Masteel Signed Agreement With Stemcor Australia

Last minute buying on CIMB and Tenaga helped to push the FBM KLCI out of the red and inched up 0.38 points to close at 1,260.3. Today’s corporate news flows includes: Sunway City Bhd has entered into a partnership to develop RM2.5bn worth of property projects in China, Scomi Marine has acquired a anchor handling vessel for US$15m, Masteel has signed an off-take agreement with Stemcor Australia for the sale of RM120m worth of steel bars, Titan Chemicals’ 3Q09 net profit rose by more than 14-fold on stronger margins and write-backs, Temasek has proposed to delist LKT Industrial Bhd, Tenaga and PT Perusahaan Listrik Negara may jointly invest US$300m to build a power line connecting Malaysia to Indonesia, the Government is expected to decide on the implementation of GST before year-end and Miti is expected to reveal details on the reviewe National Automotive Policy today. Overnight, the Dow edged up a marginal 0.14% as the positive trend in home prices was offset by weaker than expected consumer confidence data. The local bourse may trade sideways while awaiting fresh leads, with the focus on the upcoming results reporting season.

Quiet Ahead Of Budget Day

Shares on Bursa Malaysia drifted in directionless trading, with the FBM KLCI moving in and out of positive territory throughout the day and ending at 1,260.02, down 0.04 pts. Today’s key highlights include Bank Negara’s international reserves rose to RM334.2bn, Malaysia Airports may give cash incentives, Green Packet is set to secure a WiMAX broadband licence in Singapore, Bumi Armada buys vessel at US$46m, Notion VTec proposes a private placement and CIMB-Mapletree buys Patimas Computers’ HQ for RM60m. Overnight, the DJIA raced up 131.95 pts to 10,081.31 as better-than-estimated earnings from Travelers Co to McDonald’s Corp fuelled speculation that the worst recession since the 1930s is over.

Daily Commentaries 22nd October 2009

The FBM KLCI retreated by 5.7 points yesterday as profit-taking set in for regional bourses following the Dow’s overnight loss. Losers beat gainers by 519 to 214 with volume standing at 926m shares. The corporate news include Sunway Holdings entering into a JV with LCL Corp for potential interior fit-out jobs in Abu Dhabi, Genting Malaysia completes the subscription of Wynn Resorts’ First Mortgage Notes for US$15m, CIMB disposes of Sathorn Building for about RM100m, and Pelikan to raise RM189m via a 1-for-2 rights issue. Crude oil rose to US$81 per barrel on further dollar weakness, with the dollar index falling to 75.3 points, its lowest since August last year. The Dow again fell below the 10,000-point level, dragged down by financial stocks. This should result in further weakness in Asian bourses today.

Axis REIT 3.7% Increase In Net Profit 3Q 2009

The benchmark FBM KLCI closed 4.25 points higher at 1,265.7, underpinned by follow through buying on financial and plantation stocks. Positive spill over effects from strong regional performance and overnight gains on Wall Street fuelled buying momentum in the local bourse. Today’s notable headlines are Bank Negara reaffirming its confidence in the RM, stating that intervention in the Ringgit market was unnecessary, Media Prima has finalised the sale of its loss making Philippine subsidiary for RM54m, Perodua managing director Abdull Hafiz Syed confirmed that he will not be renewing his contract which expires this December, while Perodua has also revised upwards its sales targets for 2009 by 2.5%,. Meanwhile, Masteel has sealed a deal with Stemcorp Australia worth millions of Ringgit to export steel to Australia, Pos Malaysia launched a strategic partnership with Affin Bank, AlRajhi Bank and EON Bank, and Axis REIT posted a 3.7% increase in net profit for 3Q09. Overnight Wall Dow Jones closed 50.6 pts lower to settle at 10,041.5 on the back of skeptism of the strength of the economic recovery amid the poorer-than-expected results from selected heavyweight corporates.

Another KLCI New High For The Year 20th October 2009

The benchmark FBM KLCI garnered strength to close above the near term resistance of 1250 pts, spurred by trading interest on second liners and expectations of better earnings performance from the US markets and improved GDP data from China for 3Q09. Among the notable domestic headlines are RHB Capital acquiring an 80% stake in Indonesia's Bank Mestika for US$329m, MAHB hopes to conclude talks for the management of airports in Middle East and Africa in 6 months and the Sarawak government offering RM2.65/share to take Sarawak Energy private. Overnight, the Dow reclaimed the 10,000 pt-level while crude oil steadied at US$79 per barrel. Investors will continue to take heed of more results due this week from the US, particularly from the retail sector to gauge the strength of the economic recovery.

Daily Commentaries 19th October 2009

The FBM KLCI ended higher by 9.91 points at 1,256.77 in tandem with bullish sentiment on the global market’s performance. The Securities Commission has rejected Tradewinds (M) Bhd’s application for exemption from making a mandatory general offer for Bernas. Bursa Malaysia’s 3QFY09 net profit of RM30.8m was 52.4% higher y-o-y, contributed by trading revenue from the securities market. RHB Capital Bhd has requested its shares to be suspended today, possibly in relation to a regional M&A. Finally, US stocks closed lower on Friday after disappointing results from General Electric Co and Bank of America Corp, indicating that the economic recovery may take longer than expected. Crude oil price, however, ended higher by US$0.95 to US$78.53 on a weaker US$.

EPF Might Pay Higher Dividends 2009

The FBM KLCI edged up 0.02-point to 1,246.86 as investors took profit after early gains. The key highlight include the EPF considering paying higher dividend provided there is no market disruption in the next 3 months, motor vehicle sales dip 5% m-o-m, Nam Cheong gets a US$22.5m Viet vessel deal, DBE acquires 51% of rival for RM30.6m, Public Bank’s 3Q net profit of RM639m came in largely in line with estimates and Supermax’s 3Q net profit almost tripled to RM40m. Overnight, the DJIA rose 47.08 pts to 10,062.94 as energy shares gained after oil climbed to a one-year high, helping the market reverse an early drop triggered by earnings at Citigroup Inc. and Goldman Sachs Group Inc. that disappointed some investors. We expect the local bourse to trade sideways while waiting for fresh leads, with immediate resistance and support at the 1285 pt and 1231.5 pt-levels respectively.

Daily Commentaries 15th October 2009

The FBM KLCI took out its Monday high of 1238 pts to hit another record high for the year at 1246.8. The 13-point gain was primarily driven by banking stocks such as Maybank, CIMB, Public Bank, RHB Cap and Hong Leong Bank. Turnover was a respectable 1.26bn, with gainers beating losers by about 3 to 1. Meanwhile, crude oil hit US$75 on further dollar weakness. In the news are the Japanese central bank, which kept its interest rate unchanged, Magna Prima buying 2.43 ha of leasehold land in Selayang land for RM16.5m, Sime Darby to issue RM4.5bn of Islamic bonds, Litrak saying it is open to a takeover proposal, and TRC Synergy wins an Aussie job worth RM12.9m. With the Dow closing 144 points higher and breaching the 10,000-pt mark for the first time this year, the local market should open strongly today but could well see profit-taking setting in later in the day.

FKLI Trading 14th October 2009

In spite of the modest advance at Wall Street, Malaysian index futures began the day slightly lower and fluctuated between positive and negative territory on bottom-fishing activity offsetting profit-taking selling pressure. In subdue trade, traders seemed to have taken a breather taking its cue from the lackluster regional peers following the recent rally that propelled KL index futures prices to 2009 high of 1243 on Monday. Nevertheless, the underlying tone of the cash market was pretty firm, thus cushioning the downside. At the close, October contract eased 3 points lower at settle at 1234.5. With upward thrust decelerating, there is a possibility index futures will trip into consolidation mode temporarily this week. However, any pullback may be shallow and brief as sentiment remains upbeat though players are sitting on the sidelines as reflected in daily thin turnover. Overnight, Intel's Q3 earnings that surpassed analyst's expectations failed to soothe jitters sparked by Goldman's downgrade by influential analyst Meredith Whitney. For the coming sessions, the immediate overhead resistance is pegged near 1241 level. As for the downside, current support is anticipated at 1230 index points.

Green Packet To Expand WiMax To East Malaysia

The FBM KLCI closed 0.18 points higher, spurred by late bargain hunting on selected heavyweights. Today’s headlines are Media Prima is in the final stages of disposing of its loss-making TV operations in the Philippines, Berjaya Corporation to inject Cosway Holdings into its 49%-owned Berjaya Holdings (HK) Ltd for RM900m, and Green Packet Bhd has obtained approval to expand its WiMax services to East Malaysia. Overnight, the DJIA lost 14.7 pts to 9,871.1 as banking shares fell, led by Goldman Sachs, as the market may have partially priced in the strong upcoming results, leading to some profit taking. We expect the market to remain range-bound today, with key support at the 1200 pt-level.

Daily Commentaries 13th October 2009

The FBM KLCI closed 0.49-point lower, largely as a result of profit taking on CIMB. Today’s headlines are Malaysia’s August IPI declining 5.7%, Perisai forming a JV with Gryphon Energy for MOPSU related activities in the region, Zecon securing a RM182m construction contract, Rin Kei Mei emerging as a substantial shareholder of Perstima with a 32.8% stake, and Tradewinds’ board of directors have approved the acquisition of a 31.5% stake in Bernas. Meanwhile, Silk Holdings has had its PN17 status lifted. Finally, US stocks closed mixed and crude oil price was up marginally by US$1.26 at US$73.03. Meanwhile, CPO price gained RM62 to RM2,147 on bullish export data for the first 10 days of October.

FKLI Trading 12th October 2009

Steady buying support on blue-chip counters kept KL index futures afloat buoyed by mounting optimism about the global economic recovery. Earlier last Friday, futures prices propelled to a fresh high for the year at 1239.5 before retracing mildly to settle at 1238, up 4 points on the day. For the past week, KL markets came back to life on renewed optimism buying in step with Wall Street advance after Alcoa, a heavyweight component stock of DJIA, released betterthan expecting earnings. On daily basis, KL index futures extended its upward thrust for 5 consecutive days Chart wise, the current trend appears bullish but turnover has been relatively thin, implying many traders are sitting on the sidelines possibly on worries that the market has gotten too far ahead of the recovery. For the coming week, anticipated earnings optimism by JPMorgan, Goldman Sach, Intel, IBM and Bank of America, and a slew of economic data slated for release this week could well assess the pace and magnitude of economic recovery. With Wall Street having hit a closing high for 2009 last Friday, this should pave the way for more upward scaling towards 1247 level. Downside support is now raised to 1235.

Daily Commentaries 12th October 2009

The FBM KLCI ended higher by 3.73 points to close at 1,233.82 amid bullish sentiment following Wall Street’s performance. DRB-Hicom Bhd is bidding for a 32% stake in Proton Holdings Bhd and Supermax will raise the selling prices of its gloves starting from the December shipment. Naza is looking to produce Peugeot cars for markets beyond Asean while Lembaga Tabung Haji has subscribed for a total of RM216m in Islamic preference shares offered by Bank Islam Malaysia Bhd and left unsubscribed by Dubai Financial Group LLC. Elsewhere, three local Islamic banks are preparing to set up their operations in Bosnia by year-end while Malaysian contractors have secured a total of 16 projects worth RM3.7bn YTD. Finally, both US stocks and crude oil price ended higher, with oil price marginally higher by US$0.08 to US$71.77.

FKLI Trading 9th October 2009

Index futures continued its fourth day of gains on cash-led futures-buying momentum to hit another record high for this year. Against a positive ambience from abroad as Wall Street pointed to a higher start after Alcoa Inc. posted better-than-expected earnings, thus giving hope for a strong third quarter earnings season, index futures advanced 1.5 points at the opening print. Trading was lackluster in the morning but the momentum picked up later with shortcovering activity leading the market higher. By the close, October contract surged 10.5 index points to settle marginally off day's high at 1234. With market having traced out higher lows and higher highs in recent days coupled with DJIA overnight surge, futures market has the propensity to encourage further advance towards 1244 with further upside potential hinged on follow-through buying in the cash market. Profit taking selling ahead of the weekend should see
downside support near 1226 level.

FBM KLCI At Year's High

FBM KLCI ended yesterday at the year's high of 1,230.09, or 11.48 pts higher, spurred by a late buying spree in most heavyweights. Today’s key news highlights are Proton in talks with India's Hero Group to build small passenger cars for the Indian market, Port of Tanjung Pelepas eyes up to RM2bn sukuk, Genting to raise RM1.6bn via MTN, TM wins a RM170m contract, Petronas unit teams up with Gazprom to explore opportunities in on LNG terminal business, Naza to assemble another Peugeot model locally, Ogawa appointed as sole distributor for V-Patch analyser and Top Glove’s 4Q09 net profit more than doubles to RM56.8m. Overnight, the DJIA gained 61.29 pts to 9,786.87 as Alcoa Inc. started the earnings season with an unexpected profit and jobless claims decreased more than forecast. We believe this may lead spur sentiment on the local bourse today. The market’s immediate resistance lies at 1,231.5 pts, followed by the 1,242 pt- level.

FKLI Trading 8th October 2009

In line with most major markets advance, KL index futures opened firmer on follow-through interest but the momentum tapered off soon as traders seemed reluctant to make significant moves ahead of the start of earnings season, led by Alcoa Inc, the largest US aluminum producer. Despite recent days steady performance, buying interest remains lukewarm and volume stays low, reflecting a sense of caution in the marketplace. Nonetheless, we reckon that
KL index futures ability to remain above 1200 point should set the stage for more climbing going forward. At the close, October contract edged 6 points higher to settle at 1223.5.

For the moment, KL market seems stuck in range bound trading pattern and it will take some very significant news to break out and then maintain the direction. For the coming sessions, expect futures to remain confined within 1217 to 1227 trading band.

RM28 billion Bid For High Speed Rail Project

With the regional bourses closing 1% to 2% higher, the FBM KLCI managed to eke out a gain of nearly 6 points to 1218.61. Market breadth was positive, with 479 gainers against 178 losers on volume of 879m shares. After chalking up gains in the previous 2 days, the US market retreated 5 points last night. Crude oil also retraced to below US$70 with the US dollar’s rebound. Among the local headlines, Tenaga is to buy renewable power from Pesaka Technologies for RM14.89m per year for 21 years, and privately-held Global Rail and its Chinese partner have submitted a RM28bn bid for a high-speed rail project to link economic corridors, airports and seaports.

Top Glove To Sustain Buying Interest

The FBM KLCI dipped 3.72 points to close at 1,212.7 as a correction in KLK’s share price following previous day’s trading error dragged the plantation index down. Expectation of a strong set of results from Top Glove continued to sustain buying interest on rubber glove stocks. Today’s headlines include conflicting news reports on the winner of the bid for the exclusive rights to broadcast the English Premier League in Malaysia, with The Star reporting that Astro is believed to have won the bid for RM800m while the Edge Financial Daily said ESPN is instead believed to have won the broadcasting rights, Khazanah has invested RM516m for a 25% stake in a new Dubai-based investment firm, KWAP has emerged as a substantial shareholder of WCT with a 5.11% stake, and Malaysia Retail Association has forecast a 1-3% growth for Malaysia’s retail industry for 2009. We expect the market to remain firm, with key support at the 1200 level as the Dow ended higher overnight on optimism of a sustainable economic recovery.

FCPO Trading 7th October 2009

FCPO closed 2062, up 20pts Tuesday. Palm oil registered a volatile price
movement as prices broke the immediate support of 2020 and later created new highs for the day in the second half. Prices rebounded towards 2070. If prices continue to sustain, next target would be 2100. Immediate support at 2013 followed by a stronger one at 2000.

FKLI Trading 7th October 2009

KL index futures opened marginally lower but losses were limited as spillover buying momentum from previous day stirred some speculative buying interest. Despite a subdued underlying market weighed down by palm oil plantation counter, in particular KL Kepong, futures prices inch steadily higher in line with positive showing across major global markets.

Adding on to the feel good vibes, Australia became the first major country to raise interest rates since the onset of the financial crisis last year, fuelling optimism that other economies might also be growing. In range trade, October contract edged 1.5 index points higher to finish the day at 1217.5. With little leads from the domestic macro side, most traders would remain fixated on external development which will continue to dictate price movements. Following a strong close in Wall Street for the 2nd consecutive day, KL index futures looks set to trade on upward bias within 1215 to 1228 levels.

FKLI Trading 6th October 2009

Following a couple of US 'shock waves' that sent investors around the region running for cover last week, KL index futures continued to trade
sideway on extended consolidation, flirting within a 5 five-point band of 1203 and 1208 for most part of trading sessions yesterday. Trading was lackluster as
players were not willing to bid-up prices while regional markets remained cautious, awaiting for clearer direction to emerge. Subsequently, futures advanced on
speculative and technical buying yesterday into the last hour of trading boosted by the firmer underlying cash index, notably palm oil plantation counter KLumpur
Kepong. At close, October contract settled at intraday high of 1216, up 12 points.
Despite upside momentum still weak, the market held up well and showed resilience near 1200 psychological marks. Coupled with DJIA overnight bounce from a
4-day losing streak after a report showed the first growth in the service industry in a year, bargain hunting ahead of upcoming earnings optimism seems set to
solidify the upbeat sentiment with downside support pegged at 1208. To the upside, initial overhead barrier is targeted at 1225 level.

Erroneous Trade Involving KLK

The FBM KLCI closed firmer yesterday on the back of key blue chip support. Some of the notable headlines for today are the Government denying Plus is up for sale, TA Enterprise set to venture into the venture capital industry, Bina Puri wins a RM185m job and KNM receiving orders worth RM155m from international clients. MISC also partnered a Vietnamese company to build a FPSO in Johor. We expect the market to remain range-bound with key support at the 1200 pt-level, with the Dow halting a 4-day losing streak to close higher overnight. There should be a short term retracement in the morning arising from the erroneous trade involving KLK yesterday which caused the share price to surge 24% in the last few minutes of trading yesterday.

FKLI Trading 5th October 2009

As Dow suffered its worst one-day fall in three-months, stocks and commodities around the world dropped and the yen rose on speculation
rising unemployment will dampen the global economic recovery. Similarly, KL index futures reacted negatively and drop start near intraday low of 1198.5, but
managed to claw back above 1200 points psychological mark within the first hour into market open. Tracking the steady performance of underlying cash, the
October contract shed a minor 4 points to finish the day at 1204. For the week, futures lost a sum of 17.5 index points against 1221.5 the previous Friday.

Last Friday, US stocks fell for a fourth day and the dollar slump increasing speculation that Fed Reserve may postpone the withdrawal of monetary stimulus as the
economy struggles to recover. We reckon players will continue to indulge in bottom-fishing accumulation near 1200 index points as the market had managed to
bounce-off that level on couple of occasions. Upside resistance is targeted near 1211 level.

Digi Plans To Return Excess Cash To Shareholders 5th October 2009

The FBM KLCI ended lower by 2.10 points at 1,206.25, with selling pressure across the board. For today, Digi plans to return excess cash to shareholders, MAS aims to post an operating profit in 2010 by focusing on enhancing customer satisfaction, generating revenue and intensifying cost-cutting. Heveaboard plans to raise new funds through 42.6m warrants and Proton plans to restore the Lotus brand name. E&O is optimistic about the take-up for Phase 2 its St Mary Residences serviced apartments in view of the recent rally in the Singapore and Hong Kong markets. Meanwhile, Japan’s August jobless rate fell to 5.5% from 5.7% in July while household spending rose, indicating that the country has emerged from its worst post war recession. Finally, both US stocks and crude oil price ended lower, with oil price dropping by US$0.87 to US$69.95.

Daily Commentaries 2nd October 2009

The FBM KLCI closed 6.27 pts higher to 1,208.35, faring better than most regional markets. Corporate news includes the Naza shareholders not proceeding with a conditional takeover of Kumpulan Jetson as they did not secure more than 50% of Jetson shares, TM and Astro maybe slugging it out for English Premier League rights, Warisan TC in MOU to assemble and distribute Chinese trucks, UMLand and Tradewinds Johor team up to jointly develop a RM718m mixed-use development in Bandar Pulai Jaya, Johor as well as LTH to take up Bank Islam’s preference shares that were not subscribed by Dubai Financial Group. Taking the cue from DJIA’s overnight 203-pt drop to 9,509.28 on a decline in a gauge of manufacturing and an increase in jobless claims, the local bourse may come under the selling pressure today. The FBM KLCI’s immediate support lies at 1,196.5 to 1,200 pts.

Daily Commentaries 2nd October 2009

The FBM KLCI closed 6.27 pts higher to 1,208.35, faring better than most regional markets. Corporate news includes the Naza shareholders not proceeding with a conditional takeover of Kumpulan Jetson as they did not secure more than 50% of Jetson shares, TM and Astro maybe slugging it out for English Premier League rights, Warisan TC in MOU to assemble and distribute Chinese trucks, UMLand and Tradewinds Johor team up to jointly develop a RM718m mixed-use development in Bandar Pulai Jaya, Johor as well as LTH to take up Bank Islam’s preference shares that were not subscribed by Dubai Financial Group. Taking the cue from DJIA’s overnight 203-pt drop to 9,509.28 on a decline in a gauge of manufacturing and an increase in jobless claims, the local bourse may come under the selling pressure today. The FBM KLCI’s immediate support lies at 1,196.5 to 1,200 pts.

Daily Commentaries 1st October 2009

The FBM KLCI lost 6.13 pts to 1,202.08 on profit taking in both heavyweights and lower liners. Losers led gainers by 466 to 197 while 213 counters were unchanged and 382 untraded. Today’s key highlights include Malaysia and Saudi Arabia forming a US$2.5bn JV to spearhead the flow of FDI from the Middle East, Exxon sells stakes in O&G block to Petronas, Iskandar Investment to award RM2bn worth of projects in the next 12 months, Dubai Investment Group tipped to sell Bank Islam stake, SapuraCrest and Acergy win a US$100m Aussie deal and Lion Corporation’s subsidiary sells Lion Industries stake to Tan Sri William Cheng. Overnight, the DJIA dropped 29.92 pts as an unexpected drop in business activity spurred concern the economy is struggling to recover, which leads us to believe it would be another lacklustre trading day for the local bourse. The Immediate resistance and support for FBM KLCI are at 1,196.5 to 1,200 and 1,231.5 respectively.