Disappointing January for Malaysian equities

KUALA LUMPUR: Malaysia's FBM KLCI ended January on a softer note as investors were cautious ahead of the country's general elections (GE), which prompted profit taking by local funds and retail investors while foreigners were seen accumulating.
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Stocks Finish Higher; Dow Nears 14,000

Stocks closed higher on Tuesday as the Dow marched toward the 14,000 level and investors looked ahead to Wednesday's Federal Reserve policy announcement.
A gain in the energy sector following strong earnings from refiner Valero and big gains in the pharma sector after Pfizer's solid earnings report supported stocks.

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The Dow Jones Industrial Average rose 72.49 points, or 0.52 percent, to close at 13,954.42, lifted by big gains in Pfizer and Verizon. Hewlett-Packard lagged. The Dow has not closed above 14,000 since October 17, 2007.

The S&P 500 gained 7.66 points, or 0.51 percent, to finish at 1,507.84, while the Nasdaq shed 0.64 points, or 0.02 percent, to close at 3,153.66 as disappointing earnings weighed on tech stocks.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 13.
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SapuraKencana could garner RM3bil-RM5bil jobs annually

PETALING JAYA: Malaysia's largest oilfield service provider SapuraKencana Petroleum Bhd is expected to garner about RM3bil to RM5bil worth of contracts annually, said industry analysts.

Currently, it has a sizeable RM18bil in its order book, with some 35% in Malaysia while Brazil and the Gulf of Mexico its second largest markets contribute about 24%. About 65% of SapuraKencana's jobs are for full engineering, procurement, construction, installation and commissioning works.

Moving forward in Malaysia alone, there were some RM300bil worth of jobs up for grabs, and SapuraKencana was likely to bid for most of the jobs, the analysts said.

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The Great Rotation: a flight to equities in 2013

By Mike Dolan
LONDON (Reuters) - One of the big investment shifts of our day may be at hand - regardless of how global markets actually perform this year.

What's already known as the "The Great Rotation" - a tilting of pension and insurance funds' strategic, long-term asset preference back toward equity from extreme positioning in bonds - has been one of themes of the new year so far.

The gist of the argument is that investor holdings of now expensive, ultra-low yielding government debt - following a virtually unbroken 20-year bull market in bonds - are ripe for rebalancing. The attraction of relative and absolute valuations in equity will coax the outflow to stocks.
It's this juncture that has some of the most persistent global equity bears of the past two decades, such as Societe Generale strategist Albert Edwards, rethinking the big picture.

While there's little thaw evident in his view of an investment 'Ice Age' over the next couple of years, Edwards now reckons that over 10 years long-term institutional funds are in danger of missing "the cheapest equity prices in a generation."

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StarBiz presents five stock picks

With the sudden market selldown, some counters have been beaten down to attractive levels. StarBiz presents five stock picks, compiled by YVONNE TAN.
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DIGI.COM BHD

THE best reason to look at this stock, probably, is that technically, it is in oversold territory. The stock has lost 4.47% since Monday.

Its outlook for this year includes expectations that revenue would grow by 5% to 7%, while margins for earnings before interest, taxes, depreciation and amortisation are expected to remain stable.

Telco counters are also known for their generous dividend yields.

Based on its third-quarter numbers, DiGi's dividend yield is running at 4.5%, or 23.8 sen net per share. Its growth story remains intact, according to analysts.

As at the third quarter of 2012, DiGi's revenue market share expanded to 28%, up from 27.5% from end- 2011, largely driven by its above peer average net adds over the past two years, which was also accompanied

by a fairly stable, if not higher, average revenue per user or ARPU, said Affin Research.

It believes that its month-onmonth growth momentum will persist as it consolidates its market share in the youth and Malay ethnic group segments, two key growth areas.

With its revenue and growth trajectory intact, the research house is forecasting core dividend per share (DPS) to improve in the current financial year (FY13).

Although its FY13 DPS assumption is based on a 100% dividend payout, it suspects there is potential for upside to its DPS forecast of 22.6 sen for FY13.

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'Market overreaction presents opportunities'

The local stock market overreaction over the upcoming 13th General Election (GE13) would present buying opportunities
for investors, says MIDF Research.

Yesterday, the FBM KLCI reacted negatively to market talk that Prime Minister Datuk Seri Najib Tun Razak may soon seek consent from the Yang di-Pertuan Agong for the dissolution of Parliament as early as this week.

If it turns out to be true, the GE13 will most probably be held by March 2013, MIDF said.

However, it said, investors may have overemphasised on the election consequence as the research house views the likeliest of results is that the status quo would remain.

"Hence, this presents an opportunity to investors with risk tolerance and who share a similar view," it said in a research note today.

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Malaysian stocks set for worst drop in 16 months on election jitters

KUALA LUMPUR (Jan 21, 2013): Malaysia's benchmark stock index fell more than 2% on Monday and appeared headed for its worst single-day drop in more than 16 months as worries over the country's upcoming election sparked selling across the board.

The FBI KLCI was down as much as 2.3% at 1,638.27 points by early afternoon, its biggest one-session loss since falling 2.5% on Sept 26, 2011, and bucking slight gains in other Southeast Asian stock markets.

A steady drip of headlines in local media about the election and speculation of a poll date late in March is fuelling the selling, said Kaladher Govindan, head of research at TA Securities, a local brokerage. The election must be called by the end of April.

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DiGi eyes 30pc growth in online store shopping

DIGI.COM Bhd, the third largest mobile operator in the country, aims to grow its online business by 30 per cent this year, mainly driven by the increasing trend of online shopping among consumers.

Its online store, DiGi Store Online, allows customers to buy new mobile devices for their existing plans, sign up to a new plan and reload prepaid airtime, among others.

The portal also allows non-DiGi customers to buy devices by signing up to a plan - via a new DiGi number or porting from their existing number.

Products purchased online will be delivered to buyers within three working days and can be paid for via installment plans.

Read more: DiGi eyes 30pc growth in online store shopping http://www.btimes.com.my/Current_News/BTIMES/articles/digion/Article/#ixzz2IAtEZoqQ

RHB Research maintains Overweight on telco sector

KUALA LUMPUR: RHB Research Institute is maintaining its Overweight outlook on the telecommunications sector with Time dotCom as its top pick.

It said on Friday while valuations are not cheap, it expects monetary policy to remain accommodative and supportive of the country's economic growth amid ample liquidity.

“Therefore, investors may continue to seek out telecom stocks offering generous dividend yields,” it said.

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“Among the telcos, only DiGi has offered guidance for 2013 and management expects revenue to grow by 5%-7%. Apart from Time dotCom, we believe DiGi offers the strongest revenue and earnings growth prospects in 2013 based on our forecast of 8% and 9% respectively,” said RHB Research.

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More growth seen in DiGi this year

Affin Research
Buy (maintained)
Target price: RM6.04

ALTHOUGH DiGi's stock price has appreciated 38.6% year-to-date, DiGi remains a key pick for the telco sector moving into 2013.

Our buy rating is premised on DiGi's continued growth story and strong capital management initiatives.

Both factors, in our view, are likely to drive stock price towards our discounted cash flow target price of RM6.04 (based on a weighted-average cost of capital of 6.3% and growth of 1%).

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Norway's Telenor awaiting details of liberalisation before raising stake in DiGi

PETALING JAYA: Norwegian Telenor ASA is not opposed to further increasing its stake in DiGi.Com Bhd but will decide on the exact percentage once the Malaysian Government issues more details on the plan to further liberalise the local telecoms sector to allow foreign equity ownership to go up to 70%.

The current ceiling for foreign equity ownership is 49% and that is how much Telenor has in DiGi. read more...

My TP is getting higher!!!!

DiGi to expand network further

DIGI.COM Bhd, which has invested RM700mil to RM750mil on its telecommunication network this year, will further beef up its investment next year partly to drive its marketing ambitions to spur its mobile Internet business.
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“Today, we have 3G sites covering about 60% of the population, and DiGi hopes to push it to about 70% in the first half of next year. For data, the coverage is about 95% of the population, including both 2G and 3G sites,'' he tells StarBizWeek in a recent interview.

For prepaid customers, he says, it plans to continue delivering “Internet for All” by providing the right plans for the different needs in the market, and build with Internet, among others. For postpaid, DiGi will focus on mobile Internet services, smartphones and roaming offerings.

Besides providing data access, Murty says the company will roll out packages with competitive pricing to various segments of the market that will involve both “above-the-line” and “below-the-line” campaigns regardless of the technology being deployed.

Among the successful mobile Internet campaigns rolled out by the company this year were the postpaid plan that offered unlimited Internet roaming at a flat rate when roaming in certain countries and the lowest tablet plans in the market at RM15 a month with Internet quota of 500MB for postpaid customers.

Its data revenue grew by 3.4% in the third quarter of this year compared with the second quarter (of this year) driven by strong mobile Internet usage, aided by higher take-up of its DG Smart Plans and smartphone bundles.

For prepaid users, one of the successful ones is the DiGi Easy Prepaid's Refreshed its Buddyz proposition that includes 24-hour free calls, SMS to three Buddyz and free Facebook access. DiGi is the only mobile operator to offer free FB access to prepaid and postpaid customers via Opera Mini browser.

According to Murty, plans are underway to expand the number of DiGi stores nationwide next year as part of company's strategy to meet the greater demand and needs of customers.

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DiGi expects a 25% rise in smartphone customers

Kuala Lumpur (Dec 13, 2012): Mobile communications provider DiGi.Com Bhd expects to see a 25% rise in the number of its smartphone customers with the much anticipated iPhone 5 which will hit markets nationwide tomorrow.

Its head of internet and services product marketing, Praveen Rajan, said the latest iPhone is expected to strengthen the company's position as a market leader in the postpaid and prepaid segment.

Speaking at a media briefing here today, Rajan said DiGi's aim was to bring the internet to everyone and its main focus now was about making smartphones easier and more affordable for customers.
"The iPhone 5 happens to be one of the many devices we carry in the market, and it is also about bringing convenience to customers," he added. – Bernama

My TP for mum and bb.....haha

 

RHB Research: DiGi fair value at RM5.40

KUALA LUMPUR: RHB Research Institute is maintaining its fair value for DiGi.Com at RM5.40 as valuations are still not cheap at this juncture.

It said on Tuesday DiGi has largely sustained its revenue growth momentum while margins do not appear overly affected despite tougher competition.

"Management noted handset subsidies have become more aggressive in the last six months. While a risk to DiGi's EBITDA margins, we believe the risk should be controlled as management prefers to take a more rational and selective approach when subsidising handsets," it said.

RHB Research said despite lost revenue opportunities in 3Q due to prolonged post-swap optimisation, management maintained 2012 guidance of mid-to-high single digit revenue growth and stable EBITDA margins.

"There was some churn in postpaid due to the hiccup, and management will focus more on retention activities apart from acquiring new subscribers," it said.

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My TP for mum and bb.....

MAS to add RM1b in profits in 2 years

Posted on 30 November 2012 - 05:37am

Presenna Nambiar
sunbiz@thesundaily.com
 

KUALA LUMPUR (Nov 30, 2012): Malaysia Airlines (MAS) aims to generate an additional RM1 billion in profits in two years, by re-negotiating its engineering supply and catering contracts, having a more fuel-efficient fleet, higher aircraft utilisation and turnaround time, said its CEO Ahmad Jauhari Yahya.
This would be met with just a 2 sen margin between revenue and costs. Its target is to bring revenue up to 22 sen, and costs down to 20 sen respectively.
MAS' revenue per available seat kilometre (RASK), a way airlines break down the measurement of revenue, currently stands at 20 sen, while its cost per available seat kilometer (CASK) -- how it breaks down costs -- is at 24.9 sen.
In comparison, a highly profitable airline like Singapore Airlines has a RASK of 27 sen.
"It sounds simple enough but a lot of work needs to be done," he told reporters after a luncheon with local fund managers organised by Maybank Investment Bank here yesterday.
Ahmad Jauhari insists that this time around changes made are structural changes, which will lead to sustainable operations of the national airline in the future.
Its revenue management team, for example, which now has a new head under Ahmad Jauhari's management, has become more sensitive to changes of ticket prices in the market. It is now mandated to react to market fares within six hours.
MAS is also in the midst of re-negotiating its large engineering supply and catering contracts, which make up RM1 billion and RM200 million costs per year, respectively.
 

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MAS falls on delayed aircraft delivery

KUALA LUMPUR: Malaysia Airlines System Bhd's (MAS) share
prices dropped 18.8 per cent or 19 sen to 81.5 sen as at 10.05 am after economists anticipated negative impacts from the delayed re-delivery of 10 ageing Boeing 737-400 aircraft.

MIDF Research said MAS originally entered into an Aircraft Sale Agreement with Bank of Utah to buy back 10 existing Boeing 737-400 aircraft at US$6.4 million (RM19.5 million) per plane to avoid the impairment charge incurred in the re-delivery conditions imposed during the lease tenure.

"But now the ageing 10 aircraft will be utilised until the end of 2014 and this will not reduce the average fleet to 7.7 years from 12.2 years as planned before," it said in a research note today.

MIDF Research said in order to strengthen its balance sheet, the national carrier has unveiled a new fourth pillar of financing comprising share price par value reduction to RM0.10 from RM1 and new rights issues with gross proceeds of RM3.1 billion.

It said the cancellation of the RM0.90 par value will give a credit of RM3 billion to partially offset the accumulated losses in the balance sheet.

The rights issuance, targeted for completion in the second quarter of financial year 2013, will be utilised to pare down debt by RM777 million with the remainder for capital expenditure and working capital requirements.


Read more: MAS falls on delayed aircraft delivery http://www.btimes.com.my/Current_News/BTIMES/articles/20121128111635/Article/index_html#ixzz2DX571RBw

Seller’s Remorse Will Drive Stocks Higher Through Year End: Kilburg

Now’s the Time to Buy

Time to Buy Telco Stocks

Source: Bernama

Digi taps into M'sians for mobile instant messaging

KUALA LUMPUR (Nov 9, 2012): DiGi Telecommunications Sdn Bhd (DiGi) is reaching out to more Malaysians who cannot live without mobile instant messaging through an exclusive offer for DG Prepaid Smart Plan subscribers effective Monday.
"From Monday, the promotion offers subscribers an extended reload validity period and unlimited free data charges when using the WhatsApp Messenger, said DiGi in a statement today.
The mobile phone operator's collaboration with WhatsApp Inc has also given DiGi a competitive advantage in enabling customers to better enjoy the most popular mobile messaging service.
Its Head of Products (Consumer and Business) Ting Shiew Han said: "Our DG Prepaid Smart Plan is the first prepaid plan in Malaysia tailored for smartphone users."
He said with every six out of 10 phones sold in Malaysia being a smartphone, DiGi was committed to deliver even better value and more convenience to customers by giving a longer validity period and more value when they sign up for the package and reload.

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SapuraKencana awarded RM836mil jobs

KUALA LUMPUR: SapuraKencana Petroleum Bhd has been awarded RM836mil worth of jobs by Petronas Carigali Sdn Bhd and HESS Exploration and Production Malaysia BV.
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The award is effective from October 2012 until April 2016, with the option to extend for another year. The award is expected to contribute positively towards the earnings and net assets per share of the SapuraKencana Group for the financial years ending Jan 31, 2013 to 2017.

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