Highlights of Budget 2010/2011

Highlights of Budget 2010/2011

Scrapping of 10% sales tax on mobile phones, effective Oct 15, 2010

5pct service tax on all services increased to 6%, effective Jan 1, 2011

Proposed stamp duty exemption of 50% be given on instruments of transfer of residential PROPERTIES [], not exceeding RM350,000 from Jan 1, 2011. S&P must be executed between Jan 1, 2011 to Dec 31, 2012.

Stamp duty exemption of 50% be given on loan agreements for residential property priced not exceeding RM350,000.

Service tax of 6% be imposed on paid broadcasting television services, starting Jan 1, 2011. Charge on monthly subscription fees.

Warisan Merdeka, a 100-storey tower costing RM5 billion will be completed in 2015.

The EPF to undertake development of the RM10 billion Sungai Buloh project.

Govt to start private pension fund in 2011

Govt allocates RM857m for tech projects in Kedah, Penang

Mass Rapid Transit in Greater KL to be implemented 2011, estimated private sector investment RM40b, completed by 2020

GLICs allowed to up investments overseas. EPF now at 7pct, allowed to increase to 20pct

SC to offer 3 new stockbroking licences to eligible local, foreign, or JV companies

China Ouhua Winery to raise RM79.53m from IPO

KUALA LUMPUR: China Ouhua Winery Holdings Ltd plans to raise RM79.53 million from its listing on the Main Board of Bursa Malaysia next month.

According to its prospectus released on Friday, Oct 15, the initial of public offering (IPO) will involve 132.55 million new ordinary shares at an offer price of 60 sen each. These new shares would account for 19.8% of the company's enlarged issued and paid-up share capital.

Of the 132.55 million new shares, it said eight million shares would be offered to the public and 124.55 million shares to be placed out to identified investors.

China Ouhua's market capitalisation upon listing will be over RM400 million. The Chinese winemaker company will be the first wine-producing counter on Bursa Malaysia while it is the fifth Chinese company to be listed here.

China Ouhua registered revenue of RMB376 million while its profit after tax was RMB133 million for the financial year ended Dec 31, 2009.

Of the RM79.53 million to be raised from the IPO, RM35.79 million would be used to expand its market presence and distribution network, RM7.95 million to enhance the quality of and control over its materials, RM11.93 million to expand its production capacity and range of winde.

The remaining RM3.97 million would be used to beef up its research and development, RM9.54 million as working capital and RM10.4 billion for estimated listing expenses.

The application for the IPO shares is Oct 15 while the closing of applications is Oct 22 and balloting Oct 26. Allotment of the IPO shares would be on Nov 1 and tentative listing date is Nov 3.

The company said while it did not have a fixed dividend policy, for FYE Dec 31, 2010, subject to certain factors, 'our board intends to recommend and distribute 35% of our net profit attributable to our shareholders as dividends'.

It said investors should note the intention to recommend the dividends should be treated as a legal obligation and it should also not be treated as an indication of the company's future dividend policy.

FBM KLCI down on profit taking

KUALA LUMPUR: Asian markets were mixed on Friday, Oct 15 while banking stocks and key blue chips on Bursa Malaysia fell on profit taking ahead of the tabling of Budget 2011 proposals at 4pm.

At the mid-day break, the 30-stock FBM KLCI lost 0.54% or 8.14 points, weighed by losses including at BAT, Petronas Gas, DiGi, CIMB, Maybank and AMMB.

The broader market was negative with losers leading gainers by 427 to 234, while 282 counters traded unchanged. Volume was 494.9 million shares valued at RM774.41 million.

The ringgit weakened 0.1% to 3.0860 versus the greenback; crude palm oil for the third month delivery rose RM25 per tonne to RM2,945, crude oil added six cents per barrel to US$82.75 and gold added five cents an ounce to US$1,381.20.

BAT was the top loser and fell 82 sen to RM47.70, on worries that the tobacco sector might be adversely affected by the 'sin taxes' .

Petronas Gas lost 42 sen to RM11.08, Digi fell 30 sen to RM24.50, Genting PLANTATION []s and CBIP fell 12 sen each to RM8.37 and RM3.56, Maybank fell 13 sen to RM8.89, AMMB down 11 sen to RM5.89, Shell down 10 sen to RM10.60 while CIMB lost seven sen to RM7.93.

Among the gainers, Batu Kawan added 90 sen to RM14.44, Nestle was up 30 sen to RM44.30, Hartalega added 17 sen to RM5.42, Malaysia Smelting Corp rose 16 sen to RM4.96 while Metrod and Fima Corp rose 10 sen each to RM3.60 and RM5.

Infortech, which was the most actively traded counter, was queried by Bursa Malaysia Securities over the unusually high volume traded. At 12.30pm, the stock fell 4.5 sen to 13.5 sen with 31.92 million shares done.

Other actives included Maybank, Cypark, Timecom, Kencana, Malton and Nam Fatt.

Meanwhile, Asian markets fluctuated ahead of US Federal Reserve chairman Ben Bernanke's speech later on Friday that could provide clues on the Fed's next policy steps.

Movements at the regional markets were also pulled in different directions with news flow emanating from Japan and China, respectively.

On the one hand, Japan's industrial output fell 0.5 percent in August, revised data showed on Friday, down for the third straight month and adding to worries about an economy struggling with a rising yen and slowing export growth.

Meanwhile, Chinese property prices rose for this first time in four months in September, an indication that the market is ready to pounce on any let-up by the government in its crackdown on real estate speculation.

Japan's Nikkei 225 fell 1.01% to 9,486.58, Hong Kong's Hang Seng Index lost 0.40% to 23,757.11, Taiwan's Taiex fell 0.3% to 8,185.29 and the South Korean Kospi Index shed 0.02% to 1,899.35.

Meanwhile, the Shanghai Composite Index surged 1.65% to 2,927.25 and Singapore's Straits Times Index added 0.70% to 3,217.39.

Bursa Securities queries Infortech Alliance

KUALA LUMPUR: Bursa Malaysia Securities Bhd has queried ACE Market-listed INFORTECH ALLIANCE BHD [] on Friday, Oct 15 over the unusual market activity (UMA) in the trading of its shares.

Bursa Securities had queried Infortech over the unusually high volume in the trading of the company's shares.

It said in accordance with the corporate disclosure policy on response to UMA, the company had to provide Bursa Securities with an announcement for public release after making due enquiries with the directors and major shareholders seeking the cause of the UMA in the company's shares.

At 12.07pm, Infortech was down four sen to 14 sen with 31.1 million shares traded.

Haven appoints Bina Puri as main contractor

KUALA LUMPUR: BINA PURI HOLDINGS BHD [] has been appointed at The Haven's joint venture (JV) main contractor with Beijing CONSTRUCTION [] Engineering Group.

The Haven, which is being developed by Superboom Projects Sdn Bhd, is set to be Perak's most luxurious condominium project.

It is also touted to become an iconic landmark as Perak's tallest building at 26 stories when completed in 2013.

In a statement on Friday, Oct 15, Bina Puri said it would supported by a team of specialists from Beijing Construction Engineering Group, which is represented in Malaysia by Beijing Construction Engineering (M) Sdn Bhd.

The appointment of the Bina Puri-Beijing Construction JV will be formalised on Oct 19, 2010 with the signing of agreement with Superboom Projects followed by a presentation of the Letter of Award, it said.

Bina Puri-Beijing Construction was picked from among seven bidders, including other international players, for the contract, it said.

AZRB up after OSK Research raises TP to RM1.45

KUALA LUMPUR: AHMAD ZAKI RESOURCES BHD []'s (AZRB) shares advanced on Friday, Oct 15 after OSK Research said it expects the company's earnings to accelerate following a record RM876 million worth of jobs secured last year.

At 11.20am, AZRB was up seven sen to RM1.06 with 3.79 million shares done.

The research house said on Friday, Oct 15 that AZRB remains a key beneficiary of government jobs.

"We see a slew of potential jobs from the government, private sector and overseas in the coming months. There is also potential for recurring income assets via the UIA Hospital and EKVE," it said.

OSK Research's FY11-12 earnings are raised by 5%-7%, which pushes up its TP to RM1.45 (45% upside). Given the lagging share price performance YTD, it expects AZRB to catch up.

Uzma advances in early trade

KUALA LUMPUR: Shares of oil engineering specialist UZMA BHD [] advanced on Friday, Oct 15 after The Edge FinancialDaily reported that the company was now at the forefront to benefit from the US$2 billion (RM6.16 billion) budget that Petroliam Nasional Bhd (Petronas) has allocated for domestic explorations over the next three years.

At 9.36am, Uzma was up eight sen to RM1.57 with 956,400 shares done.

Proton up on new model

KUALA LUMPUR: National carmaker PROTON HOLDINGS BHD []'s shares rose in early trade on Friday, Oct 15 after the company unveiled its all new mid-sized four Sedan, the Inspira, following its collaboration with Mitsubishi Motors Corporation (MMC).

At 9.40am, Proton was up two sen to RM4.90 with 217,800 shares done.

The starting price for the Inspira is RM79,888, Proton said on Thursday.

FBM KLCI stays in the red at mid-morning

KUALA LUMPUR: The FBM KLCI fell sharply on Friday, Oct 15, ahead of the tabling of Budget 2011 and in line with the overnight decline at Wall Street as US stocks fell on worries of the strength of the world's biggest economy.

Key Asian stock markets traded cautiously after Wall Street ended lower on Thursday, dragged by banking stocks, as investors fretted that a widening foreclosure crisis could undermine the market's recent strength, according to Reuters.

The situation was further compounded by rising unemployment in the US as the Dept of Labour reported that in the week ending Oct 9, the advance figure for seasonally adjusted initial claims was 462,000, an increase of 13,000 from the previous week's revised figure of 449,000.

The 4-week moving average was 459,000, an increase of 2,250 from the previous week's revised average of 456,750. On Bursa Malaysia, the 30-stock FBM KLCI fell 9.47 points to 1,486.91, dragged by losses at banking stocks and key blue chips.

Gainers trailed losers by 115 to 310, while 221 counters traded unchanged. Volume was 197.58 million shares valued at RM292.24 million.

BAT was the top loser ahead of Budget 2011 to be unveiled later today in anticipation that "sin taxes" would be raised. The stock fell 50 sen to RM48.02.

Petronas Gas fell 50 sen to RM11, DiGi.Com lost 28 sen to RM24.52, Bursa Malaysia down 17 sen to RM8.46, Genting PLANTATION []s fell 16 sen to RM8.33, Top Glove lost 13 sen to RM5.44 and KL Kepong fell 12 sen to RM18.88.

Among banking stocks, Maybank fell 12 sen to RM8.90 while CIMB and AMMB lost nine sen each to RM7.91 and 5.91.

CypARK RESOURCES BHD [] made a lackluster debut on the Main Market of Bursa Malaysia and was down six sen to RM1.94 with 10.54 million shares done.

Infotec was the most actively traded counter with 22.6 million shares done. The stock fell one sen to 17 sen. Other actives included Maybank, Nam Fatt, Timecom, Leweko and CIMB.

The top gainer at mid-morning was Batu Kawan that rose 72 sen to RM14.26; Nestle gained 60 sen to RM44.60, Fima Corp and Uzma rose 16 sen each to RM5.06 and RM1.65. United Malacca added 12 sen to RM11.30, HPI Resources up 10 sen to RM1.94 while Hartalega and Amway added six sen each to RM5.31 and RM8.15.

At the regional markets, Japan's Nikkei 225 fell 0.72% to 9,514.71, the Shanghai Composite Index lost 0.27% to 2,871.95, the South Korean Kospi shed 0.02% to 1,899.44 and Hong Kong's Hang Seng Index opened 0.6% lower at 23,715.95. Meanwhile, Singapore's Straits Times Index rose 0.37% to 3,206.70 and Taiwan's Taiex added 0.05% to 8,219.21.

FBM KLCI dips ahead of Budget 2011

KUALA LUMPUR: The FBM KLCI opened in negative territory on Friday, Oct 15, ahead of the tabling of Budget 2011 later in the day.

The decline was in line with the cautious trading sentiment across regional markets after the slightly weaker close on Wall Street on concerns a widening foreclosure crisis could undermine the market's strength over the last five weeks.

At 9.10am, the 30-stock index was down 2.27 points to 1,494.11, dragged by losses including at Genting, CIMB and Maybank. Gainers led losers by 94 to 58, while 116 counters traded unchanged.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi said due to the sideways tone in the USA last night, the FBM KLCI could be in a quiet mode on Friday, with minor blue chip and lower liner profit-taking activity on Budget Day 2010 on Friday.

"Traditionally and historically, there is usually profit-taking on Budget Day afternoon.

"The FBM KLCI broke above its previous peak of 1,479.59 recently and the subsequent 1,445.33-correction low was swiftly confirmed soon after. As such, trade with a short-term bias for most stocks over the next few weeks, using a relevant stop-loss level," he said in a note to clients on Friday.

Glove makers were among the early decliners on Bursa Malaysia, with Supermax down eight sen to RM4.43 and Top Glove down four sen to RM5.53; Genting fell six sen to RM10.14, CIMB and Maybank lost five sen each to RM7.95 and RM8.97 while Masterskill lost three sen to RM3.30.

Gainers included Batu Kawan, Uzma, Malaysia Smelting Corp, Mudajaya, S P Setia and Mah Sing.

CypARK RESOURCES BHD [] made a weak debut on the Main Market of Bursa Malaysia, and traded flat at RM1.10 with 5.4 million shares done.