KLCC Property (HOLD)
Refinancing its debt
§ KLCC's 50.5% owned subsidiary, Midciti Resources Sdn Bhd has agreed to fully repay its bonds outstanding to parent company PETRONAS, at a premium of RM35.31m.
§ The bonds in question are the RM199m secured Bai Al-Dayn Bonds and the RM600m 13-year bond, due in Nov 2011 and Nov 2012 respectively. They will be refinanced from the proposed issuance RM880m Sukuk.
§ Impact is uncertain, as the interest rate for the new RM880m, 10-year sukuk have yet to be announced.
§ However, we do note that interest costs for the refinanced bonds were RM67m, or 47% of last year's total financing costs.
§ Maintain HOLD on KLCC, given lack of upside catalysts and unresolved RCULS conversion issue. Target price maintained at RM3.46.
FBM KLCI: Taking cues from overseas
§ On the monthly chart, the KLCI remains vulnerable to further downward correction towards 1259 (lower Bollinger band) and 1200 (50% FR) in the medium to long term. Immediate supports are 1310 (26 Sep pivot low), 1300 and 1293 (38.2% FR).
§ Without a firm recovery in euro-zone solution, any market bounce-ups from an oversold position will likely be short-lived. Based on the daily charts, resistance levels are 1363 (lower Bollinger band), 1383 (5-d SMA) and 1409 (10-d SMA).
Crude oil: Supports: US$70-75; Resistance: US$90-95
§ If prices can breach the mid Bollinger band of US$85, we expect more upside targets to US$88 (50-d SMA) and US$90 (downtrend line resistance). Beyond that, it is likely to face tremendous hurdles at US$92.6 (upper Bollinger band) and US$95.4 (200-d SMA).
§ On the other hand, deteriorating economic outlook and failure to tackle the euro-zone debt crisis in the near term will dampen sentiment and trigger another round of selldown towards US$75-79 territory. A global recession may see prices sliding further towards US$65-74 levels (weekly chart)
No comments:
Post a Comment