Reports » Malaysia

Malaysia stock market and companies daily report (September 06, 2012)

Contributed by Shares Investment

HLIB Research Rates Time Dotcom A ‘Buy’
Time dotCom’s (TdC) share rose four sen to RM3.40 as at 11.45 am Wednesday after announcing the group’s investment of RM100 million to create the TIME Fibre 100 megabits per second (mbps) Home Broadband. The 100 per cent fibre optic network would reach some 100,000 homes in the Klang Valley and Penang. HLIB Research is marginally confident with TdC’s approach of expanding its presence in the consumer segment by offering the fastest fibre broadband in the market. The new product will enhance asset utilisation rates, thus leading to higher return on assets. Compared to Telekom Malaysia’s UniFi’s VIP20 bundle of 20mbps, the monthly fee is RM70 cheaper and switchers would benefit from RM1,180 savings over the two-year contract period. HLIB Research retains “buy” call on TdC’s shares with an unchanged RM4.12 target price.
Significance: TdC is the second-largest but fast growing fixed-line telecommunications network and solutions provider in Malaysia. Recently, the group has completed the acquisition of three companies within the telecommunications industry which would accelerate the company’s growth in the coming years.

Rubber Gloves Margins Expand On Lower Latex Prices
The recent round of results saw margin expansion for glove makers on the back of lower raw material cost where aggregate core net profit for Top Glove Corp, Supermax Corp, Kossan Rubber Industries and Hartalega Holdings grew by 20.5 percent q-o-q, driven by stronger demand and lower natural and nitrile latex costs. After peaking at RM7.96 per kg in February, the latex price has plunged by as much as 34 percent to RM5.27 per kg on 16 August. The sharp price decline was triggered by the end of the wintering period and recovering rubber supply combined with weaker demand for rubber from, China, the world’s largest consumer of natural rubber. Thailand, Malaysia and Indonesia have prepared to cut exports and reduce production to remove an estimated 450,000 tonnes of natural rubber off the market to support the price.
Significance: Since the measures were announced, the latex price has rebounded by 8.5 percent to RM5.71 per kg currently. Among glove manufacturers, Top Glove Corp was upgraded to a Buy as being the key beneficiary of the low latex prices, According to Affin Investment Bank Research.

Lynas Wins Temporary Malaysia Operating License For Plant
Lynas Corp said it gained a temporary operating license for its rare-earths refinery in Malaysia and expects to begin operations next month. Lynas’ US$230 million Malaysian processing plant is intended to produce about a sixth of the world’s supply of rare-earths at full production. The company finished construction on the first phase of the plant last month, moving the company closer to its goal of breaking China’s grip on the industry. Chinese firms currently account for about 95percent of global output and actions by its government in limiting exports have raised worldwide concern over a potential supply shortfall. The Lynas project which has attracted significant local opposition over the perceived hazard from radioactive waste, has insisted the plant is safe, and that any radioactive waste produced wouldn’t harm human health.
Significance: The Lynas rare earth refinery is set to become one of the few sites outside China to process rare earths which are metals used in high-tech equipment ranging from missiles to mobile phones.