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DJ MARKET TALK: F&N +1.7%; Dividend Hopes After Planned Sale
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0320 GMT [Dow Jones] Fraser & Neave (3689.KU) +1.7% at MYR11.88, may retest intraday high of MYR12.18 later, on hopes beverage firm may return $221.7 million proceeds from planned sale of entire stake in glass maker unit Malaya Glass to Thailand's Berli Jucker (BJC.TH), Australia's ACI International (ACI.XX), says dealer with local brokerage. Maybank Research analyst Khair Mirza says disposal will relieve F&N from running an upstream business that passes cost increases only with 6-9 month time lag; sale will allow F&N to focus on core, downstream beverage businesses. "It is possible that F&N could return net proceeds of about MYR2.17/share from the disposal to shareholders, although we are conservatively forecasting only 60% of net proceeds or MYR1.30/share to be paid out in FY11," says Khair; keeps Buy on stock, raises target to MYR14.60 from MYR13.25.
DJ MARKET TALK: Hwang-DBS Keeps AMMB As Buy, MYR5.50 Target
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0106 GMT [Dow Jones] STOCK CALL: Hwang-DBS Vickers Research keeps AMMB (1015.KU) as Buy with MYR5.50 target after Malaysia's 5th-largest lender by assets' FY10 net profit surpasses MYR1 billion mark, mainly driven by non-interest income, strong loan growth. "AMMB has repositioned its balance sheet by managing interest-sensitive assets and liabilities gapping, and net mismatch is narrowing," says analyst Lim Sue-Lin; estimates AMMB's net profit to rise 2% with each 25bp increase in policy rates (impact is less compared to other banks with higher variable rate loans). Projects AMMB to post FY11 net profit of MYR1.23 billion, FY12 profit of MYR1.5 billion. Stock flat at MYR4.99.
DJ MARKET TALK:Sealink Down 0.7% Though Units Land MYR88M In Jobs
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0334 GMT [Dow Jones] Sealink (5145.KU) down 0.7% at MYR0.67, although company says its units have secured 3-year long-term contract for offshore vessel in Australia, also sold another offshore support vessel for delivery end 2010, total value of contracts at MYR88.0 million. "The stock is down in line with softer market conditions," says dealer (KLCI down 0.7%); tips strong support at 100-day moving average of MYR0.66. "With these new contracts, Sealink within the first five months (this year) has so far secured contracts worth MYR146 million," says AmResearch; adds 1-2 more vessels expected to be sold over next few months. Keeps Buy on Sealink with unchanged MYR0.76 target as its earnings has bottomed last year, macro industry outlook recovered. "At current price, Sealink is trading at a very cheap P/E of six times -- a discount of 50% versus its peers at 12 times," says AmResearch
DJ MARKET TALK: IOI Corp Down 1.5%; Fruit Yields Concern -CIMB
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0410 GMT [Dow Jones] IOI Corp (1961.KU) down 1.5% at MYR5.31 on concerns over declining fresh fruit bunches (FFB) yields, says dealer with local brokerage; tips immediate support at 200-day moving average of MYR5.28. This, after plantation firm reported weak 9-month earnings Friday. "3Q plantation earnings missed our forecast because of weaker-than-expected FFB output resulting from a slow pick-up in yields," says CIMB Research analyst Ivy Ng; adds 9-month FFB production fell 7%, worse than 4.5% decline in output house had factored in for full year; cuts FY10-12 core net profit forecasts by 8%-11% for lower FFB yields, higher corporate expenses. Keeps Neutral call, lowers target by 8% to MYR5.60, based on unchanged forward 18X P/E.
DJ MARKET TALK: CIMB May Rise On Plans To Buy More Of Bank Niaga
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0032 GMT [Dow Jones] CIMB Group Holdings (1023.KU) may rise to test MYR14.60 (April 8 high) vs last done at MYR14.40, down 0.6% Friday says dealer; this after Malaysia's second largest lender by assets says planning to buy a further 19.67% stake in its Indonesian unit PT Bank CIMB Niaga for MYR1.943 billion from government investment arm Khazanah Nasional in an all-share deal. CIMB Group plans to issue to Khazanah 134 million shares in CIMB Group (equivalent to 3.79% of its paid up capital at April 30). CIMB Niaga is currently 78.26% unit of CIMB Group; deal expected to be completed by 4Q. Dealer says deal will be liked by investors as it will boost contribution from one of the fastest growing parts of the CIMB network; "the longer term prospects for the Indonesian franchise are excellent... this looks like a win-win solution for both CIMB and Khazanah," dealer says.
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0320 GMT [Dow Jones] Fraser & Neave (3689.KU) +1.7% at MYR11.88, may retest intraday high of MYR12.18 later, on hopes beverage firm may return $221.7 million proceeds from planned sale of entire stake in glass maker unit Malaya Glass to Thailand's Berli Jucker (BJC.TH), Australia's ACI International (ACI.XX), says dealer with local brokerage. Maybank Research analyst Khair Mirza says disposal will relieve F&N from running an upstream business that passes cost increases only with 6-9 month time lag; sale will allow F&N to focus on core, downstream beverage businesses. "It is possible that F&N could return net proceeds of about MYR2.17/share from the disposal to shareholders, although we are conservatively forecasting only 60% of net proceeds or MYR1.30/share to be paid out in FY11," says Khair; keeps Buy on stock, raises target to MYR14.60 from MYR13.25.
DJ MARKET TALK: Hwang-DBS Keeps AMMB As Buy, MYR5.50 Target
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0106 GMT [Dow Jones] STOCK CALL: Hwang-DBS Vickers Research keeps AMMB (1015.KU) as Buy with MYR5.50 target after Malaysia's 5th-largest lender by assets' FY10 net profit surpasses MYR1 billion mark, mainly driven by non-interest income, strong loan growth. "AMMB has repositioned its balance sheet by managing interest-sensitive assets and liabilities gapping, and net mismatch is narrowing," says analyst Lim Sue-Lin; estimates AMMB's net profit to rise 2% with each 25bp increase in policy rates (impact is less compared to other banks with higher variable rate loans). Projects AMMB to post FY11 net profit of MYR1.23 billion, FY12 profit of MYR1.5 billion. Stock flat at MYR4.99.
DJ MARKET TALK:Sealink Down 0.7% Though Units Land MYR88M In Jobs
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0334 GMT [Dow Jones] Sealink (5145.KU) down 0.7% at MYR0.67, although company says its units have secured 3-year long-term contract for offshore vessel in Australia, also sold another offshore support vessel for delivery end 2010, total value of contracts at MYR88.0 million. "The stock is down in line with softer market conditions," says dealer (KLCI down 0.7%); tips strong support at 100-day moving average of MYR0.66. "With these new contracts, Sealink within the first five months (this year) has so far secured contracts worth MYR146 million," says AmResearch; adds 1-2 more vessels expected to be sold over next few months. Keeps Buy on Sealink with unchanged MYR0.76 target as its earnings has bottomed last year, macro industry outlook recovered. "At current price, Sealink is trading at a very cheap P/E of six times -- a discount of 50% versus its peers at 12 times," says AmResearch
DJ MARKET TALK: IOI Corp Down 1.5%; Fruit Yields Concern -CIMB
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0410 GMT [Dow Jones] IOI Corp (1961.KU) down 1.5% at MYR5.31 on concerns over declining fresh fruit bunches (FFB) yields, says dealer with local brokerage; tips immediate support at 200-day moving average of MYR5.28. This, after plantation firm reported weak 9-month earnings Friday. "3Q plantation earnings missed our forecast because of weaker-than-expected FFB output resulting from a slow pick-up in yields," says CIMB Research analyst Ivy Ng; adds 9-month FFB production fell 7%, worse than 4.5% decline in output house had factored in for full year; cuts FY10-12 core net profit forecasts by 8%-11% for lower FFB yields, higher corporate expenses. Keeps Neutral call, lowers target by 8% to MYR5.60, based on unchanged forward 18X P/E.
DJ MARKET TALK: CIMB May Rise On Plans To Buy More Of Bank Niaga
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0032 GMT [Dow Jones] CIMB Group Holdings (1023.KU) may rise to test MYR14.60 (April 8 high) vs last done at MYR14.40, down 0.6% Friday says dealer; this after Malaysia's second largest lender by assets says planning to buy a further 19.67% stake in its Indonesian unit PT Bank CIMB Niaga for MYR1.943 billion from government investment arm Khazanah Nasional in an all-share deal. CIMB Group plans to issue to Khazanah 134 million shares in CIMB Group (equivalent to 3.79% of its paid up capital at April 30). CIMB Niaga is currently 78.26% unit of CIMB Group; deal expected to be completed by 4Q. Dealer says deal will be liked by investors as it will boost contribution from one of the fastest growing parts of the CIMB network; "the longer term prospects for the Indonesian franchise are excellent... this looks like a win-win solution for both CIMB and Khazanah," dealer says.
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