24 Feb 2014 - BC Daily Trading Floor

Good Morn ...   

Trading ideas: Golsta Synergy, Ho Hup, AirAsia, GUH

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Economy

G20: Aims to add USD2trn to global economy. The world’s biggest economies have agreed to target reforms aimed at adding more than USD2trn to the global economy over five years, marking a shift in emphasis at G20 level from championing austerity to promoting growth as the financial crisis recedes. “We will develop ambitious but realistic policies with the aim to lift our collective GDP by more than 2% above the trajectory implied by current policies over the coming five years,” said ministers in a joint G20 communiqué. “This is over USD2trn more in real terms and will lead to significant additional jobs,” (Financial Times)

EU: Ready to offer financial aid to Ukraine. Olli Rehn, Europe’s top economic officer, said the EU is prepared to offer a financial aid package worth billions of euros to Ukraine and extend the longer-term prospect of EU membership to help stabilise the country. “The EU will be ready to provide substantial financial assistance for Ukraine and the Ukrainian people once a political solution, on the basis of democratic principles, a commitment to reform and a legitimate government, is in place,” said Mr Rehn. (Financial Times)

UK: Disappointing data curb enthusiasm on UK recovery. Britain’s recovery remains on track but a trio of disappointments this week were a reminder the economy is still far from fully healed. Data on retail sales, the public finances and unemployment were all worse than economists had expected. Retail sales fell 1.5% in Jan after a bumper Christmas, while the government posted a smaller surplus than a year ago because of poor income tax receipts. That followed a small rise in the unemployment rate from 7.1 to 7.2%. (Financial Times)

China: Downplays yuan, banking risk as Zhou sees 7% to 8% growth. China’s Finance Minister Lou Jiwei played down yuan declines and the risks from shadow banking as central bank Governor Zhou Xiaochuan signaled that the nation’s economy can sustain growth of between 7% and 8%. Possible defaults in some wealth-management products don’t reflect a “big problem” and recent yuan weakness is within the normal range, the finance minister told Bloomberg News. (Bloomberg)

India: Rajan diverges with Chidambaram on inflation as growth wanes. Indian central bank Governor Raghuram Rajan warned that inflation remained the biggest threat to growth, diverging from the nation’s finance chief, who highlighted diminishing price pressures. A developing economy like India that is seeking higher growth rates can tolerate higher inflation than advanced nations, Finance Minister Palaniappan Chidambaram said. (Bloomberg)

Indonesia: GDP growth may slow to least since 2009, Basri says. Indonesia’s Finance Minister Chatib Basri said economic growth may slow this year to the least since 2009 as the government reins in the current-account deficit. Southeast Asia’s largest economy may grow between 5.5% and 5.8% in 2014. GDP expanded 5.8% in 2013. Growth in Indonesia, where elections are due this year, is slowing after central bank Governor Agus Martowardojo embarked on the country’s most aggressive rate-tightening cycle in eight years within a month of taking the helm in May. (Bloomberg)
Markets

Ta Ann (Outperform, TP: RM5.84): Seen reeling from Wilmar decision. Sibu-based plantation and timber group Ta Ann Holdings is one of the big plantation casualties from Wilmar International Ltd’s decision to stop buying crude palm oil (CPO) from Sarawak starting from the end of Dec next year. “It is true that we are dependent on Wilmar’s Bintulu refinery to sell our entire CPO production for quite sometime,” Ta Ann MD and CEO Wong Kuo Hea said. “However, I want to correct some of the misinterpretations out there which says that Wilmar will no longer purchase CPO from Sarawak planters and also, on Ta Ann itself. “The new Wilmar policy will not affect Sarawak planters that have cultivated on forest and peat areas before Dec 31, 2015. “Only those planters with plans to further expand their plantation hectarage on forest and peat areas will be affected,” explains Wong. (StarBiz)

GUH: Eyes stake in second IPP. GUH Holdings is poised to take the plunge in the power generation sector by acquiring a substantial stake in Leader Universal Holdings’ 100MW coal-fired power plant in Cambodia. The plant, built at the cost of USD340m (RM1.2bn), is already in the early stages of commercial operations and due for an official launch today in Cambodia. It is estimated that the purchase can potentially add at least RM20m per annum to the bottom line of GUH in the immediate term and the numbers will grow. The coal-fired power plant has a 30-year concession. (StarBiz)

Golsta Synergy: Hii launches MGO for Golsta Synergy at RM2.10. Journalist-turned-businessman Tan Sri Clement Hii announced he had acquired a total of 36.69% stake in Golsta Synergy last Friday and will launch a conditional mandatory general offer (MGO) for the rest of the shares. Golsta said it had received a notice from GS Capital SB to undertake a conditional mandatory takeover offer to acquire all the remaining shares in Golsta not already held by the offeror, at the offer price of RM2.10 per share. (Financial Daily)

Oil and Gas (Overweight): Another delay for Rapid? Petroliam Nasional (Petronas) is looking at another delay in its RM60bn Refinery and Petrochemicals Integrated Development (Rapid) project as its final investment decision (FID) cannot be made before the deadline by the first quarter of this year. “The project will be further delayed as Rapid’s FID will most likely not be approved by the timeline stipulated, which is in March, and Petronas will incur a sunk cost of RM4bn,” a source familiar with the matter told. Another source added that one of the reasons delaying the decision involves the still unresolved problems faced by the community in the Pengerang area in Johor where the project is to be built. (Financial Daily)

IPO: Ekuinas set for first IPO by mid-2014. The listing on Bursa Malaysia is a major milestone for Ekuinas since its establishment in Sept 2009 to nurture Bumiputera companies into leading players. Ekuinas CEO Datuk Abdul Rahman Ahmad said the governmentowned private equity fund management company has hired three local and foreign investment bankers to handle the deal. We will be making the submission to the regulators soon,” Abdul Rahman. Ekuinas, which has a war chest of RM2.4bn, has been nurturing Icon Offshore to become a larger company with international presence. As at 2013, Icon Offshore was Malaysia’s third-largest offshore supply vessel provider with 36 vessels operating in waters off Malaysia, Vietnam and Qatar. (Business Times)
MARKET UPDATE

US equities weakened last Friday as central bank officials indicated that they would likely maintain their course of stimulus tapering even with weaker economic numbers having been released in recent times, most of which has been attributed to the unseasonably cold spell currently. Sales of previously-owned homes fell in January to its lowest levels in more than a year as harsh weather conditions, declining supply and tighter credit conditions lowered demand, falling 5.1%. G20 finance ministers meet in Australia over the weekend, with the only major development being an agreement to implement a global standard for automatically exchanging information between tax authorities by the end of 2015. For the day, both the Dow Jones Industrial Average and S&P 500 posted identical 0.2% declines.

Most European benchmarks closed higher for the day as sentiment was buoyed by healthier-than-expected earnings announcements, reflective of the improving macroeconomic environment. France’s CAC40, Germany’s DAX and UK’s FTSE 100 rose 0.6%, 0.4% and 0.4% respectively while Spain’s IBEX 35 inched 0.1% higher. Italy’s FTSE MIB slipped 0.3% as the country entered a new era with the installation of its youngest ever Prime Minister following a power struggle which saw the previous one in office for only about ten months.

North Asian markets saw mixed performances last Friday. Japan’s Nikkei 225 surged 2.9% on no significant developments other than the Bank of Japan’s meeting minutes showing officials agreeing to continue monitoring global markets while maintaining its course of asset purchases, while China’s Shanghai Composite Index slumped 1.2% on growing concerns that the government may allow a bigger slide in economic growth as it re-engineers the country’s growth drivers, mirrored by preliminary manufacturing data showing a second consecutive month of contraction. Hong Kong and Korea rose however, by 0.9% and 1.4% respectively. Closer to home, the Straits Times Index and Jakarta Composite Index rose 0.4% and 1.0% while the FBM KLCI inched 0.2% higher, reacting positively to preliminary US manufacturing data which came in stronger than expected.

Golsta Synergy received a takeover notice from GS Capital after Tan Sri Clement Hii amassed a 36.69% stake in the company through the acquisition of shares from a few company directors after having earlier acquired a 27.27% stake. Curiously, the share ended trading on Friday at RM2.48, a premium to the mandatory offer price of RM2.10 per share and significantly above its net asset value per share (as at 30 Sep, 2013) of RM1.16. Investors are quite likely speculating that certain asset injections could be in the offing to “revive” the prospects of this industrial machine design and fabrication company which has seen some rather spotty financial performances in recent years. The new owners’ intention in maintaining the listing status of the company could encourage some trading activity in the company in the interim. Ho Hup Construction Company announced the securing of another contract in Iraq, this time round about RM191.1m of works to rehabilitate roads, infrastructure and utility services in Iraq. Its earlier foray (in 2012) into the country entailed works related to a water treatment plant in Baghdad for about RM258.9m in value. With the company speculated to be on the verge of exiting its PN17 status and with its financial prospects looking to be “on the up” again, interest could return to this “long-forgotten” but once-watched construction stalwart.

Source: PublicInvest Research - 24 Feb 2014

pos ...   

bo lang ???   

hlk wrote:pos ...   

go go go ...  4.71 

Good morning HLK and BC Comrades     

hlk wrote:

hlk wrote:pos ...   

go go go ...  4.71 

small play POS-CN     

WinningHeart wrote:

hlk wrote:

hlk wrote:pos ...   

go go go ...  4.71 

small play POS-CN     

ur entry prc 0.045 ?

hlk wrote:

WinningHeart wrote:

hlk wrote:

hlk wrote:pos ...   

go go go ...  4.71 

small play POS-CN     

ur entry prc 0.045 ?

ya ... later comer again ... woke up late        

WinningHeart wrote:

hlk wrote:

WinningHeart wrote:

hlk wrote:

hlk wrote:pos ...   

go go go ...  4.71 

small play POS-CN     

ur entry prc 0.045 ?

ya ... later comer again ... woke up late        

HAPSENG-CJ also late comer but thank God able to sold back at cost last week            

WinningHeart wrote:

hlk wrote:

WinningHeart wrote:

hlk wrote:

hlk wrote:pos ...   

go go go ...  4.71 

small play POS-CN     

ur entry prc 0.045 ?

ya ... later comer again ... woke up late        

bz w proj still can huat at klci ...   

WinningHeart wrote:

WinningHeart wrote:

hlk wrote:

WinningHeart wrote:

hlk wrote:

hlk wrote:pos ...   

go go go ...  4.71 

small play POS-CN     

ur entry prc 0.045 ?

ya ... later comer again ... woke up late        

HAPSENG-CJ also late comer but thank God able to sold back at cost last week            

  

hlk wrote:
bz w proj still can huat at klci ...   

after strike mini dragon with TROP-CD ... then the rest all late comer        

POS bb can uncle play or not? looks like oversold ady now rebounding     

Susan Jie u in luxury bb POS-CL kah? ... sudah huat lor    

WinningHeart wrote:

hlk wrote:
bz w proj still can huat at klci ...   

after strike mini dragon with TROP-CD ... then the rest all late comer        

POS bb can uncle play or not? looks like oversold ady now rebounding     

epf & kwsp buying   

WinningHeart wrote:Susan Jie u in luxury bb POS-CL kah? ... sudah huat lor    

i bot mom   

hlk wrote:

WinningHeart wrote:

hlk wrote:
bz w proj still can huat at klci ...   

after strike mini dragon with TROP-CD ... then the rest all late comer        

POS bb can uncle play or not? looks like oversold ady now rebounding     

epf & kwsp buying    

ok uncle play few days and see ... need to go now ... wish u strike dragon on POS Susan Jie        

hlk wrote:

WinningHeart wrote:Susan Jie u in luxury bb POS-CL kah? ... sudah huat lor    

i bot mom   

Value Investing Play ...        

WinningHeart wrote:

hlk wrote:

WinningHeart wrote:

hlk wrote:
bz w proj still can huat at klci ...   

after strike mini dragon with TROP-CD ... then the rest all late comer        

POS bb can uncle play or not? looks like oversold ady now rebounding     

epf & kwsp buying    

ok uncle play few days and see ... need to go now ... wish u strike dragon on POS Susan Jie        

wish all huat !    

afternoon bc comrades :)

close of session 

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