Reports » Malaysia

Malaysia stock market and companies daily report (October 29, 2012)

Contributed by Shares Investment

Coastal Seeks To Diversify Revenue Stream
Coastal Contracts is actively pursuing opportunities to diversify into other oil and gas-related business, such as offshore structure fabrication business, floating storage and offloading and floating production, storage and offloading. Recently, the group upgraded one of its yards which is now capable of erecting offshore structures. The group is looking forward to tapping into this new found growth potential via collaboration with strategic partners that complement its technical capabilities in the fabrication business. Despite the global economic slowdown, Coastal has managed to secure its third major vessel sales order amounting to RM111 million not long after its major deal of RM141 million in August, according to its executive chairman. The latest contract adds to a total of RM743 million worth of vessel orders awaiting delivery to customers up to 2013. Despite posting a lower net profit of RM190.64 million in FY11 compared with RM200.79 million in FY10, the group’s revenue was up 6.5 percent at RM719.13 million from RM675.05 million in 2010.
Significance: With on-going uncertainty in the Eurozone and forecasted slowdown in global economic growth, the group’s revenue stream for FY13 is expected to remain stable with no major breakthrough unless it manages to clinch big ticket oil and gas upstream projects.

Ringgit Likely To Trade Higher
The Ringgit is likely to strengthen against the US Dollar this week lifted by indications of better progress in the global economy, dealers said. The local currency would likely stay at the 3.00 level against the US Dollar with sustained support for the Ringgit and a positive trend on the cash market. Last week, the US and China – both of which have significant influence on exports in emerging countries, showed improvements in their economic data indicating renewed progress of their economies. Dealers are hoping that the US government will stick to its plan to spur growth to improve their employment data. “In addition, the forecast that the world’s second biggest economy, China, will escalate its factory output ahead of the year-end should give support for the riskier asset performance,” he added.
Significance: In the week ended 20 October, the Ringgit was on a downtrend against the US Dollar due to absence of fresh catalysts which resulted in investors opting for the safe US Dollar. Subsequently on Thursday 25 October, the Ringgit trimmed its earlier losses as investors took short positions on the US dollar and made profits ahead of the long weekend.

KLK Urges Local Players To Open Up Tocotrienol Market
Kuala Lumpur Kepong (KLK) urges the tocotrienol players in Malaysia to develop the promising market of tocotrienol. Tocotrienol, a form of vitamin E sourced from palm oil, could be the key in promoting palm oil. Recently KLK’s wholly-owned subsidiary, Davos Life Science invested RM65 million to construct a two acre nutraceutical plant in Westport, Klang with a revenue target of RM20 million for next year and aims to reach full capacity of 100 tonnes per year within five years. In the meantime, Davos’ focus is to boost the local demand for tocotrienol as the public is less aware of the health benefits of tocotrienol. Currently there are fewer than 10 local players and all of Davos’ customers are foreign based. Chief executive officer Arthur Ling said the tocotrienol market was currently worth around RM150 million globally while the vitamin E market, as a whole; is valued at more than RM3 billion. The tocotrienol players in the country must develop the market in order to make this product successful, he added.
Significance: With the local market being more aware of tocotrienol, it could help shift the vitamin E market from sourcing soya oil to using palm oil, instead. This would allow business to remain in the country where palm oil is a huge commodity.