Harn Len buys private company to get hands on Johor land

Loss-making oil palm planter and property developer Harn Len Corp Bhd announced today that it has bought a private company for RM24 million to gain access to a plot of land the latter owns in Johor Bahru. 

The target company is Midwest Equity Sdn Bhd and jointly owned by Datuk Azizi Yom Ahmad (35%), Datuk Abdul Gani Yusof (35%), and Piagam Wira Sdn Bhd (30%). However, Harn Len did not detail how big the land is.

“The basis of the Purchase Consideration was that the Land is located at a strategic and prime location and thus, there is expected capital appreciation and gain from future development,” Harn Len said in a filing with Bursa Malaysia today.

“The land is located in the heart of Johor Bahru City Centre and approximately opposite the state's most strategic development, comprising of six towers — a hotel, a hotel with residences, an office, high rise medical suites, two serviced apartment towers and a mall,” Harn Len added.

According to Harn Len, its purchase of Midwest Equity — done on the basis of willing-buyer, willing-seller — was funded via a combination of cash and borrowings. As at end-2016, Harn Len has cash and bank balances of RM3.12 million.

Harn Lern owns 16,901ha of oil palm plantations, mainly in Pahang and East Malaysia. It also operates a three-star hotel, Tropical Inn, which is part of the 25-storey office tower known as Johor Tower.

Listed on the main market since 2003, Harn Lern shares slid 1 sen or 1.22% to 81 sen today, for a market capitalisation of RM150.24 million.

Genting 1Q net profit surges 361% on disposal gain

Genting Bhd saw its net profit surge 361% to RM603.06 million or 16.2 sen per share for the first quarter ended March 31, 2017 (1QFY17), from RM130.83 million or 3.52 sen per share in 1QFY16, helped by a gain on disposal.

 

Revenue for the quarter, however, grew a marginal 1% year-on-year to RM4.77 billion from RM4.71 billion.

In a statement, Genting said its performance for the quarter was boosted by a gain of RM302.2 million recognised from the completion of the sale of Genting Singapore Plc’s 50% interest in associate Landing Jeju Development Co Ltd.

The group said Resorts World Sentosa (RWS) benefited from the stronger Singapore dollar exchange rate to the ringgit during 1QFY17, translating to higher revenue for the quarter.

As for Resorts World Genting (RWG), it reported stronger revenue contribution due to better hold percentage from the mid to premium segment of the business, even though business volumes were lower. However, RWG pre-tax profit slid on higher costs related to the premium players business, and costs incurred for the new facilities under Genting Integrated Tourism Plan (GITP).

The group’s operations in UK also saw lower revenue and pre-tax profit, due to the weaker British pound against the ringgit.

As for its Resorts World Casino New York City (RWNYC), it saw better performance following an improved commission structure with the New York state authority, which, coupled with the stronger US dollar versus the ringgit, drove revenue and pre-tax profit higher for its US and Bahamas business.

"There was also a lower adjusted loss before interest, tax, depreciation and amortisation (LBITDA) from the Resorts World Bimini operations in Bahamas following the cessation of Bimini Superfast cruise ferry operations in 1QFY16," it said.

Meanwhile, its plantation business in Indonesia recorded higher revenue and profit amid higher palm product selling prices and higher fresh fruit bunch (FFB) production. But its plantation business in Malaysia, despite higher prices, posted lower performance amid lower sales.

The power division was impacted by lower construction revenue, due to lower percentage of completion for the 660MW coal-fired Banten plant in Indonesia, while the oil and gas division benefited from higher average oil prices.

Going forward, the group said it continues to focus on the development of GITP, which is expected to elevate RWG’s position as the destination of choice in the region, while RWS remains focused on growing the premium mass market.

For the plantation business, Genting said the movements in palm product prices and crop production trends will continue to have significant influence. It expects FFB production growth to be driven by the addition of newly-mature areas and the progression of existing mature areas into higher-yielding brackets at its Indonesian estates.

Genting closed down 21 sen or 2.11% at RM9.73, giving it a market capitalisation of RM37.03 billion.

Active Runner in Focus: DRB-HICOM BERHAD (1619.KL)

Shares of DRB-HICOM BERHAD (1619.KL) are moving on volatility today 2.38% or $0.04 from the open. The BM listed company saw a recent bid of $1.72 and 70695100 shares have traded hands in the session.

Investors might have been ready to throw in the towel as the rally stalled recently. However, the panic subsided and growth-hungry investors came searching for their favorite stocks in the wreckage. Keeping things in perspective, the economy seems good, and so does earnings growth. Investors may be wondering where the money will be flowing in the second half of the year. Many people may assume healthcare and tech would be the easy targets, primarily because that’s where the earnings growth is. Industrials and staples are no slouches for growth either, but they may be well fully-valued for their growth. Traders will most likely be honing their strategies that they created, trying to beat the market over the next couple of months. 

Digging deeping into the DRB-HICOM BERHAD (1619.KL) ‘s technical indicators, we note that the Williams Percent Range or 14 day Williams %R currently sits at -28.57. The Williams %R oscillates in a range from 0 to -100. A reading between 0 and -20 would point to an overbought situation. A reading from -80 to -100 would signal an oversold situation. The Williams %R was developed by Larry Williams. This is a momentum indicator that is the inverse of the Fast Stochastic Oscillator.

DRB-HICOM BERHAD (1619.KL) currently has a 14-day Commodity Channel Index (CCI) of 78.66. Active investors may choose to use this technical indicator as a stock evaluation tool. Used as a coincident indicator, the CCI reading above +100 would reflect strong price action which may signal an uptrend. On the flip side, a reading below -100 may signal a downtrend reflecting weak price action. Using the CCI as a leading indicator, technical analysts may use a +100 reading as an overbought signal and a -100 reading as an oversold indicator, suggesting a trend reversal.

Currently, the 14-day ADX for DRB-HICOM BERHAD (1619.KL) is sitting at 37.26. Generally speaking, an ADX value from 0-25 would indicate an absent or weak trend. A value of 25-50 would support a strong trend. A value of 50-75 would identify a very strong trend, and a value of 75-100 would lead to an extremely strong trend. ADX is used to gauge trend strength but not trend direction. Traders often add the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) to identify the direction of a trend.

The RSI, or Relative Strength Index, is a widely used technical momentum indicator that compares price movement over time. The RSI was created by J. Welles Wilder who was striving to measure whether or not a stock was overbought or oversold. The RSI may be useful for spotting abnormal price activity and volatility. The RSI oscillates on a scale from 0 to 100. The normal reading of a stock will fall in the range of 30 to 70. A reading over 70 would indicate that the stock is overbought, and possibly overvalued. A reading under 30 may indicate that the stock is oversold, and possibly undervalued. After a recent check, the 14-day RSI for DRB-HICOM BERHAD is currently at 63.68, the 7-day stands at 62.14, and the 3-day is sitting at 60.68.

Ringgit likely to trade lower next week

The ringgit will likely trade lower versus the greenback next week on expectations of lower commodity prices, dealers said.

 

A dealer said the decline in the global oil prices has hit the currencies of commodity-dependent countries including Malaysia.

Last Wednesday, the benchmark oil, Brent crude, fell by over three per cent towards 11-year lows, after data showed an increase in the US crude supplies.

He said this has caused the greenback to trade lower and influence other emerging currencies including the ringgit.

"The local note will likely trade downwards if the commodity prices continue to weaken," he said.

It was reported that the Brent crude went down by US$1.33, or 3.5 per cent, to US$36.46 a barrel.