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Reports Malaysia

Malaysia stock market and companies daily report (March 10, 2014)

March 10, 2014, Monday, 06:09 GMT | 02:09 EST | 10:39 IST | 13:09 SGT
Contributed by Shares Investment

Foreign Institutional Investors Selling Malaysian Equities, Says MIDF Research

- According to MIDF Research, foreign portfolio investors sold Malaysian shares in the open market (excluding off-market transaction) amounted to RM218.9 million net last week, compared with a net purchase of RM296.2 million in the week before.

- Monday through Thursday saw at an average sale of RM55.1 million per day which was relatively low compared with the average sale of RM166.3 million between 3 January and 26 February, which saw foreign investors sold every day during the 35-day trading period, except on 19 February.

- Foreign selling was however relatively insignificant and it was well absorbed by local liquidity. Local institutional funds supported the market last week, combing up RM226.4 million net. It was not aggressive although daily participation rate remained elevated at RM2.4 billion.

Significance: Retail investors turned cautious last week, making a marginal net sale of RM7.5 million after two weeks of buying. Daily participation rate dropped sharply to below the RM1 billion mark for the first time in three weeks at only RM881 million.

DiGi Invests RM900m In Capex

- DiGi Telecommunications plans to invest up to RM900 million in capital expenditure (capex). The capex will go towards raising its high speed packet access (HSPA) and 3G coverage to 86 percent of the population as well as growing its Long-Term Evolution (LTE) footprint up to 5,500 sites.

- DiGi will also expand its fibre network to ensure continuous high-speed internet experience to customers.

- Also, DiGi has launched two new Internet offerings, namely a weekly prepaid mobile Internet package and an enhanced choice of postpaid smartphone plans.

Significance: DiGi believes that the new offerings, powered by high quality internet experience on its brand new network will enhance internet usage and the various packages will make subscription more flexible and affordable.

CIMB: “Add” Hovid On Strong Earnings Prospects

- CIMB Research remained positive on Hovid for its strong earnings growth prospects despite the outage of its blister packaging machine and rising operating costs. Hovid had raised its wages in September last year and only started to pass on the higher cost to its customers this year.

- The unscheduled downtime for its blister packaging machine delayed the production of about RM4 million worth of drugs and has led to tepid revenue growth of 3 percent in 2Q14, short of its full-year target of 10 percent to 15 percent.

- Nonetheless, Hovid remains confident of maintaining 10 percent to 15 percent revenue and earnings growth annually. CIMB continue to anticipate stronger earnings in 2H14 as the machine has been restored and also taking into account that Hovid usually revise its selling price in 2H to account for operating cost inflation.

Significance: The house maintains “Add” on the stock with target price of RM0.43 and adds that stronger 2H14 earnings and increased product registrations in export markets could spark a re-rating.