Thursday, 5 February 2009.

DAILY MARKETS REPORT.

Wednesday Markets Closing Prices.

KLCI 876.80 down 2.87.
DJIA 7,956.66 down 121.70 or 1.51%.
Crude Oil US$40.10.
April FCPO RM1,845.
Ringgit 3.6240.

LOCAL NEWS.

DPM Najib to seek an audience with the Sultan of Perak this morning for the BN to form the next state government.

Malaysia second stimulus plan to focus on job creation and helping the lower and middle income group.

Analysis - Besides all that, this is an opportunity for the government to get rid of outdated economic model based on crony capitalism with an oversized pay packages for the executives. It is high for the toll free roads too.

Even in the America, President Obama is putting a cap on the executives pay at companies getting the aid up to US$500,000 only.

CORPORATE NEWS.

IOI Corp. Bhd ,RM3.92, to make a voluntary take over offer to acquire all the remaining 199,727,505 ordinary shares of RM0.50 each in IOI Properties Bhd, RM2.22, for RM506.032 million or at an offer price of RM2.598 per IOI Prop. share via 1. the issuance of 0.6 ordinary shares of RM0.10 each in IOI Corp. at an issue price of RM3.78 and 2. RM0.33 in cash.

IOI Properties Bhd is a 76.04% owned subsidiary of IOI Corp Bhd now. For FYE 30 June 2008, net profit is RM390.3 million and net assets is RM2.361 billion.

Stock Recommendation - SELL, TAKE PROFIT even though the takeover is done at an annualized PER of 8.88X and 0.66X price to book ratio based on unaudited account as at 30.9.2008, on earnings dilution from the issuance of 116,867,000 new shares arising from the takeover, unexciting earnings outlook for the property sector and steep valuation for IOI Corp Bhd (Est. 2009 EPS 16 sen, PER 24.5X, Dividend Yield 2.55% or 10 sen).

COMPANY RESULTS.

BURSA MALAYSIA BHD RM5.05. Audited 4Q FYE 31.12.2008.

Net Profit drop 73% year on year to RM13.525 million from RM49.489m on a revenue of RM71.114 million on lower average trading value inclusive of direct business trade of RMo.91 billion as compared to around RM1.8 billion but fixed costs remain the same.

4Q 2009 net EPS at 2.60 sen and 2.40 sen after dilution.

Bursa also proposed 7.80 sen dividend.

For the FYE 2008 , revenue RM331.667m down from RM491.968m in 2007. Net Profit at RM104.420 down from RM240.625m. Net EPS at 19.90 sen down from 46.10 sen. Dividend at 24.30 sen down from 85.00 sen. Net assets per share is RM1.39.

Stock Recommendation - SELL, fair value at RM2.62 based on estimated FYE 2009 EPS of 10 sen at PER of 26.2X and dividend yield of 3.8% or 10 sen dividend at RM2.62, on weak earnings outlook as the current average daily trading value together with the DBT are even lower than RM910 million recorded during the 4th quarter of 2008.


Sincerely By:-

KAMEL BIN MOHD YUSOH.
KENANGA INVESTMENT BANK BHD.
013-6306544 OR 03-21634549/50.