Tuesday, April 17, 2007

MALAYSIAN STOCKS - ALL Time 13-Year High & RINGGIT NEARS 10-YEAR HIGH; Investors Bet on Growth; PM Abdullah Happy - KLCI Surge; Sustainable Till GE?

April 16, 2007 23:48 PM

PM Happy With High Confidence Shown In Bursa Malaysia

From Amer Hamzah Md Sap KHARTOUM, April 16 (Bernama) -- Malaysian Prime Minister Datuk Seri Abdullah Ahmad Badawi today expressed happiness with the level of confidence shown by local investors in the Kuala Lumpur stock exchange. Commenting on Monday's rise on Bursa Malaysia, where the Composite Index rose to a record high of 1,323.91 compared with the previous high of 1,314 reached in January 1994, he said the uptrend was a reflection of the maturity of local investors and their ability to deal in the share market.

He said local investors were also taking a new approach in the way they were investing by keeping ahead and making their investments before the others enter the market. With their confidence, Malaysian investors are also attracting other investors to buy shares in the local bourse, he told Malaysian journalists covering his visit to Sudan. Hopefully, the rise in the CI will continue to be sustained and reflect the value and confidence in the market, he said. -Abdullah also expressed confidence that the people would see that the government's current efforts were giving rise to a new level of confidence and hope for the country's future economic growth.

On another note, he said he expected to relate the requests of entrepreneurs in Sudan who have asked for Malaysia to open a bank in their country, if the Sudanese government agrees to give the licence. "If Bank Islam opens a branch here, that would be good," he said.

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April 16, 2007 22:13 PM
Heavy Institutional Buying Sends KLCI To All-time-high

ABOVE: KLCI at Record High on April 16 2007

By Massita Ahmad

KUALA LUMPUR, April 16 (Bernama) -- Heavy buying from both local and foreign institutional funds pushed up the benchmark Composite Index (CI) to close the day at a new all-time-high of 1,322.91. Its last recorded high point was on Jan 5, 1994 where the KLCI hit 1,314.46. On the same day, it saw an intraday high of 1,332.04. Today's CI closing was also its highest level for the day, up 14.71 points after opening 2.34 points higher at 1,310.54 this morning. The stronger interest was spurred by a string of positive news for sectoral as well as individual stocks, said one analyst who spoke on the condition of annonymity. The plantation stocks were mostly higher on expectations of better earnings following higher crude palm oil prices (CPO), the analyst told Bernama.

Price on the CPO futures market surged to record a new eight-year high of RM2,288 per tonne today, boosted by a huge increase in exports. The rise was also supported by news that one of the largest importers of CPO, India, will be cutting down palm import tariffs.

Representing the sector, Plantation Index was the biggest gainer, up 2.84 percent to 5,932.65. Among the stocks were IOI Corp which rose six percent to RM1.50 and PPB Oil Palms which rose 3.18 percent to RM16.20. The property stocks were the second runner up, with the Index rising 1.24 percent to 1,032.36. The government last Friday announced new measures to boost the sector, among them being speedy approvals for development projects. Among the stocks, LBS Bina gained 5.5 sen to 82 sen, Crescendo gained 13 sen to RM1.75, and A&M Realty rose 16 sen to RM2.10. The analyst said Tenaga Nasional Bhd, which reported a commendable performance for the half-year financial period ended Feb 28, 2007, gave further support to the CI. Tenaga Nasional which carried the highest CI weightage of 9.050 per cent rose 20 sen to end the session at RM12.20. The company reported that its net profit rose to RM2.823 billion from RM1.003 billion in the same period of 2006 on increased sales. It also posted a 28.4 per cent increase in forex translation gains due to the stronger ringgit while revenue rose 15.8 per cent to RM11.284 billion. Commenting on the CI performance, Bursa Malaysia Bhd's chief executive officer Datuk Yusli Mohamed Yusoff said that this was an indication on how far the market has grown in the last few years.Yusli who is in Hanoi attending a seminar on the benefits of cross-regional listings said: "What is vital to note is that today's performance is reflective of a strong Malaysian capital market that is fundamentally sound."

Malaysian Stocks Advance to Record as Investors Bet on Growth

Updated : 16-04-2007 Media : Bloomberg; Story By : Chan Tien Hin

April 16 (Bloomberg) -- Malaysian stocks closed above a record that had stood for 13 years after investors bet the government's moves to offer tax breaks and ease foreign ownership rules will fuel growth and spur corporate earnings.``For so long, Malaysia has been an underperformer; we're still a laggard,'' Pankaj Kumar, who manages about $430 million as chief investment officer at Kurnia Insurans Bhd. in Kuala Lumpur. New

government policies are now attracting foreign investors while higher palm-oil prices are ``making investors bullish'' on IOI Corp. and other plantation stocks, he said. IOI surged today after palm-oil prices rose to the highest in more than eight years. Sunrise Bhd. led property shares higher after Prime Minister Abdullah Ahmad Badawi announced speedier building approvals and offered incentives to build homes. The Kuala Lumpur Composite Index climbed 14.71, or 1.1 percent, to 1322.91, surpassing the previous record close of 1314.46 set on Jan. 5, 1994. The all-time high was 1332.04 set on the same day. The

measure has risen 21 percent this year, the third-biggest gainer among regional benchmarks. The index's futures contract expiring April jumped 3.2 percent, its biggest gain since March 12. Malaysian stocks have rallied since the government began easing rules on foreign ownership and cutting taxes. The policies are part of the prime minister's 200 billion ringgit ($58 billion), five-year development plan to build new infrastructure to reinvigorate the building industry and lure investment to Southeast Asia's third-biggest economy. Strong Fundamentals ``Foreigners are in the market,'' said Alicia Tan, Executive Chairmanof TA Enterprise Bhd., Malaysia's biggest retail brokerage in Kuala

Lumpur. ``The fundamentals are strong.'' On April 13, the government said it will accelerate building approvals and property transactions in a bid to cut red tape, less

than a month after it removed a capital gains tax on property. It also allowed foreign investors to take out more than three mortgages from local lenders and offered tax incentives to turn the southernmost state of Johor into an international business and

leisure destination. In December, the government allowed non-nationals to buy Malaysian properties priced above 250,000 ringgit without having to seek state

approval, as they had previously. ``These measures are positive for the property sector,'' Tan Ting Min, an analyst at Credit Suisse Group, wrote in a report today. ``The good news is that the holding cost of land will be reduced, as the approval period will be shortened,'' said Tan, who kept an ``overweight'' call on the sector. Best Quarter Malaysian stocks completed their best quarter in seven years when the stock index gained 14 percent in the first three months of the year. That was its biggest quarterly gain since the first three months of 2000, as foreign investors bought more shares. Overseas fund managers bought a net 9.1 billion ringgit of stocks in the fourth quarter of last year, the most since March 2004, according to the central bank's data. ``From being an isolated market, the Malaysian stock market is back on the radar screen of most foreign investors,'' Choong Wai Kee, Andrew Chow and Julian Chua, analysts at Citigroup Inc., wrote in a March 13 report in Kuala Lumpur.

The benchmark Composite Index may rise to 1406 by the end of the year, Colbert Nocom, an analyst at UBS Investment Research, said in a note on April 9, citing a ``return of private investments'' and ``solid corporate fundamentals.'' That's 6.3 higher than today's close. Bumiputra-Commerce Holdings Bhd., Malaysia's second-biggest lender, AMMB Holdings Bhd., the fifth largest, Tenaga Nasional Bhd., the No.

1 Malaysian power producer, and Maxis Communication Bhd., the country's biggest mobile-phone company, are among his top picks, hesaid in the report. `Defy Logic' To be sure, as the stock market ``goes higher, it also gets tougher'' to pick stocks as some of the shares are getting expensive, said Kumar of Kurnia Insurans. Gains in some property stocks ``defy logic,'' he said. TA Enterprise Bhd., a brokerage whose property sales almost tripled last year, has surged 147 percent this year, making it the best performing stock in Malaysia. Seven property-related companies, such as UEM World Bhd., Selangor Properties Bhd. and Sunrise are among the top 10 biggest gainers in the benchmark stock index this year. The Kuala Lumpur Composite's relative strength index, based on its 14-day moving average, climbed to 77.3 today from 68.6 on April 6. A

reading above 70 indicates to some technical analysts that shares are poised to fall. Sunrise Sunrise, Malaysia's biggest developer of luxury condominiums, today gained 18 sen, or 5.5 percent, to 3.46 ringgit, a record, after Aseambankers Research said the company will benefit the most from recent property policy changes announced by the government. Ong Chee Ting, an analyst, rated the stock ``buy'' in new coverage with a

share-price estimate at 3.92 ringgit. SP Setia Bhd., Malaysia's biggest property developer, gained 15 sen, or 1.9 percent, to 8.10 ringgit, set for its second day of gains.The Malaysian government will cut the time for development approvals to as little as four months, from one-to-two years, Abdullah said on April 13. Plantation stocks such as IOI Corp., the world's biggest oil-palm planter, have surged. Palm-oil futures in Malaysia, the world's largest producer of the commodity, are at their highest in more than eight years on speculation demand will increase, and as the prices of alternative oils advanced as crude trades about $64 a barrel. Palm-Oil Rally Malaysia is estimated to have exported 666,793 metric tons of palm oil in the first 15 days of April, up 47 percent from 454,791 tons recorded in the same period last month, independent cargo surveyor Intertek said.

Palm oil for June delivery, the most active contract, rose as much as88 ringgit, or 4 percent, to 2,307 ringgit ($671) a ton on the Malaysia Derivatives Exchange. That's the highest since Dec. 1, 1998, when it touched 2,311 ringgit. The contract traded at 2,278 ringgit at 5:33 p.m. local time. It has risen 49 percent in the past six months. IOI jumped 1.50 ringgit, or 6 percent, to 26.50 ringgit, its sixth day of gains. It also climbed after the stock exchange approved the company's plans to split its shares. Kuala Lumpur Kepong Bhd., Malaysia's second-biggest oil-palm planter, added 20 sen, or 1.5 percent, to 13.20 ringgit. Vegetable oils from oil palms, soybeans and corn are increasingly being turned into chemicals that are added to fuel. As a cooking oil, it is consumed largely by China, India and Pakistan. In the market today, some 562 stocks rose while 355 declined and 267 were unchanged. About 2 billion shares worth 2.6 billion ringgit changed hands, lower than its three-month daily average of 2.1 billion shares. The smaller Second Board Index was little changed at 102.61. The FTSE Bursa Malaysia Emas Index advanced 1.3 percent to 8883.48.

April 16, 2007 20:33 PM

Ringgit Hits New High Of 3.43 Against US Dollar

KUALA LUMPUR, April 16 (Bernama) -- The ringgit surged to 3.43 against the US dollar, a new high of almost 10 years, due to brisk demand as foreign funds went on to accumulate shares on Bursa Malaysia, dealers said. At 5.00pm Monday, the ringgit touched 3.4390/4410 against the greenback, its strongest since the start of the 1997/1998 Asian financial crisis. The local currency was quoted at 3.4400/4425 in the earlier session today. According to the dealers, the upward trend of the local bourse was spurred by the country's strong economic fundamentals. The key Kuala Lumpur Composite Index (KLCI) today reached an all-time high of 1,322.91, up 1.12 per cent or 14.71 points in line with the rally in regional bourses as institutional funds continued to hunt for bargains on property stocks as well as oil and gas counters.

"The ringgit's appreciation was supported by dollar-selling by foreigners as they remained confident over the country's positive economic factors," said one of the dealers from a local investment bank. He added that the Malaysian economy was getting stronger on expectations of better economic performance and rising foreign reserves coupled with the government's recent move to liberalise the foreign exchange policy. The new foreign exchange policy came into effect April 1. Earlier in 2005, Bank Negara Malaysia lifted the peg on the ringgit which was introduced in 1998. The ringgit had been fixed at 3.80 to the dollar. The peg was removed in July 2005 in favour of a managed float and following the de-peg, the ringgit barely moved initially but to date has gained more than 9.5 percent.

"Based on the current trend, the ringgit is expected to climb further. It could possibly touch 3.40 per US dollar in the next two to three months. This is not impossible," another dealer said. The dealer said the ringgit's rise was also due to weakness of the greenback in most of the overseas markets as investors remained cautious over uncertainties of the US economic outlook. The US dollar currently traded at 119.49/51 against the Japanese yen.
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KLCI at all time high of 1,322.91 Updated : 16-04-2007 Media : The Edge

Story By : Joseph Chin

The Kuala Lumpur Composite Index (KLCI) closed at an all-time high of 1,322.91 on April 16, lifted by the impressive performance in regional markets, last Friday’s closing on Wall Street and the strong ringgit, which surged to a fresh nine-year high. The KLCI rose 14.71 points to 1,322.91, surpassing the previous life time closing high of 1,314.46 on Jan 5, 1994, while the FBM Emas rose 105.02 points 8,879.23. The KLCI futures surged 40.5 points to 1,323. Turnover was 2.03 billion shares valued at RM2.62 billion with 563 advancing counters against 354 decliners while 268 counters were unchanged. Asian markets ended the day on a stronger note with Hong Kong’s Hang Seng Index surging 416.56 points to 20,757, Japan’s Nikkei 225 was up 264.35 points to 17,628,30 and Singapore’s Straits Times Index added 40.56 points to 3,414.15. The ringgit was quoted at RM3.439 to the US dollar and economists expect the local currency to strengthen further to RM3.4 in the next few months because of liquidity flow. On Bursa Malaysia, plantation counters were among the top gainers with the Plantation Sector Index rising 3.38% or 195.13 points to 5,964.08.

They were underpinned by the strong crude palm oil (CPO) prices which was more than its eight-year high. CPO futures for May rose RM48 to RM2,303 per tonne while for the July futures, it jumped RM50 to RM2,250. Palm oil exports rose 29% from April 1 to 15 from a month ago. Malaysia exported 642,292 tonnes of bulk palm oil shipments, according to Bloomberg. IOI Corporation Bhd topped the gainers list, rising RM1.50 to RM26.50, IOI Corp-CB 50 sen to RM2, IOI Corp-CC 46 sen to RM1.90. PPB Oil Palms Bhd added 50 sen to RM16.20, Asiatic Development Bhd 25 sen to RM6 and Kuala Lumpur Kepong Bhd 20 sen to RM13.20. Steel stocks were also in the limelight as investors bet on improving

demand and prices to lift earnings in the coming months. InsiderAsia said the steel sector was still trading at relatively low valuations. Integrated steel makers Ann Joo Resources Bhd rose 36 sen to RM3.60, Kinsteel Bhd 35 sen to RM5.85 and Malaysia Steel Works Bhd 16 sen to RM1.53. Malayan Banking Bhd rose 30 sen to RM12.70, Tenaga Nasional Bhd 20 sen to RM12.20 and Telekom Malaysia Bhd was flat at RM10.30. The major losers were BIMB Holdings Bhd, which fell 23 sen to RM1.40 ahead of the listing of its new shares on April 17, while Proton Holdings Bhd and Lion Diversified Holdings Bhd dropped 15 sen each to RM6.25 and RM8.05, respectively. Aseambankers Equity Research head Vincent Khoo said the market could continue to rise in tandem with the strong regional markets and also the positive steps taken by the government. He added that the market was also driven by liquidity into the market. “Without any external shocks, the market could continue its upward trend. Global markets had shrugged off the worries following the yen-carry trade and the US economy's slow down,” he said._

Other headlines across other markets

S'pore - Shares close 1.2% higher

Indonesian shares hit new record

Australian stocks rise to record highs

Seoul shares close at new high


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Tenaga Posts Net Profit Of RM2.823 Bln In First Half

KUALA LUMPUR, April 16 (Bernama) -- Tenaga Nasional Bhd (TNB) today reported that net profit for its half year ended Feb 28, 2007, rose to RM2.823 billion from RM1.003 billion in the corresponding period of the previous year on increased sales and 28.4 percent gains in forex translation gains due to the strong ringgit. TNB also recognised a write-back in deferred tax provision of RM408 million over the first half year following the government's announcement to reduce corporate tax from 28 per cent to 27 per cent in 2007 and 26 per cent in 2008. The group's net profit, excluding new tariff, forex translation and deferred tax write-back, reflected an increase of RM331.7 million or 64.3 per cent if compared against the same period of financial year 2006.

Its revenue increased 15.8 per cent to RM11.284 billion from RM9.743 billion on six per cent increase in demand and introduction of new tariff since June last year. However, for the six months the group also managed to reduce its economic loss to RM97.9 million from RM998.4 million in the corresponding period in the previous year. For the second quarter, TNB said net profit increased to RM1.555 billion from RM399.5 billion in the corresponding quarter of the previous year. The national utility giant said revenue for the quarter rose to RM5.682 billion from RM4.831 billion.

Its chairman Tan Sri Amar Leo Moggie said the group reported a pick-up in electricity unit growth for the industrial sector of 4.7 per cent in the first half compared to a contraction of 1.6 per cent in the same period in the previous year. In the first six months of the current financial year TNB spent RM1,120 million on capital expenditure for new supply and system improvement, he said at a press conference to announce the results Monday. On TNB's dividend policy, Moggie said the utility company intended to distribute dividends within a range of 40 to 60 per cent of its annual free cashflow to shareholders, with effect from financial year 2007. He said the policy has been formulated to ensure sustainable and sound dividend payout after considering the company's financial performance, debt obligations, market expectation, optimal capital structure, credit and tax considerations.

"Going forward, the policy will be reviewed accordingly to ensure sustainability and growth in line with the underlying business growth," he added. TNB's board of directors approved an interim gross dividend of 10 sen per ordinary share less income tax of 27 per cent, equivalent to a net dividend of 7.3 sen per ordinary shares, in respect of the financial year ending August 31, 2007. As for the performance in second half of the year, chief executive officer Datuk Seri Che Khalib Mohamad Noh said a challenging period is expected for TNB to achieve return on asset of 6.5 per cent that it registered in the first half. He said operating cost is expected to increase further following commissioning of the second unit of the Tanjung Bin power plant on Feb 28, 2007. Independent power producer cost is expected to further increase, thereby impacting profitability, he added.

On the proposed disposal of TNB's stake in a coal mine in Indonesia, Che Khalib said it will not have any material impact on the account. "We have made sufficient provision of RM180 million and the write-back would not going to be material," he said. Che Khalib said it would not have an impact on coal supply to TNB as it had already secured a long-term supply for 30 per cent of its coal requirement from sources in Indonesia and Australia. Previously, it had yearly contracts, he said


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