Barefoot Investor: April 2011

KUALA LUMPUR: The FBM KLCI slipped into negative territory in line with the decline at key regional markets that fell on some profit taking ahead of the long weekend as well as the holiday-shortened trading in Japan next week.

The FBM KLCI slipped 1.20 points to 1,534.10 at 10am. It had earlier risen to 1,540.55 before giving up its gains.

Losers overtook gainers by 189 to 179, while 222 counters traded unchanged. Volume was 162.73 million shares valued at RM175.67 million.

At the regional markets, South Korea’s Kospi fell 0.93% to 2,187.78, Hong Kong’s Hang Seng Index lost 0.41% to 23,708.94, Singapore’s Straits Times Index was down 0.30% to 3,175.47, the Shanghai Composite Index shed 0.05% to 2,885.46 and Taiwan’s Taiex slipped 0.01% to 9,039.76.

Japan stock markets were closed for a national ahead.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on April 29 said that due to the Dow Jones Industrial Average’s positive tone last night, the FBM KLCI could remain stronger today.

“There may be an initial gap-up, followed by pre-weekend profit taking later.

“We expect further range trading for the FBM KLCI. As such, invest with a short-term horizon. The index could limp to a good week-on-week close,” he said.

On Bursa Malaysia, F&N was the top loser at mid-morning and fell 30 sen to RM17.34; Kawan Food and Sime Darby fell eight sen each to RM1.34 and RM9, Petra Energy down seven sen to RM1.62, Malayan Flour Mills six sen to RM5.74 while Ta Ann, Petrol One Resources and Litrak fell five sen each to RM6.60, RM1.33 and RM3.82 respectively.

Priceworth warrants were most active at mid-morning with 17 million units done. The warrants added 17 sen to 38 sen.

Other actives included Focus Lumber, ConnectCounty, Karambunai, HWGB and SAAG.

Gainers included Petronas Gas, HLFG, BAT, KLK, AirAsia, Daibochi and Proton. (


KUALA LUMPUR: EON Bank Bhd has declared a dividend of RM311.94 million, translating into 44.9 sen per share, once it has received the approval from Bank Negara Malaysia.

HONG LEONG BANK BHD [] said on Friday, April 29 it has no objection to EON Bank Bhd declaring and paying dividend of RM311.94 million once it has received the approval from Bank Negara Malaysia.

The 44.9 sen is on top on the RM7.30 offer made by HL Bank in its proposed acquisition of the assets and liabilities of EON CAPITAL BHD [] at RM5.06 billion with no deduction for the payment of the proposed interim dividend.

It said that EON Cap had on Thursday accepted its offer in accordance with the terms and conditions set out in HL Bank’s letter of offer dated April 1, 2010

HL Bank and EON Cap also agreed that EON Cap/EON Bank shall submit the application to BNM for the proposed interim dividend.

“Either party may submit the application to the Securities Commission (“SC”) for the change in control of MIMB Investment Bank Bhd,” it said.

They agreed the the total liabilities at EON Cap company level less available cash at EON Cap company level liabilities shall not exceed RM14.1 million as at the completion date.

In a separate statement, EONCap said following HL Bank’s agreement to its conditions, once BNM’s and SC’s approvals for the BNM application and SC application respectively were obtained, the parties shall complete the transaction.

“HL Bank has also acknowledged that the net liabilities at EONCap company level shall not be more than RM14.1 million as at the completion date of the offer and that no further debts, expenses or liabilities shall be incurred or committed by EONCap without prior approval from HL Bank.

“Any net liabilities incurred or committed by EONCap in excess of RM14.1 million without the prior written approval of HL Bank shall not form part of the liabilities to be transferred to HL Bank pursuant to the offer,” it said. (


Primus suit dismissed
The suit by Primus Pacific Partners Ltd's Malaysian unit against certain shareholders and directors of EON Capital Bhd (EON Cap) over the proposed sale of the latter to Hong Leong Bank (HLB) has been dismissed with costs. In his 100-page decision which took about one-and-a-half hours to deliver, Judicial Commissioner Varghese George Varughese held that petitioner Primus (M) SB had failed to prove the so-called complaints that formed the foundation of the petition against nine board members of EON Cap and three entities controlled by Rin Kei Mei and Tan Sri Tiong Hiew King, who are the shareholders in the banking group. He also ruled that the petitioner was not entitled to any relief sought. (StarBiz) Please see accompanying report

Joint agreement on RM5bn aluminium smelting plant
Gulf International Investment Group Holdings SB, headed by local tycoon Tan Sri Syed Mokhtar Al-Bukhary and UAE-based business leader Mohamed Ali Rashed Alabbar, has entered into a JV agreement with Aluminium Corp of China to develop a USD1.6bn (RM5bn) aluminium smelting plant in Sarawak. The JV company, Smelter Asia SB, will develop, own and operate the private aluminium smelting plant with an annual capacity of 370,000 tonnes. The smelter will be located in Samalaju Industrial Park, 60km from Bintulu and some 180km from the Bakun hydroelectric dam. The park has been earmarked by the state government for heavy industries under the Sarawak Corridor of Renewable Energy master plan. (StarBiz) Please see accompanying report

HELP on the way to seeing up to 20% increase in revenue
HELP International is upbeat on achieving a yearly increase in revenue of 15%-20% based on its current performance, eventually doubling its revenue in six years. HELP, which owns and operates HELP University College, reported a revenue of RM105.2m for its financial year ended 31 Oct 2010, up 8.9% from RM96.6m previously. “We have consistently been achieving similar figures for many years, so we will be able to achieve that figure in the years to come. In six years, the revenue will double because the percentage is compounded,” said HELP president and co-founder Datuk Dr Paul Chan. (Malaysian Reserve)

Sime Darby Motors targets to sell 60,000 cars in 2011
Sime Darby Motors may venture into new markets including Indochina as it seeks new opportunities. Executive vice president Datuk Lawrence Lee said on 28 Apr, the company sold 35,000 cars in 1H2011 and for the full year, targets to sell 60,000 units, up from 57,000 in 2010. He said there could be supply issues in 2H2011 following the aftermath from the recent tsunami in Japan, although the company is managing the issue as to not fall short of the market demand. (Financial Daily)

SEGi 1Q net profit surges 90.5% to RM18.12m
SEG INTERNATIONAL net profit for the first quarter ended 31 Mar 2011 surged 90.5% to RM18.12m from RM9.51m a year earlier due to the increase in student enrolments at its institutions. Revenue for the quarter rose to RM68.47m from RM52.29m in 2010. EPS was 7.35 sen, while net assets per share was 77.2 sen. SEGi said on Thursday, 28 Apr that it recorded marked improvement in student numbers and profitability in the previous year and the current quarter. “This trend is expected to continue in 2011 and the foreseeable future as the group has put in place a firm foundation and strategy for sustainable growth. “Quality niche academic programmes will be introduced continually by the group backed by a strong management and academic team,” it said. (Financial Daily)

Eversendai IPO to fund growth in India
Local steel and power plant installation contractor Eversendai Corp SB plans to utilise EM83m of the proceeds raised in its upcoming IPO for its operations in India. In a preliminary prospectus posted yesterday on the Securities Commission’s website, the company noted that RM50m would go towards the acquisition establishment of a fabrication facility in India with a fabrication capacity of 36,000 MT per annum. The company intends to invest another RM33m to increase the capacity of its Indian plant to 50,000 MT per annum. The facility will be located in Tamil Nadu or Andhra Pradesh in India, and will be established two years from its IPO. (Financial Daily)


SYDNEY: Australia's Qantas Airways on Tuesday announced hefty increases in fuel surcharges on international routes in response to surging fuel prices, adding A$100 ($105) to the cost of one-way fares from Australia to Europe and North America.

It is the third such surcharge increase in calendar 2011. – Reuters


KUALA LUMPUR: The FBM KLCI fell sharply below the 1,520-point level in early trade on Tuesday, April 19 in line with key regional markets that were mired in the red following the overnight slump at Wall Street.

The FBM KLCI fell 0.71% or 10.80 points to 1,517.12 at 10am.

Losers beat gainers by 404 to 70, while 151 counters traded unchanged. Volume was 148.70 million shares valued at RM170.93 million.

Asian markets fell on Tuesday after rating agency Standard & Poor's lowered its US credit outlook to negative, prompting a global flight to other assets, according to Reuters.

The euro nursed heavy losses early in Asia while the yen gained across the board as worries about sovereign debt problems in Europe and the United States prompted investors to unwind carry trades, it said.

S&P, which assigns ratings to guide investors on the risks involved in buying debt instruments, said the move signals at least a one-in-three chance that it could eventually cut its long-term AAA rating on the United States within two years, it said.

At the regional markets, Japan’s Nikkei 225 lost 1.49% to 9,413.99, Hong Kong’s Hang Seng Index fell 1.09% to 23,570.82, the Shanghai Composite Index was down 0.99% to 3,026.93, Taiwan’s Taiex fell 1.24% to 8,606.52, South Korea’s Kospi declined 1.03% to 2,115.76 and Singapore’s Straits Times Index shed 0.61% to 3,125.15.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on April 19 said that due to the Dow Jones Industrial Average’s negative tone last night, the FBM KLCI would be in a heavy profit-taking mode today.

A recent secondary high of 1,565.53 (April 4, 2011) had been seen and a major downward retracement phase has now emerged.

“Failure to hold above 1,529.41 last Tuesday implies a very bearish outlook for the FBM KLCI.

“Sell on any and every rebound rally that emerges,” he said.

However, OSK Research’s Shin Kao Jack in a note April 19 said the market’s near-term technical outlook has been straightforward enough for the research house to continue to maintain its bullish view, as long as the benchmark was trading at above the 1,474 point-level.

“Immediate support is still seen at last Wednesday’s low of 1,517 points while the 1,500-pt psychological mark would be the next support.

“To the upside, there is immediate resistance at the 1,544 point-level, followed by the 1,565 point-level and the historic high of 1,577 points,” he said.

On Bursa Malaysia, BAT and DiGi fell 48 sen each to RM47.22 and RM28.52, Panasonic 40 sen to RM23, Hong Leong Bank 20 sen to RM10.30, HLFG 19 sen to RM9.26, Lafarge Malayan Cement 15 sen to RM7.22, MISC 14 sen to RM7.53, Petronas Dagangan and CIMB 12 sen each to RM15.98 and RM8.18, while RHB Capital lost 11 sen to RM8.29.

Smartag was the most actively traded counter with 11.1 million shares done. The stock fell half a sen to 37.5 sen.

Other actives included Key West, Perisai, Tejari, Focus, Karambunai, MAA, HWGB and Ramunia.

Gainers at mid-morning included APM Automotive, Ewein, HELP, LTKM, Texchem, Ken Holdings and Sceintex.(


US stocks sink after S&P issues warning on US debt

A warning from Standard & Poor's that the agency might lower its rating on US government debt sent stocks on their steepest slide in a month Monday. S&P said there is a 33% chance it would lower the country's credit rating from AAA in the next two years if Washington fails to pare the country's debts. The Dow fell 140.24 points, or 1.1%, to close at 12,201.59. The S&P 500 fell 14.54, or 1.1%, to 1,305.14. The Nasdaq composite fell 29.27, also 1.1%, to 2,735.38. (StarBiz)

Celcom in RM168m deal to push fibre-optic usage

Celcom Axiata will invest RM168m to enable faster transmission of data through its base stations. Celcom had struck a deal with Sarawak’s Sacofa for a 10-year fiberisation leasing agreement which will see all of Celcom’s node-b and base stations in Sarawak use fibre optics. This will provide trunk capacity throughout the state as well as provide cross-ocean submarine capacity. The infrastructure is set for completion within two years’ time. (Malaysian Reserve)

Indonesian tin miner to list on Bursa Malaysia

Malaysia Smelting Corp (MSC) is proposing to list its Indonesian unit TMR Ltd, involved in tin mining, on Bursa Malaysia's Ace Market. According to its draft prospectus, MSC will emerge as a substantial shareholder in the Bermuda-incorporated TMR, with a 14.23% stake. TMR's business is mainly in offshore exploration and mining as well as support activities for the production of tin in the Bangka Belitung Islands, Indonesia. The initial public offering will involve 90m shares of USD0.20 each, of which 10m will be for the pink form offer, 60m for placement offer and 20m for the retail offer. The IPO price has yet to be determined. (StarBiz)

Three foreign firms pump in RM500m in biotech push

Malaysia has secured three foreign investors who have pumped in some RM500m to set up their manufacturing facilities as part of the country’s push for a regional biotechnology hub. Bio-XCell SB, which develops the Bio-XCell park within Iskandar Malaysia, has signed up India’s Biocon, France’s METabolic Explorer and US-based Glycos Biotechnologies as key tenants. The three investors will occupy more than 100 acres. Bio-XCell park’s first phase is said to cost as much as RM950m to develop. With RM500m in the form of foreign investment and RM250m debt, the remaining RM200m will be funded by shareholders’ equity. (FinancialDaily)

Vehicle sales at all-time month high

Total vehicle sales surged to an all-time month high of 12.7% to 63,265 units in March 2011 from 56,139 units a year earlier due to a rush for deliveries and invoicing by companies that have their financial year ending in March. YTD March 2011 sales volume increased by 7.5% y-o-y, up from 4.3% as at YTD February 2011. (StarBiz)

28 April decision on EON Capital legal tussle

The long-drawn legal tussle involving directors and shareholders of EON Capital and its single largest shareholder Primus Pacific Partners may see some light soon, with a court decision expected on 28 April. Yesterday was the last day for counsels from both sides to present their oral submissions before the decision is made. The decision on the case, well into its tenth month, will be delivered at the Penang High Court (StarBiz)


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