Morning Coffee - 14 Feb 2013

MARKET ROUNDUP

Most U.S. Stocks Rise as Investors Weigh Data, Speech
As investors weighed economic reports and President Barack Obama’s State of the Union address. The S&P 500 advanced 0.1 percent to 1,520.33 at 4 p.m. in New York. The Dow Jones Industrial Average lost 35.79 points, or 0.3 percent, to 13,982.91. Four stocks gained for every three that fell on U.S. exchanges, with about 6 billion shares changing hands, 2.9 percent lower than the three-month average. Retail sales in the U.S. rose 0.1 percent last month, matching the median forecast of economists surveyed by Bloomberg, which showed household spending is holding up even as an increase in the payroll tax takes a bigger bite from paychecks.

WTI OIL FALLS ON IRAN NUCLEAR NEGOTIATIONS
After Iran said it was nearing agreement with nuclear inspectors and as the Energy Information Administration said U.S. crude output rose to the highest level in 20 years. Crude oil for March delivery fell 50 cents to settle at $97.01 a barrel on the New York Mercantile Exchange. Futures have declined 3.9 percent in the past year.

PALM OIL EXPORTS FROM INDONESIA SEEN FALLING TO FOUR-MONTH LOW
The world’s largest grower, may decline to the lowest level in four months in February as more buyers turn to Malaysia after it extended duty-free shipments to clear record stockpiles. Malaysia, the second-largest producer, set its tax on crude exports at zero for January and February after revamping tariffs to combat the biggest ever reserves. Prices in Kuala Lumpur, which lost 23 percent last year as the stockpiles accumulated, have climbed 3.2 percent in 2013 amid speculation the reserves will drop as exports gain and supply contracts. Futures on the Malaysia Derivatives Exchange, the regional benchmark, fell 1.7 percent to 2,516 ($814) a ton at 5:34 p.m. yesterday after the Palm Oil Board released January data for reserves, shipments and output. Stockpiles fell 1.9 percent from a record to 2.58 million tons, a smaller decline than forecast. Exports declined 1.6 percent as production dropped 10 percent. - Bloomberg

NEWS

AZRB signs RM1.55bil East Klang Valley Expressway deal
AZRB said in a note to Bursa Malaysia that the concession period shall be for a period of 50 years, adding that the Government had agreed to provide a loan amounting to RM635mil at an interest rate of 4% per annum. Under the concession agreement, AZRB said the works would involve the design and construction of the expressway, including the upgrading works and the widening of the existing road, as well as the supply and installation of tolling and other equipment (including telecommunications equipment) at the toll plaza, and managing, operating and maintaining the same on the expressway during the concession period. The concession also grants AZRB the right to demand, collect and retain the toll for its own benefit from all vehicles liable to pay toll using the expressway during the operating period. http://biz.thestar.com.my

Online insurance attractive, Tune and others competing for its strong profit margins
One insurer intending to lead the pack is Tune Ins Holdings Bhd. Although there are some hurdles in this new channel of distribution, the company, like other insurers, is bullish on the scope of this channel going forward. Tune Ins, which had a database of 7.6 million online policyholders as at Dec 31, 2012, sold six million insurance policies online last year, putting the company at the forefront of this growing business segment. An industry observer felt that the longstanding tariffs for products such as motor insurance and fire insurance had been holding Malaysia back. Essentially, motor tariff insurance companies, on average, lose money, while the fire tariff insurance companies make decent profits. http://biz.thestar.com.my

People world-wide are buying fewer mobile-phones for the first time in four years
Smartphone sales, a category dominated by Samsung and Apple, continued to rise, he said, and the higher-end devices would account for more than half the market for the first time this year. Total worldwide mobile sales to endusers fell 1.7% to 1.75 billion units in 2012, Gartner said. Samsung and Apple continued to dominate the market, with the South Korean company selling 385 million phones in 2012, of which 53.5% were smartphones, with Apple selling 130 million smartphones. In the fourth quarter alone, Apple and Samsung accounted for 52% of smartphone sales, up from 46% in the third quarter. China's Huawei reached third spot in worldwide smartphone sales for the first time in the fourth quarter, Gartner said. The company sold 27.2 million smartphones to end-users in 2012, up 74%. - Reuters

MRCB-Gapurna deal excites investors and analysts
MRCB on Sunday entered into a collective share sale agreements to acquire Nusa Gapurna Development Sdn Bhd's (NGD) subsidiaries, Gelanggang Harapan Construction Sdn Bhd (GHC) and Gapurna Global Solutions for a RM729 million. Its acquisition of NGD's subsidiaries include Gapurna Builders Sdn Bhd, Gapurna Land Sdn Bhd, Puncak Wangi Sdn Bhd and 70% owned PJ Sentral Development Sdn Bhd for RM459 million. The subsidiaries own a combined 13.23ha of land in the Klang Valley, increasing MRCB's depleting landbank from 20.23ha to 33.59ha. The total GDV of NGD's land is estimated at RM5.7 billion. http://www.thesundaily.my

Jupiter Securities Research - 14 Feb 2013