hwang capital

 
 

Malaysia’s auto industry off on a positive start

KUCHING: Malaysia’s automotive industry is off on a positive start this year, led by strong numbers recorded by national carmakers. Analysts expect the industry to continue this strong momentum, underpinned by healthy demand and favourable foreign exchange (forex). According to the research arm of Affin Hwang Investment Bank Bhd (AffinHwang Capital), the automotive industry’s January […]


All-over optimism for Serba Dinamik’s maiden 2019 contracts

KUCHING: Analysts across the board gave two thumbs up for Serba Dinamik Holdings Bhd (Serba Dinamik) catching its first batch of contract wins in 2019 totalling US$110 million (RM448 million). The announced values consist only of the international contracts – United Arab Emiraes, Uzbekistan and Qatar – as the Malaysian contracts are all call-out in […]


E&O loses RM318m in market cap on cash call news

PETALING JAYA: Investors reacted negatively towards Eastern & Oriental Bhd’s (E&O) proposed fund raising exercise of up to RM550.3 million with its share price tumbling 24 sen or 22.02% to a multi-year low of 85 sen today.

The heavy selling pressure led to RM318 million of its market capitalisation being wiped off.

It was the top fourth loser on Bursa Malaysia today on 36.7 million shares done.

On Monday, E&O announced a proposed fund raising exercise which would raise proceeds of RM250 million to RM550.3 million, to fund its Seri Tanjung Pinang (STP) Phase 2 project in Penang and repay bank borrowings.

“Although the company seems to have identified a taker for the placement shares, we think investor sentiment on E&O may turn cautious given the magnitude of the equity call,” RHB Research said in its report today.

The research house, however, noted that the need for financing is understandable, based on the funding requirement for the reclamation and infrastructure capital expenditure on STP 2A, 2B and 2C, as well as working capital to kick-start new high-rise projects such as The Conlay (GDV: RM900 million), which is slated for launch at the end of 2019, and The Peak (GDV: RM280 million) in 1H 2020.

“We believe that as a result of tight cash flow, slow high-end property sales and weak market sentiment, the maiden launch of STP 2A’s Plot 14 has been delayed until 1H 2020,” it added.

The total proceeds of around RM350 million to RM400 million from the fund raising exercise would be about 24-28% of the stock’s current market cap. After factoring in the impact from the placement and rights issue, RHB Research reduced its target price to RM1 from RM1.24 previously.

It maintained E&O’s net profit estimates but reduced its earnings per share (EPS) forecasts due to the expected dilution from the placement and rights issue.

PublicInvest Research maintained its “neutral” call on E&O but reduced its target price to RM1 from RM1.30 previously.

“This comes as a negative surprise as we had believed earlier that the group would raise funds by disposing non-strategic assets and/or get more strategic partners for its STP Phase 2 development. Based on illustrative issue price of RM1.12, our RNAV (revalued net asset value) could be diluted from RM4 per share to RM2.80 to RM3.30,” it said.

Meanwhile, Affin Hwang Capital, which maintained its “buy” call on E&O with RM1.55 target price, believes the long-term prospects for the group remain good, despite the short to medium term impact of the fund raising exercise on investor sentiment.

“We believe the overhang from the equity issuance will dampen sentiment on the stock in the short to medium term, but the long-term prospects for E&O remains good with the scheduled completion of 253-acre STP 2A by September 2019,” it said.

“We gather that the entrepreneurs and substantial shareholders Datuk Seri Tham Ka Hon (owns 20.6% stake) and Datuk Tee Eng Ho/Tee Eng Seng (owns 15.2%) will likely undertake to subscribe for their rights issue entitlement. This will show the entrepreneurs’ commitment and shore up support for the proposed equity issuances,” it added.


Uptick in Malaysia’s banking sector scorecard for 2018

  KUCHING: Malaysia’s banking sector ended 2018 with a slight uptick in its figures, recording 5.6 per cent year on year (y-o-y) growth while expanding by 0.6 per cent month on month (m-o-m). The annual growth was underpinned by sectors such as manufacturing, retail, business services, construction and households – specifically residential properties, personal use […]


FBM KLCI to retest 1,700-point level next week

KUALA LUMPUR: Trading on Bursa Malaysia is expected to be reinvigorated next week with the market moving in a tight range as most investors flock back from the Chinese New Year celebration, analysts said.

Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) had been struggling to pierce its immediate resistance of 1,700 points over the last few weeks.

“External developments continue to take centre stage. Issues surrounding the trade negotiations between the US and China has always been the source of market instability,“ he told Bernama.

If latest news are any indication, the resolution of trade negotiations will still be a long way to go before the US struck a trade deal with China, according to the National Economic Council Director Larry Kudlow.

Additionally, Mohd Afzanizam said the meeting between US President Donald Trump and Chinese President Xi Jinping might not happen before the March 1 trade deadline.

Despite this, Mohd Afzanizam said foreign investors turned net buyers on Feb 4 and 7 snapping up RM138.6 million worth of stocks while the ringgit appreciated to 4.067 against the US dollar at the time of writing.

“Against such backdrop, we could expect the FBM KLCI to continue remaining in a tight range next week,“ said Mohd Afzanizam.

Additionally, Malaysia’s 2018 fourth-quarter (Q4 2018) gross domestic product numbers would be announced on February 14.

“Perhaps, investors would also want to assess the resilience of the Malaysian economy.

“This is especially true in the context of weak business and consumer sentiment as indicated by the Malaysian Institute of Economic Research’s survey recently,“ the chief economist said.

The Business Condition Index and Consumer Sentiment Index fell to 95.3 points and 96.8 points in Q4 2018 from 108.8 points and 107.5 points in the previous quarter, respectively.

Affin Hwang Capital Asset Management managing director Teng Chee Wai remained optimistic on the US-China trade negotiations as the backdrop of the global economy was actually very strong, while the vision of a downtrend in local corporate earnings is still an ongoing process.

“Putting the two together, this year will probably be a better year than last year from the equity market standpoint,” said Teng.

On a Friday-to-Thursday basis, the benchmark FBM KLCI settled 2.99 points higher at 1,686.52.

The market was closed on Tuesday and Wednesday for the Chinese New Year.

The FBM Emas Index was 64.9 points higher at 11,725.52, the FBMT 100 Index increased 56.33 points to 11,601.54 and the FBM Emas Syariah Index improved 40.42 points to 11,593.03.

The FBM 70 gained 215.69 points to 14,032.9 and the FBM Ace Index added 153.12 points to 4,555.22.

Sector-wise, the Financial Services Index rose 127.14 points to 17,642.11, the Plantation Index increased 19.36 points to 7,299.6, and the Industrial Products and Services Index inched up 0.86 of-a-point to 161.97.

On a Friday-to-Thursday basis, weekly turnover dwindled to 4.94 billion units worth RM3.8 billion against 8.77 billion units worth RM8.13 billion.

Main Market volume shrank to 3.77 billion units valued at RM3.57 billion versus 6.32 billion units valued at RM7.66 billion.

Warrants turnover declined to 690.66 million units worth RM149.03 million from 1.38 billion units worth RM301.90 million.

The ACE Market volume decreased to 483.1 million shares valued at RM83.25 million against 1.05 billion shares valued at RM152.46 million. — Bernama


Unchanged Fed rate likely to push BNM to maintain stance

KUCHING: The US Federal Reserve (US Fed) decided to keep its federal funds rate (FFR) unchanged between 2.25 to 2.50 per cent in the latest January meeting, leading analysts in Malaysia to predict for Bank Negara Malaysia (BNM) to maintain its accommodative monetary stance. Affin Hwang Investment Bank Bhd (AffinHwang Capital) saw that US’ job […]


Analysts: Still room for OPR cut in the future

KUCHING: While Bank Negara Malaysia (BNM) has retained the overnight policy rate (OPR) at 3.25 per cent, analysts believe there is still room for a potential cut in OPR. This comes following the monetary policy committee (MPC) meeting, BNM announced that it has maintained the OPR rate at 3.25 per cent given the domestic financial […]


Affin Hwang eyes RM50 mln securities lending

KUALA LUMPUR: Affin Hwang Investment Bank Bhd (Affin Hwang) is eyeing to achieve RM50 million in securities lending book size this year following the official launch of the Retail Securities Borrowing and Lending (Retail SBL) programme. Affin Hwang, in collaboration with Bursa Malaysia Bhd (Bursa Malaysia), launched its Securities Borrowing and Lending (SBL) for retail […]


Affin Hwang targets RM50m in securities lending

KUALA LUMPUR: Affin Hwang Investment Bank Bhd, which has launched its Securities Borrowing and Lending (SBL) for retail investors today, is targeting to achieve RM50 million in its securities lending book size in 2019.

The retail SBL, launched in collaboration with Bursa Malaysia Bhd, enables the retail investors to diversify their investment, thus potentially earning returns on their idle assets.

At the launch ceremony today, Affin Hwang Capital group managing director Datuk Maimoonah Hussain said the bank had initially rolled out the retail SBL through three branches to its commissioned and salaried dealer representatives.

In less than two months, she said the bank has loaned out RM8.5 million of retail clients’ shares in spite of the relatively slow market performance in the final quarter of 2018.

In his opening speech, Bursa Malaysia CEO Datuk Seri Tajuddin Atan said as at December 2018, there were 1.87 million retail accounts in the marketplace holding a portfolio worth RM137.3 billion.

Currently, Tajuddin said the main participants in SBL activities are institutional participants, including the sovereign funds, government-linked companies, fund management companies and insurance companies.


BAT faces competition from PMI’s latest HNB device

KUCHING: Philip Morris International’s (PMI) launching of its flagship heat-not-burn (HNB) device, the iQoS, in Malaysia may deflate the margins of British American Tobacco Bhd (BAT). In a company update report, the research arm of Affin Hwang Investment Bank Bhd (Affin Hwang Capital) said that it believed PMI could potentially be a significant competition to […]