Reports » Malaysia

Malaysia stock market and companies daily report (September 20, 2012)

Contributed by Shares Investment

GAB and BAT Fall on Possible Tax Hikes Ahead of Budget 2013
Brewer Guiness Anchor (GAB) and British American Tobacco (BAT) fell in mid-morning trade on fears of a possible tax hike at the upcoming Budget 2013. The Budget is stated to be tabled on 28 September. GAB was down 20 sen or 1.25 percent to RM15.80 mid-morning after four straight days of gains. Meanwhile, BAT which is still up 25% year-to-date sank 12 sen or 0.19% to RM62.28. According to Maybank Investment Bank Research, the government is unlikely to raise tobacco and alcohol taxes in the budget, given the impending general elections. Based on September 18 notes, Maybank-IB maintains its ‘neutral’ stand on breweries and ‘underweight’ call on tobacco stocks. Analysts tracking the stock were mostly neutral on Guinness at current levels, as shown by Bloomberg data. There are six ‘holds’ versus three ‘buy’ recommendations and one ‘sell’ call for the stock.
Significance: In the event of a surprise tax hike, it would be less detrimental to tobacco companies’ earnings due to their in-elastic demand and lower historic growth base compared to brewers.

EITA Equips for High-Speed Elevators Market
Elevator maker EITA Resources, which is about to be listed on Bursa Malaysia’s Main Board this year, plans to venture into high-speed passenger elevator systems to boost its competitive edge in bidding for more projects in Malaysia and overseas. Currently, EITA’s elevators, which are marketed under the “EITA-Schneider” brand, have been installed in buildings ranging from three-stories to above 30-stories high, whereas its high-speed elevators are commonly used in very tall skyscrapers exceeding 150metres (m) or above 40-stories high. Currently, the company’s in-house engineers and designers are conducting research and development activities (R&D) in the design of parts and components for such systems at its headquarters in Subang Jaya, said EITA group managing director. The group plans to commercialise these high-speed elevators by next year. Once listed on the main market, EITA will utilise a portion of its initial public offering (IPO) proceeds for R&D activities including the development of high-speed passenger elevator systems, and expansion of its R&D Centre in Penang.
Significance: EITA has installed more than 1,450 elevators in Malaysia for commercial and residential properties, government offices, hotels, shopping complexes, and universities. Its overseas projects extend to Singapore, Laos, Vietnam, the Philippines, Hong Kong and Saudi Arabia.

Poh Kong FY12 Revenue to Increase by 25%
Gold retailer Poh Kong Holdings expects its revenue for the financial year ended June 30, 2012 to increase by between 25 to 30 percent, lifted by rising gold price, sales from new outlets as well as sales growth from its existing outlets nationwide. According to the group’s executive director, sales for the first three quarters of the year had already exceeded last year’s total sales. Total sales for the year are forecasted to exceed the previous year by at least 25 percent. The revenue growth in 2011 was driven by the higher unit price of gold in 2011 compared with 2010. Although average gold prices this year is actually lower than the peak from last year, sales for the company have grown in double digits, this year. The average gold price for the full year of 2012 is estimated at USD1,731 per ounce. This is according to the group’s executive director. However, some analysts tracking the commodity have forecasted gold price to reach USD1,920 per ounce.
Significance: The announcement of the US Federal Reserve’s third round of quantitative easing is expected to spur demand for gold, as the precious metal is seen as a safe haven when the US dollar and other major currencies are weak. A bullish trend is surely a concern for Poh Kong, as 90 percent of its sales constitute of gold jewellery.