Reports » Malaysia
Malaysia stock market and companies daily report (May 13, 2013)
Property, Construction To Guide Market Uptrend
Major names in property and construction such as Sunway, UOA Development, Mah Sing Group, Glomac, Gamuda, IJM Corporation, WCT and Kimlun Corporation are expected to lead local stock market’s uptrend in the post-general election. Affin Investment Bank vice president and head of retail research Dr Nazri Khan said with the positive post-election sentiment and upside from properties and construction, these sectors were poised to continue on the previous Economic Transformation Programme policies. “The local benchmark FBMKLCI is expected to hit the 1,800 level (led by the property and construction sectors) as the focus shifts to the continuity of pro-economic-growth policies following the win of the incumbent government on the 5 May,” he said. Nazri further noted that the property and construction stocks have at least two positive factors to sustain the broad market rally — early stage chart uptrend and fundamentally low price relative to the rest of the markets.
Significance: After lagging badly behind during the last three years, the property and construction sectors have been rising faster than others since the start of 2013. According to Nazri, the construction index hit a 13-month high while the property index recorded a major bullish breakout since 2000 (a 13-year high).
Positive Outlook For O&G Firms
The bullish sentiment in the oil and gas (O&G) sector have extended the share price rally of small and mid-caps on anticipation of more aggressive contract flows. In a report, Kenanga Research attributes the bullish outlook for the O&G companies to clearer contract flows on the back of Petroliam Nasional’s (PETRONAS) continued aggressive capital expenditure spending. To recap, RM2.1 billion worth of contracts were awarded to locally-listed O&G companies in April, bringing a total value of contracts awarded for the first four months this year to over RM11 billion, according to a separate report by MIDF Research. Meanwhile, Kenanga Research preferred Alam Maritim Resources among small-to-mid-caps, with a target price of RM1.39 at the back of its better vessel utilisation and improving prospects of other divisions.
Significance: Kenanga Research also indicated counters such as Coastal Contracts and Pantech Group Holdings seem to be lagging behind the current bullish trend, pegging their target prices at RM2.90 and RM1.18, respectively, with “outperform” ratings.
Hytex Ink MoU With China’s Gezhouba
Hytex Integrated’s wholly owned unit Hytex Integrated (Suzhou) Co Ltd entered into a Memorandum of Understanding (MoU) with China’s Gezhouba Group Electric Power Co Ltd to collaborate in the development of a maglev wind farm worth approximately 500 million yuan in Guizhou Province, China. In a filling to Bursa Malaysia, Hytex said the work on the project is expected to begin in October and will be completed by October 2015, and would be based on a projected concession period of 30 years with an option extension of 20 years. According to the company, Gezhouba had been appointed as turnkey contractor to develop the wind farm on a build-and-transfer basis for Hytex. Hytex and its green technology partner, Shenzhen TIMAR Scenery Energy Technology Co Ltd will also provide the maglev wind turbines and other equipment, as well as the technical skills and expertise required. Meanwhile, the company expected a final agreement to be concluded with Gezhouba in the second quarter.
Significance: Through the collaboration agreement, Hytex is making its maiden foray into the energy-generation sector. Upon completion, it is expected to produce more than 200GW of electricity annually for the China Southern Grid in Taijiang county which has a population of more than 60 million people.
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