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Malaysia stock market and companies daily report (August 30, 2010)

Contributed by Shares Investment

By Shares Investment

IOI To Ride On China’s Strong Palm Oil Demand

China is one of IOI Corp’s top five palm oil markets and the largest vegetable oil consumer in the world. Executive chairman Tan Sri Lee Shin Cheng sees stronger demand and very good potential in increasing their sales volume further to this geographical segment in the years ahead. Lee also expects the US dollar to weaken further in line with heightened prospects of the US entering a second recession. According to Bank Negara Malaysia’s website, the US dollar has weakened by 9% against the ringgit. Despite the US economy facing a sluggish outlook, palm oil consumption continues to grow, as palm oil is seen as a healthy substitute to partially hydrogenated soft oils that contain artery-clogging transfat and as a result, the US market has been growing fast, with US imports hitting about a million tonnes of palm oil annually. As at 30 June 2010, IOI Corp’s net cash position was RM3.9b.

OSK Research Maintains Buy On Proton

OSK Research is maintaining its Buy call on Proton Holdings at RM4.53, being the cheapest auto stock under its coverage which is only trading at forward PE of 7.2 times versus the sector average of 10 times. The research house said on 30 Aug, Monday that it is not making any changes to its earnings estimates for Proton, pending more clarification from management on how the injection to Lotus will be structured  and whether a new issuance of shares will be involved. “On its foray into the India market, we believe it is too early to tell how this would contribute to earnings although we are still generally positive on whatever the outcome given the market potential,” it said. OSK Research also said in the shorter term, Proton is expected to post favourable results on the back of its new model pipeline going forward in addition of the much improved operating landscape.

UDA Aims To Enhance Its Property Value

Government-owned UDA Holdings’s priority for the long term is to enhance the value of its properties with an optimum Bumiputera and non-Bumiputera mix of buyers and tenants to ensure their appreciation. Recently appointed chairman, Datuk Nur Jazlan Mohamed, said UDA’s priority for Bumiputeras is not only about providing residential and retail opportunities, but also to ensure that those properties stay in Bumiputera hands while the value increases in the long-term. In the face of new socio-economic challenges, it is important to have a good mix of buyers to improve the value of the property. He added that UDA’s equity break-up could be as much as 60% Bumiputera and 40% non-Bumiputera, or even an equal 50%, to be healthy, and believes that such a proposal can improve the property value and is in line with the 1Malaysia concept, without UDA losing sight of its goal of promoting Bumiputera participation.

This article is contributed by Shares Investment. Visit Sharesinv.com for the latest Singapore, Malaysia and China stock market news and reports.