Thursday, November 12, 2009

20091112 1823 FCPO EOD Daily Chart Study.

FCPO closed 10 points higher at 2245 with much better volume today compare to yesterday. Price gap up in ther morning and traded mostly higher and tested the high at 2277 then followed by last minutes sell down forced today chart to form a doji bar candle. Closing at above middle Bollinger band with the band width stay flat = the upward movement remains resilient. However, MACD Histrogram still falls gradually despite price closed higher = aggressiveness still in with the seller side. Immediate support stands at 2225 ~ 2215 level and resistant rest at 2285 level.
When to buy : buy at support/weakness/break out with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20091112 1756 FKLI EOD Daily Chart Study.

FKLI traded 7 points weaker today to closed at 1268.5 after tested the low of 1262 in unison with major Asia market that ended lower. Today doji bar candle remained above the middle Bollinger band inside the unchanged Bollinger band width = uptrend market consolidation is taking place. MACD Histrogram also stay flat = market activities are evenly distributed among buyer and seller. The consolidation could test the immediate support at 1262 and the next support at 1253 level. Another unconfirmed signal to take note would be a possible MACD negative divergent in the forming should MACD cross down with price going lower. 
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20091112 1625 DJIA EOD Daily Chart Study.

The Dow closed marginally higher yesterday at 10291.26 up 44.29 forming a shoting star doji bar candle. Price closed near the upper Bollinger band level and the band width expanding together with MACD Histrogram rising, all sending bullish signals for the Dow to go up further. However, volume traded for the past 2 day seems insufficient to support the upward movement momentum. Additional to this, the Dow has actually risen for the sixth consecutive days hints for a possible pullback to occurs anytime. At last looked major European market opened and traded up marginally. Hang Seng futures today at a 67 points premium towards its cash market.

20091112 1306 FKLI Mid Day Hourly Chart Study.

Exhausted FKLI closed weaker in unison with major Asia market down 8.5 points at 1267. At closed price penetreted and stop at the lower Bollinger band with the band width spreading wider = market has turned into selling mood. MACD Histrogram also confirming the negative sentiment by diving deeper into the negative zone. With the plotted 1269 support line broken, the next immediate defense line rest at the 1262 ~ 1263 level. Should price over extended far below the lower Bollinger band, a pull back effect will likely to happen.

20091112 1246 FCPO Mid Day Hourly Chart Study.

Crude palm oil futures traded 26 points higher today to closed the morning session at 2260 after soy oil ended yesterday in positive tone. Volume traded also turned higher today to support the upward pushed. Technically, price lifted and remained above the middle Bollinger band = market positive sentiment has returned. But the Bollinger band width still continue to narrowing = market can continue to trade side way range bound waiting for the band width to turned spreading outward for a continue upward price movement. MACD Histrogram edge up higher to near the zero line level = buyer activities have returned to the market with some mild short covering. Overall, market still trading inside the in the forming symetrical triangle and waiting for price to break above the plotted upper line. So keep your finger crossed, longed trader.

20091112 0927 Malaysia Corporate News.

Kencana Petroleum has proposed to implement rights and bonus issues to raise financial assistance for its 25%-owned associate Mermaid Kenana Rig 1 Pte Ltd. The proposal will involve a renounceable rights issue of up to 369.07m rights shares at an issue price of 50 per right share on a two-for-five basis. This could raise up to RM185m, assuming all the remaining 17.5m employee share options are exercised. The proceeds are expected to be utilised within two years for capital expenditure, investment opportunities, business expansion, working capital and repayment of bank borrowings and expenses for the rights issue amounting to RM4.5m. Kencana has also proposed a bonus issue of up to 387.52m new shares on the basis of three-for-10. (Malaysian Reserve) We are negatively surprised by the cash call as Kencana's balance sheet is strong with net gearing of only 8%. Nonetheless, we note that this is a deeply discounted rights as the price of 50 sen is at a 78% discount to yesterday's closing price of RM2.27 and 72% discount to the ex-rights price of RM1.76. This means that effectively Kencana is doing a small cash call with a significant element of a bonus issue. Including the post rights 3-for-10 bonus issue, the share capital of the group could increase 83% to 1.68bn shares. The dilution impact on FY11/12 EPS is estimated at only around 6%. We will review our earnings estimates and recommendation pending further clarification from management about the rights and the prospects of the company. 

Source say Media Prima would likely revise upwards its offer price for NSTP while NSTP is expected to announce a special dividend. An announcement will be made today. The revise offer involves a change in the valuation of NSTP's business and the price revision will be reflected in the swap ratio which will no longer be 1-for-1. (StarBiz) This is a surprise development as MD/CEO Dato' Amrin Awaluddin recently indicated that there would be no chance of a higher offer. This turn of event would be positive for the progress of the NSTP privatisation deal and is likely to entice NSTP minorities to take up the offer. The potential special dividend payout by NSTP would be another positive surprise. Shares of Media Prima (MPB) and The New Straits Times Press (M) (NSTP) will remain suspended today, in anticipation of an announcement to revise the terms and conditions of MPB’s offer to take NSTP private. (BT)

Power : The use of nuclear energy to generate electricity in the country is safe and can also increase the long-term national energy security, DG of Malaysian Nuclear Agency (Nuclear Malaysia) Datuk Dr Daud Mohamad said. "We know that nuclear technology is a clean and safe technology which had been developed over 50 years ago. Besides, it does not release the greenhouse gas effects," he added. Dr Daud said nuclear power was deemed as the future source of energy because nuclear-generated electricity was cheaper than any other alternative sources. (Bernama)

The Roundtable on Sustainable Palm Oil (RSPO) initiatives, now limited to big plantation companies, will be extended to smallholders next year, its secretary-general Dr Vengeta Rao said. Rao said the RSPO would be introducing a certification scheme for smallholders. "We are doing whatever is necessary for the smallholders to be certified. For the smallholders scheme, we have the standards and need to undertake a trial in Indonesia and later in Malaysia," he said. To help reduce the burden of smallholders in terms of certification cost, he said the RSPO is looking at a different mechanism for them.(Bernama)

China : Malaysia’s government has agreed to award a contract to a Chinese company to develop double railway tracks from Johor Baru to Gemas, in the state of Negeri Sembilan, prime Minister Najib Razak said. He didn’t name the Chinese company. Malaysia and China would also cooperate in other projects including the Mengkuang dam, aluminum smelter in Sarawak and a pulp and paper project. (Bloomberg, Bernama)

MAS : In an effort to simplify and enhance the travel experience of customers, Malaysia Airlines (MAS) is investing RM480m in its Passenger Services System (PSS) over 10 years. "We believe that over a period of 10 years it will give us benefits worth over RM2bn," said MD and CEO Tengku Datuk Azmil Zahruddin. "This is both in terms of revenue for customers due to the enhancement that we are giving as well as better efficiency that we expect to get from the system," he said. (Bernama)

Airasia : In anticipation of strong demand to its "1 Million Free Seats" offer, AirAsia has doubled its server capacity to cope with the huge increase in demand. Demand has vastly exceeded its expectations partly driven by its entry into new markets such as Australia, United Kingdom, India, China and the Middle East, resulting in congestion on "For those who have not been able to make a booking, we urge them to be patient and keep trying as there are still 700,000 free seats available up to Nov 15," said regional head of Commercial, Kathleen Tan. (Bernama)

Green Packet has agreed to subscribe for 419,500 Class A ICPS in Packet One for RM110m or RM262.22 per share.
  • Green Packet said the preference share subscription would enable the company toinvest in Packet One's rollout of its worldwide interoperability for microwave access(WiMAX) network that would provide commercial wireless access services across the country. 
  • The Class A ICPS shall carry an expected dividend amounting to 47.5% of its acquisition price for each preference share throughout a 10-year tenure. 
  • It also expected interim dividend distribution based on an annual average of 4.75% foreach Class A ICPS, to be paid semi-annually subject to the availability of distributable profits. 
  • The subscription would be funded via interally generated funds. The proposed exerciseis expected to be completed by 4Q09. (Financial Daily) 
REDtone International has acquired Kerry Telecommunications (Shanghai)'s 25% stake in REDtone Telecommunications (China) (RTCL) for HK$20.5m (RM8.942m). The acquisition enabled it to have full control over RTCL and its subsidiaries in China as it already holds the balance of 75% interest. REDtone International expects RTCL's telecommunication business to contribute positively towards the group's revenue and profit as it has been developed to a healthy level currently and continued to expand the market there. (Bernama)

Bank of East Asia’s (BEA) shares surged as investors bet on a potential bidding war between its long-time owners and a Malaysian conglomerate that upped its stake in the bank last week. The control of the Li family, the largest shareholder in BEA with 14% stake, may be under threat, as Malaysia's Guoco Group, led by tycoon Quek Leng Chan, disclosed last week that it had raised its stake in BEA above 8%, bolstering its position as the bank's third largest shareholder after Spain's Criteria CaixaCorp. (SCMP) 

Bank Islam Malaysia says it plans to be active in the equity capital market, now that it has a  licence to offer the full scope of Islamic investment banking activities. "This mean we can now do things like initial public offerings (IPOs) and reverse takeovers. So we are operating like any other investment banks in the country. We can offer our clients total financing solutions," Mashitah Osman, its head of corporate investment banking, said. The debt capital market business will, however, continue to be the segment's bread-and-butter business. Mashitah expects investment banking activities to start contributing significantly to Bank Islam's group revenue from this year. The bank aims to double its fee-based income this year. It is targeting for between 20-30% of group revenue to be fee-based, she said. (BT)

Malaysian Resources Corp (MRCB) plans to undertake its biggest development project ever in the Klang Valley by as early as next year. Group MD Shahril Ridza Ridzuan said MRCB will use part of the RM566m raised from a rights issue to buy land for the development. "We are looking at a few plots of land. Depending on the land size and location, we will decide on the best development to do," Shahril said. He said the group is also buying land for new commercial and residential projects in 2010. (BT) MRCB's COO Mohamad Razeek Hussain is likely to succeed Shahril Ridza Ridzuan as MD. MRCB board will be making the decision soon. Razeek Hussain has over 20 years experience in property development projects, having worked with SIME UEP, Land & General and E&O Property. (Star)

Energy : Capital expenditure cuts among the oil majors could lead to constraint in capacity growth in the medium term and a shortfall in supply, according to the International Energy Agency's (IEA) World Energy Outlook 2009 report. The IEA estimates that oil demand will rise from 85m barrels per day (bpd) in 2008 to 99m bdp in 2015 and 105m bpd in 2030. In addition, it was reported that the world was closer to running out of oil but that official estiates appeared to have been toned down to avoid panic buying. The upside to the scenario is that oil and gas projects that were shelved over the part year will start to make a comeback. (Financial Daily)

Melati Ehsan plans to buy four pieces of land measuring 109,743 sq m in Pekan Padamaran in Klang, Selangor, from TPPT Sdn Bhd for RM15.5m. The purchase is part of the group’s plan to acquire strategic land bank for residential and commercial property development at the Southern Klang corridor. (BT)

JAKS Resources plans to raise up to RM48.2m from a proposed placement exercise of up to 10% of the company’s equity. Proceeds from the placement will be used for working capital, business expansion, settlement of bank borrowings and/or other investments as well as to defray the expenses for the placement exercise. (BT) 

K-One Technology has proposed to transfer its listing status to the Main Market of Bursa Malaysia Securities after meeting the profit track record requirement of three to five full financial years, with an aggregate consolidated net profit of at least RM20m and that of the most recent year of at least RM6m. It has appointed AmInvestment Bank as adviser for the proposal and expects it to be completed in the first quarter of 2010. (Financial Daily) 

Xidelang Holdings made its debut on Bursa Malaysia's Main Market with a premium of 17 sen over its offer price of 58 sen. It closed five sen higher at 63 sen with a volume of 110.542m shares. (Bernama)