Bursa Malaysia market trades mixed

Sentiment on Bursa was somewhat ambivalent on July 24. Some profit-taking activities are to be expected after the KL Composite Index's 36-point gain in the previous two trading days.

Despite opening in negative territory, the KLCI's losses were, by and large, limited. The benchmark index drifted sideways for the better part of the day. Selling pressure was well absorbed. Investor confidence was likely shored up by broadly positive sentiment in key regional markets.

Bellwether indices in most Asian markets traded higher on July 24, consolidating their gains from the last few sessions. The continued pullback in crude oil prices allayed inflationary concerns, for the moment. Crude oil futures traded on the New York Mercantile Exchange fell below US$125 (RM408.75) per barrel after the US reported rising stockpiles. Higher pump prices is evidently having some impact on demand.

Lower oil prices, if sustained, should give governments around the world some breathing room to hold off on raising interest rates. Interest rate is, traditionally, one of the major tools to combat inflation. However, with demand slowing down, higher borrowing costs will further hurt economic growth.

Having said that, many investors remain cautious. It is too soon to declare the worst over. The current rally may just be a brief reprieve, a technical rebound from the last sell-off, and we could be looking at more volatility in the days ahead. Certainly, jittery investors would require more evidence before committing more money to the global financial markets.

About 567 million shares were traded on the local bourse. Although on July 24's trading volume was fairly robust by recent standards, it is far from what is needed for a sustained rally. Some of the most actively traded counters were AirAsia, IOI Corp, MRCB and MK Land. A spurt of last minute buying lifted the KLCI two points higher at 1,141.6. But market breadth was in the red. At the close, losers outnumbered gainers by about seven to five.

Plantation stocks drag KLCI down

by Surin Murugiah
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PETALING JAYA: The Kuala Lumpur Composite Index fell this morning, dragged by losses at plantation counters as crude oil and crude palm oil prices declined further yesterday.

Crude oil fell US$3.98 per barrel to settle at US$124.44 (RM406.92) on the New York Mercantile Exchange yesterday, while crude palm oil dropped RM182 and RM202 per tonne respectively to RM3,070 and RM3,035 for August and September deliveries, respectively.

At the Bursa Malaysia, the KLCI fell 3.49 points to 1,135.92 at 10am. Losers led gainers by 159 to 125. Some 123.8 million shares valued at RM177.27 million were traded mid-morning.

The top loser was Kuala Lumpur Kepong Bhd which fell 40 sen to RM13.20, while IOI Corporation Bhd lost 20 sen to RM5.40. Asiatic Development Bhd fell 15 sen to RM6.10, while PPB Group and Sime Darby Bhd lost 10 sen each to RM9.35 and RM8, respectively.

Leading the gainers was Lingkaran Trans Kota Holdings Bhd which added 12 sen to RM3.42, while LCL Corporation Bhd and Tanjong Plc rose 10 sen each to RM2.70 and RM12.90, respectively.

Bumiiputra-Commerce Holdings Bhd, Petronas Gas Bhd and Lion Industries Corporation Bhd gained 10 sen each to RM8.40, RM10.20 and RM2.62, respectively. Other gainers included Ranhill Bhd and Malaysian Airline System Bhd.

AirAsia Bhd was the most actively traded stock this morning, with 11.3 million shares done. It rose 4 sen to RM1.08. Other actively traded counters included MK Land Holdings Bhd, IOI Corp and Malaysian Resources Corporation Bhd (MRCB).

Off Market Transactions On KLSE (24 July 2008)

Stock	Dir-Vol	Dir-Val	Av-Price
ECOFIRS	3,892,000	564,340	0.145
KARYON	3,000,000	600,000	0.2
IRCB	3,000,000	1,035,000	0.345
MEDAINC	2,380,000	261,800	0.11
KNM	2,200,000	3,960,000	1.8
PRDUREN	2,000,000	800,000	0.4
BONIA	700,000	1,260,000	1.8
MINPLY	606,000	212,100	0.35
KBB	472,000	259,600	0.55
EMICO	400,000	118,000	0.295
QSR	400,000	832,000	2.08
HARBOUR	316,700	205,855	0.65
GCORP	250,000	255,250	1.021
UMW	250,000	1,475,000	5.9
KULIM	200,000	1,610,000	8.05
EKOVEST	150,000	159,000	1.06
UPA	142,000	184,600	1.3
STSTEC	116,904	119,242	1.02
GHLSYS	100,000	26,000	0.26
PBBANK	100,000	1,050,000	10.5
MRCB	100,000	105,000	1.05
GENTING	85,200	489,900	5.75
HARTA	30,000	44,700	1.49
NICORP	20,000	1,300	0.065
IOICORP	20,000	114,000	5.7
TCHONG	10,000	16,800	1.68
UAC	10,000	36,400	3.64
SIME	7,382	56,103	7.6
RESORTS	5,000	12,700	2.54
RUBHD	1,000	3,500	3.5
YIKON	1,000	1,060	1.06
SPRITZR	1,000	1,300	1.3
JPK	1,000	200	0.2
AWC	1,000	140	0.14
MPCORP	1,000	380	0.38

Bursa Malaysia Sentiment took a turn for the better

KUALA LUMPUR: Sentiment took a turn for the better yesterday. Shares on Bursa traded broadly higher, encouraged by overnight gains on Wall Street and the rally in key Asian markets.

With many stocks sold down to attractive valuations, investors were tempted to do some bargain-hunting. Market trading volume rose to 656 million shares, the highest level recorded since end-May.

Another drop in crude oil prices bolstered confidence and for the moment, allayed some fears of runaway inflation. Oil prices succumbed to profit taking on expectations of weakening global demand and higher stock levels. Crude oil futures traded on the New York Mercantile Exchange is currently hovering around US$127 (RM415.29) per barrel, well off its peak of US$147 per barrel recorded little over a week ago.

The retreat in oil prices gave investors something to cheer about, although concerns remain on corporate earnings growth going forward. The KL Composite Index opened on a firmer footing and gained in strength as the day progressed.

Blue chips racked up gains, leading the benchmark index sharply higher. Among the top gainers were Tanjong plc, Bursa Malaysia, Bumiputra Commerce, PPB, Genting, Sime Darby and Maybank. The KLCI added nearly 30 points to finish at 1,139.4 points.

DiGi and JT International were also among the big gainers for the day. Both companies announced generous cash returns for shareholders. DiGi declared a net interim dividend of 57 sen per share after chalking up another strong set of earnings in 2Q08. Meanwhile, cigarette manufacturer, JT International, proposed a capital repayment of 75 sen per share.

Market breadth was positive. At the close, the number of gaining stocks outpaced losing ones by a ratio of about four to one. AirAsia was the most actively traded counter. The stock gained on crude oil's fall. Other actives include MRCB, IOI Corp, Resorts World and Gamuda.

Off Market Transactions On KLSE (23 July 2008)

Stock	Dir-Vol	Dir-Val	Av-Price
CME	35,000,000	3,325,000	0.095
RANHILL	29,000,000	23,490,000	0.81
DKCORP	3,000,000	1,440,000	0.48
COMPUGT	1,818,100	199,991	0.11
GENETEC	600,000	198,000	0.33
EMICO	493,300	155,390	0.315
FRB	455,300	346,819	0.762
MVEST	382,600	237,212	0.62
PWORTH	335,000	169,175	0.505
EKOVEST	330,000	330,000	1
CCK	180,000	99,000	0.55
MRCB	172,000	180,600	1.05
AFFIN	115,000	205,850	1.79
MAYBULK	110,000	407,000	3.7
TENAGA	100,000	840,000	8.4
SIME	100,000	840,000	8.4
ANALABS	86,800	69,440	0.8

Investors remained sidelined Bursa Malaysia

THE KL Composite Index traded higher on July 22. There was some bargain hunting, including for plantations stocks that have been heavily sold down in the last few days. However, the overall sentiment remains ambivalent.

Outlook for global equities is still clouded. The relevant bellwether indices in key Asian markets mostly ended marginally lower on July 22. Meanwhile, US stocks closed mixed overnight. Investors are uneasy over the outlook for corporate earnings going forward.

Recent prognosis on the US economy did not offer much for the market to cheer about. A quick recovery in 2H08 is looking increasingly unlikely. Indeed, earnings guidance from big companies such as American Express, Apple and Texas Instrument is very cautious. The market will continue to sieve through upcoming data to see if the all-important consumer spending weakens.

Meanwhile, crude oil prices regained some lost ground after the recent sell off. Crude oil futures traded on the New York Mercantile Exchange rebound above US$131 (RM428.37) per barrel. As a result, the crude palm oil market also closed steadier. Plantation stocks including KL Kepong, Sime Darby, Kulim and PPB were among the big gainers for the day.

The KLCI opened on a firmer note and stayed in positive territory throughout the day. Select blue chip gains led the benchmark index six points higher at 1,109.6 points. On the other hand, market breadth was more ambivalent. The number of losing counters was ahead of gaining ones for much of the day. However, gainers managed to outpace losers by roughly four to three at the close.

Trading volume was thin. Less than 330 million shares changed hands, a decline from the 375 million shares traded on Monday. Among the most actively traded stocks were IOI Corp, Resorts World, Gamuda, AMMB and KNM. Investors are expected to stay on the sidelines in the near term.

KNM down on financing concerns

by Jose Barrock
Email us your feedback at fd@bizedge.com

KUALA LUMPUR: Fast-expanding oil and gas player KNM Group Bhd continued to slide, shedding 25 sen yesterday to close at RM5.10 on concerns of its proposed exchangeable bond issue, in the current difficult period. At its lowest in intra-day trading, KNM fell to RM4.96.

The company’s shares were among the most active with 11.9 million shares traded. Since end- May this year, the company’s share has tumbled by about 27% and during the period in review, under-performed the sluggish Kuala Lumpur Composite Index by 13.5%.

According to Goldman Sachs, the dip in KNM’s shares is a result of fears as to whether the company’s proposed exchangeable bond issue will proceed, with the current weak market likely to be a dampener. KNM had taken a €350 million (RM1.8 billion) bridging loan to finance the acquisition of German-based Borsig Beteiligungsverwaltungsgeselschaft mbH, last month, and has since partially pared down some of these loans, by utilising proceeds from a RM1.1 billion one-for-four rights issue, which was completed end of last month.

KNM had proposed raising another US$350 million (or its equivalent) in exchangeable bonds to settle the remaining amount of the outstanding debts taken for the purchase.

Goldman said that checks with the company revealed that in line with the widening global credit spreads the indicative yield for their proposed exchangeable bond has risen by 100 bps to 4.8% now (30%-35% conversion premium) against the existing bridging loan’s 5.2%.

“Given the significant increase, KNM is exploring other options, including the possibility of issuing plain vanilla debt, which the company says has indicative yields of 5.5%-6%,” Goldman Sachs says in report recently.

The research house stated that KNM may launch the exchangeable bonds when market conditions improve and that it views the alternative plan positively.

Foreign funds such as FMR LLC and FIL Ltd have been trading KNM’s shares heavily, which could explain its high trading volumes. The two funds emerged as substantial shareholders in end July last year, with 5.2% or 54 million shares. Since then, the funds have upped their shareholding to above 10.7% or about 141.4 million shares.

Another fund, which has been actively trading KNM’s stock, is the Employees Provident Fund (EPF). The EPF has about 6% in KNM now.

Early last week, about 11 million shares in KNM were traded off market in 22 block trades of above half-a-million shares crossing at RM5.85 a share. This occurred in about a 10-minute span of time in the later part of morning trade.

For its first three months of FY08, KNM posted a net profit of RM54.1 million on the back of RM331.2 million revenue. In contrast to a year ago, net profit improved by about 41%, while revenue increased 26%.

In a short span of three years, KNM has grown to become one of the top oil and gas players providing a wide spectrum of services. In March this year, the company proposed to buy the German-based Borsig to expand its reach in Europe.

Off Market Transactions On KLSE (22 July 2008)

Stock	Dir-Vol	Dir-Val	Av-Price
GPHAROS	6,789,600	2,715,840	0.4
WASEONG	2,500,000	4,900,000	1.96
ALAQAR	2,084,000	1,958,960	0.94
PWORTH	2,021,100	1,010,550	0.5
HUAYANG	535,837	364,369	0.68
PECD	500,000	15,000	0.03
FRB	489,200	378,342	0.773
PRDUREN	250,700	105,294	0.42
UEMBLDR	200,000	230,000	1.15
K1	190,000	69,350	0.365
GAMUDA	170,000	440,300	2.59
BIOOSMO	120,100	13,211	0.11
BPURI	110,000	102,850	0.935
BORNOIL-WB	100,000	7,000	0.07
MPHB	95,000	133,000	1.4
EONCAP	79,006	355,527	4.5
KPS	70,000	152,600	2.18
HARTA	54,000	64,800	1.2
PBBANK	48,200	462,980	9.605
EDEN	20,000	9,160	0.458
AMMB	8,900	24,030	2.7
DIALOG	4,600	4,692	1.02
KLK	4,500	50,850	11.3
RHBCAP	4,400	15,048	3.42
MRCB	4,300	3,698	0.86
KNM	4,000	18,240	4.56
UMW	4,000	20,600	5.15
AEON	4,000	14,080	3.52
ASIATIC	3,700	20,350	5.5
ALLIANZ	3,100	9,486	3.06
COMMERZ	3,000	20,850	6.95
IOICORP	2,600	12,896	4.96
TM	2,300	6,992	3.04
TMI	2,300	12,995	5.65
SIME	2,200	14,960	6.8
FRONTKN	2,100	1,239	0.59
TENAGA	2,100	15,120	7.2
MAYBANK	1,900	12,255	6.45
TANJONG	600	6,780	11.3

Bursa Malaysia Market still tentative

Shares on Bursa rebounded after opening on a weaker footing yesterday. Sentiment may have been buoyed by a rally in key Asian markets. Nevertheless, market volume remained relatively thin. It is quite likely that the market will see more volatility in the days ahead.

The KL Composite Index opened in negative territory and continued to fall for much of the morning session. Plantation stocks were among the big losers. Investors are reacting to the sharp fall in crude palm oil (CPO) prices. The benchmark CPO futures contract traded on the Bursa Derivatives closed below RM3,300 per tonne. Prices had averaged around RM3,500 per tonne in the first half of the year.

The fall in CPO prices was triggered by weaker crude oil prices. Oil prices retreated from record high levels last week due, in part to expectations of slowing demand from weaker global economies. Crude oil futures on the New York Mercantile Exchange are now hovering around US$130 per barrel.

There remains debate as to whether this latest price retreat is sustainable. Global spare production capacity is limited, leaving the market vulnerable to supply disruptions. However, for now, many are breathing a little easier for the relief. Lower oil prices will certainly help cool inflationary pressures.

Recent news reports suggest that domestic inflation rate may have risen to the highest level in more than two and half decades. This raises worries that the central bank will hike interest rates soon. If so, higher borrowing costs will further dent consumer spending already weighed down by higher food and fuel prices. Weaker demand and rising cost of doing businesses will also eat into corporate earnings growth.

The KLCI ended the day marginally lower 1,103.5 points after falling by almost 16 points earlier in the day. Market volume however remained fairly low at 375 million shares. Market breadth too was in the red despite the headline gains. At the close, losing counters outnumbered gaining ones by a ratio of about eleven to ten.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.

Off Market Transactions On KLSE (21 July 2008)

Stock	Dir-Vol	Dir-Val	Av-Price
MEDAINC	3,670,000	367,000	0.1
PSPRING	1,000,000	1,190,000	1.19
EDEN	600,000	276,000	0.46
EMICO	499,900	132,474	0.265
SUPERMX	250,000	307,500	1.23
IJM	191,100	974,205	5.098
KUB	100,000	32,750	0.328
IOICORP	100,000	627,000	6.27
ASIATIC	100,000	698,500	6.985
GAMUDA	50,000	125,000	2.5
JERNEH	40,000	56,000	1.4
POHUAT	25,000	13,250	0.53
JERNEH-WA	25,000	7,500	0.3
GENTING	20,000	107,000	5.35
RESORTS	11,000	28,490	2.59
TIENWAH	3,000	3,720	1.24

Off Market Transactions On KLSE (18 July 2008)

Stock	Dir-Vol	Dir-Val	Av-Price
MULPHA	10,000,000	12,500,000	1.25
COMPUGT	1,818,100	199,991	0.11
BJMEDIA	1,752,754	1,752,754	1
IJMPLNT	1,500,000	4,530,000	3.02
IOICORP	1,257,350	7,041,160	5.6
COMMERZ	1,006,000	7,746,200	7.7
EMICO	893,300	241,191	0.27
BIOSIS	700,000	210,000	0.3
SAAG-WA	650,000	110,500	0.17
Y&G	590,000	106,200	0.18
TDEX	500,000	115,000	0.23
SEEHUP	491,161	648,333	1.32
EDEN	452,700	212,769	0.47
BJMEDIA-WA	422,000	168,800	0.4
JAKS	400,000	236,000	0.59
YTLLAND	385,000	392,700	1.02
HARBOUR	316,700	212,189	0.67
DNP	300,000	270,000	0.9
KNM	300,000	1,800,000	6
FABER	300,000	225,000	0.75
MYETFDJ	300,000	211,500	0.705
MAA	249,000	199,200	0.8
GAMUDA	171,500	423,605	2.47
AXIS	169,800	320,024	1.885
GLOMAC	130,000	92,950	0.715
AIM	110,000	28,050	0.255
BIMB	100,000	100,000	1
PBBANK	100,000	1,080,000	10.8
YNHPROP	100,000	158,000	1.58
BLDPLNT	55,000	236,500	4.3
UEMWRLD	50,000	140,000	2.8
DAYANG	50,000	42,500	0.85
RHBCAP	50,000	187,500	3.75
TOYOINK	50,000	81,500	1.63
LEADER	33,000	19,470	0.59
KHSB	20,000	9,800	0.49