan, which have seen political developments complicating their respective policy environments.

S&P currently rates 21 sovereigns in the Asia-Pacific region, including Malaysia. Malaysia is one of the 16 sovereign ratings with “stable” outlooks. Three others have “positive” outlooks, while the remaining two have “negative” outlooks.

In February, S&P affirmed Malaysia’s short-term foreign currency sovereign credit rating at A-2 and its long-term rating at A-, with a “stable” outlook for the long-term rating.

In its report yesterday, it noted the country’s strength in its monetary asssessment and external assessment, and the rating agency is “neutral” on Malaysia’s institutional assessment, economic assessment, fiscal assessment (budget performance) and fiscal assessment (debt).

In the past five years, S&P said, the average sovereign rating of the region had increased slightly to between BBB and BBB+, from just under BBB. But over the period, geopolitical developments and domestic politics have gained prominence as risks to Asia-Pacific sovereign ratings, it added.

On its ratings and the outlook trend for the period, S&P said despite growing economic uncertainties in 2015, it continues to see stable trends for most sovereign credit ratings in the Asia-Pacific.

The continuing US economic recovery, lower energy prices and still-plentiful liquidity in financial markets support economic growth in the region, it added.

On the other hand, China’s continuing slowdown, its struggle with asset deflation and ongoing uncertainties in the eurozone weigh on Asia-Pacific’s growth prospects, it said.

However, it does not expect the resulting weakening of some credit metrics to be material enough to trigger sovereign rating downgrades so far this year, it added.

Meanwhile, S&P noted that of the 21 ratings, 12 are investment grades (three in the AAA category, four in AA, two in A and three in BBB) and nine are speculative grades (three in BB and six in B), said S&P.

The highest-rated AAA entities are Australia (since February 2003), Hong Kong (since December 2010) and Singapore (since March 1995), it added, with the lowest-rated sovereign in the region being Pakistan (B- since August 2009).

S&P said sovereign ratings in the Asia-Pacific region had been very stable recently, especially when compared with other regions, though it noted that rating movements in smaller sovereigns had contributed to an advance in non-gross domestic product-weighted ratings by almost half a notch over the past year.

http://www.theedgemarkets.com/my/article/politics-unlikely-affect-credit-ratings-next-two-years

Managepay Systems to target SME market for new e-money cards business

Managepay Systems Bhd will launch its e-money cards by the end of the year and target the SME market for this new line of business. 

"We have been given a year to build towards this new business. Our deadline is next February, which can be extended but we don't want to do that, " its managing director and chief executive officer Chew Chee Seng told reporters at its extraordinary general meeting on a proposed private placement exercise to raise RM40.41mil. 

The issued and paid up share capital of ManagePay stood at RM40.27mil consisting of 402,718,580 shares. 

The issue price of the placement shares has been fixed at 23 sen per share. 

"The SME market is considered niche because there is no other e-money provider targeting this market at large, " Chew said. 

The company will use about RM17mil to develop the MPAY issuer project, the e-money cards business.

http://www.thestar.com.my/Business/Business-News/2015/07/14/Managepay-Systems-to-target-SME-market-for-new-e-money-cards-business/?style=biz

Insider Asia’s Stock Of The Day: Kawan Food Bhd

Kawan Food Bhd

ESTABLISHED more than 30 years ago, Kawan (Fundamental: 3/3, Valuation: 1.1/3) is, today, a leading manufacturer and exporter of frozen food in the country.

The company produces an extensive range of products that includes paratha, chapatti, steamed buns, soy protein bites and bakery products. Popular brands under its stable are Kawan, KG Pastry, Veat and Passion Bake.

We favour Kawan for its steady, resilient growth. Sales grew consistently over the past five years, recording a CAGR of 12.9%. Export, is a key driver, accounting for 58% of total sales of RM149.5 million last year. In particular, North America, which contributes more than half of export revenue, increased 32% y-y in 2014.

Kawan has kept margins fairly stable, at an average of 13.6% between 2010 and 2014. For 1QFY15, net profit increased 33% y-y to RM5.5 million, driven by stronger consumer demand and favourable foreign exchange rate movements.

Looking ahead, Kawan should benefit from the weaker ringgit as well as lower global commodity prices. For instance, prices for wheat — one of its key raw materials — have fallen by 8% over the past 12-months.

Kawan plans to spend RM100 million for capex over the next 2-3 years. It intends to consolidate two existing factories — situated in Shah Alam — to a 15-acre site in Pulau Indah, Port Klang, which is almost 5 times the combined size of both existing factories. The new factory will cater to growth for the foreseeable future.

In addition, Kawan’s steady cash flow from operations and net cash of RM34.7 million, should comfortably fund its expansion needs and maintain steady dividends. Dividends totaled 5.4 sen in 2014, including special dividend of 3.6 sen. Interim dividend for 2015 stood at 2 sen per share.

The stock is currently trading at trailing 12-month P/E of 21.9 times —well below net profit growth of 29% over the same period.

http://www.theedgemarkets.com/my/article/insider-asia%E2%80%99s-stock-day-kawan-food-bhd

Insider Asia’s Stock Of The Day: Supermax Corporation

WE like Supermax (Fundamental: 1.0/3, Valuation: 0.8/3) for its comparatively undemanding valuations and growth potential. The stock is trading at a trailing 12-month PE of 13.4 times, compared to its prospective growth of 15%.

It operates in a fairly defensive sector (and is a good proxy for the healthcare industry) with steady global demand growth expectations.

About 70% of Supermax抯 gloves are sold under its own brands (OBM), which command higher profit margins than original equipment manufacturers (OEM). At end-2014, the company has a total installed capacity of over 18 billion pieces per annum.

Supermax was first recommended by InsiderAsia on October 24, 2014. The stock rose as much as 6.2% to RM2.36, before slumping to a low of RM1.57 following allegations of insider trading by its Chairman and Managing Director Datuk Seri Stanley Thai and Executive Director Datin Seri Cheryl Tan. The stock has since recovered somewhat, to the current price of RM2.02.

Charges by the Securities Commission involved insider trading related to transactions in APL Industries Bhd (APLI), an associate of Supermax, back in 2007. Both claimed trial to the charges.

Importantly, Supermax抯 business operations are not related to the allegations.

To be sure, earnings have been range bound for the past few years, due to various factors such as intense competition and rising costs. Lower profit in 2014 was due, mainly, to start-up costs and teething problems at its two new plants in Meru, Klang.

Once resolved though, the capacity expansion ?for an additional 6.9 billion pieces of nitrile gloves per annum ?will drive earnings growth over the next two years. Nitrile gloves will then account for 53% of the company抯 total installed capacity.

Notably, sales jumped 34.6% y-o-y to RM258.8 million in 4Q2014 with production having fully recovered from fire at one of its plants in 4Q2013.

http://www.theedgemarkets.com/my/article/insider-asia%E2%80%99s-stock-day-supermax-corporation-0

3A

3A (0012 – Main Market) had on 10 July 2015 crossed over the RM1.12 hurdle to reach a high of RM1.18 before settling near the day’s high at
RM1.17 (+RM0.08, +7.33%).

Next Potential Immediate Upside Target : The crossover of the RM1.12 hurdle would likely see 3A trading upward with the next upside target
pegged between RM1.25 and RM1.44.

Indicative Entry Level : Risk taking traders can establish a buying position at RM1.14 on a small pullback.

Stop Loss Level : Once a buying position is established, a stop loss at RM1.12 level must be placed for risk capital protection, and this RM1.12 is to be followed by a trailing stop loss strategy

- Alliance Investment Bank

Minho on investors’ radar:

Timber stocks are not in vogue currently. But Minho (M) Bhd, primarily a manufacturer and exporter of timber products, has been generating a lot of investor interest for its land bank in Klang. The share price of the low-profile company has been moving up, gaining 83% year-to- date, outperforming the stock market’s bench- mark index, which is down over the same period. - StarBiz

Eurozone leaders: Greece must do more to earn rescue:

Eurozone leaders told near-bankrupt Greece at an emergency summit on Sunday it must enact key reforms this week to restore trust before they will open talks on a financial rescue to keep it in the European currency area. Leftist Prime Minister Alexis Tsipras will be required to push legislation through parliament to convince his 18 partners in the eurozone to release immediate funds to avert a state bankruptcy and start negotiations on a third bailout program estimated at up to 86 billion euros (US$95.5 billion). Six sweeping measures including tax and pension reforms must be enacted by Wednesday night and the entire package endorsed by parliament before talks can start, a draft decision by Eurogroup finance ministers sent to the leaders showed. The document included a German proposal to make Greece take a "time-out" from the eurozone if it fails to meet the conditions. - Reuters

SLP banks on thin-gauge packaging materials for growth

Plastic packaging products manufacturer SLP Resources Bhd expects the bottom line of its thin-gauge packaging materials to improve this year, riding on expansion plans that will take off in September.

Group managing director Kelvin Khaw said SLP would install a RM6.5mil production line to increase its capacity to produce 2,000 tonnes of plastic packaging materials per month due to strong demand from the overseas market for thin-gauge packaging materials.

The current production capacity is 1,700 tonnes per month while the utilisation rate is 75%.

“Of the 2,000 tonnes, about 35% to 40% will comprise higher margin thin-gauge materials, targeted at export markets in Japan, Australia and New Zealand, compared with about 20% presently.

“The gross margin of thin-gauge plastic packaging material is between 35% and 40%, compared with the 20% gross margin of conventional plastic packaging materials,” he said.

He told StarBiz that “the overseas sales will generate about 55% of the group’s revenue this year, compared with about 44% a year ago.”

The group has locked in orders for about RM17mil worth of packaging products to be delivered in the third quarter, according to Khaw.

“More orders are expected to come in. In the first quarter of this year, we registered a sales revenue of RM41.4mil,” he said.

However, there was a decline in the demand from the domestic market, Khaw said.

“For example, the orders from the domestic market for this Ramadan period has dropped compared with the same period a year ago. The whole domestic market has slowed down since the last Ramadan period.

“We expect the domestic segment to contribute about 45% of revenue this year, compared with about 56% last year,” he added.

The slower domestic sales would have an impact on group revenue as the domestic contribution was still substantial, Khaw said.

“The lower pricing of polyethylene prices at US$1,400 currently, compared with US$1,700 per tonne in October 2014, has also pushed down the selling price of mid-range plastic packaging materials to about around US$1,900 per tonne, compared with US$2,300 per tonne a year earlier.

“To stay competitive, we try to price our products at the present price level. This will also impact revenue this year,” he said.

Khaw pointed out that overall, the stronger sales of higher-value packaging materials overseas would offset the slower domestic growth.

http://www.thestar.com.my/Business/Business-News/2015/07/13/SLP-banks-on-thingauge-packaging-materials-for-growth/?style=biz

Cramer game plan: Next week's buying opportunity

Finally! Jim Cramer was pleased that Friday's market rally seemed to be on firmer footing. But that means the hard part must begin, as next week will be all about Greece and China.

Cramer saw that the Chinese government implemented various measures in an attempt to stabilize its markets. He also saw that Europe took one step closer to closing part of the Greek drama—but could it be one more bailout that is destined to fail?

In Cramer's opinion, it doesn't matter. A resolution is a resolution, and it will finally kill all of the uncertainty swirling in the market and allow it to rally. This was evidenced with the dollar, which finally managed to weaken against the euro.

http://www.cnbc.com/2015/07/10/cramer-game-plan-next-weeks-buying-opportunity.html

Greece Talks Spill Into 2nd Day as Finance Chief Deadlock

European finance ministers deadlocked over how to keep Greece in the euro, forcing emergency talks to continue Sunday and threatening to delay the infusion Prime Minister Alexis Tsipras desperately needs.

With Greece running out of money and its banks shut for the past two weeks, the hardline group led by Germany signaled that the country’s debt was too great, Tsipras’s reform proposals were inadequate and, in any event, the Greeks couldn’t be trusted to keep their word. Finance ministry aides will work through the night, allowing finance chiefs to reconvene at 11 a.m. in Brussels before a leaders’ summit.

“It’s still very difficult, but work is still in progress,” Dutch Finance Minister Jeroen Dijsselbloem, the head of the Eurogroup, told reporters after nine hours of talks that ended at midnight. “The issue of credibility and trust was discussed and also, of course, the financial issues.”

http://www.bloomberg.com/news/articles/2015-07-11/european-hardliners-call-greece-trust-deficit-key-hurdle-to-deal

Eye on stock; Comintel Corp

COMINTEL Corp Bhd (Comcorp) shares retraced from a near three-year high of 36 sen on May 19, last year to the base of the previous rally amid persistent profit-taking activity.

Thereafter, this stock rebounded slightly on consolidation, lasting several months before spiking in the wake of renewed bargain hunting, which saw prices re-visiting the 36-sen barrier on June 26.

In the absence of strong buying momentum to push the shares through this heavy barrier, thus resulting a mid-term “double-top” formation, they succumbed to pressure to pull back marginally to trade range-bound, but with a mild upward bias, undergoing another round of consolidation.

Comcorp flirted to a high of 36.5 sen during intra-day session, but finished at 35.5 sen, up 1.5 sen yesterday.

Based on the daily chart, the bulls had finally cracked the tough nut of 36 sen briefly on the second attempts yesterday.

Traders can consider taking up a position, if one is optimistic of the trend ahead. In the short term, prices are poised to challenge the 44 sen-45 sen heavy resistance band, of which a major breakthrough would see the bulls turning more aggressive. The next upper resistance is resting at the 60-sen mark.

Elsewhere, the oscilltor per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were on the rise. It had triggered a short-term buy at the 60% level on Thursday. Also, the daily moving average convergence/divergence histogram continued to expand upward against the daily trigger line to stay bullish. A buy call was issued on June 23.

Meanwhile, the 14-day relative strength index retained the posture above the 70-point bullish line. Apparently, indicators are painting a pretty promising pictogram, suggesting advances in the pipeline. For the downside, initial support is envisaged at the 32-sen level, followed closely by the 29.5-sen floor, which is the 14-day simple moving average.

The next lower floor is lying at the 22 sen-22.5 sen range.

http://www.thestar.com.my/Business/Business-News/2015/07/11/Eye-on-stock-Comintel-Corp/?style=biz

Poultry stocks fall on higher commodity prices, stronger USD

POULTRY stocks had a good run, but the market dynamics now are working against the industry.

Stock prices of a number of counters have fallen as higher soybean prices, the stronger US dollar and lower selling prices of eggs affect the financials of many firms in the industry.

During the second quarter, Teo Seng Capital Bhd fell 26% while Lay Hong Bhd shed 1.52% and PW Consolidated Bhd slid 10%.

Operating conditions have become tougher as the price of soybean, a key feedstock for chickens, has gained 6.72% while the ringgit weakened 2% over the period.

Compounding matters is the fall in the average selling prices of Grade A eggs, which dropped by 14.7% in the second quarter compared with the previous quarter.

An industry observer says there is an oversupply of eggs, resulting in lower selling prices.

On the other hand, the tougher operating situation seems limited to egg producers.

Broilers seem to be benefiting as the wholesale price of chickens improved by 17.6% to RM5.74 per kg in the second quarter, versus the first quarter.

The higher selling prices would more than offset the more pricey feedstock and stronger greenback.

Compared with egg producers, chicken breeders are holding up better as the share prices of CAB Cakaran Corp Bhd traded marginally higher by 0.95% and Huat Lai Resources Bhd jumped 13% during the same period.

“Investors are waiting for the latest sets of financial results from the poultry players.

“Some investors have taken profit as they expect numbers for the second quarter to be weaker than the first,” an analyst says.

But buying opportunities have emerged for some of the stocks.

The historical price to earnings ratio of the large poultry stocks are now trading at single digit levels and there’s a general trend of a slight rebound in the sector over the past two days amid better sentiment in the broader market.

Some counters were relatively cheaper as they traded in the range of high single digits to low teens in the first quarter.

There has been some help for the industry. The price of soy bean, a big cost factor, has slipped 1.6% from the end of June.

Over the years, the bigger companies have also improved their efficiency and scale to bring costs down to preserve operating margins.

Operationally, they have become more prudent over the years to keep diseases like bird flu at bay by building better enclosed farms that help to control the variables better.

Integrated farm systems have also helped save costs for the breeders.

“Investors are sensitive towards the changes of feedstock and US dollars because margins for the players can be quite low.

“Besides, most poultry players do not hedge their currencies so a stronger greenback would be a concern even if the companies can pass on the cost to their customers,” explains an analyst.

Even when stock prices are volatile, some investors will collect poultry stocks on price weakness.

“Agriculture is still a recession proof business. Food security is one of the most important things for a country and we’re a growing nation,” says a fund manager.

Meanwhile, market expansion would strengthen the positions of these firms.

For example, Teo Seng and CAB have ventured into Singapore.

Some of the firms had been acquiring smaller local farms to improve their market share as there are opportunities for them to expand into neighbouring countries.

Among the egg producers, Teo Seng was up 5 sen or 3.76% at RM1.38, LTKM jumped 9 sen or 5.23% to RM1.81 and Lay Hong was unchanged at RM3.11 yesterday.

QL Resources Bhd, which launched a takeover offer on Lay Hong for RM3.50 per share in the third quarter last year, continued to buy into the stock in the open market earlier this month at between RM3.11 and RM3.24.

The bigger agriculture firm has a 38.6% stake in Lay Hong even though the public shareholding spread requirement in the egg producer has become an issue for the lack of breadth of investors.

Lay Hong’s public shareholding was 16.06% as at May 26 and the required spread is 25%.

Lay Hong’s founding Yap family, which holds 43% of Lay Hong’s stock, had proposed a private placement to address the issue but the plan was rejected by shareholders at its EGM in May. It has up to Sept 30 to comply with the regulatory requirement. As for the chicken breeders, CAB added 7 sen or 6.9% to RM1.08, Huat Lai closed unchanged at RM3.25 and PW Consolidated increased 3 sen or 2.54% at RM1.21 yesterday.

http://www.thestar.com.my/Business/Business-News/2015/07/11/Sunny-side-down/?style=biz

IRCB to exit PN17 status

Integrated Rubber Corp Bhd (IRCB) ( Financial Dashboard) will no longer be classified as a Practice Note 17 (PN17) company starting next Monday (July 13) after Bursa Securities approved its early upliftment.

In a filing with Bursa Malaysia today, the rubber glove manufacturer said the regulator has decided to approve its application for an early upliftment from being classified as a PN17 company after due consideration of all facts and circumstances of the matter. 

"IRCB will be uplifted from being classified as a PN17 company effective from 9am next Monday (July 13)," it added. 

"With the completion of the regularisation plan, IRCB has regularised its financial condition and level of operations and no longer triggers any of the criteria under Paragraph 2.1 of PN17 of the Main Market Listing Requirements of Bursa Securities," it said in the filing today.

IRCB (fundamental: 2.1; valuation: 0) had slipped into PN17 status after its unit, Comfort Rubber Gloves Industries Sdn Bhd defaulted on RM64.2 million worth of debt obligations. It had submitted a regularisation plan on Dec 26, 2013 to Bursa Securities and obtained the green light from the latter on July 24 last year.

The proposed regularisation plans entail an increase in the existing authorised share capital of RM200 million comprising 1,000 million shares of 20 sen each in IRCB to RM400 million comprising 2,000 million shares of 20 sen apiece. 

Subsequently, the company has proposed advance capitalisation and proposed capital reduction and consolidation.

Upon completion of the proposed regularisation plan, IRCB's authorised share capital will remain unchanged at RM100 million comprising 1,000 million consolidated shares of 10 sen each.

For the first financial quarter ended April 30, 2015 (1QFY16), IRCB posted a net profit of RM4.09 million on revenue of RM52.58 million. 

For the financial year ended Jan 31, 2015 (FY15), IRCB recorded a net profit of RM4.26 million against a net loss of RM19.26 million, while revenue grew to RM155.22 million from RM134.69 million a year ago. 

On prospects, the company said it continue strive to capture bigger market share on the growing global demand on examination gloves. 

It has also changed its production mix to produce more nitrile golves. 

IRCB shares closed one sen or 1.16% higher at 87 sen today, with 508,800 shares changing hands. It has a market capitalisation of RM373.05 million. 

http://www.theedgemarkets.com/my/article/ircb-exit-pn17-status

Bank Negara keeps OPR at 3.25%

Bank Negara Malaysia (BNM) has kept the overnight policy rate (OPR) at 3.25% after the Monetary Policy Committee (MPC) meeting yesterday.

In a statement, the central bank said the stance of monetary policy remains accommodative and supportive of economic activity at the current OPR level.

BNM expects the economy to continue expanding at a more moderate pace in the second quarter, driven by domestic demand, though it forecasts slower growth in private consumption, due to frontloading of consumption ahead of the implementation of the goods and services tax (GST).

“While households are expected to continue adjusting to the GST in the immediate future, overall spending will be supported by continued wage growth and stable labour market conditions,” it said.

It added that investment is projected to be driven by capital spending in the manufacturing and services sectors and infrastructure projects, offsetting the weaker performance of the external sector.

It expects headline inflation to be higher moving forward, due to the GST and the adjustments to domestic fuel prices. Inflation, however, is expected to moderate towards the latter half of 2016.

BNM also said there is still ample liquidity in the domestic financial system with continued orderly functioning of the financial and foreign exchange markets.

IMF lowers global growth forecasts, cites U.S. weakness

The International Monetary Fund on Thursday trimmed its forecast for global economic growth for this year to take into account the impact of recent weakness in the United States.

But the global financial institution said growth prospects for next year remain undimmed, despite Greece's debt crisis and recent volatility in Chinese financial markets.

In an update to its World Economic Outlook report, the IMF said the global economy should expand 3.3 percent this year, 0.2 percentage point below what it predicted in April. Growth should speed up to 3.8 percent next year, it said, unchanged from earlier forecasts.

The IMF pinned much of the blame for the lower growth forecast on the United States. The U.S. economy contracted in the first quarter, hurt by unusually heavy snowfalls, a resurgent dollar and disruptions at West Coast ports.

The IMF said it expected the U.S. economy to grow 2.5 percent this year - it lowered the U.S. growth forecast last month from 3.1 percent in April. The IMF also said U.S. economic sluggishness had spilled over to Canada and Mexico.

"(But) for the most part, it was a series of accidents ... and the rest of the year should not be very much affected," Olivier Blanchard, the IMF's chief economist, said in a press conference.

The IMF maintained its forecasts for a pickup in growth in the euro zone, despite Greece moving closer to the edge of default and an exit from the currency bloc as it races to find a last-minute third bailout.

"The stress tests of the last 10 days (around events in Greece) reassure us and make us think that if things go badly in Greece ... the rest of the world would probably survive quite well," Blanchard said.

In developing economies, the IMF said growth had been dampened by lower commodity prices, tighter financial conditions tied to economic rebalancing in China and geopolitical factors.

Chinese stock markets have tumbled by more than 30 percent over the last month, prompting regulators to impose heavy-handed intervention to stem the rout.

The IMF said the market crash suggests China could face difficulties as it tries to move from an investment-led economic growth model to one focused on domestic consumption.

The Fund also repeated its warning that asset price shifts and financial market volatility could disrupt predictions, though it expects geopolitical tensions tied to Russia and the Middle East to calm down next year. - Reuters

Malaysia at risk in China slowdown, says JP Morgan

Malaysia is at particular risk of a slowdown in China trade, and is among emerging markets that is expected to drag down global trade growth this year, said JP Morgan.

In its Asia Pacific Economic Research report today, JP Morgan warns that a slowdown in China trade could affect commodity exporters to China, like Malaysia, Indonesia and Thailand.

“As a result, we have made a series of downward revisions to growth for 2015, with the revised growth forecast now looking for a 3.6% year-on-year expansion from 4.1% previously,” said the international bank.

China’s gross domestic product expanded by 7.4% in 2014, its slowest rate of output growth in nearly a quarter of a century, stoking fears of a permanent slowdown.

China remains Malaysia’s second biggest export market after Singapore — China imports about 12% of all Malaysian export products.

According to JP Morgan, slower growth and softening inflation should lead to a more aggressive policy response across the region.

However, it said the ensuing uncertainty around capital flows will constrain monetary policy, citing Malaysia, Indonesia and the Philippines.

http://www.theedgemarkets.com/my/article/malaysia-risk-china-slowdown-says-jp-morgan

China places 6-month selling restriction on stocks

China's securities regulator ordered shareholders with stakes of more than 5 percent from selling shares in the next six months in a bid to ease the pressure on its stock markets.

The China Securities Regulatory Commission (CSRC) said on its website late on Wednesday that it would deal severely with any shareholders who violate the rule.

http://www.cnbc.com/id/102817968

Super Enterprise receives conditional voluntary take-over offer

Super Enterprise Holdings Bhd has announced it has received a press notice from MCC LABL2 Netherlands B.V. for a conditional voluntary take-over offer at RM3.80 per share.

In a filing to Bursa Malaysia today, Super Enterprise said the offer to shareholders was to acquire all ordinary shares of RM1 each, which are not yet held by MCC LABL2, at RM3.80 per share.

It added the offer is open for acceptances until 5pm, July 29, unless revised or extended.

Super Enterprise's share price (fundamental: 2.2; valuation: 1.4) closed 1.96% or seven sen lower at RM3.51, for a market capitalisation of RM149.2 million. The stock saw 135,300 shares changing hands today.

http://www.theedgemarkets.com/my/article/super-enterprise-receives-conditional-voluntary-take-over-offer

HLIB Research maintains Buy on Evergreen, ups target to RM2.15

Hong Leong IB Research has maintained its “Buy” rating on Evergreen Fibreboard Bhd ( Financial Dashboard) with a higher target price of RM2.15 and said it believed the strong share price performance was due to stronger US dollar (against the ringgit) and declining crude oil price which are both positive to Evergreen’s earnings.

“In our view, Evergreen’s valuation remains commendable despite the recent strong share price performance, as: (1) MYR will remain under pressure; and (2) Prices of key inputs, namely rubber log wood and glue remain on downtrend, and these are supportive of Evergreen’s earnings,” it said in a note today.

HLIB IB Research said the ringgit and lower key input prices aside, we note that management’s continuous efforts to further improve Evergreen’s output and cost efficiencies, and diversifying its product range will help drive its earnings higher.

The research house said given the improving earnings visibility and decent balance sheet, we do not discount the possibility of Evergreen resuming paying dividends by 2016 (although management remains tight lipped on such possibility).

“FY15-17 net profit forecasts raised by 6.4-12.9%, largely to account for: (1) A higher US$:RM assumption of RM3.60/US$ (vs. RM3.50/US$ previously); and (2) Slightly lower raw material cost assumptions.

“Target price lifted by 35.2% to RM2.15, to reflect: (1) Higher net profit forecasts; (2) The roll forward of our valuation base year (from average 2015-2016 to 2016); and (3) Higher target P/E of 11x (from 10x previous), given Evergreen’s improving earnings visibility. Maintain Buy recommendation,” it said.

http://www.theedgemarkets.com/my/article/hlib-research-maintains-buy-evergreen-ups-target-rm215

Global semiconductor sales up 5%

The global semiconductor industry recorded worldwide sales of US$28.2bil in May, which was a 5.1% increase from the US$26.8bil a year ago as it overcame lingering macroeconomic uncertainty.

According to the US-based Semiconductor Industry Association (SIA), global sales in May 2015 rose 2.1% from April’s US$27.6bil with the Americas taking the lead.

“Regionally, sales in the Americas increased 11.4% compared to last May to lead all regional markets,” it said, citing the data provided by the World Semiconductor Trade Statistics organisation. The data represents a three-month moving average.

SIA president and CEO John Neuffer said the global semiconductor industry overcame lingering macroeconomic uncertainty to post solid year-to-year growth in May.

“Year-to-year sales have now increased for 25 straight months, month-to-month sales increased for the first time in six months, and we expect modest growth to continue for the remainder of 2015 and beyond,” he said.

In addition to the Americas market, year-to-year sales also increased in China (9.5%) and Asia-Pacific/all other (8%), but decreased in Europe (-7.8%) and Japan (-11.8%).

Compared to last month, sales were up in China (4%), Asia-Pacific/all other (3.3%), and the Americas (0.2%), but decreased slightly in Europe (-0.6%) and held flat in Japan.

http://www.thestar.com.my/Business/Business-News/2015/07/08/Global-semiconductor-sales-up-5/?style=biz

Glove makers back in limelight on weaker ringgit

The continuous strengthening of the US dollar against the ringgit has enhanced the appeal of rubber glove-manufacturer stocks on Bursa Malaysia.

Shares of glove manufacturers on Bursa gained in morning trade, led by Top Glove Corp Bhd, before closing mixed yesterday, as the ringgit weakened beyond the crucial level of 3.80 against the US dollar for the first time since the US-dollar-peg was removed 10 years ago.

Top Glove’s shares rallied to a five-year high to close at RM6.95 yesterday, after gaining 26 sen, or 3.89%, on volume of 3.4 million. That was off an intra-day high of RM7.05.

Kossan Rubber Industries Bhd’s shares were up six sen to RM6.55 on volume of 2.9 million, while shares of Hartalega Holdings Bhd gave up early gains to close three sen lower at RM8.67, off an intra-day high of RM8.74.

Supermax Corp Bhd’s shares also gave up early gains to close two sen lower at RM2.02, off an intra-day high of RM2.09.

“Fundamentally, there is no change to the sector. It is all about their currency (US dollar) exposure,” Hong Leong Investment Bank Research analyst Abdul Hadi Manaf said of the share price performances of glove makers yesterday.

He pointed out that a strong US dollar would benefit glove makers, as reflected in their strong financial performances for the three months to March 2015, when the ringgit depreciated 6% against the greenback.

“There is still potential for the share prices of glove makers to rise further, driven by sentiment that US dollar will remain strong against the ringgit,” Hadi said.

The ringgit weakened further yesterday to close at 3.8073 against the US dollar due to a combination of domestic political and external economic uncertainties. Year-to-date, it had lost about 8.1% against the greenback, making it the worst-performing currencies in Asia.

However, glove makers are one of the beneficiaries of a strong US dollar vis-à-vis ringgit, as the bulk of their sales proceeds are in US-dollar terms. Conversely, the input costs are in ringgit terms.

At their close, Top Glove’s shares were valued at 18 times its forward price-earnings (P/E), while the shares of Hartalega and Kossan were valued at 25 times and 21 times forward P/E, respectively. Supermax’s shares were valued at 12 times its forward P/E.

Kenanga Research in its report dated July 2 noted the potential upside in share price performance of glove manufacturers in the third quarter of this year.

“Our investment case is based on sequential earnings growth (which is expected) to continue in coming quarters, underpinned by new capacity expansions matched and fuelled by pent-up demand for rubber gloves and nitrile gloves; favourable US dollar-to-ringgit exchange rate; and sustained low raw material prices, especially latex,” the brokerage explained.

According to Kenanga Research, given the positive prospects, the glove sector could be poised for a further re-rating, with the players’ shares trading at its historical peak valuations of between 19 and 27 times earnings

http://www.thestar.com.my/Business/Business-News/2015/07/08/Glove-makers-back-in-limelight/?style=biz

Insider Asia’s Stock Of The Day: Superlon Holdings

SUPERLON (Fundamental: 3.0/3, Valuation: 2.0/3) manufactures nitrile butadiene rubber (NBR) foam insulation materials for the heating and air conditioning industry. Based in Klang, it exports about 70% of its production, mostly to other Asian countries.

Last December, the company declared an interim dividend of 2 sen per share and a special dividend of 4 sen per share — compared with total dividends of 3.25 sen for FYApril2014.

This means that dividends totalled 8 sen per share in the past 12 months, translating into an attractive yield of 5.4%.

The higher-than-market average yield generated investor interest in the relatively low-profile manufacturer — its share price has more than doubled since then, to RM1.49 currently.

Besides the generous dividends, its improving financial performance has also not gone unnoticed. After exiting from the loss-making steel pipes division in FY12, the company has turned around, from a net loss of RM0.6 million in FY12 to net profit of RM5.9 million in FY14.

For FY15, net profit climbed 60% to RM9.4 million, lifted by a 21% increase in turnover. Margins expanded on the back of economies of scale and strengthening of the US dollar. The company declared an interim dividend of 2 sen per share for FY2016, which will go ex on 20 July 2015

Stronger operating cash flow enabled the company to pare its debts. It now has net cash of RM11.7 million, a reversal from net debt of RM4.1 million in FY12.

Going forward, Superlon intends to focus on expanding its domestic and regional market shares as well as strengthen its distribution network. In anticipation of a recovery in global demand, Superlon plans to invest RM12 million in the next two years to expand production capacity.

http://www.theedgemarkets.com/my/article/insider-asia%E2%80%99s-stock-day-superlon-holdings

The stock is trading at a trailing 12-month P/E of 12.6 times — low relative to the 43% earnings growth in FY14 and 60% growth in FY15.

Borneo Oil to invest more in Pahang

Borneo Oil Bhd, which is expected to commence gold mining activities soon in a second area in Pahang, plans to invest an additional RM40mil to step up its mining operations in the state.

According to executive director Raymond Teo Kiew Leong, land clearing is underway and mining equipment is being mobilised to facilitate the mining of alluvial gold and tailings at Bukit Ibam, Rompin district, in the current quarter.

“An extensive exploration and drilling programme is being planned for the area with regard to its lode gold potentials,” he told StarBiz.

(Alluvial gold deposit is formed as a result of transportation by water from weathered mineralised rocks and veins while lode gold deposit is formed in mineralised rocks and veins.)

Besides Bukit Ibam that covers 1,200ha, Borneo Oil group has been appointed the sub-contractor to carry out prospecting, exploration and mining of alluvial and lode gold on an exclusive basis in two other designated areas – Mukim Batu Yon (162.3ha) and Hutan Simpan Hulu Jelai (202.8ha) – both in Lipis district.

http://www.thestar.com.my/Business/Business-News/2015/07/06/Borneo-Oil-to-invest-more-in-Pahang/?style=biz

Greece's 'nays' have it--how markets will react

Greece's rejection of a set of repayment terms offered by its international creditors is likely to be the biggest factor driving stocks when opening bells sound in global markets on Monday.

Germany's Dax is indicated sharply lower from Friday's close at around 4 percent, while the euro was down 2 percent against the yen as the news emerged. U.S. stocks are expected to open around 1 percent lower Monday, according to recent stock futures data.

What could be most important for those worried about contagion from the Greek crisis is how Portuguese, Spanish and Italian government bonds perform in Monday morning trade.

If these peripheral euro zone countries, often lumped in with Greece, suffer a sharp spike in yields, this could cause alarm about whether Greece leaving the currency might cause further contagion to other weaker euro zone economies.

http://www.cnbc.com/id/102810251

Greece debt crisis: Greek voters reject bailout offer - BBC News - http://www.bbc.com/news/world-europe-33403665

Why Magni? Price RM3.80 @ July 3, 2015
Pure cash garment manufacturing company for NIKE (TP:RM6.90)

http://klse.i3investor.com/blogs/undervalue/

China Brokers Set Up $19 Billion Fund To Stem Market Rout

Chinese brokerage firms have come together to set up a stock-market fund, the latest effort to stem the biggest three-week drop in China’s key share index since 1992.

The 21 brokers led by Citic Securities Co. will invest the equivalent of 15 percent of their net assets as of the end of June, or no less than 120 billion yuan ($19.3 billion) in total, the Securities Association of China said in a statement on its website Saturday. The fund will invest in blue-chip exchange-traded funds, it said.

The move comes after measures to shore up equities failed to stop margin traders from unwinding positions at a record pace, with the market losing more than $2.8 trillion of value in three weeks. The People’s Bank of China cut interest rates last week, while margin-trading rules were eased and trading fees were cut Wednesday.

The new fund to bolster equities may have only “a fleeting effect when daily turnover has reached 2 trillion yuan”, according to Hao Hong, China equity strategist at Bocom International Holdings Co. in Hong Kong.

“This 120 billion yuan won’t last for an hour in this market,” Hong said by phone from Beijing Saturday. “It might benefit blue-chip stocks, as investors may see them as value, but the bursting of the bubble in small-cap/tech stocks is likely to continue.”

Small-Cap Stocks
The ChiNext index of smaller companies in Shenzhen traded at a record 131 times reported earnings last month -- five times the level of the Shanghai Composite Index -- after tripling over the past year. The gauge had lost 33 percent from its June 3 peak as of Friday, trimming this year’s gains to 77 percent.

“The market’s most acute concern is still these smaller cap stocks, as investors levered up to buy them and now margin lending curbs hit them the hardest,” Hong said. “With their valuation in the stratosphere, nobody is willing to step in and bolster these stocks.”

The brokers on Saturday pledged not to reduce any proprietary investments in the equity market as long as the Shanghai Composite Index stays below 4,500, the association said; it closed Friday at 3,686.92. Listed brokers will actively buy back outstanding shares, while encouraging their parent companies to increase holdings, according to the statement.

The group of 21 brokers said the economic fundamentals that had justified the stock market’s rally before the rout hadn’t changed.

“It is therefore our duty to unite in stabilizing this market,” the statement said.

Li-Gang Liu, chief China economist for the Australia & New Zealand Banking Group Ltd., said the market would eventually find its own level.

“If a listed company thinks its shares are undervalued it could buy back shares. Such purchases shouldn’t be triggered by any kinds of administrative calls,” he said. “I believe the market is still under big downward pressure.”

There remain additional steps the government could take to support the market. China’s central bank-affiliated Economic Observer reported last week the government is considering reducing the stamp tax, while the finance ministry said it will allow the national pension fund to invest in shares.

On Friday, China’s securities regulator said it will limit the number of initial public offerings this month and revise rules to encourage foreign investment in the market. Chinese media reported that a unit of China’s sovereign wealth fund has been buying exchange-traded funds in the past week to support the market - Bloomberg

Play it again, SAM

Dividend play prompts investors to look at Sam Engineering & Equipment

THE growth in dividends being paid out by Sam Engineering & Equipment (M) Bhd (SAM Engineering), one of the few component manufacturers for the airline industry, has attracted increasing interest by investors locally and abroad.

According to data obtained from the Bloomberg terminal, SAM Engineering, which is controlled by Singapore Aerospace Engineering (SAM), had seen its dividends returned back to shareholders increasing at an exponential rate of 108% in the past one year.

Its recent dividend announcement took the market by surprise as the company has a portion of its business in the semi-conductor industry - manufacturing equipment for producers - a segment that is going through a tough operating environment.

However, this obviously has changed as the airline component of its business takes up the mantle to drive the earnings of the company.

Since 2013 SAM Engineering had transited from being a semiconductor dominant business to one that now derives close to 70% of its revenues from the aerospace industry.

It produces components for plane manufacturers such as Boeing and Airbus.

There are not many such producers in this region as it takes years of expeience and perfection before the parts can be acceptable to the plane manufacturers.

SAM Engineering’s move towards becoming a supplier of components for planes is outlined by its chairman Loh Chuk Yam.

“Despite the continued weakness in our equipment business, revenue for the group rose steadily due to the strong aerospace sales.


“The demand for aero-engine cases exceeded the negative impact caused by the weak test equipment business,” the company’s chairman Loh said in the annual report.

Thanks to its diversification into manufacturing parts for plane, SAM Engineering has been able to derive steady income and build up a strong balance sheet.

It has cash balances of RM103.6mil and no borrowings.

Its trade receivables after netting off payables about RM56mil. It also has inventory numbers of another RM140mil.

Two weeks ago, it announced special dividend and interim dividend amounting 32.2 sen, which is higher than the 17.25 sen declared last year.

Notably, SAM Engineering had seen dividends growing consistently in the past four years.

Its shares had registered growing dividend yields, as it rose from a net yield of 1.7% in 2012 to 7.67% this year. (see table attached)

With such generous payouts generated from its business, SAM Engineering had recorded a net dividend payout ratio of 40% in the financial year 2015 (FY15) ended March 31.

The latest dividend announcement in the past week will only be computed for FY16’s payout ratio.The payout ratio in FY15 almost doubles the previous year’s payout ratio of 21%.

Whether this short term buying interest or high dividend payouts can be sustained moving forward will be key but analysts note that the aerospace industry is a highly niched one.

It also has strong shareholders in SAM and other Temasek Holdings (Pte) Ltd related companies holding a total of 74.18% in the Penang based company.

http://www.thestar.com.my/Business/Business-News/2015/07/04/Play-it-again-SAM/?style=biz

Tessa.....ulicorp, maybank still say trading buy....price really crazy dy

Tessa...i also wan to whisper ;-)

Jp Morgan: Fitch's rating upgrade a positive endorsement of Malaysia's reforms

Fitch Rating’s assertion of Malaysia’s credit rating at A- and rating outlook to “stable” is seen as a positive sign for the country, JP Morgan said in a statement.

The agency said Fitch’s revised sovereign rating outlook from negative to stable was an affirmation of fiscal reforms that have been taking place, such as the fuel subsidy reforms and successful introduction of the goods and services tax in April.

“Fitch’s affirmation of Malaysia’s credit rating at A- and the revised outlook from negative to stable has removed one of the equity market overhangs, in our view.

“Nevertheless, lower oil prices (even at current levels), heightened political uncertainty, and weak earnings momentum would likely remain market overhangs,” it said.

JP Morgan noted that the equity market’s earlier fear was that a potential Fitch downgrade was likely to have an impact on the ringgit and currency rates.

Given the potential reprieve on the ringgit and rates, and arguably the fiscal outlook, JP Morgan believes that property developers are interest sensitive.

“At the start of the year, we turned less negative on developers on a lack of new macro-prudential measures and potential easing of rates. Our top picks within the sector are Sunway Bhd and Eco World Development Group Bhd.

“We would also include telcos as interest sensitive. From the yield-trade perspective, Maxis Bhd and DiGi.com Bhd are less attractive compared with Telekom Malaysia Bhd and Axiata Group Bhd.”

The financial services firm noted that utility companies were also interest sensitive.

“For every 25 basis points change in rates, the impact to earnings in 2015 for Malakoff Corp Bhd, Tenaga Nasional Bhd (TNB) and YTL Power Bhd is 9%, 1% and 4% respectively, on our estimates.

“For Malakoff, 94% of debt is on fixed rates with 92% maturing in more than two years. For TNB, 99% of debt is on fixed rates, and for YTL Power, 54% of debt is on fixed rates.”

JP Morgan said TNB remained one of its top picks in Malaysia for structural reforms in returns, and has, in its view, priced in the 1Malaysia Development Bhd asset acquisition risk.

“A tactical rebound trade should, in our view, include large cap stocks that were sold down by foreign investors. For stocks under our coverage, AirAsia Bhd and IJM Bhd were sold down the most by foreign investors.

“AirAsia has stock-specific issues, leaving IJM as our preferred pick,” it said.

http://www.theedgemarkets.com/my

Yvonne Chia among independent investors subscribing for ManagePay shares

ManagePay Systems Bhd ( Financial Dashboard) announced that it has received undertakings from independent third party investors — including former Hong Leong Financial Group Bhd (Financial Dashboard) chief executive officer Datuk Yvonne Chia and Fajarbaru Builder Group Bhd ( Financial Dashboard) chairman Tan Sri Kuan Peng Ching@Kuan Peng Soon — to subscribe for some 120.81 million placement shares at an issue price of 23 sen apiece, for a total of RM27.79 million.

In a filing with Bursa Malaysia this evening, ManagePay said Chia will subscribe for 20 million shares for RM4.6 million, while Kuan will subscribe for 5 million shares for RM1.15 million.

Other investors include ConnectIoT Sdn Bhd, which will subscribe for 13.8 million shares, followed by RedGiant Analytics Asia Sdn Bhd (26.47 million shares), Andrew Chia Wei Jun (12 million shares), Chu Hong Keong (8 million shares), Chin Chee Thoy (20 million shares) and Soon Kian Heng (15.55 million shares).

“The proposed private placement is conditional upon the approval being obtained from the shareholders of the company at the forthcoming extraordinary general meeting (EGM),” ManagePay said in a filing. The group has scheduled the EGM on July 14, 2015.

ManagePay also noted that should any of its outstanding warrants be exercised prior to the implementation of the private placements — which will increase its issued and paid-up capital — the group will place additional placement shares to third party investors.

As at June 19, 2015, ManagePay has 182.98 million of outstanding warrants, which carries the right to subscribe for a new share during the three-year exercise period.

Assuming that all its warrants are exercised, ManagePay’s issued and paid-up capital will increase to 585.7 million shares from 402.72 million shares currently.

To recap, ManagePay had on March 25, 2015 announced its plan to raise up to RM40.41 million by issuing up to 175.7 million shares — equivalent to 30% of its existing issued and paid-up capital — at 23 sen per share.

As at March 31, 2015, ManagePay has cash and cash equivalent of RM15.45 million.

ManagePay had said that the bulk of the proceeds raised will be used to develop its electronic money (e-money) project via online wallet and prepaid card.

ManagePay (fundamental: 1.3; valuation: 0) had also noted that it would sign strategic partnership agreements with other card service provider such as Visa, MasterCard and China’s UnionPay for its e-money project.

ManagePay’s counter has risen 75.6% from 20.5 sen on Feb 13 to its one-year high of 36 sen on May 15. It has since retreated to close at 29 sen today, with 1.83 million shares traded, giving it a market capitalisation of RM115.35 million.

http://www.theedgemarkets.com/my/article/yvonne-chia-among-independent-investors-subscribing-managepay-shares

Kenanga Research maintains overweight on tech sector

Kenanga IB Research maintained its overweight recommendation on the technology sector, pointing out that the strong US dollar versus the ringgit trend and healthy global industry outlook as being in favour of the sector, despite the uncertainty GST has brought to the nation’s economy.

Its analyst Desmond Chong reported that the export-oriented earnings of local semi-conductor companies allowed them to escape the impacts of GST.

“It (the sector) is an investment merit for investors seeking refuge in the challenging local economic landscape.

“However, after two consecutive years of share price outperformance, risk-reward ratios of the local tech stocks have become less favourable. Hence, we see the bottom-fishing approach as especially apt for the sector,” said Chong.

He reported that in April 2015, global semiconductor sales maintained a strong momentum (+4.8% Year over Year – YoY), marking the 24th consecutive months of year-on-year increase.

“Outlook-wise, the Semiconductor Industry Association (SIA) expects continued growth in 2015, with World Semiconductor Trade Statistics (WSTS) sharing the same optimism, expecting the worldwide semiconductor market to grow steadily at a 2-year CAGR of 3.4% to USD359b in 2016, and further grow by 3.0% in 2017.

“Looking at another crucial indicator which tracks equipment spending (indicates the industry capacity expansion), SEMI, SIA and WSTS concurrently expect a high-single to mid-teens digit growth for the worldwide equipment sales in 2015,” he said.

Kenanga Research’s economic team was also projecting an exchange rate of UD vs MYR at a RM3.57/USD average in 2015, which is a boon for export-oriented semi-conductor companies.

“Based on our sensitivity analysis, every 1% fluctuations in the USD will impact our FY15E NPs for Unisem (M) Bhd ( Financial Dashboard), Malaysian Pacific Industries Bhd ( Financial Dashboard) and Vitrox Corporation Bhd ( Financial Dashboard) by 1%. Meanwhile, on the GST front, these players are expected to be least affected (based on the draft general guideline issued by Royal Malaysian Customs) due to their zero-rated status,” said Chong.

Looking back at the last round of the tech industry upcycle based from data by SIA, Chong warned that the last time the upcycle happened, it sustained itself for around 20 months (Nov 2009 to July 2011) before YoY growth tapered off, turning into an industry downturn.

“On our take on this current cycle, we see favourable macro factors fuelling industry growth. Note that our assumptions are premised on the continuation of gradual improvement in the global economy, with the US leading on firmer expansion of its domestic economy.

“Should there be any unforeseen adverse macro factors such as global economy slowdown, adverse currency fluctuations or a financial crisis, it could alter/deviate our positive convictions on the sectors and stock picks,” he said.

http://www.theedgemarkets.com/my/article/kenanga-research-maintains-overweight-tech-sector

Fitch upgrade of Malaysia from negative to stable is brilliant news
Posted in Uncategorized on 01/07/2015 by J&J 35

It is a positive thing that we need after 1MDB issues. At least not because of 1MDB impacted every angles.

We do have a better appetite after this upgrade and we bought Cypark after their good result announced yesterday at RM 1.80. We will reasonably shop around after this Fitch upgrade.

Major Puerto Rico investor warns it stands ready to defend bonds

U.S. fund manager OppenheimerFunds, the largest holder of Puerto Rico debt among U.S. municipal bond funds, warned the island it stands ready to defend the terms of bonds it holds, a day after the governor said he wanted to restructure debt and postpone bond payments.

Puerto Rico's Governor Alejandro Garcia Padilla could be heading toward a fight with creditors unwilling to take reduced payouts as he tries to restructure the island's $73 billion debt to relieve its fiscal problems.

OppenheimerFunds, with about $4.5 billion exposure to Puerto Rico according to Morningstar, said it believed the island could repay bondholders while providing essential services to citizens and growing the economy. It said it stood ready "to defend the previously agreed to terms in each and every bond indenture."

"We are disheartened that Governor Padilla, in a public forum, has called for negotiations with other creditors, representing and including the millions of individual Americans that hold Puerto Rico municipal bonds," a spokesman for Oppenheimer said in a statement.

http://www.reuters.com/article/2015/06/30/us-usa-puertorico-idUSKCN0PA2IJ20150630

Puerto Rico more important than Greece, China: Cramer

As default looms large over Puerto Rico, CNBC's Jim Cramer said Tuesday the situation there is more important to investors than the Greek saga or the situation in China.

"Everybody had it. Rich people had Puerto Rico. Mutual funds had Puerto Rico [bonds]. A lot of hedge funds had levered up Puerto Rico because it was such a great trade. It turned out to be not so great," Cramer said on "Squawk on the Street."

Cramer made his remarks a day after the U.S. territory's governor, Alejandro García Padilla, told The New York Times that, as the situation stands now, Puerto Rico cannot pay its $72 billion debt. "This is not politics, this is math," García Padilla said.

http://www.cnbc.com/id/102798297

Fitch affirms Malaysia's credit rating at 'A-', revises outlook to stable

Fitch Ratings has revised the outlook on Malaysia’s sovereign rating to “stable” from “negative”, and affirmed the country’s long-term foreign currency Issuer Default Rating (IDR) at 'A-', with local currency IDR at 'A'.

The review is in sharp contrast to the market's expectation of a downgrade by as much as two notches on Malaysia’s credit rating, following its earlier remark in March on such a possibility because of worsening trade balance and a state investment company's struggles to meet its debt obligations.

Fear of the downgrade has dampened the equity market sentiment and sent the ringgit to near ten-year low earlier this week.

In a statement released just before midnight, Fitch said Malaysia's fiscal finances have improved since last year with the general government deficit falling from 4.6% of gross domestic product (GDP) in 2013 to 3.8% of GDP in 2014, and general government debt to GDP ratio declining from 54.7% at end-2013 to 53.9% end-2014, as per Fitch estimates.

Fitch viewed the progress on the Goods and Services Tax (GST) and fuel subsidy reform as supportive of the country's fiscal finances. A further narrowing of the deficit is forecast in 2015, despite lower oil prices.

http://www.theedgemarkets.com/my/article/fitch-affirms-malaysias-credit-rating-revises-outlook-stable

Few signs of market panic as Greece nears default

Eurozone stocks, low-rated bonds and the euro weakened on Tuesday as Greece looked set to default on a repayment due to the International Monetary Fund and to plunge deeper into financial crisis.

There was little evidence of panic, however, with investors pointing to Europe's improved ability to fight financial contagion since the height of the euro debt crisis in 2011.

http://www.theedgemarkets.com/my/article/few-signs-market-panic-greece-nears-default

Analysts say Greece fallout unlikely to affect Malaysia, concerned about ringgit

The fallout from Greece’s possible exit from the European Union following its debt crisis is unlikely to have a contagion effect on the Malaysian economy for now.

But the concern is more on Fitch’s credit rating of Malaysia that could impact the ringgit, which is seeing minimal effects from the Greece problem.

Areca Capital chief executive officer Danny Wong felt the risk of a contagion effect on the Malaysian economy was “quite removed”.

“There is a small chance it will affect the rest of the world. but indirectly through perhaps a programmed sell-down by fund managers due to Greece’s exit because they are overweight on developed countries and underweight on emerging markets,” he said.

Malaysia’s equity exposure was quite limited at the moment, he added. But the worry lies in possible selldown on Malaysian Government Securities (MGS) bonds.

“There’s a substantial amount of foreign holdings on MGS. If they sell down, the risk is on whether we have the reserves and funds to cushion this. Even if we have, what about the currency side? Will it go down further?” he said.

Wong thinks the impact on the direct economy would be minimal, especially since the country does not have products with exposure to Greece.

A majority of Asian markets recorded losses following the Greek government’s decision to shut its banks for a week on Sunday night, and put capital controls in place, limiting withdrawals to 60 euro a day. This ensued from the European Central Bank’s decision to cap liquidity on Greece’s bail-out plan a day before.

MIDF Research said the Greece problem would have little fundamental impact to Malaysia’s economy and the local financial market except for a negative transitory shock in the short term.

With just yesterday’s and today’s trading figures to be included, the cumulative outflow for June would exceed RM3bil.

“For 2015, last week’s selldown increased the cumulative net foreign outflow to RM8.7bil, surpassing the RM6.9bil outflow for the entire 2014,” MIDF Research said.

This was significantly higher than the RM372.4mil sold during the previous week. Foreign investors have been net sellers on Bursa Malaysia for nine consecutive weeks.

“It has been the longest stretch of foreign withdrawal since the last three months of 2013. Last week, foreign investors sold equity listed in the open market on Bursa, excluding off-market deals amounted to RM824.7mil on a net basis,” said MIDF.

The capital controls put in place by Greece will, to a degree, cause some investor aversions to risks, said Fortress Capital CEO Thomas Yong.

He said: “Although the Greece problems have limited impact on Asia, investors are watching closely for ringgit outlook downgrade by Fitch. Certainly a downgrade will be negative in terms of foreign equity flows.”

As for equity, Wong said he would “buy on any sharp selldowns”. “It’s more a sentiment issue and not really a direct impact,” he said.

On concerns that it would trigger another round of exit by foreign funds, he said: “I’m not too worried about this as we have gone through so many ups and downs. People tend to forget the long-term strategy. As a fund manager our long-term strategy doesn’t change but we might have a bit of tactical move to switch counters for risk management purposes. We are still 80% invested,” he said.

He added that a possible downgrade from Fitch was not warranted, given Malaysia’s current data and fundamentals.

“When oil price came down, there were concerns of how it will affect our trade surplus and current account with the possibility of a twin deficit. But now, almost a year since oil price started to come down, our trade surplus is still big enough to cover that. So that proves that we are not that heavily dependent on oil trade. Yes, it affected us on the budget side, but the GST and subsidy rationalisation is enough to cushion that. And now oil is above the level that was used in the revised budget level,” he said.

http://www.thestar.com.my/Business/Business-News/2015/06/30/Greece-fallout-unlikely-to-affect-Malaysia/?style=biz

Unfazed by Greece, some fund managers stay bullish on Europe

The prospect of Greece defaulting on its debt has long been viewed as the recipe for a global stock market disaster. Yet some fund managers are prospering by ignoring the risks of another financial crisis and moving more money into European stocks.

Brian Burrell, co-portfolio manager of the $11.5 billion Thornburg International Value fund, increased the percentage of European stocks such as French materials maker Compagnie de Saint-Gobain and French construction company Vinci in his portfolio by 10 percentage points since the end of 2014, making European stocks 65 percent of his total assets.

Now, he's reaping the rewards: with broad European stock markets up by 15 percent or more for the year to date, his fund is up 17.1 percent over the same time, a performance that ranks among the best international funds and leaves the 2.5 percent gain in U.S. stocks far behind.

At a time when the average international fund tracked by Lipper has dropped its holdings of European stocks by 1 percentage point, to an average of 43 percent, fund managers like Burrell that went the other way are outperforming.

Now, with Greece and the so-called "Troika" of primary creditors - the European Commission, the European Central Bank and the International Monetary Fund - once again at an impasse, several of these fund managers say that they are ready to double down on European stocks should the market start to sell-off if Greece does indeed default.

"People are starting to react to headlines, and that's when we start buying," said Michael Testorf, a co-portfolio manager of the $53.8 million RSQ International Equity fund.

REASONS FOR BULLISHNESS

Chief among their reasons for bullishness: the conviction that Greece's debt standoff, now drawn out for four years, has given Europe's financial system enough time to prepare, preventing the sort of panic that sent stocks tumbling in 2008 when Lehman Brothers fell.

At the same time, the European Central Bank has expanded its quantitative easing program to lower interest rates, helping spur economic growth and leading to an 11 percent drop in the euro against the dollar in the first quarter.

Combined with lower oil prices, the ECB now expects eurozone GDP to grow by 1.5 percentage points in 2015 and 1.9 percentage points in 2016. The eurozone economy rose by an annual rate of 1 percent in the most recent quarter.

To be sure, the significant decline in the value of the euro has eaten into the returns for some dollar-based investors. Burrell, the Thornburg fund manager, said that his portfolio had partial currency hedges in place during the early part of the first quarter, but that the fund no longer has currency hedges in place after the euro's decline.

Testorf, whose fund has been trimming its holdings of Japanese stocks to have cash available to buy European stocks on declines, is planning on increasing his holdings of Italian banks such as Intesa Sanpaolo and Banca Popolare di Milano in the event of a selloff. Both companies should benefit from increased consolidation in the Italian banking sector over the next 12 months, he said, which will give the companies more pricing power.

"We've been long-term believers in the repair of Europe, and you're starting to see it in the economic numbers. We are confident that you're going to see GDP growth of over 2 percent in the eurozone by 2016," he said.

A Greek default would also likely lead to an immediate recession in the country, muting the appeal of anti-austerity movements in Spain and Italy, he added.

Not all fund managers that have benefited from Europe's stock rally are as optimistic, however.

Michael Allison, a co-portfolio manager of the $423 million Eaton Vance Global Dividend fund, increased his stake in European stocks by 64 percent between the end of 2014 and April. Yet much of that move was timed to capture annual dividend payments, and not indicative of his long-term outlook for Europe, he said, adding that the fund has since sold some of its European holdings.

"With Greece, who knows what could happen. You could have a very unpleasant outcome for investors, and we don't try to position ourselves with macro outcomes in mind," he said.

Burrell, the Thornburg fund manager, said that he is not overly concerned that a Greek default would affect his holdings in companies such as wealth manager UBS or Telecom Italia.

Instead, he's looking for signs that the European economy is truly improving before he decides to significantly increase his positions from here.

"We're in the phase where need to see fundamental growth kick in. If that happens, then these stocks are still quite compelling valuation-wise," he said.

http://www.theedgemarkets.com/my/article/unfazed-greece-some-fund-managers-stay-bullish-europe

SCGM proposes bonus issue, share price hits all-time high

Thermo-vacuum-formed plastic packaging products manufacturer SCGM Bhd, whose share price hit a record high today, is proposing a bonus issue of 40 million new shares on a one-for-two basis.

SCGM (fundamental: 1.5; valuation: 1.5) told Bursa Malaysia this evening that the bonus issue is the most appropriate avenue of rewarding the existing shareholders, while simultaneously enhancing its capital base.

The group also expects the proposed corporate exercise to increase its issued and paid-up share capital to a level which would be more reflective of its current scale of operations and assets employed.

SCGM noted its proposal today requires the approval from Bursa Malaysia and shareholders.

Its share price has been on the rise from RM1.81 on Jan 2 to RM3.70 today. The stock has more than doubled year to date, with a market capitalisation of RM296 million.

SCGM's net profit for the fourth financial quarter ended Apr 30, 2015 (4QFY15) has doubled to RM5.14 million or 6.42 sen, from RM2.51 million or 3.14 sen per share in 4QFY14. Cumulatively, the group's FY15 profit was RM15.65 million or 19.57 sen per share, up 36% from RM11.49 million or 14.36 sen per share in FY14.

http://www.theedgemarkets.com/my/article/scgm-proposes-bonus-issue-share-price-hits-all-time-high

Share valuations of world's top medical glove makers surge, all in Malaysia

Share valuations of the four biggest medical glove makers in Malaysia -in the world, in fact - have soared to historic highs, but not because of the MERS outbreak.

The median forward 12-month price-to-earnings ratio of Top Glove, Supermax, Kossan Rubber Industries and Hartalega has risen to 18, the highest ever, according to Thomson Reuters data.
The figures also show their combined revenue is expected to grow 20 percent in 2015, the most in five years.

The chief driver of sales is the ringgit's slump to nine-year lows against the dollar, making exports more competitive.

Low raw material prices will also help widen profit margins.

Analysts advocate a selective stock-picking strategy. Among the four, they see Top Glove as their top pick.

Shares of the world's biggest glove maker, which commands a 25 percent share of the market, have jumped some 11 percent in Kuala Lumpur since the company released earnings on June 17 that beat expectations.

"I think given the strong rally in Kossan prices, value has emerged more in players such as Top Glove and Supermax," said Chris Eng, head of research at Etiqa Insurance & Takaful, which manages more than 23 billion ringgit ($6.12 billion) of assets.

"Probably Top Glove presents the most value as we expect oil prices to gradually rise in coming months putting upward pressure on nitrile as well, which will disadvantage Hartalega and Kossan."

The recent outbreak of Middle East Respiratory Syndrome (MERS) in South Korea has also helped spark investor interest in the stocks, though analysts do not expect MERS to translate into a jump in glove demand with a material impact on earnings.

Malaysia-based RHB Research attributed this to the success of South Korea in containing MERS. South Korea has reported a total of 180 MERS infections as of Thursday morning, with 29 deaths.
In contrast, Severe Acute Respiratory Syndrome (SARS) in 2003 infected 8,096 people and killed 774, and driving up demand for medical gloves.

As for Ebola, which has killed more than 11,000 people in West Africa in the past year, cases have declined sharply in recent months.

http://www.thestar.com.my/Business/Business-News/2015/06/25/Share-valuations-of-worlds-top-medical-glove-makers-surge/?style=biz

Encorp and Felda team up to develop new township in Malacca

Encorp Bhd plans to develop an integrated township on a 640.98-acre leasehold land in Malacca provided by its ultimate owner, the Federal Land Development Authority (Felda).

The property developer told Bursa Malaysia that it entered into a memorandum of understanding (MoU) with Felda on Wednesday for a proposed development of commercial and housing projects in Bukit Katil.

Felda will provide the land free from all encumbrances for purpose of the proposed development, and Encorp will develop the master plan and investment proposal, manage and coordinate the master planning as well as develop and construct the township.

The MoU will take effect from Wednesday (June 24) will continue in force for 12 months or until the execution of the definitive agreement, whichever is earlier, or such other extended period of time as may be mutually agreed to by the parties in writing

The MoU may be terminated by both parties without cause subject to 30 days prior written notice to the other party.

Felda owns 70.97% of Encorp through its investment arm Felda Investment Corp Sdn Bhd (FIC). FIC had emerged as a substantial shareholder in Encorp last year.

Felda chairman Tan Sri Mohd Isa Abdul Samad told StarBizWeek earlier this year that Encorp had the opportunity to leverage on a sizeable landbank located in prime areas across Malaysia that was owned by Felda.

Encorp closed 8 sen higher at RM1.13 on Wednesday.

http://www.thestar.com.my/Business/Business-News/2015/06/24/Encorp-and-Felda-team-up-to-develop-new-township-in-Malacca/?style=biz

China to scrap commercial banks’ loan-to-deposit ratio

BEIJING: China is to scrap the country’s longstanding loan-to-deposit ratio requirement, the latest in a series of measures to reform the country’s commercial banking sector and get more lending into a slowing economy.

China’s cabinet, the State Council, published its decision late on Wednesday, as part of a draft amendment to the country’s 20-year-old commercial banking law.

Chinese banks at present are prohibited from lending more than 75% of their deposits, limiting their ability to offer loans and engage in other commercial activity.

The move comes as the country’s economic growth continues to slow, and as the government hastens financial reforms that have included the liberalisation of interest rates and the implementation of a deposit insurance scheme.

“The loan-to-deposit ratio is the biggest administrative restriction over banks,” said Ma Kunpeng, a Shanghai-based banking analyst at Sinolink Securities Co, after the announcement.

The removal of the restriction will “strengthen ability of financial institutions to lend more to the agriculture sector and small businesses”, the State Council said in an online statement.

Analysts said shares in Chinese banks, including top lenders Industrial and Commercial Bank of China Ltd, China Construction Bank Corp, Agricultural Bank of China Ltd and Bank of China Ltd , would likely rise as a result.

As China steps up its financial reforms, its central bank has cut interest rates three times in the last seven months in a bid to lower borrowing costs, while giving banks more flexibility over how much they pay depositors, which has hit bank earnings as lenders face competitive pressure to pay more for deposits.

In May, China launched a long-awaited bank deposit insurance scheme, setting the stage for full liberalisation of deposit rates, which would allow banks to compete on the basis of deposit yields, seen as a key step in letting the market, not the state, set the price of capital and risk.

Last week, Bank of Communications, the country’s fifth-biggest lender, unveiled the country’s first ownership reform of state-owned banks, which aims to introduce private shareholding to help drive growth.

Even with the removal of the lending restriction, bank lending isn’t expected to increase substantially, said Li Qilin, an analyst at Minsheng Securities Co, as banks have become more risk-averse in a slowing economy.

Wednesday’s draft amendment will be submitted for approval to the Standing Committee of the National People’s Congress, China’s parliament, the cabinet said. It didn’t provide a timetable.

With credit demand weakening and banks struggling with the rising costs of deposits brought about by interest rate liberalisation, it was the “perfect time” to remove the loan-to-deposit requirement, said Ma of Sinolink Securities.

The State Council also said it would set up a 300 billion yuan (US$48bil/RM180.6bil) national insurance fund to invest in domestic and foreign funds that finance urban construction, regeneration and water projects as well as key projects in the “One Belt, One Road” initiative. - Reuters

http://www.thestar.com.my/Business/Business-News/2015/06/24/China-to-scrap-commercial-banks-loan-to-deposit-ratio/?style=biz

VS Industry’s net profit surges nearly six-fold

VS Industry Bhd’s net profit surged close to six-fold to RM26.5mil for the third quarter ended April 30, 2015 (3Q15), from RM3.8mil a year ago supported by higher revenue from its operations.

Its revenue for the quarter increased 11.7% to RM420.1mil compared to RM375.9mil a year ago due to Malaysian operations as well as China and Indonesia plants.

“The Malaysian operations was the group's largest 3Q15 revenue contributor with RM284.1mil in sales, increasing 36.6% year-on-year compared to RM208mil in 3Q14,” the company said on Tuesday.

VS Industry managing director Datuk Gan Sem Yam said its Malaysian operations secured higher sales orders and benefited from a favourable sales mix.

Meanwhile, the company noted that group’s China and Indonesia plants for the quarter registered RM116.7mil and RM18.7mil in sales respectively.

Gan said the group performance was commendable for the quarter due to its growth-centric key customers.

Going forward, he remains positive on the group’s prospects due to the strengthening US economy as consumer sentiments and jobs data improves.

“In line with this, we will continue to explore new business opportunities by increasing our customer base to sustain our growth momentum,” Gan added.

VS Industry declared a third interim single-tier dividend of 6sen per share in relations to the financial year ending July 31, 2015, which will paid to its shareholders on July 28, 2015.

Overall, the company declared a total of 12sen for the current financial year, whereby the cumulative dividend payout of RM26.1mil translating to 32.5% of its net profit for the third quarter.

VS Industry pointed out that it has a dividend policy of distributing at least 40% of the group's net profit to its shareholders.

http://www.thestar.com.my/Business/Business-News/2015/06/23/VS-Industrys-net-profit-surges-close-to-sixfold/?style=biz

Genetec Tech secures RM27.3mil orders

Genetec Technology Bhd has secured new orders from its clients worth RM27.3 million. 

In a filing to Bursa Malaysia on Tuesday, Genetec said the orders were for the electronics, semiconductor, hard disk drive and car sectors.

"The tenure of the contracts normally range from three to nine months depending on the size of order and scope of work, and they are expected to contribute positively to our earnings for the financial year ending March 31, 2016," it said.- Bernama

http://www.thestar.com.my/Business/Business-News/2015/06/23/Genetec-Tech-secures-RM27mil-orders/?style=biz

Fitch places Malaysia on "negative" outlook

Fitch Ratings has placed Malaysia's sovereign rating to A-, with a “negative” outlook in its latest Asia-Pacific Sovereign Overview 2Q15 report released today.

The rating agency said the ratings reflect pressure on the sovereign’s credit profile.

“An ongoing leveraging-up of the economy, particularly in the broader public sector and households, and weakening macro fundamentals due to a widening savings investment gap.

“But the rating is balanced by reasonably strong growth rates and an external solvency position that is still strong,” said Fitch.

It noted that high dependence on commodities remains an inherent structural weakness of the credit.

It explained that goods surplus declined in the first quarter of 2015 (1Q15) from the year-ago period, on lower oil and liquified natural gas prices.

Fitch also said the Goods and Services Tax (GST) was implemented on 1 April 2015, which could be supportive of fiscal finances, but on its own is unlikely to achieve the targeted deficit reduction without the government making further spending cuts.

“Real gross domestic product (GDP) in 1Q15 rose by 5.6% year-on-year, mainly driven by strong domestic demand, as households frontloaded their expenditure as a pre-GST move.

“Contingent and off-balance sheet liabilities of the government remain a weakness in the broader public sector’s finances.

“Explicit federal government guaranteed debt at the end of 2014 stood at 16% of GDP, up from 15.4% a year ago,” it said.

Fitch said the positive sensitivities were greater confidence in the authorities’ commitment to containing direct and indirect public indebtedness.

On the negative sensitivities, Fitch said these included the emergence of sustained “twin” fiscal and external deficits, where failure to consolidate the public finances leads to the emergence of a structural current account deficit.

“A shock to interest rates or employment that is enough to impair households’ debt servicing capacity or trigger a need for sovereign support to the banking system.

“Slippage relative to the government’s fiscal targets and lack of progress on budgetary reform,” it said.

Besides Malaysia, Fitch said sovereigns across the region were seeing pressures build on growth, external finances and public finances from a combination of weaker commodity prices, the drag from a run-up in private-sector leverage, and anticipation of higher US interest rates later this year.
Fitch Rating report news just out at 3.05pm. Maintain at A-.

http://klse.i3investor.com/blogs/kianweiaritcles/78862.jsp