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Malaysia stock market and companies daily report (February 18, 2013)

Contributed by Shares Investment

Expansion In The Construction Sector
The construction sector expanded by 27.2 percent in the final quarter of 2012, led by the private sector. The sector registered RM22.45 billion worth of work done between October and December last year, which brings the total for the whole year to RM80.93 billion. The Statistics Department noted that the private sector continued to dominate as project owner, with an increase of its market share from 64.5 percent in the third quarter to 68.8 percent in the fourth quarter last year. “In the fourth quarter, the private sector showed an increase in terms of value of construction work done from RM13.1 billion to RM15.4 billion,” it said. The market share of the public sector on the other hand, has slipped to 31.2 percent from 35.5 percent during the comparative period. The Statistics Department highlighted that Selangor topped the list with the highest value of construction work done with RM4.99 billion, of which was 22.2 percent of the total value of the work undertaken.
Significance: The Construction Industry Development Board Malaysia (CIDB) gave a robust outlook for 2013 as the sector is likely to secure projects worth some RM110 billion this year. The catalyst for this sector would be led by the Economic Transformation Programme, as numerous projects would come on stream.

Lingui Posts Loss On Changes At Associate Entity
Lingui Developments registered a net loss of RM10.08 million for its second quarter ended 31 December 2012, versus a net profit of RM45 million a year ago. In a filling to the local burse, Lingui said the losses were attributed to changes in fair value of biological assets of an associate involved in oil palm plantation of RM13.2 million. “After accounting for net finance cost of RM1 million, which included the recognition of net gain from changes in fair value of financial instruments amounting to RM4.8 million, the group recorded a loss before taxation of RM13.3 million for the financial quarter under review,” it added. For its fiscal six months, the company posted a net loss of RM14.78 million, compared with a net profit of RM16.94 million previously, while revenue slipped to RM829.4 million from RM931.9 million. The company is in the midst of being taken private by its parent, the Samling Group.
Significance: Lingui expects to face challenging environment in the current financial year with an uncertain outlook and with likely greater competition. In view of this, the group will continue to manage its cost to remain lean and efficient.

Wah Seong Secures US$198m Norway Job
Wah Seong Corporation’s pipe-coating unit clinched a US$198 million (RM611.3 million) pipe-coating contract in Norway. In an announcement to Bursa Malaysia, the contract was awarded by Statoil for the total scope of coating work for the Polarled Development Project, including anti-corrosion coating, internal flow coating and concrete weight coating. It was noted that this was the first major contract for Wah Seong in Europe. The project was a significant one as pipe coating contributed 60 percent of its oil and gas (O&G) revenue, according to Hong Leong Investment Bank analyst Samsukri Glanville Mohamad. The value of the contract alone had exceeded the figure in 2012, he added. Furthermore, few other analysts are optimistic that this year could be a better year for the group, with a possibility of winning the RM600 million North Malay Basin contract after the general election. This is supported by another analyst who believes that more jobs are coming Wah Seong’s way, as its competitor Bredero Shaw (M) had possibly maxed out its capacity.
Significance: It is estimated that the contract alone had boosted Wah Seong’s order book by 70 percent to RM1.6 billion. Furthermore, the company’s 27 percent stake in Petra Energy and its indirect involvement in marginal field development make it an attractive investment proposition, according to CIMB Research analyst Norziana Mohd Inon.