Upcoming company earnings may set tone for M'sian market

PETALING JAYA: The incoming barrage of financial results may set the underlying tone on Bursa Malaysia over the next few weeks, as eager investors searching for fresh leads may support mild gains for the index in the near term. Heavyweights including the likes of Malayan Banking Bhd, CIMB Group Holdings Bhd, plantation giant Sime Darby Bhd and the Genting Group are set to reveal their quarterly results soon. Analysts and fund managers generally expect an unexciting quarter with no big negatives and an upside bias. Kenanga Investment Bank head of research Chan Ken Yew anticipates no negative surprises this result season, with more event-driven developments driving stock prices in the near term.

He is bullish on a few sectors, namely construction, oil and gas, fast-moving consumers goods and also companies involved in the Economic Transformation Programme.

Jupiter Securities Sdn Bhd head Pong Teng Siew said although he expected a generally good results season, the performance of some large capitalised companies might excel while some might not.

“It is still a mixed bag of marbles, plantation stocks are expected to be good, buoyed by optimal weather and the traditional peak harvest season, while companies in the oil and gas sector are boosted by the domestically-driven projects and global high oil prices,” he said.

Banking and financial stocks are not high on his favoured list due to squeezing margins and stiff competition among local banks.

Meanwhile, a foreign research house analyst said the property and construction sector might also benefit from the spill-over effects of the My Rapid Transit project and other key projects.

“The results are expected to be within expectations, numbers would tend to be unassuming as there were no unsuspecting black swans that happened during the last quarter,” said the analyst.

He said 50% of the FBM KLCI component stocks would be within expectation, while 25% to 35% of that would exceed expectations.

“Fast-moving consumer goods counters would largely be in line with consensus, while oil and gas service providers might spring a surprise with the sharp rebound in the charter of supply vessels,” he said.

However, even if assuming improved corporate earnings, analysts believe that with markets being forward looking, investors tend to focus on the trend of economic and corporate earnings growth this year, rather than that of the fourth quarter last year.

Last week, Bank Negara announced that economic activities between October and December grew by 5.2% compared with 5.8% in the third quarter, underpinned by domestic demand.

Although domestic growth is present, fearful sentiment in major overseas stock markets has weighed on local investors.

The eurozone is still marred in its own financial doldrums with Greece struggling to implement its planned austerity measures, threatening the stability of the 17-country single currency zone.

Some might find consolation in the United States as upbeat data continued to rally up stocks.

The Dow Jones industrial average is inching closer to the psychologically important 13,000 mark, a key mark that was touched just before the financial crisis plunged global stock prices.

Bursa's website target of DDOS attack

Stock market operator Bursa Malaysia Bhd's website was the target of a distributed denial of service attack, whereby the site was overloaded with excess traffic from multiple sources. This resulted in users experiencing intermittent access to its website on Monday evening, said Bursa Malaysia in a statement today. It said contingency measures were activated to provide continued access to the website, however, international users may still be temporarily affected. "Users in Malaysia are not expected to experience any disruption," it said. Bursa Malaysia's other systems were not affected during the incident and trading in its securities, derivatives and Islamic markets continued to operate normally. The exchange will update the market on further developments. -- Bernama

Carmakers expect slower sales

Perusahaan Otomobil Kedua Sdn Bhd, for example, has seen its registration rate dropping by up to 20 per cent last month.

The more stringent financing conditions had lead to a five per cent sales orders decline for Perodua vehicles during the month, said its managing director Datuk Aminar Rashid Salleh.

Analysts said more vehicle loan applications were rejected than before after Bank Negara Malaysia tightened the hire-purchase (HP) approval process and other credit controls.

Under the new guidelines, banks are now required to assess loan applications based on net income instead of gross income of borrowers.

Analysts estimated that 70 per cent of the HP loan applications had been rejected since the new ruling came into force.

MIDF Research said the move was more likely to affect consumers within the low-middle income bracket. 

In terms of vehicle makes, it felt that mid-range Japanese and South Korean models could be the hardest hit. 

It also expected second-hand vehicle prices to fall as sellers would offer discounts, given the stricter credit financing conditions.

Aminar Rashid, who spoke to reporters at Perodua's Chinese New Year luncheon yesterday, said he hoped the government would introduce a new mechanism to address the loan issue.

Perodua, he said, was expecting a tougher 2012 after selling 180,000 units last year, which were 8,000 units off its target of 188,000 units.

Still, the second national carmaker was able to maintain its position as the country's top-selling car company for the sixth consecutive year.

Perodua has a 30 per cent market share against the 26.4 per cent by Proton Holdings Bhd.

Total new car sales in December eased 12.9 per cent year-on-year and two per cent month-on-month to 47,708 units, although this was largely due to the flood in Thailand and seasonal factors.

The Malaysian Automotive Association (MAA) had expected sales to slightly improve last month, given the ongoing promotional campaigns and the rush to deliver new vehicles ahead of the Chinese New Year holidays.

The January sales figures will be released by MAA in the middle of February.

MIDF Research has maintained its 2012 total industry volume (TIV) forecast of 611,140 units, which is lower than MAA's two per cent growth to 615,000 units, due to the more severe repercussion of the tighter credit conditions.

Last year, the TIV declined 0.8 per cent to 600,123 units.

A more efficient and safe way of transporting cargo

The transportation of cargo within and outside Malaysia has moved to the next level with the successful implementation of the Radio Frequency Identification (RFID) security and trade facilitation system at Royal Malaysian Customs’ checkpoints nationwide.

Launched on 26 September in Penang, this home-grown RFID system will be implemented in stages at more than 200 customs checkpoints and 600 high-value bonded warehouses nationwide.

Containers entering, leaving, and moving within the country will be tracked under the RFID system based on the ISO18186:2010 and GS1 EPC global EPCIS standards. The reusable RFID Seal affixed to containers are scanned by RFID readers set up at locations to retrieve the container information and users will be able to identify automatically the container’s movement.

This cost-effective system is also expected to reduce the time taken for customs clearance by 50 percent as well as enable the automatic detection of compromised or tampered containers. Thus facilitating secure and faster trade for users.

The system has received the thumbs-up by the industry and users such as the Air Freight Association of Malaysia, TNT Malaysia, DHL Malaysia amongst others.

S'pore Customs launches dedicated training school

SINGAPORE: Singapore Customs has launched a new dedicated training institute that provides specialist Customs training.
Targeting the local trading and logistics community, the Singapore Customs Academy offers courses on customs procedures, import and export documentation requirements and tariff regimes.
Officiating the launch, Minister of State for Finance and Transport, Josephine Teo says the Academy will help raise traders' compliance capacity with customs requirements.She says this will allow Singapore Customs to adopt a "light touch" towards regulation.