FBM KLCI narrows losses

KUALA LUMPUR: The FBM KLCI pared down its losses to close 1.87 points lower at 1,486.78 on Wednesday, Oct 20 in line with the decline in volatile key regional markets after the initial shock of China raising its interest rates for the first time in three years wore off.

Global markets were rattled after China's central bank decided late yesterday on a 25-basis-point hike in one-year deposit and lending rates, a move that was seen as possibly marking the beginning of a more aggressive phase of monetary tightening.

The 30-stock FBM KLCI had earlier in the day fallen by more than 12 points before clawing back and narrowing some of its losses.

Losers edged gainers by 408 to 385, while 293 counters traded unchanged. Volume was 1.49 billion shares valued at RM1.8 billion.

Among the major losers today were Batu Kawan that lost 44 sen to RM15.50, BAT down 40 sen to RM48, Lysaght fell 17 sen to RM1.62, Panasonic down 16 sen to RM18.34, Bursa lost 15 sen to RM8.20, Padini and CBIP lost 14 sen each to RM4.80 and RM3.45, Lafarge Malayan Cement down 11 sen to RM7.89 while Glenealy fell 10 sen to RM5.20.

Glove makers advanced in the afternoon session after CIMB Research maintained its overweight call on the sector. Latexx rose 29 sen to RM3.15, Kossan added 20 sen to RM3.40 and Adventa gained 14 sen to RM2.55.

Press Metal was up 21 sen to RM1.67, while DiGi and Genting rose 14 sen each to RM24.60 and RM10.52.

Karambunai was the most actively traded counter with 162.5 million shares done. The stock declined 1.5 sen to 23.5 sen. Other actives included Timecom, Keladi, Sinotop, Hubline and Scomi.

Puncak Niaga forms JV to bid for Tamilnadu water project

KUALA LUMPUR: PUNCAK NIAGA HOLDINGS BHD [] has entered into two separate joint-venture (JV) agreements with P&C CONSTRUCTION []s (P) Ltd in India to participate in the international tenders for water supply and flourosis mitigation project called by the Tamilnadu Water Supply and Drainage Board in India.

In a filing to Bursa Malaysia on Wednesday, Oct 20 Puncak Niaga said that together with P&C Constructions, it would form a JV in the name of PNHB-P&C Joint Venture to bid for Packages III and V of the Hogenakkal project for the Dharmapuri and Dharmapuridistricts.

Puncak Niaga will hold a 60% stake in the JV and be the lead partner while P&C Constructions will have 40%.

The company said the JV agreements were synergistic to its business expansion plans in India.

P&C is a company incorporated in India, providing support to its parent company, SP Periasamy & Co, for large projects and civil engineering contracts and is also involved in construction of public buildings, commercial and factory buildings, road and bridges, irrigation and hydro-management projects, and many other specialty construction jobs.

Glove makers extend gains

KUALA LUMPUR: Rubber glove makers extended their gains in the afternoon session on Wednesday, Oct 20, reversing their losses from early on in the day after CIMB Research maintained its overweight call on the sector and said the results that rubber glove companies announced during August-October were mostly in line with its expectations, except for Adventa and Top Glove which missed expectations.

At 3.45pm, Latexx as up 27 sen to RM3.13, Kossan added 18 sen to RM3.38, Adventa was up 15 sen to RM2.56, Supermax added 11 sen to RM4.76, Rubberex rose six sen to 91.5 sen, Top Glove up four sen to RM5.72 while Hartalega added three sen to RM5.45.

CIMB Research said despite the 36% year-on-year surge in core net profit for the six companies under its coverage during their recent results (quarters ending June to August), their average quarterly core net profit declined almost 4% quarter-on-quarter due to the unrelenting high level of latex prices, weak US dollar and softening demand.

"We continue to believe that these hiccups are only temporary as rubber glove demand remains resilient due to their importance to the healthcare industry.

"In light of this, we maintain our Overweight call on the sector. Potential re-rating catalysts include the continuing uptick in demand, capacity expansion and strong earnings growth," it said in a note on Wednesday.

The shares of glove makers initially fell this morning after the Malaysian Rubber Glove Manufacturers' Association (MARGMA) had advised its members to increase and adjust prices to be in tandem with high raw material costs and continued weakening US dollar.

MARGMA president K M Lee said on Tuesday most rubber glove manufacturers had started raising prices of their products to reflect the increasing raw material costs and the weakening of the US dollar.

"If the orders forthcoming do not match the glove price requested, glove makers have no choice but to reduce the output," said Lee.

Boustead, BHIC shares advance

KUALA LUMPUR: The shares of BOUSTEAD HOLDINGS BHD [] and BOUSTEAD HEAVY INDUSTRIES CORP [] Bhd (BHIC) advanced on Wednesday, Oct 20 after AmResearch upgraded the latter from "hold" to "buy" with a raised fair value of RM5.50.

The research house upgraded the stock on Oct 10 after BHIC's 21% effectively owned Boustead Naval Shipyard Sdn Bhd (BNS) received a letter of intent (LoI) to construct six second-generation patrol vessels (PV) from the Ministry of Defence.

At 4.30pm, BHIC was up one sen to RM4.60 with 331,000 shares done while Boustead added 11 sen to RM5.41 with 1.14 million shares traded.

#Flash* Pintaras Jaya hopes to double order book in 2011

KUALA LUMPUR: CONSTRUCTION [] outfit PINTARAS JAYA BHD [] is targeting to double its order book to RM120 million in the next twelve months, in anticipation of more substructure work.

Its managing director Dr Chiu Hong Keong said the construction industry has been slow in the past two years, but is upbeat on future prospects with the upcoming 10th Malaysia Plan and various projects in the offing.

"This year has continued to be slow. However, upcoming projects like the LRT and MRT expansion line and Warisan Merdeka should generate a lot of work in the next two years. And Pintaras Jaya would be one of the first to benefit from it as we are involved in the piling and substructure works," he said after the company's AGM on Wednesday, Oct 20.

According to Chiu, Pintaras Jaya currently has about RM60 million of contracts in hand to be completed in the next twelve months, and is in the midst of tendering for more projects.

FBM KLCI pares down losses at mid-day break

KUALA LUMPUR: The FBM KLCI pared down some of its earlier losses and was only 0.48 point lower to 1,488.17 at the mid-day break on Wednesday, Oct 20 as DiGi and Genting rose to lift the 30-stock index.

The FBM KLCI had earlier fallen as much as 12.09 points to 1,476.56 in tandem with the slump at key regional markets that fell in after China raised its interest rates on Tuesday for the first time since 2007.

On Bursa Malaysia, losers led gainers by 391 to 241, while 318 counters traded unchanged. Volume was 777.38 million shares valued at RM720.77 million.

The ringgit weakened 0.51% to 3.1245 per US dollar; crude palm oil futures for the third month delivery rose RM3 per tonne to RM2,922, gold jumped US$8.67 an ounce to US$1,340.72 (RM4,156.23) while crude oil added 82 US cents per barrel to US$80.31.

The top loser Wednesday morning was BAT that fell RM1.08 to RM47.32; GAB was down 60 sen to RM8, Batu Kawan lost 34 sen to RM15.60, Panasonic down 20 sen to RM18.30, Lysaght fell 17 sen to RM1.62, Bursa lost 15 sen to RM8.20, RHB Capital fell 13 sen to RM7.79 and Lafarge Malayan Cement fell 10 sen to RM7.90.

Among the gainers, DiGi added 28 sen to RM24.74, Genting rose 24 sen to RM10.62, Press Metal up 19 sen to RM1.65, Latexx added 15 sen to RM3.01, DFZ Capital and AirAsia rose 14 sen each to RM3.64 and RM2.59, Sungei Bagan up 11 sen to RM2.97 and Fima Corp added 10 sen to RM5.48.

Karambunai continued to be the most actively traded counter. The stock rose one sen to 26 sen with 88.5 million shares done. Other actives included Timecom, Sinotop, Keladi, Hubline, Carotech and Hovid.

At the regional markets, Japan's Nikkei 225 fell 1.74% to 9,373.83, Hong Kong's Hang Seng Index shed 0.55% to 23,632.73 and Singapore's Straits Times Index lost 0.45% to 3,177.79. Meanwhile, the Shanghai Composite Index rose 0.65% to 3,021.42, the South Korean Kospi added 0.70% to 1,870.30 and Taiwan's Taiex rose 0.71% to 8,103.31.

AirAsia up on MIDF Research upgrade

KUALA LUMPUR: AIRASIA BHD [] shares advanced on Wednesday, Oct 20 after MIDF Research upgraded the stock to a buy with a target price of RM2.88 based on FY11 EPS pegged at PER of 8.5 times, which is the mean PER of its peers.

At 12noon, AirAsia was up 8 sen to RM2.53 with 4.33 million shares done.

MIDF Research said it was upbeat on the continuing growth of AirAsia as demand for travelling continues and its ability to resist past shocks.

"Hence, we are revising our full year FY11 net earnings by 26.9% to RM834.5m in FYE11.

"We believe that Air Asia will perform strongly in FYE11 and we expect that ancillary income will grow 19%y-o-y and load factor to reach 78%," it said in a note on Wednesday.

Glove makers rebound slightly after CIMB Research maintains overweight

KUALA LUMPUR: Rubber glove makers pared down their earlier losses on Wednesday, Oct 20 after CIMB Research maintained its overweight call on the sector and said the results that rubber glove companies announced during August-October were mostly in line with its expectations, except for Adventa and Top Glove which missed expectations.

At 12.10pm, Latexx was up 13 sen to RM2.99, Kossan added eight sen to RM3.28, Adventa and Supermax up five sen each to RM2.46 and RM4.70 respectively, Hartalega up four sen to RM5.46, Top Glove rose one sen to RM5.69 while Rubberex added 1.5 sen to 87 sen.

CIMB Research said despite the 36% year-on-year surge in core net profit for the six companies under its coverage during their recent results (quarters ending Jun to Aug), their average quarterly core net profit declined almost 4% quarter-on-quarter due to the unrelenting high level of latex prices, weak US dollar and softening demand.

"We continue to believe that these hiccups are only temporary as rubber glove demand remains resilient due to their importance to the healthcare industry.

"In light of this, we maintain our Overweight call on the sector. Potential re-rating catalysts include the continuing uptick in demand, capacity expansion and strong earnings growth," it said in a note on Wednesday.

Asian markets fall on China rate hike

KUALA LUMPUR: Asian markets, including Bursa Malaysia, fell on Wednesday, Oct 20 after China raised interest rates for the first time since 2007, with Japan's Nikkei share average down over 2%.

China's rate rise was aimed in part at curbing a red-hot property market, prompting the Shanghai property subindex to fall 3.3% at the open, according to Reuters.

The People's Bank of China, the central bank, said it would lift its benchmark one-year lending and deposit rate, effective on Wednesday.

At the regional markets, Japan's Nikkei 225 fell 2.18% to 9,331.86, the Shanghai Composite Index lost 0.96% to 2,972.91, Singapore's Straits Times Index fell 0.81% to 3,166.51, Taiwan's Taiex lost 0.04% to 8,043.13 and Hong Kong's Hang Seng Index opened 1.4% lower at 23,423.82. The South Korean Kospi, however, was up 0.32% to 1,863.32.

On Bursa Malaysia, the FBM KLCI fell 4.85 points to 1,483.80 at 10am as the broader market breadth remained cautious in view of China's interest rate hike as well as the overnight slump at Wall Street.

Losers beat gainers by 306 to 127, while 229 counters traded unchanged. Volume was 322.31 million shares valued at RM201.46 million.

On Bursa Malaysia, BAT was the top loser at mid-morning and fell RM1.08 to RM47.32; Batu Kawan fell 32 sen to RM15.62, Panasonic down 20 sen to RM18.30, Bursa lost 16 sen to RM18.30, Lafarge Malayan Cement down 10 sen to RM7.90 while Petronas Dagangan, IJM Corp and Masterskill fell eight sen each to RM10.90, RM5.35 and RM3.26 respectively.

Meanwhile, RHB Capital lost seven sen to RM7.85 and F&N fell six sen to RM14.34.

Among the gainers, Far East Corp added eight sen to RM6.88, Huat Lai and BLD PLANTATION []s gained seven sen each to RM1.27 and RM4.88, DiGi was up six sen to RM24.52 while Toyo Ink, Kluang and ho Hup added five sen each to RM1.70, RM2.60 and 78 sen respectively.

Karambunai was the most actively traded counter with 56.1 million shares done. The stock added half a sen to 25.5 sen. Other actives included Sinotop, Carotech, Hovid and Jadi.

RHB Research upgrades valuation for property stocks

KUALA LUMPUR: RHB Research has upgraded its valuations for the property stocks, as many have almost hit its target prices recently.

'We still see values in the sector led by sustained property prices and demand, and valuations are still attractive at about +1 standard deviation above the average of P/B,' it said on Wednesday, Oct 20.

RHB Research said it expected the liquidity play and margin expansion will first flow to the big caps.

'Our favourite four are SP Setia (Upgrade to OP, FV upgraded to RM5.94); IJM Land (OP; FV upgraded to RM3.50), Suncity (OP, FV upgraded to RM5.80) and Mah Sing (OP, FV = RM2.33). Maintain Overweight on the sector,' it said.