Allianz advances on upbeat CIMB Research note

KUALA LUMPUR: ALLIANZ MALAYSIA BHD [] shares rose on Thursday, April 14 following an upbeat report by CIMB Equities Research that said the company offers the only exposure to a well-managed Malaysian composite insurer that is controlled by an established international insurance group.

At 11.15am, Allianz was up 29 sen to RM5.28 with 213,600 shares traded.

The research house Allianz's key attractions were (1) its well-managed general insurance business with above-industry underwriting margin, and (2) the expected exponential expansion of life insurance contributions.

CIMB Research said Allianz was also set to ride on the upward adjustment of motor tariffs starting next year.

'Assuming a 40-50% discount to the P/E implied in our target price for AIA, we arrive at a target P/E range of 8-9.6 times, which implies a value of RM8.20-9.80 for Allianz or upside of 64-97%.

'Despite its strong fundamentals and bright outlook, the stock is trading at only 6x P/E and 1.2x P/BV. Its only drawback is its low liquidity due to lack of newsflow and coverage by analysts,' it said.

Naza Kia's Forte named Debut Model of the Year at the 2011 by Frost & Sullivan

KUALA LUMPUR: Naza Kia Malaysia's Forte was named the Debut Model of the Year at the 2011 Frost & Sullivan Malaysia Excellence Awards on Wednesday, April 13.

The award is presented to models launched between November 2009 to November 2010 that made a significant impact in the market with a substantial sales volume and positive market acceptance.

"Since its launch in November 2009, the Forte has made waves in the market and has sparked a new interest and desirability for the Kia brand.

'This award is the sixth accolade the Forte has won in Malaysia since its launch,' said Naza joint group executive chairman and Naza Kia Malaysia CEO SM Nasarudin SM Nasimuddin in a statement Thursday, April 14.

He said the company recently introduced the Forte 6-Speed, adding that the model was well-positioned for more honours this year.

Since its launch in November 2009, Naza Kia Malaysia has sold a total of 6,878 units of the Forte as at the end of the first quarter this year.

Frost & Sullivan consultant for Asia Pacific Automotive and Transportation Practice, Ahmad Faridz Dzulkarnain, said the Forte broke the monotony in its segment by offering a very bold and dynamic European styling vehicle packed with high technological features and fitment level at a very attractive price point.

The new Forte 6-Speed, which was recently launched by Naza Kia Malaysia, features several new premium features that are set to further strengthen the award-winning sedan's position in the market.

The enhanced Forte is now mated to a six-speed automatic transmission with Shiftronic functionality as well as steering mounted paddle shifters.

The on-the-road (OTR) price of the 1.6EX variant is at RM78,800 while the OTR prices for the 1.6SX and 2.0SX are at RM85,800 and 97,800 respectively.

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FBM KLCI slips at mid-morning

KUALA LUMPUR: The FBM KLCI slipped into negative territory at mid-morning on Thursday, April 14 in line with most key regional markets following a lackluster overnight close at Wall Street.

Also, sentiment at the regional markets was weighed down by the on-going nuclear crisis in Japan as well as the various aftershocks that have hit that nation following the March 11 earthquake.

Japan's nuclear crisis sent corporate confidence plunging to a record low in April and the International Monetary Fund (IMF) warned the risk to the world's third largest economy is firmly on the downside, with no end in sight to its nuclear disaster, according to Reuters.

At 10am, the FBM KLCI fell 4.63 points to 1,530.96, dragged by losses including at BAT, Hong Leong Bank, KLK and PPB.

Losers beat gainers by 325 to 123, while 217 counters traded unchanged. Volume was 169.94 million shares valued at RM176.19 million.

At the regional markets, Japan's Nikkei 225 fell 0.59% to 9,583.86, Hong Kongs' Hang Seng Index lost 0.69% to 23,967.48, Singapore's Straits Times Index fell 0.36% to 3,160.55, South Korea's Kospi was down 0.15% to 2,118.73 and the Shanghai Composite Index slipped 0.11% to 3,046.97.

Meanwhile, Taiwan's Taiex edged up 0.05% to 8,784.39.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi said that due to the DJIA's benign tone last night, the FBM KLCI would be in a quiet mode today, ahead of the Sarawak state election this Saturday.

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

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

'Sell on any and every rebound rally that emerges,' he said in a note to clients on April 14.

On Bursa Malaysia, BAT was the top loser at mid-morning and fell 68 sen to RM47.32; Hong Leong Bank fell 22 sen to RM10.36, KLK 18 sen to RM20.82, PPB 12 sen to RM16.72, UMW, Kluang and MISC down nine sen each to RM7.24, RM2.60 and RM7.67 respectively, while HLFG and Asas lost eight sen each to RM9.31 and 92 sen.

E&O was the most actively traded counter with 8.36 million shares done. The stock added three sen to RM1.29.

Other actives included Iris, Tiger, HWGB, Alam Maritim, Masterskill, Melewar and Perisai.

Gainers included Allianz, Petronas Dagangan, Panasonic, F&N, KPJ, Top Glove and Aeon Credit.

Masterskill active, up in early trade

KUALA LUMPUR: Masterskill Education Group Bhd shares were actively traded on Thursday, April 14 after its group CEO and PT Sejahteraraya Anugrahjaya Tbk (PTSA) teamed up to look into the setting up of a university in Indonesia.

They will form a joint venture company in Indonesia with proposed paid-up capital of US$10 million wherein MEGB and its CEO will each hold a 30% stake and the remaining 60% by PTSA.

At 9.20am, Masterskill rose five sen to RM2.33 with 2.22 million shares done.

PTSA is listed on the Stock Exchange of Indonesia and is the owner of Mayapada Hospital in Indonesia.

POLL-Japan firms hit by supply woes after disasters

TOKYO: The earthquake and tsunami that devastated Japan and triggered a nuclear crisis have negatively affected nearly 60 percent of Japanese companies, disrupting production and supply chains, a Reuters poll showed on Thursday.

While manufacturers were hit especially hard, there are already some tentative signs of recovery, underscoring that the impact -- at least for some firms -- may not be long-term.

The special survey of 400 large firms was taken between March 25 and April 11 in tandem with the monthly Reuters Tankan, a poll of corporate sentiment. The special poll was taken just weeks after a March 11 earthquake and tsunami ravaged northeastern Japan and triggered a nuclear safety crisis.

While Japanese companies are likely to be squeezed by production disruptions in northern Japan, as well as power shortages and supply woes, they may not feel the same pain as after the collapse of Lehman Brothers, when lending markets froze.

"The impact of this earthquake will not be on the same scale as the Lehman crisis," said Soichiro Monji, chief strategist at Daiwa SB Investments, a Japanese asset management firm.

"This earthquake has more of an impact on the supply side than the demand side," he said, adding that he did not expect a prolonged impact on consumer spending from the disasters.

Tokyo estimates the material damage alone could top $300 billion, making it the costliest natural disaster in history, leaving nearly 28,000 dead or missing and hitting the world's third-largest economy.

Still, some firms reported signs of improvement.

About one-quarter of respondents, which typically numbered around 210 firms for each of the six questions in the survey, said their production or ability to provide services had already been restored to prequake levels, while an additional 54 percent said they were currently at more than 80 percent of prequake levels.

SUPPLY CHAIN

Nearly 70 percent of respondents said difficulty in acquiring materials or parts was the single biggest problem in righting their businesses, a sign that supply chains remained hampered.

Global companies from semiconductor makers to shipbuilders are moving to minimise supply disruptions caused by the disasters. The earthquake and tsunami destroyed infrastructure and knocked out factories supplying products from steel to high-tech components.

Firms such as Toyota Motor Corp and Sony Corp have been forced to suspend production. Plant closures and production outages among Japanese TECHNOLOGY [] firms are major threats to the global supply chain, analysts have said.

Yet the problems do not appear severe enough to spur a large number of companies to move factories, change suppliers or shift their target markets, with 79 percent of respondents saying they were not considering moving offices or factories, or shifting suppliers.

Of the respondents, 43 percent said their order volume and sale prices had returned to 90 percent of prequake levels.- Reuters

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KPJ advances, upgraded to Trading Buy by MIDF Research

KUALA LUMPUR: KPJ HEALTHCARE BHD [] shares rose in early trade on Thursday, April 14 and were up 10 sen to RM4.21 at 9.40am with 469,300 shares traded.

MIDF Research upgraded the stock to a Trading Buy with a higher target price of RM4.60 from RM3.51 previously based on EPS12.

The research house in a note April 14 said it was raising its implied PER for KPJ to 18 times (from 14 times previously), which is at the high-end of its historical PER band, due to positive newsflow and valuation rerating.

'We expect valuation re-rating to outweigh the impact of earnings dilution on warrants conversion. About 23.6% of the total warrants 2010/15 issued have been exercised.

'We revised marginally our forecast due to some housekeeping activities.

Continuous expansion locally with one or two new hospitals'' each year as well as potential venture into countries such as Vietnam, Cambodia and Myanmar will support the company's future growth and enhance its brand name regionally, MIDF Research said.

It said KPJ's management expects a strong double digit revenue growth in FY11

CIMB Research upbeat on Allianz Malaysia

KUALA LUMPUR: CIMB Equities Research said Allianz Malaysia offers the only exposure to a well-managed Malaysian composite insurer that is controlled by an established international insurance group.

It said on Thursday, April 14 its key attractions are (1) its well-managed general insurance business with above-industry underwriting margin, and (2) the expected exponential expansion of life insurance contributions.

CIMB Research said Allianz was also set to ride on the upward adjustment of motor tariffs starting next year.

'Assuming a 40-50% discount to the P/E implied in our target price for AIA, we arrive at a target P/E range of 8-9.6 times, which implies a value of RM8.20-9.80 for Allianz or upside of 64-97%.

'Despite its strong fundamentals and bright outlook, the stock is trading at only 6x P/E and 1.2x P/BV. Its only drawback is its low liquidity due to lack of newsflow and coverage by analysts,' it said.

CIMB Research keeps Buy on Perisai

KUALA LUMPUR: CIMB Retail Research has a Buy on PERISAI PETROLEUM TEKNOLOGI [] at 83 sen, which means it is trading at FY12P/E of 8.6 times, P/BV: 2.4 times.

It said on Thursday, April 14 that despite its technical buy rating on April 7, Perisai continued to consolidate sideways.

'At this juncture, we are still keeping to our short term bullish stance on the stock unless prices breached its recent low of 80 sen,' it said.

CIMB Research said the MACD has turned negative but RSI is above the 50pts mark. Its is not overly concerned about its recent pullback as this is likely to be short term.

'Once the candles swing above its downward slopping resistance trend line (now at 86.5 sen), the next upside targets are 89.5 sen and 93 sen. Be quick to cut loss once 80 sen is violated,' it said.

CIMB Research has Buy on Mieco at 71 sen

KUALA LUMPUR: CIMB Retail Research has a Buy on Mieco Chipboard at 71 sen, which means it is trading at a price-to-book value of 0.5 times.

It said on Thursday, April 14 the recent pullback dragged prices towards its 50% FR level but prices have since rebounded a tad higher. A short term bottom could have been formed at 66 sen.

CIMB Research said although technical landscape is easing, the candles are holding steadily above its key moving averages. Hence, this correction could be temporary.

'We see any pullback as an opportunity to accumulate. Only a fall below 66 sen would prompt us to review our call. Meanwhile, resistance is at 75 sen and 83 sen,' it said.

RHB Research maintains Market Perform on UEM Land, FV RM2.80

KUALA LUMPUR: RHB Research Institute has retained its forecasts, market perform call for UEM Land and fair value of RM2.80 at RNAV a share.

It said on Thursday, April 14 any share price weakness should represent a good trading opportunity of the stock.

'News flow on UEM Land is expected to be strong over the next few months. Apart from the ongoing land disposal, given its backing of major shareholders as well as the strengthening execution ability after the consolidation of Sunrise, we think UEM Land is a prospective candidate to participate in some of the government projects in Klang Valley, which include the RRI land in Sg Buloh and others, as part of its landbank/development diversification effort,' it said.

RHB Research said investors should also anticipate the announcement of UEM Land's involvement in the development of the land parcels in Singapore over the next few months.