U.S. and European market roundup
Cyclical sectors led US stocks lower on Thursday after factory data showed a slowdown in both the euro zone and China. The drop in demand fueled calls for the pullback in stocks after the S&P 500 scored 10 weeks of gains out of this year’s 11 weeks so far. FedEx shares dragged down the Dow Jones Transportation Average after the package delivery company warned of a lower outlook, due in part to Europe’s weak economy. (Reuters)
European stocks fell for a fourth day as manufacturing contracted in China and the euro area. European services and manufacturing output fell more than forecast in March. A survey of purchasing managers in both industries dropped to 48.7 from 49.3 in February. A preliminary measure of Chinese manufacturing fell to 48.1 in March, the lowest reading on the purchase managers’ index since November and compares with a final 49.6 in February. A result below 50 indicates a contraction. (Bloomberg)
Macro News
NA
Corporate News
Sapuracrest Petroleum Bhd, together with its stakeholder and partner Seadrill Ltd, is bidding for its second project in Brazil to capitalise on the country's burgeoning oil and gas sector. SapuraCrest executive vice-chairman and president Datuk Seri Shahril Shamsuddin said the two entities have decided to form an alliance to share the risk in bidding for the project. In November last year, SapuraCrest won a US$1.4b (RM4.3b) contract from Petroleo Brasileiro SA (Petrobras), Latin America's largest company by market value. The state-run oil producer, based in Rio de Janeiro, Brazil, awarded the contract to TL Offshore Sdn Bhd, a wholly-owned unit of SapuraCrest, to charter and operate three units of pipe-laying support vessels to be built for operations in Brazil. Seadrill is listed on both the New York and Oslo stock exchanges and owns a 23.5% stake in SapuraCrest. Shahril said Australia is another market where the company is giving added focus on top of Southeast Asian region as well as the Middle East. (Business Times)
Kobay Technology Bhd has proposed to privatise its 53.16%-owned subsidiary Lipo Corp Bhd, via a selective capital reduction and repayment exercise under Section 64 of the Companies Act, 1965 to be undertaken by Lipo. The proposed exercise would involve a RM29.93m payment to entitled Lipo shareholders, or a RM1.25 cash per Lipo share held on a date to be determined. Kobay, which does not intend to maintain the listing status of Lipo, told Bursa Malaysia that the offer price RM1.25 per Lipo share represented a premium of 21 sen (or 20.19%) over the last transacted price of RM1.04 on March 19. Also, based on Lipo’s audited statements for the financial year ended June 30, 2011, the offer price represents a price-to-earnings multiple of 6.76 times (based on a basic
earnings per Lipo share of 18.5 sen) and a price-to-book multiple of 0.8 times (based on net assets per share of RM1.57). Lipo is involved in the manufacture of precision machine components and sheet metal. (StarBiz)
Malaysia AE Models Holdings Bhd has secured a RM61.9m job for the baggage handlings system for the new low cost carrier. The contract was awarded by UEMC-Bina Puri Joint Venture, the scope of works included the
baggage handling system, auto sorting system for the proposed LCCT and associated works at the Kuala Lumpur International Airport. (The Edge Daily)
Ireka Corporation Bhd has secured a RM45.8m contract for the fit-out works of the Aloft Hotel, KL Sentral. The contract, awarded by Iringan Flora Sdn Bhdm was for 13 months. (The Edge Daily)
SP Setia Berhad’s net profit for the first quarter ended Jan 31. 2012 rose by 19% to RM74m from RM62m in the same quarter ended last year. Revenue, however, fell to RM49.16m from RM518.9m. The property developer said its pre-tax profit for the property development segments rose by 12% despite a 3% fall in revenue, mainly due to the increase in profit margin arising from the group’s success in steadily increasing the selling of its products
through continuous value creation (Bernama)
Glomac Bhd’s net profit climbed 32.5% to RM21.9m in 3Q ended Jan 31, 2012 from RM16.5m a year ago, mainly contributed by ongoing projects Glomac Damansara, Glomac Saujana Rawang and Bandar Saujana Utama. However, revenue fell 17.7% to RM145.3m from RM176.5m, mainly due to completion of projects – Glomac Tower, Sri Bangi and Glomac Galleria. The company has proposed an interim dividend of 2.75 sen per share less tax for FY12. For the nine-month periods, Glomac’s net profit also rose by 32.5% to RM63.5m from RM48m a year ago. Revenue was lower at RM408m compare with RM443.7m previously. (The Sun Daily)
Datuk Raymond Chan Boon Siew, who has been buying into several companies previously, has become a new substantial shareholder in Metronic Global Bhd. He surfaced with a 5.18% stake in the company by acquiring 32.9 million shares via the open market and a married deal. Previously, companies in which Chan surfaced as a substantial shareholder had experienced significant share price movements like Harvest Court Industries Bhd and Naim Indah Corp Bhd. Chan bought into Harvest last year. He plans to inject his private company Sagajuta (S) Sdn Bhd into Naim Indah via a reverse takeover that will see his stake in Naim Indah increasing from 12% to 45%. In a separate announcement, Metronic said it had also disposed of shares it owned in Ariantec Global Bhd through the open market yesterday and the day before and had realised a gain on disposal of RM3.4m. The company still owns about 5.3% of Ariantec after the disposal, shaving off its shareholding from 11.7%. It sold about RM5.17m worth of shares, which represents 9.7% of the group's net assets. (StarBiz)
The Minority Shareholder Watchdog Group (MSWG) has raised the question of whether Esso Malaysia Bhd’s board has received competing offers for the company. Some of the issues of interest to non-interested
shareholders (of Esso Malaysia) include whether Esso Malaysia has received other offers and, if so, the reason or reasons for not considering them, MSWG said. , Esso Malaysia said that subsequent to the fulfillment of all conditions precedent pertaining to the proposed acquisition of 65% of Esso Malaysia shares by San Miguel Corp (SMC) from ExxonMobil International Holdings Inc, SMC was extending the mandatory and unconditional general takeover offer to acquire the remaining 35% of Esso Malaysia shares at RM3.59 per share. The offeror did not intend to maintain the listing status of Esso Malaysia and its board of directors had no plans to seek a competing or alternative takeover offer. (StarBiz)
Source: Jupiter Securities Research 23 March 2012
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