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Reports Malaysia

Malaysia stock market and companies daily report (January 22, 2014)

January 22, 2014, Wednesday, 06:06 GMT | 01:06 EST | 10:36 IST | 13:06 SGT
Contributed by Shares Investment

Malaysia Inflation Set To Rise 3.1% In 2014
- The subsidy rationalisation programme last year would have likely introduced inflationary pressure leading to a raise in the consumer price index (CPI) to an average 3.1 percent for December 2013 compared to a year ago. A Business Times poll expects the CPI to increase to 3.1 percent in 2014.
- HSBC Bank noted that inflation data for last month is likely to come in higher than the two to three percent comfort zone range for Bank Negara Malaysia. Housing, utilities and transport prices are likely some of the major CPI components that experienced faster price pressures.
- HSBC also expects core inflation to edge to 1.9 percent in December from 1.8 percent in November last year, while Citibank expects CPI for 2013 to be about 2.1 percent.
Significance: Most research houses have forecast CPI for 2014 to hit 3 percent. Bank Negara Malaysia is expected to maintain its monetary policy to commence hikes in the second quarter, where headline inflation would likely breach 3.5 percent and export improvements would bolster the committee’s confidence over growth outlook.
Hibiscus JV Unit Wins 5 New Offshore Licenses In Norway
- Hibiscus Petroleum announced that its jointly-controlled entity, Lime Petroleum Norway, has been awarded five new offshore licenses in the 2013 Awards in Predefined Areas (APA) licensing round for geographically mature areas.
- Hibiscus Petroleum managing director Kenneth Pereira said the latest offer from the Norwegian government would enable Lime Norway to expand its presence in Norway, barely a year after the company obtained its prequalification as a licensee on the Norwegian Continental Shelf.
- Ivar Aarseth, chief executive officer of Lime Norway said, “We are very pleased to be awarded several of the licenses which we have identified using the direct hydrocarbon indicator, Rex Virtual Drilling, and look forward to working with established operators in the mature Norwegian Continental Shelf Exploration and Production arena, a well-known oil prolific region.”
Significance: The licenses offered given to Lime Norway in the latest APA licensing round consist of one in the Norwegian Sea as well as two each in the North Sea and Barents Sea. The board of Lime Norway has also approved an increase in its stake in PL498 located in the North Sea, from 5 percent to 25 percent, however it is still pending the approval of the Norwegian government.
RHB Research Increases Caring’s Target Price To RM2.38
- At a recent corporate luncheon, Caring Group Pharmacy’s management revealed that it plans to open 12 to 15 new pharmacies a year. It also hinted that it will pay dividends above the 30 percent stipulated during its initial public offering.
- Besides the expansion plans and potential dividend increase, other notable takeaways from the event are: 1) its target to be serious player in the retail healthcare segment rather than moving into consumer lifestyle; 2) focus on Klang Valley suburbs to cement its already dominant market share.
- Following the insights gained from the luncheon, RHB Research raises their FY14 net profit forecast by 3 percent, lifting its fair value for the firm to RM2.38 from RM2.28 based on an unchanged 18 times FY14 forecast price-to-earnings ratio. This represents a discount to the larger cap healthcare stocks and is comparable to the mid-cap consumer plays.
Significance: The brokerage house expects a 40 percent dividend payout ratio instead of 30 percent, which will equate to a decent 2 percent net yield for FY14. It likes the firm because of its resilient store sales, stable return on equity of 24 percent and a strong three-year earnings compound annual growth rate of 20.3 percent.