Friday 20 February 2009.

DAILY MARKET REPORT.

Thursday Daily Closing Prices.


KLCI 899.59 up 4.36.
DJIA 7,465.95 down 89.68 or 1.19%.
Crude Oil US$39.48.
May FCPO RM1,860.
Ringgit 3.6520.


LOCAL NEWS.

TM Bhd, RM3.44, to acquire 51% of C-Mobile Sdn Bhd for RM2.55 million.

Stock Recommendation - SELL. Take Profit as the valuation and debt level for TMI are quite excessive considering the future outlook.

National Water Services Commision (SPAN) is considering to negotoiate directly with the four water operators in Selangor.

Analysis - Federal government through SPAN, all this while should have negotiate directly with all the water operators not only in Selangor, especially the listed water concessionaires to eliminate the element of profiteering or even a criminal breach of trust by giving the minority shareholders a raw deal (meanings lower offer price from the state government first).


WORLD NEWS.

U.S. stocks decline, DJIA close at six year low.

Analysis - As I forecasted the week before, the DJIA broke through the support level of 7,500 and heading toward 4000 to 5000 level as this economic trough (meanings depression) with take a longer time to run its course possibly up to 5 years as most (2/3) Americans felt according to the recent Reuters / University of Michigan Economic Survey.

The number of Americans collecting unemployment benefits jumped to 4.99 million two weeks ago, signalling the job market is still deteriorating.

Analysis - Possible double digit unemployment rate from 7.6% now. If calculated using the same method used during the Great Depression era (including part time workers), the unemployment level already in double figures. Together with the housing problems that are more widespread ow and the dollars and cents involved, the current crisis already eclipsed the Great Depression in term of severerity.


CORPORATE RESULTS.

PETRONAS GAS BHD. RM9.80. Unaudited 3Q FY 31.3.2009.

3Q09 revenue up to RM832.8m from RM769.7m year on year.
Net Profit down to RM164.05m from RM252.9M yoy on higher costs.
Net EPS 8.29 sen down from 12.78 sen.
Net Assets Per Share at RM3.93.

9 months 2009 revenue up to RM2.479b from RM2.325b.
Net Profit down to RM666.8m from RM792.3m.
Net EPS down to 33.7 sen from 40.05 sen.
Dividend 15 sen.

Stock Recommendation - SELL. The new lower selling price for gas to industrial users and power industry will certainly effect Petronas Gas profit even further. Steep valuation as the current results was below expectation on higher costs.

YTL Group Bhd. RM7.15. Unaudited 2Q FY 30.6.2009.

2Q09 revenue up from RM1.515b to RM1.624 billion year on year.
Net profit down from RM328.4m to RM193m on forex losses.
Net EPS down from 12.61 sen to 3.35 sen.
Net assets per share RM4.87.

6 months FY 2009 revenue up from RM3.098b to RM3.363b.
Net profit down from RM688.3m to RM661.3m.
Net EPS down from 27.57 sen to 20.12 sen.
No dividend.

Stock Recommendation - SELL as the YTL Corp looked overvalued based on current valuation and future outlook also doesn't look so bright based on the world economic outlook.


By:-
Kamel Bin Mohd Yusoh.
Kenanga Investment Bank Bhd.
013-6306544 or 03-21634549/50.