Author Topic: Coastal  (Read 43659 times)

Offline idzuari

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Re: Coastal
« Reply #150 on: July 26, 2011, 11:26:59 AM »
Coastal hit low of RM 2.47 and high of RM 2.50, currently trading at RM 2.48 (-0.02, -0.80%) with light volume done at 148,400 shares.

COASTAL-WA last done price at RM 0.605 (+0.30, +98.36%) with 658,000 at BUY queue and zero at SELL queue; total volume done at 867,300 since market opened this morning.



strange. my coastal-wa doesn't show at maybank2u share portfolio.  :S
Doesn't matter bullish or bearish. Be happy & keep learning.

Offline zuolun

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Re: Coastal
« Reply #151 on: July 26, 2011, 11:46:29 AM »
COASTAL-WA at RM 0.605 (+0.30, +98.36%) with 650,700 at BUY queue and zero at SELL queue; total volume last done at 1,429,800 warrant shares.

COASTAL-WA after conversion into ordinary share would be RM 3.785 (RM 0.605 + RM 3.18); a huge difference of RM 1.305 or 65.52% against the underlying share currently trading at RM 2.48.




Offline zuolun

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Re: Coastal
« Reply #152 on: July 26, 2011, 12:02:48 PM »
strange. my coastal-wa doesn't show at maybank2u share portfolio.  :S

You need to re-confirm via your broker; the EXACT quantity of free warrants automatically credited into your CDS a/c with maybank before you sell.


Offline jollybee

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Re: Coastal
« Reply #153 on: July 26, 2011, 12:21:03 PM »
Better run for Coastal.  Volume drop so much...............be careful..   Price will be pressed down by Broker house when ppl cannot hold their shares any longer.
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Offline tedbeh

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Re: Coastal
« Reply #154 on: July 26, 2011, 12:27:38 PM »
I've checked with my mayban2u, got the warrant in my portfolioi

Offline zuolun

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Re: Coastal
« Reply #155 on: July 26, 2011, 12:28:48 PM »
COASTAL-WA performs ridiculously better than the underlying share because of limited quantity available on the open market, i.e. strong demand Vs limited supply, the price will rise.

If demand continues to increase and supply remains unchanged, COASTAL-WA will shoot higher; just like Kulim Warrants, from low of 30 sen to high of RM 1.18, 300% gain!  :P   :P   :P

Offline TheLord

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Re: Coastal
« Reply #156 on: July 26, 2011, 12:41:55 PM »
COASTAL-WA performs ridiculously better than the underlying share because of limited quantity available on the open market, i.e. strong demand Vs limited supply, the price will rise.

If demand continues to increase and supply remains unchanged, COASTAL-WA will shoot higher; just like Kulim Warrants, from low of 30 sen to high of RM 1.18, 300% gain!  :P   :P   :P

Normally for a newly listed 5-years warrant, what is the reasonable premium? Currently Kulim-w is abt 35% premium, am i right?

Offline zuolun

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Re: Coastal
« Reply #157 on: July 26, 2011, 01:03:29 PM »
Better run for Coastal.  Volume drop so much...............be careful..   Price will be pressed down by Broker house when ppl cannot hold their shares any longer.

Market manipulators/big players who short-sell Coastal are always able to buy back the stock cheaply from margin/T+3 contra traders because these small players have no money to pick up their shares. In the stock market; it's always big fish eat small fish...

 

Offline idzuari

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Re: Coastal
« Reply #158 on: July 26, 2011, 01:22:19 PM »
COASTAL-WA performs ridiculously better than the underlying share because of limited quantity available on the open market, i.e. strong demand Vs limited supply, the price will rise.

If demand continues to increase and supply remains unchanged, COASTAL-WA will shoot higher; just like Kulim Warrants, from low of 30 sen to high of RM 1.18, 300% gain!  :P   :P   :P


kulim share price rm3.56. exercise price rm3.85. kulim-wc price rm0.96. that's 35.11% premium. whoever holding kulim-wc now must be very optimistic with the business.  :clap:
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Offline jollybee

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Re: Coastal
« Reply #159 on: July 26, 2011, 01:26:02 PM »
I got a feeling.   Better RUN than NEVER.   Coastal really bad outlook..............volume drop ler.
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Offline idzuari

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Re: Coastal
« Reply #160 on: July 26, 2011, 01:39:07 PM »
I got a feeling.   Better RUN than NEVER.   Coastal really bad outlook..............volume drop ler.

MACD line didn't cross signal line yet from below. Buy rate now is 35%. Means less buyer. In few days will get clearer picture.  :speechless:
Doesn't matter bullish or bearish. Be happy & keep learning.

Offline zuolun

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Re: Coastal
« Reply #161 on: July 26, 2011, 02:05:27 PM »
Normally for a newly listed 5-years warrant, what is the reasonable premium? Currently Kulim-w is abt 35% premium, am i right?

For those who bought COASTAL-WA at 0.305 sen yesterday and sold it at 0.605 sen early this morning, it's 100% profit!

For those who bought COASTAL-WA at 0.605 sen today and able to sell it double at RM 1.21 tomorrow or within the 5 years upto July 2016; it would be 100% gain!

It's obvious that the warrants trading at RM0.605 today is way "out-of-the-money". However, if the underlying share could recover later with continued excellent profitability and positive news then the current high premium would be  "reasonable".  :P



Offline zuolun

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Re: Coastal
« Reply #162 on: July 26, 2011, 02:17:27 PM »
I got a feeling.   Better RUN than NEVER.   Coastal really bad outlook..............volume drop ler.

For those who short-sell Coastal, they hope that people could dump the shares cheaply for them to buy and cover their short positions.

Offline zuolun

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Re: Coastal
« Reply #163 on: July 26, 2011, 02:24:58 PM »
MACD line didn't cross signal line yet from below. Buy rate now is 35%. Means less buyer. In few days will get clearer picture.  :speechless:

Market sentiment will be clearer after 2nd Aug 2011 (Deadline for United States debt default).

Offline zuolun

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Re: Coastal
« Reply #164 on: July 26, 2011, 03:03:22 PM »
kulim share price rm3.56. exercise price rm3.85. kulim-wc price rm0.96. that's 35.11% premium. whoever holding kulim-wc now must be very optimistic with the business.  :clap:

The price movement of a stock/warrant is always irrational; it moves (up/down) due to the swing of investors' emotions rather than their views (optimistic/pessimistic) on the company's business.

Offline zuolun

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Re: Coastal
« Reply #165 on: July 26, 2011, 03:10:02 PM »
COASTAL-WA trades higher at RM 0.61 [b](+0.305, +100%)[/b] with 851,400 at BUY queue and zero at SELL queue; total volume last done at 1,449,000 warrant shares.


Offline idzuari

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Re: Coastal
« Reply #166 on: July 26, 2011, 03:15:49 PM »
The price movement of a stock/warrant is always irrational; it moves (up/down) due to the swing of investors' emotions rather than their views (optimistic/pessimistic) on the company's business.

now people is greedy. time to be fear.  :sweat:
Doesn't matter bullish or bearish. Be happy & keep learning.

Offline zuolun

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Re: Coastal
« Reply #167 on: July 26, 2011, 03:19:05 PM »
COASTAL-WA trades higher at RM 0.61 (+0.305, +100%) with 851,400 at BUY queue and zero at SELL queue; total volume last done at 1,449,000 warrant shares.

The underlying shares are tightly held by its major SSHs (70%) who are unlikely to sell their warrants. The free float of the warrants (in % term) available on the open market is only 18,122,600 units or 30% of 60,408,667 units.

Offline zuolun

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Re: Coastal
« Reply #168 on: July 26, 2011, 03:24:40 PM »
now people is greedy. time to be fear.  :sweat:

Then we must learn how to profit from people who fear.  :P


Offline TheLord

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Re: Coastal
« Reply #169 on: July 26, 2011, 03:37:58 PM »
COASTAL-WA trades higher at RM 0.61 [b](+0.305, +100%)[/b] with 851,400 at BUY queue and zero at SELL queue; total volume last done at 1,449,000 warrant shares.


30 cents price up will triggle limit up for share price below RM1, is it? Why still can buy at RM0.61?

Offline zuolun

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Re: Coastal
« Reply #170 on: July 26, 2011, 03:42:22 PM »
Then we must learn how to profit from people who fear.  :P

When Coastal hit low at RM 2.34 and rebounded to high of RM 2.53; traders could still make good profits from people who dumped their shares at the low. Every stock has a value in it, whoever dares to buy at the right timing/price will win. 
 

Offline zuolun

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Re: Coastal
« Reply #171 on: July 26, 2011, 03:53:21 PM »
30 cents price up will triggle limit up for share price below RM1, is it? Why still can buy at RM0.61?

Based on Bursa Malaysia rules on trading limit for new listing:

Limit Up: Below RM 1.00 = 400% (5 times) or 30 sen, whichever is higher


Offline zuolun

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Re: Coastal
« Reply #172 on: July 26, 2011, 04:04:49 PM »
Coastal now trading at RM 2.52 (+0.02, +0.08%) with total volume done at 332,300 shares.


 
 
 
 

Offline jollybee

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Re: Coastal
« Reply #173 on: July 26, 2011, 05:05:35 PM »
If we all vote, which is the best contra stock T+3 for year 2011.  I believe Coastal will rank #1.
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Offline zuolun

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Re: Coastal
« Reply #174 on: July 26, 2011, 06:34:56 PM »
Rebound as Asian stocks closed higher

Tuesday July 26, 2011 MYT 5:31:07 PM

KUALA LUMPUR: Asian markets rose in Tuesday's trade on positive investor sentiment, with data suggesting improved corporate earnings and further economic growth in the Asia Pacific region this year.

Investors also sought out bargains and shrugged off uncertainty surrounding debt problems in the euro zone and United States as well as a weakening American dollar.

At 5pm, Tokyo's Nikkei 225 was up 0.47% to 10,097.72 while Hong Kong's Hang Seng Index rose 1.25% to 22,572.08 and Shanghai's A share index was 0.53% higher at 2,703.03.

The benchmark FBM KLCI was up 0.14% to 1561.77 and Singapore's Straits Times Index was up 0.42% to 3,184.75.

At Bursa Malaysia, gainers outpaced losers by 374 to 334 while 325 other counters were traded unchanged.

There were 1.04 billion shares done with a total turnover of RM1.54 billion.

Among the gainers were Coastal Contracts Bhd's warrants which rose 31 sen to 61.5 sen, Zecon Bhd's warrants which rose 30.5 sen to 44.5 sen, Zecon Bhd which rose 30 sen to 78 sen and DRB-HICOM BHD which rose 29 sen to RM2.24.

The losers included Boustead Holdings Bhd which fell 9 sen to RM5.81 and Malaysia Marine and Heavy Engineering Holdings Bhd which fell 29 sen to RM7.70.

At 5pm, spot gold was US$2.62 lower at US$1,611.40 per ounce while silver slipped 1 cent to US$40.33.

Nymex crude oil in electronic trade gained 33 cents to US$99.53 per barrel while Brent crude added 12 cents to US$118.06.

Crude palm oil futures for October delivery rose RM19 to RM3,119 per tonne.

The ringgit was quoted at 2.95 to the US dollar and 4.28 to the euro.

Offline zuolun

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Re: Coastal
« Reply #175 on: July 26, 2011, 07:20:26 PM »
If we all vote, which is the best contra stock T+3 for year 2011.  I believe Coastal will rank #1.

Whether long or short, the current uncertain/volatile market is not meant for everyone, especially people who trade stocks with margin/T+3 contra. Small players are always the 1st to be completely wiped out when market turned against them.   

US hedge fund giants fail to perform this year

Jul 6, 2011

BOSTON: The first half of 2011 has been humbling for many of the $2 trillion hedge fund industry's biggest stars, with the likes of John Paulson, David Einhorn, and Louis Bacon losing money for their investors' money while underperforming the major US stock market indexes.

At the year's half-way point, the average hedge fund was off 2.12 per cent, preliminary data from Hedge Fund Research show. By contrast, the Standard & Poor's 500 gained 6 per cent.

Only six months ago, few investors would have forecast that as of June 30, Paulson's flagship Advantage Fund would have lost 15 per cent, or Einhorn's Greenlight Capital would be down 5 per cent. Even Louis Bacon's flagship Moore Global fund, which has boasted average annual returns of 19 per cent for more than two decades, was down 5 per cent for the year through June 16.

Offline zuolun

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Re: Coastal
« Reply #176 on: July 26, 2011, 07:51:31 PM »
Coastal closed at RM 2.51 (+0.01, +0.40%) with total volume done at 382,700 shares.

COASTAL-WA closed at RM 0.615 (+0.31, +101.64%) with total volume done at 1,490,000 warrant shares.

Offline zuolun

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Re: Coastal
« Reply #177 on: July 26, 2011, 08:12:31 PM »
Share prices close higher

July 26, 2011

KUALA LUMPUR: Share prices on Bursa Malaysia closed higher today on active buying of bluechips, particularly finance and plantation, and in line with gains on regional markets, dealers said.

Gains in BAT and DRB Hicom pushed the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) to close higher by 2.17 points or 0.14 per cent to 1,561.77.

The index had opened 2.13 points easier at 1,557.47 and hovered between the 1,554.58 and 1,561.91 levels in moderate trading

BAT rose 30 sen to RM46.80 and DRB Hicom added 29 sen to RM2.24.

The stock market started out in negative territory due to selling pressure, continuing from where it left off yesterday, according to HwangDBS Vickers Research.

The market also took the cue from the US market’s overnight weak cl­ose, which saw its key equity indices dipping between 0.6% and 0.7%, it said in a research note.

However, the market posted moderate gains towards mid-day, tracking regional markets which edged higher after US President Barack Obama expressed confidence that the current stalemate over increasing the nation’s debt ceiling can be resolved, a dealer said.

“It’s a positive development and can make a huge impact on our stock market,” the dealer added.

The Finance Index rose 39.689 points to 14,777.3, the Plantation Index fell 0.61 of a point to 7,720.31 and the Industrial Index added 3.8 points to 2,871.85.

The FBM Emas Index increased 20.739 points to 10,739.81 and the FBMT100 gained 19.6 points to 10,518.6 and the FBM Ace Index improved 26.13 points to 4,145.49.

The overall market breadth was positive with advancers leading decliners by 374 to 334 while 325 counters closed unchanged and 462 others untraded.

Volume rose to 1.04 billion shares valued at RM1.54 billion from the 810.53 million shares worth RM1.57 billion yesterday.

Actively-traded, Ingenuity Solutions-Warrant fell one to 2.5 sen, Hibiscus Petroleum-Warrant rose 3.5 sen to 17 sen, Jotech added half a sen to 15.5 sen and Axiata increased three sen to RM5.13.

Animal feed maker, Peterlabs Holdings, which made its debut on the Ace Market at half-a-sen premium over its offer price of 30 sen, declined six sen to 24 sen.

Among heavyweights, Maybank rose two sen to RM8.85, CIMB fell five sen to RM8.40, Petronas Chemicals was unchanged at RM7.01, Sime Darby added one sen to RM9.20 and Axiata increased three sen to RM5.13.

Among top gainers, Coastal Contracts Bhd-Wa rose 31 sen to 61.5 sen, Zecon Bhd-Wa added 30.5 sen to 44.5 sen, QSR Brands-Wa increased 22 sen to RM3.34 and Kwantas gained 19 sen to RM2.29.

Volume on the Main Market rose to 675.684 million shares valued at RM1.5 billion from the 605.085 million shares worth RM1.329 billion yesterday.

Turnover on the ACE Market increased to 289.89 million shares worth RM35.17 million from 186.364 million shares valued at RM18.554 million previously.

Warrants added to 76.05 million units valued at RM11.06 million from 61.623 million units worth RM10.612 million previously.

Consumer products accounted for 26.23 million shares traded on the Main Market, industrial products 164.02 million, construction 61.72 million, trade and services 192.53 million, technology 12.08 million, infrastructure 4.93 million, finance 49.95 million, hotels 355,300, properties 56.23 million, plantations 29.28 million, mining 50,000, REITs 5.85 million and closed/fund 102,500.

- Bernama


Offline zuolun

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Re: Coastal
« Reply #178 on: July 26, 2011, 08:37:48 PM »
The gambler's fallacy

Consider a series of 20 coin flips that have all landed with the "heads" side up. Under the gambler's fallacy, a person might predict that the next coin flip is more likely to land with the "tails" side up.

This line of thinking represents an inaccurate understanding of probability because the likelihood of a fair coin turning up heads is always 50%. Each coin flip is an independent event, which means that any and all previous flips have no bearing on future flips.

This can be extended to investing as some investors believe that they should liquidate a position after it has gone up in a series of subsequent trading session because they don't believe that the position is likely to continue going up.

Offline zuolun

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Re: Coastal
« Reply #179 on: July 26, 2011, 08:43:46 PM »
The gambler's fallacy

Consider a series of 20 coin flips that have all landed with the "heads" side up. Under the gambler's fallacy, a person might predict that the next coin flip is more likely to land with the "tails" side up.

This line of thinking represents an inaccurate understanding of probability because the likelihood of a fair coin turning up heads is always 50%. Each coin flip is an independent event, which means that any and all previous flips have no bearing on future flips.

This can be extended to investing as some investors believe that they should liquidate a position after it has gone up in a series of subsequent trading session because they don't believe that the position is likely to continue going up.

COASTAL-WA is likely to trade higher tomorrow.  :P

Offline idzuari

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Re: Coastal
« Reply #180 on: July 26, 2011, 09:29:08 PM »
Coastal closed at RM 2.51 (+0.01, +0.40%) with total volume done at 382,700 shares.

COASTAL-WA closed at RM 0.615 (+0.31, +101.64%) with total volume done at 1,490,000 warrant shares.

tq coastal. free lunch using coastal-wa.  :D
Doesn't matter bullish or bearish. Be happy & keep learning.

Offline zuolun

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Re: Coastal
« Reply #181 on: July 26, 2011, 10:19:29 PM »
Coastal: Moving up the value chain

HwangDBS Vickers Research
Tuesday, July 26, 2011

Coastal Contracts
BUY RM2.50
Price Target : 12-Month RM 3.90


Moving up the value chain
• Focusing on building high-margin vessels
• Catalyst is progress at Sabah deepwater field
• Reiterate Buy with RM3.90 TP (56% upside)

Moving up the value chain. There is potential for a greater inflow of vessel sales orders in the near term for Coastal based on a positive O&G climate. We understand that the group has intentions of building higher value offshore support vessels (OSV) that would prove lucrative if constructed and subsequently completed. We also believe that the group recently quoted orders amounting to RM200m to a few Malaysian players that would take MoUs in the pipeline to c. RM500m, if successful. Its current outstanding
order book stands at c. RM500m as at 2Q11, that would stretch till 1Q12. Coastal also recently secured an order for an SP2-enabled maintenance/support vessel (and 2 barges) worth RM98m. We believe this maintenance/support vessel is a testament to the group moving up the value chain considering the deep sea capabilities the vessel has compared to a conventional anchor handling tug (AHT) and tug and barge.

Fabrication jobs a catalyst. Sabah’s * deepwater field is up and running with the Gumusut/Kakap field scheduled to start production at end-2011. The state’s potential to produce 25% of Malaysia’s 660,000 barrels/day oil production and Coastal’s exclusivity as the only Sabahan yard (52 acres available) with fabrication facilities should net it repair and maintenance jobs when oil platforms are commissioned. We understand its OSV chartering segment is in progress with bareboat charters a possible strategy to avoid cannibalising its vessel building segment.

Reiterate Buy, RM3.90 TP offers 56% upside. The stock has recently recovered from a share price drop, and we expect some upside on a strong set of 2Q11 results. At FY12 EPS of 48.9 sen (PE of 5.2x), Coastal is trading at attractive 72% and 65% discount to local (18.6x) and regional peers (14.7x), respectively.

Positive Outlook
OSV supply glut overplayed. Clarkson’s research report noted that the average age of AHTS and AHTs (below 8,000BHP) globally is 19 years, with 53% of the total 2,142 vessels built from 1980 onwards being over 20 years old. Given that oil majors currently cap their OSV age limit at 16 years, there is a large market for vessel builders to replace obsolete, aging assets. Moreover, Coastal’s expertise in building a diverse range of vessels mitigates its exposure to this perceived supply glut in the 5,000BHP range AHT/AHTS. This is evident in its recently secured order for an SP2- enabled maintenance/support vessel and two barges worth RM98m, as reported on 14 July 2011.

Enough to go around. We understand that despite potent competition from local peers, it is still reined in by capital constraints at individual shipyards. Further, Coastal’s business model - outsourcing to Chinese shipyards under 12- 18 month fixed cost contracts - ensures minimal capital expenditure by contracting with more shipyards if it needs additional capacity.

Coastal’s China-based outsourced shipyards are mostly stateowned with little expenditure on mediation, unlike larger companies such as Cosco. As such, Coastal’s 85%-
international client base (majority are service providers) will face difficulty in liaising with them in terms of language barriers and cultural differences. The group’s role as an
intermediary ensures timely and efficient order-to-delivery of vessels.

OSV chartering segment. Coastal’s OSV Chartering segment (separate from its tug & barge chartering segment) is still in its infancy, with only a team performing market research on the business environment. Coastal does not currently own any OSVs for charter, although unsold vessels will likely be absorbed. However, the main issue with Coastal’s plan to derive recurring income from OSV chartering would be cannibalisation of its vessel building segment via competition with vessel buyers (who are mostly O&G service providers). A possible solution would be bareboat chartering, but we understand that discussions are still ongoing.

Warrants and bonus Issue. Coastal’s 1-for-3 bonus issue has gone ex- and the additional 120.8m shares were listed on 19 Jul 2011. Subsequently, the group has issued free warrants on 1-for-8 basis (up to 60.4m warrants or 12.5% of total paid-up capital) at an exercise price of RM3.18 per warrant on 25 July 2011. Fully diluted, Coastal would have a 543m share base. The warrants’ exercise price is at 27% premium to the current share price of RM2.50– or out of the money -, and as such, we do not expect these warrants to be exercised in the near term. Consequently, there is little risk of share dilution in the near term, and we did not dilute out forecast earnings.

2Q11 results to remain steady. We expect Coastal to register strong 2Q11 result, similar to 1Q11 result. Margins are expected to remain at c.30% based on expected delivery of similar vessel mix (barges) as well as higher-margin OSVs. Net profit should be flat q-o-q, but on track to meet our FY11F net profit of RM204m.

Offline zuolun

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Re: Coastal
« Reply #182 on: July 27, 2011, 10:55:57 AM »
COASTAL-WA is likely to trade higher tomorrow.  :P

COASTAL-WA shoots higher from RM 0.66 to RM 0.895, now trading at RM 0.775 (+0.16, +26.02%) with 6,600 at BUY queue and 39,600 at SELL queue; total volume last done at 4,444,300 warrant shares.

Offline zuolun

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Re: Coastal
« Reply #183 on: July 27, 2011, 11:05:08 AM »
Coastal hit low of RM 2.50 and high of RM 2.60, now trading at RM 2.54 (+0.03, +1.20%) with 2,800 BUY at RM 2.53 and 39,600 SELL at RM 2.55; total volume last done at 161,900 shares.



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Re: Coastal
« Reply #184 on: July 27, 2011, 11:09:07 AM »
Hi Zoulun, are u major shareholder or official spokeman for coastal... i think for FA this counter will be long term play as need not to worry about it everysecond. However , i do appreciate ur effort to upload latest news cheers, what is ur target price  just say one year from now? :thumbsup: :thumbsup: :thumbsup:

Offline zuolun

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Re: Coastal
« Reply #185 on: July 27, 2011, 11:26:22 AM »
Better run for Coastal.  Volume drop so much...............be careful..   Price will be pressed down by Broker house when ppl cannot hold their shares any longer.

I got a feeling.   Better RUN than NEVER.   Coastal really bad outlook..............volume drop ler.

For those who short-sell Coastal, they hope that people could dump the shares cheaply for them to buy and cover their short positions.

Coastal spiked up 9 sen to hit high of RM 2.60 was due to short-sellers covering their short positions early this morning.  :D  :D  :D   

(Finally, the underlying share price is able to move in tandem with the warrant share price today.)  :P   

Offline zuolun

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Re: Coastal
« Reply #186 on: July 27, 2011, 12:27:51 PM »
Hi Zoulun, are u major shareholder or official spokeman for coastal... i think for FA this counter will be long term play as need not to worry about it everysecond. However , i do appreciate ur effort to upload latest news cheers, what is ur target price  just say one year from now? :thumbsup: :thumbsup: :thumbsup:

Agreed Coastal is a fundamentally strong stock meant for long term investment. Based on past 3 years' data, I believe the company could replenish its orderbook back to RM 1.3 billion FY2011. If the recent correction at RM 2.34 has bottomed and price could rebound strongly to > RM 2.65 (immediate resistance level) and move higher by yearend, then it should be able to take out the last high of RM 3.82, one year from now. However, if the M&A materialized (a replacement for Ramunia Holdings Bhd), the stock has the potential to hit double from current price at RM 2.50++. Meanwhile, enjoy the ride of COASTAL-WA, which is on a very strong uptrend now.  :P

Offline zuolun

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Re: Coastal
« Reply #187 on: July 27, 2011, 07:15:46 PM »
General Announcement
Reference No MB-110726-8E056 

Submitting Merchant Bank : AMINVESTMENT BANK BERHAD   
Name : COASTAL-CA: CW COASTAL CONTRACTS BHD (AM)   
Stock Name  : COASTAL-CA   
Date Announced : 27/07/2011   

Type : Announcement
Subject : STRUCTURED WARRANTS ANNOUNCEMENT INITIAL OFFERING
 
Description : AMBANK (M) BERHAD (“AmBank”)

PROPOSED ISSUE OF UP TO 100,000,000 EUROPEAN STYLE CASH SETTLED CALL WARRANTS OVER ORDINARY SHARES OF COASTAL CONTRACTS BHD (“COASTAL”) (“COASTAL SHARES”) WITH AN EXERCISE RATIO OF FOUR (4) CALL WARRANTS : ONE (1) COASTAL SHARE (“COASTAL CW”) 
 
Announcement Details/Table Section :

With reference to the above, AmInvestment Bank Berhad (“AmInvestment Bank” or the “Adviser”), a member of AmInvestment Bank Group, on behalf of AmBank, is pleased to announce the proposed issue by AmBank of up to 100,000,000 European style cash settled call warrants over ordinary shares of COASTAL, to be listed on the Structured Warrants Board of Bursa Malaysia Securities Berhad.

COASTAL CW is constituted by the Deed Poll dated 4 August 2010 executed by us, as supplemented from time to time. The COASTAL CW is subject to the terms and conditions of the Base Prospectus dated 23 August 2010, the First Supplementary Base Prospectus dated 27 September 2010, the Second Supplementary Base Prospectus dated 4 January 2011, the Third Supplementary Base Prospectus dated 9 March 2011 and the Term Sheet for the COASTAL CW dated 27 July 2011.

A summary of the principal terms of the COASTAL CW is set out in Table 1.

This announcement is dated 27 July 2011.

 
Table 1: Summary of the Principal Terms of the COASTAL CW

Issuer : AmBank

Market Maker : AmBank

Instrument : European style cash settled call warrants over the COASTAL Shares

Issue Size : Up to 100,000,000 COASTAL CW

Settlement Currency : Ringgit Malaysia (“RM”)

Exercise Ratio : Four (4) COASTAL CW referenced to one (1) COASTAL Share

Exercise Price : RM2.38

Issue Price : RM0.150

Settlement :

Cash settlement only. The COASTAL CW entitle the Warrantholder to receive from us on Expiry Date the Cash Settlement Amount in the Settlement Currency (if greater than zero), which shall be calculated as follows:

Cash Settlement Amount:

= Number of Structured Warrants X [(Closing Price – Exercise Price)/Exercise Ratio] - Exercise Expenses

The Closing Price shall be determined on the Expiry Date by reference to the average of the closing prices of the COASTAL Shares on each of the 5 Market Days immediately before the Expiry Date.

Exercise Expenses:

Any charges or expenses including any taxes or duties which are incurred in respect of or in connection with the exercise of the COASTAL CW to be borne by the Warrantholders. Warrantholders may calculate the Exercise Expenses by using the following formula:

= 0.3% X [(Closing Price – Exercise Price)/Exercise Ratio] X Number of Structured Warrants

Issue Date : 27 July 2011

Listing Date : 28 July 2011

Expiry Date : 18 April 2012

Offline papayashot

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Re: Coastal
« Reply #188 on: July 27, 2011, 07:25:24 PM »
General Announcement
Reference No MB-110726-8E056 

Submitting Merchant Bank : AMINVESTMENT BANK BERHAD   
Name : COASTAL-CA: CW COASTAL CONTRACTS BHD (AM)   
Stock Name  : COASTAL-CA   
Date Announced : 27/07/2011   

Type : Announcement
Subject : STRUCTURED WARRANTS ANNOUNCEMENT INITIAL OFFERING
 
Description : AMBANK (M) BERHAD (“AmBank”)

PROPOSED ISSUE OF UP TO 100,000,000 EUROPEAN STYLE CASH SETTLED CALL WARRANTS OVER ORDINARY SHARES OF COASTAL CONTRACTS BHD (“COASTAL”) (“COASTAL SHARES”) WITH AN EXERCISE RATIO OF FOUR (4) CALL WARRANTS : ONE (1) COASTAL SHARE (“COASTAL CW”) 
 
Announcement Details/Table Section :

With reference to the above, AmInvestment Bank Berhad (“AmInvestment Bank” or the “Adviser”), a member of AmInvestment Bank Group, on behalf of AmBank, is pleased to announce the proposed issue by AmBank of up to 100,000,000 European style cash settled call warrants over ordinary shares of COASTAL, to be listed on the Structured Warrants Board of Bursa Malaysia Securities Berhad.

COASTAL CW is constituted by the Deed Poll dated 4 August 2010 executed by us, as supplemented from time to time. The COASTAL CW is subject to the terms and conditions of the Base Prospectus dated 23 August 2010, the First Supplementary Base Prospectus dated 27 September 2010, the Second Supplementary Base Prospectus dated 4 January 2011, the Third Supplementary Base Prospectus dated 9 March 2011 and the Term Sheet for the COASTAL CW dated 27 July 2011.

A summary of the principal terms of the COASTAL CW is set out in Table 1.

This announcement is dated 27 July 2011.

 
Table 1: Summary of the Principal Terms of the COASTAL CW

Issuer : AmBank

Market Maker : AmBank

Instrument : European style cash settled call warrants over the COASTAL Shares

Issue Size : Up to 100,000,000 COASTAL CW

Settlement Currency : Ringgit Malaysia (“RM”)

Exercise Ratio : Four (4) COASTAL CW referenced to one (1) COASTAL Share

Exercise Price : RM2.38

Issue Price : RM0.150

Settlement :

Cash settlement only. The COASTAL CW entitle the Warrantholder to receive from us on Expiry Date the Cash Settlement Amount in the Settlement Currency (if greater than zero), which shall be calculated as follows:

Cash Settlement Amount:

= Number of Structured Warrants X [(Closing Price – Exercise Price)/Exercise Ratio] - Exercise Expenses

The Closing Price shall be determined on the Expiry Date by reference to the average of the closing prices of the COASTAL Shares on each of the 5 Market Days immediately before the Expiry Date.

Exercise Expenses:

Any charges or expenses including any taxes or duties which are incurred in respect of or in connection with the exercise of the COASTAL CW to be borne by the Warrantholders. Warrantholders may calculate the Exercise Expenses by using the following formula:

= 0.3% X [(Closing Price – Exercise Price)/Exercise Ratio] X Number of Structured Warrants

Issue Date : 27 July 2011

Listing Date : 28 July 2011

Expiry Date : 18 April 2012



Could you please explain what is call warrant (COASTAL CW)? What is the difference with the existing warrant tat it has just issued (COASTAL WA)?
Is it harmful to the mother's share price?


Offline zuolun

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Re: Coastal
« Reply #189 on: July 27, 2011, 11:26:05 PM »


Could you please explain what is call warrant (COASTAL CW)? What is the difference with the existing warrant tat it has just issued (COASTAL WA)?
Is it harmful to the mother's share price?

A warrant is a derivative instrument that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame and if not exercised, is worthless after its expiry date. 

The difference between Coastal Warrant (COASTAL-WA) and CALL Warrant (COASTAL-CA):

COASTAL-WA
1.  COASTAL-WA is a debt issue by Coastal to raise fund for the company. It's listed on 25th July 2011.

2.  It's issued free at 1-for-8 to existing shareholders to be converted into Ordinary Shares of the company at an exercise price of RM 3.18 per share if "in-the-money".

3.  The listing price is determined by market forces; if price moves postively, it indicates that investors are bullish on Coastal.

4.  It has a long life-span of five (5) years with maturity date on 18th July 2016.

5.  If more players gamble and Coastal's warrant price moves positively; theoretically the underlying share should move in tandem with the warrant.

COASTAL-CA
1. COASTAL-CA is a CALL warrant issued by market-maker, AmBank. It will be listed on 28th July 2011.

2.  It's issued at the ratio of four (4) warrants to one (1) Coastal share at an exercise price of RM 2.38. If "in-the-money", investors cannot convert the CALL warrant into Coastal share; it's cash settlement only (5 days prior to expiry date).

3.  The listing price is fixed at RM 0.15 each by market-maker, AmBank. If price moves postively, it indicates that investors are bullish on Coastal.

4.  It has a short life-span from 28 July 2011 - 18 April 2012.

5.   If more players gamble and the CALL warrant price moves positively; theoretically the underlying share should move in tandem with the warrant.

Offline zuolun

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Re: Coastal
« Reply #190 on: July 28, 2011, 06:07:54 PM »
AMBANK ISSUES FOUR NEW CALL WARRANTS

KUALA LUMPUR, 27 July 2011 - AmBank (M) Berhad (“AmBank”) is issuing four new European style cash-settled structured warrants to meet investor demand for trading opportunities and sophisticated investment alternatives in the current market scenario. For the upcoming issuance, there will be four call warrants (“CW”) over the ordinary shares of Bumi Armada Berhad (“ARMADA”), Coastal Contracts Berhad (“COASTAL”), Lingui Developments Berhad (“LINGUI”) and Lafarge Malayan Cement Berhad (“LMCEMNT”). The structured warrants on ARMADA, COASTAL, LINGUI and LMCEMNT will have tenures of approximately nine months and will be listed on 28 July 2011 with issue size of up to 100 million each.

“For AmBank’s upcoming tranche of structured warrants, we will be issuing four call warrants on ARMADA, COASTAL, LINGUI and LMCEMNT. In spite of the high frequency gyrations in global markets due to the slowing growth, debt ceiling and deficit reduction issues in the US, overheating in China and the EMU sovereign crisis, the Malaysian market remains an outperformer year-to-date versus regional indices. Bumi Armada’s IPO was extremely well received by the market and our call warrants on COASTAL, LINGUI and LMCEMNT will be the first structured warrants to be issued off the respective companies. This is part of our warrant programme’s objective to continuously introduce new trading alternatives for the market,” said Ms Ng Ee Fang, Director/Head, Equity Derivatives, AmInvestment Bank Berhad.

International offshore services provider to the oil & gas industry ARMADA is the largest Offshore Support Vessel (OSV) owner operator in Malaysia. It is also the eighth largest floating production, storage and offloading (FPSO) operator in the world. ARMADA currently has 43 OSVs and three FPSOs in operation. As at June 2011, it has an order book of RM5.8 billion with extension options adding a potential RM2.5 billion. For Malaysia, it foresees more opportunities from the Malaysian Government’s initiatives to rejuvenate the country’s marginal oil fields. AmBank’s CW on ARMADA is priced at 15 sen with gearing of 5.05 times.

Shipbuilder and vessel chartering company COASTAL recently announced it had secured contracts for the sale of a DP2-enabled maintenance and support vessel and two units of barges for an aggregate value of RM98 million. Taking into account the new contracts, COASTAL has an order book of approximately RM500 million worth of vessels pending delivery to customers up to 2012. It also continues to look for strategic partners to help diversify into the offshore structure fabrication business utilizing its 90-acre ship/fabrication yard in Sandakan. Overall, COASTAL is expected to benefit from Petronas’ RM300 billion programme over the next five years together with the Malaysian government’s ETP initiatives. AmBank’s CW on COASTAL is priced at 15 sen with gearing of 4.15 times.

Timber company LINGUI has total gross forest concession areas of approximately 1.4 million hectares in Malaysia with a log production volume of over 2.3 million cubic metres per annum. For 3QFY11, ended Mar 31, revenue rose to RM377.4 million from RM360.1 million a year ago while pretax profit surged to RM74.9 million from RM25.1 million in the previous year. Prices for timber products were reported to be higher than previous quarters on the back of firm demand from China and India and stronger prices out of Japan. AmBank’s CW on LINGUI is priced at 15 sen with gearing of 4.00 times.

Cement manufacturer LMCEMNT posted 1QFY11 (ended Mar 31) revenue of RM603 million and net profit of RM52 million. Manufacturing margins were higher at 12.6% for the first quarter compared to 11.9% a year ago. Overall, the domestic cement demand growth is estimated at 4%. With tender awards for the massive Klang Valley MRT project expected towards year end, cement demand is also expected to pick up accordingly then and in early 2012. AmBank’s CW on LMCEMNT is priced at 15 sen with gearing of 4.94 times.

This offer is aimed at sophisticated traders who want to trade on the direction and volatility of ARMADA, COASTAL, LINGUI and LMCEMNT. The new CWs have gearings ranging between 4.00 and 5.05 and are targeted at investors who want leveraged exposure to the underlying on both the upside and downside.

Offline zuolun

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Re: Coastal
« Reply #191 on: July 28, 2011, 06:23:25 PM »
Malaysia's Petronas discovers gas in offshore Sabah

By Purwa Naveen Raman
July 28, 2011

* Sees the first well to have 550 bscf of gas

* Sees the second well to have 650 bscf of gas

KUALA LUMPUR (Reuters) - Malaysia's state oil firm Petronas on Thursday said it has made two significant gas discoveries in the shallow water areas off the west coast of Sabah state on Borneo island.

The company said its first discovery was at the Zuhal East-1 well, located in the Samarang Asam Paya Block southwest of Kota Kinabalu, the state capital of Sabah.

"The current estimate of gas-initially-in-place is about 550 billion standard cubic feet (bscf)," the company said.

Petronas Carigali, the exploration and production arm of Petronas, is the sole equity holder of the production sharing contract of the Samarang Asam Paya block.

The second discovery, at the Menggatal-1 well, is located in Block SB312, near Kota Kinabalu. The company estimates the gas-initially-in-place of about 650 bscf.

The Block SB312 PSC is a joint-venture between Petronas Carigali with 60 percent equity and KUFPEC Malaysia (SB 312) Ltd, a unit of Kuwait Foreign Petroleum Exploration Co(KUFPEC), which holds the remaining interest.

Petronas had recently signed two separate agreements to distribute natural gas extracted from the Kebabangan cluster located in the state of Sabah in East Malaysia.

Offline zuolun

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Re: Coastal
« Reply #192 on: July 28, 2011, 06:43:02 PM »
OSK clarifies on DRB-Hicom shares

Written by Financial Daily     
Thursday, 28 July 2011 11:15 

KUALA LUMPUR: OSK Investment Bank Bhd said it is not involved in the substantial decline in DRB-Hicom Bhd’s share price on Monday.

The investment bank’s clarification came amid market talk that the unusual sharp drop in DRB-Hicom’s share price in the final minutes of trading on the day was linked to the conglomerate’s call warrants. OSK Investment Bank is the issuer of the call warrants (DRBHCOM-CE CW).

“We, the bank, would like to clarify that we were not involved nor did we have any prior knowledge as to the purported ‘trade error’ reported in the article,” OSK Investment Bank said yesterday in a statement in response to a report by The Edge Financial Daily.

On Monday, DRB-Hicom shares fell 14% or 33 sen to close at RM1.95, making the counter the biggest loser on the local bourse.

The sharp decline in the stock’s price occurred within 10 minutes prior to the close of trading and involved about three million DRB-Hicom shares transacted at RM1.95.  Prior to this, at 4.48pm, the stock had changed hands at RM2.28.

The call warrants were issued on Feb 2, 2011, at 17 sen each, and are due to expire next Monday. They have a strike price of RM1.95.

According to the investment bank, the first valuation date for the DRBHCOM-CE CW was on July 25. There are five valuation dates and the settlement price which is used to determine the maturity cash settlement amount is the average of the closing prices of DRB-Hicom shares for the five valuation dates.

As the closing price of the shares on Monday was RM1.95, OSK said there might “be a direct implication on the determination of the settlement price of the call warrant”.

Yesterday, the warrants ended unchanged at 12 sen while DRB-Hicom shares added one sen to close at RM2.25.Since the warrants’ listing on Feb 8, they have traded between a high of 29.5 sen on April 8 and a low of 11.5 sen on March 2.

During the last six months, DRB-Hicom shares had traded between a high of RM2.48 on April 6 and a low of RM1.73 on March 3.

Offline idzuari

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Re: Coastal
« Reply #193 on: July 29, 2011, 01:25:33 AM »
A warrant is a derivative instrument that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame and if not exercised, is worthless after its expiry date. 

The difference between Coastal Warrant (COASTAL-WA) and CALL Warrant (COASTAL-CA):

COASTAL-WA
1.  COASTAL-WA is a debt issue by Coastal to raise fund for the company. It's listed on 25th July 2011.

2.  It's issued free at 1-for-8 to existing shareholders to be converted into Ordinary Shares of the company at an exercise price of RM 3.18 per share if "in-the-money".

3.  The listing price is determined by market forces; if price moves postively, it indicates that investors are bullish on Coastal.

4.  It has a long life-span of five (5) years with maturity date on 18th July 2016.

5.  If more players gamble and Coastal's warrant price moves positively; theoretically the underlying share should move in tandem with the warrant.

COASTAL-CA
1. COASTAL-CA is a CALL warrant issued by market-maker, AmBank. It will be listed on 28th July 2011.

2.  It's issued at the ratio of four (4) warrants to one (1) Coastal share at an exercise price of RM 2.38. If "in-the-money", investors cannot convert the CALL warrant into Coastal share; it's cash settlement only (5 days prior to expiry date).

3.  The listing price is fixed at RM 0.15 each by market-maker, AmBank. If price moves postively, it indicates that investors are bullish on Coastal.

4.  It has a short life-span from 28 July 2011 - 18 April 2012.

5.   If more players gamble and the CALL warrant price moves positively; theoretically the underlying share should move in tandem with the warrant.

tq. :clap:
Doesn't matter bullish or bearish. Be happy & keep learning.

Offline zuolun

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Re: Coastal
« Reply #194 on: July 29, 2011, 09:37:34 AM »
Good O&G climate likely to benefit Coastal Contracts

July 27, 2011, Wednesday

KUCHING: There is potential for a greater inflow of vessel sales orders in the near term for Coastal Contracts Bhd (Coastal Contracts) based on a positive oil and gas (O&G) climate.

“We understand that the group has intentions of building higher value offshore support vessels (OSV) that would prove lucrative if constructed and subsequently completed.

“We also believe that the group recently quoted orders amounting to RM200 million to a few Malaysian players that would take MoUs (memorandum of understandings) in the pipeline to approximately RM500 million, if successful,” said HwangDBS Vickers Research Sdn Bhd (HwangDBS Research) in a research note yesterday.

According to the research firm, Coastal Contracts current outstanding orderbook stood at approximately RM500 million as at the second quarter of this year (2Q11), that would stretch until the first quarter of next year (1Q12).

HwangDBS Research stated that Coastal Contracts also recently secured an order for an SP2-enabled maintenance/support vessel and two barges worth RM98 million.

“We believe this maintenance/support vessel is a testament to the group moving up the value chain considering the deep sea capabilities the vessel has compared with a conventional anchor handling tug (AHT) and tug and barge,” HwangDBS Research affirmed.

Meanwhile, HwangDBS Research pointed out that Sabah’s * deepwater field was up and running with the Gumusut/Kakap field scheduled to start production at end-2011.

“The state’s potential to produce 25 per cent of Malaysia’s 660,000 barrels per day oil production and Coastal Contracts’ exclusivity as the only Sabahan yard with fabrication facilities should net it repair and maintenance jobs when oil platforms are commissioned,” it highlighted.

HwangDBS Research understood Coastal Contracts’ OSV chartering segment was in progress with bareboat charters a possible strategy to avoid cannibalising its vessel building segment

“The stock has recently recovered from a share price drop, and we expect some upside on a strong set of 2Q11 results. At FY12 (financial year 2012) EPS (earnings per share) of 48.9 sen, Coastal  Contracts is trading at attractive 72 per cent and 65 per cent discount to local and regional peers, respectively,” it stated.

HwangDBS Research pegged Coastal Contracts’ shares with the target price of RM3.90 per share.

Offline fevos_85

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Re: Coastal
« Reply #195 on: July 29, 2011, 10:01:25 AM »
Good O&G climate likely to benefit Coastal Contracts

July 27, 2011, Wednesday

KUCHING: There is potential for a greater inflow of vessel sales orders in the near term for Coastal Contracts Bhd (Coastal Contracts) based on a positive oil and gas (O&G) climate.

“We understand that the group has intentions of building higher value offshore support vessels (OSV) that would prove lucrative if constructed and subsequently completed.

“We also believe that the group recently quoted orders amounting to RM200 million to a few Malaysian players that would take MoUs (memorandum of understandings) in the pipeline to approximately RM500 million, if successful,” said HwangDBS Vickers Research Sdn Bhd (HwangDBS Research) in a research note yesterday.

According to the research firm, Coastal Contracts current outstanding orderbook stood at approximately RM500 million as at the second quarter of this year (2Q11), that would stretch until the first quarter of next year (1Q12).

HwangDBS Research stated that Coastal Contracts also recently secured an order for an SP2-enabled maintenance/support vessel and two barges worth RM98 million.

“We believe this maintenance/support vessel is a testament to the group moving up the value chain considering the deep sea capabilities the vessel has compared with a conventional anchor handling tug (AHT) and tug and barge,” HwangDBS Research affirmed.

Meanwhile, HwangDBS Research pointed out that Sabah’s * deepwater field was up and running with the Gumusut/Kakap field scheduled to start production at end-2011.

“The state’s potential to produce 25 per cent of Malaysia’s 660,000 barrels per day oil production and Coastal Contracts’ exclusivity as the only Sabahan yard with fabrication facilities should net it repair and maintenance jobs when oil platforms are commissioned,” it highlighted.

HwangDBS Research understood Coastal Contracts’ OSV chartering segment was in progress with bareboat charters a possible strategy to avoid cannibalising its vessel building segment

“The stock has recently recovered from a share price drop, and we expect some upside on a strong set of 2Q11 results. At FY12 (financial year 2012) EPS (earnings per share) of 48.9 sen, Coastal  Contracts is trading at attractive 72 per cent and 65 per cent discount to local and regional peers, respectively,” it stated.

HwangDBS Research pegged Coastal Contracts’ shares with the target price of RM3.90 per share.


Thanks.

Offline zuolun

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Re: Coastal
« Reply #196 on: July 29, 2011, 02:09:53 PM »
FDI expected to reach $10 billion in 2011 

KUALA LUMPUR, July 27 (Bernama) -- Foreign direct investment (FDI) inflows to Malaysia are expected to reach $10 billion in 2011, surpassing last year's record of $9.1 billion.

International Trade and Industry minister Datuk Seri Mustapa Mohamed said the recovering global FDI trends, supported by the government's initiatives such as the Economic Transformation Programme (ETP), would be the key drivers for foreign investments.

"Based on enquiries from people who came to MIDA (the Malaysian Industrial Development Authority) and the Ministry of International Trade and Industry, we believe there will be a stronger interest this year," he said after launching the United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2011 here Tuesday.

Present were MIDA Chief Executive Officer Datuk Jalilah Baba, UNCTAD Resident Coordinator for Malaysia Kamal Malhotra and Head of Investment Trends and Issues Branch of UNCTAD's Division on Investment and Enterprise Masataka Fujita.

Mustapa said that in the first quarter alone, total FDI into this country amounted to $3.7 billion, which was equivalent to 40 per cent of FDI inflows to Malaysia whole of last year.

With the second half performance forecast to be better from the first half, boosted by the implementation of ETP projects, the $10 billion mark seemed achievable, he said.

Last year, total FDI inflow to Malaysia hit an all-time high of $9.1 billion, an increase of 536 per cent from $1.43 billion in 2009, due to better economic conditions after the financial crisis in the previous year.

Published by UNCTAD, the World Investment Report 2011 provides a comprehensive and authoritative source of data and analysis on global trends in investment, enterprise development and related issues.

Titled "Non-Equity Modes of International Production and Development", the report also forecasts that global FDI will grow five per cent this year to reach the pre-crisis level of $1.4 trillion-US$1.6 trillion.

The trends are expected to continue and reach the $1.9 trillion mark in 2013, equivalent to the peak of global FDI in 2007.

Offline zuolun

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Re: Coastal
« Reply #197 on: July 29, 2011, 02:11:25 PM »
S&P lowers local currency long-term rating on M’sia to 'A' from 'A+'

By theedgemalaysia.com | The Edge – Wed, Jul 27, 2011

KUALA LUMPUR: Standard & Poor's Ratings Services has lowered its local currency long-term sovereign rating on Malaysia to 'A' from 'A+', with a stable outlook.

Correspondingly, it lowered the ASEAN scale credit rating on Malaysia to 'axAA+/axA-1' from 'axAAA/axA-1+'.

At the same time, S&P affirmed its 'A-/A-2' foreign currency rating and 'A-1' local currency short-term rating.

In a statement Wednesday, July 27, S&P said it lowered the local currency rating on Malaysia following the implementation of the agency's revised methodology and assumptions for sovereign ratings.

The criteria update did not affect the long-term foreign currency rating on Malaysia, it said.

Under the revised methodology, the gap between the local and foreign currency ratings on most sovereigns we rate worldwide is narrowing, it said.

S&P credit analyst Takahira Ogawa said the gap was narrowing because governments were likely to have fewer incentives to differentiate between their local and foreign currency debt in the event of debt restructuring, given the increasing globalization of markets.

S&P said that in accordance with its criteria for sovereign ratings, the local currency rating on Malaysia was one notch higher than the foreign currency rating, based on the following factors, namely, its active local currency fixed income market, with an annual trading volume equivalent to more than 50% of GDP; and the absence of significant rating constraints related to fiscal flexibility.

It said the sovereign credit rating on Malaysia reflected the country's moderately strong external liquidity position, which continues to underpin its credit standing.

“Malaysia's open, diversified, and competitive economy, with a moderately flexible labor market, relatively developed infrastructure in the region, ample supporting industries, and a high savings rate also support the rating,” it said.

Ogawa said the government's economic policies were generally pragmatic, and it had made efforts to enhance transparency and corporate governance, thereby improving Malaysia's business environment.

“Malaysia's rating constraints are its moderately weak fiscal and debt profile for the rating category. In our view, the slow fiscal consolidation stems from the increasing subsidies, despite the strong 5.2% GDP growth forecast.

"The government has plans to reform the subsidy systems and to introduce goods and service tax. But given the political sensitivity, we expect any implementation to be gradual," said  Ogawa.

He said an additional rating constraint was Malaysia's moderately weak economic structure, which resulted in continually large government investments--sometimes exceeding that of the private sector's--for more than a decade.

This, in turn, adversely affected the government's fiscal position, he said.

The stable outlook reflects S&P's expectation that, despite Malaysia's still-high fiscal deficit compared with its peers, the government will be able to refinance without a significant increase in interest rates or negative implications for the economy, he said.

"We may raise the sovereign credit rating if stronger growth and the government's effort to lower spending result in lower-than-expected deficits. With lower deficits, a significant reduction in government debt is possible.

"We may lower the rating if the fiscal deficit remains unchanged or increases, resulting in higher net debt in the medium term,” said Ogawa.

Offline zuolun

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Re: Coastal
« Reply #198 on: July 30, 2011, 09:49:19 AM »
Market sentiment will be clearer after 2nd Aug 2011 (Deadline for United States debt default).

"World suffers when the Democratic donkey and the Republican elephant fight."   :(  :(  :(

Global Concern Over U.S. Debt Ceiling Disagreement

By LIZ ALDERMAN
July 29, 2011

PARIS — While the debt debacle in Washington preoccupies America, it is causing jitters in power corridors from Beijing to Brussels. The stewards of the world’s largest economies are anxious for a compromise, to keep their own finances from suffering collateral damage.

Their worries stem from an inescapable reality: for other governments, there is still no good alternative to holding the almighty dollar, or American Treasury securities, even if the United States gets tarnished by a once-unthinkable credit downgrade.

China, which has the most to lose because it holds the largest amount of Treasuries — at least $1.16 trillion — offered a blistering attack on Washington on Friday, calling for a show of responsibility and an end to the partisan bickering.

“The ugliest part of the saga is that the well-being of many other countries is also in the impact zone when the donkey and the elephant fight,” the state-run news agency, Xinhua — considered the propaganda arm of the Communist Party — said in an opinion piece Friday, referring to the standoff between Democrats and Republicans.

Xinhua said the “irresponsible” brinksmanship in Washington risked “strangling the still fragile economic recovery of not only the United States but also the world as a whole.”

Officials in Europe were more diplomatic, but archly recalled that American leaders had admonished them just a few weeks ago to straighten out the messy politics of the Continent’s own debt crisis.

“One could now ask why is the U.S. debt treated any better than a country like Portugal, which has about the same levels of deficit and debt,” said a senior European policymaker, who spoke on condition of anonymity.

The main concern in Europe is that a Washington failure to lift the debt limit will cause the dollar to weaken further, pushing up the euro and making it harder for Europeans to work out their problems.

That is also among the worries for Japan, the second biggest among United States creditors, whose post-tsunami economic problems would only worsen if the yen rises further against the dollar.

Around the world, many leaders seem to expect the Washington showdown to somehow end in an uneasy truce, given the dire global and domestic political consequences of failing to do so.

But while no one seems to expect the United States to default on its debt, governments elsewhere are girding for the repercussions of the likely tarnishing of America’s sparkling credit rating.

Analysts expect China to continue buying American debt, because China keeps producing big trade surpluses that bring in dollars, which must then be reinvested in a haven, like United States Treasuries.

Except that Treasuries may no longer seem as safe as they once did. And China knows it. The Xinhua article warned that China may be “forced” to reduce its purchases if the United States government were to lose its triple-A rating.

There are limits to cutting back because other large bond markets, in Europe and Japan, are not nearly as liquid. “As long as the dollar remains the dominant currency there’s little choice for many in the public sector but to hold U.S. debt,” said the senior European policy maker.

That sentiment is widely shared.

“You still cannot find an asset as safe as U.S. government bonds, even if there is a credit downgrade,” said Choi Jong-ku, South Korea’s deputy minister for international affairs at the Ministry of Strategy and Finance.

And yet, that does not mean countries might not slightly reduce their purchases of long-term American debt, as China and some others have already shown signs of doing. Whether that is a temporary slowdown or will prove more lasting is a question that worries Washington.

Some experts say there is room for China to steer slightly more money toward Europe or Japan, and buy up more dollar-denominated stocks, rather than debt, while also pushing ahead with its own financial reforms to slow its accumulation of dollars.

Like China, Japan has several reasons to be jittery about America’s debt crisis. There are concerns in Tokyo, for example, that a possible downgrade could shake investor confidence in Japan’s own mushrooming debt, which is already twice the size of its $5 trillion economy.

“As the world’s biggest economy, the U.S. has a big and immeasurable impact on global financial markets, and Japan would not escape the damage,” Hidetoshi Kamezaki, a Bank of Japan board member, said this week, urging American officials to strike a deal on the matter.

In Europe, officials are just as concerned about the impact on their own problems. Stricken countries like Ireland and even healthy ones like Germany can hardly afford the trade impact if the euro gets much stronger against a weakening dollar. Worse, the Washington debt standoff has already made borrowing more expensive for big countries with high debt, like Italy and Spain, fanning fires that could imperil the euro zone.

When Chancellor Angela Merkel of Germany visited the White House a few weeks ago, President Obama pressed her on the importance of Europe’s politicians finding a solution to their debt crisis. On Friday, a spokesman said Mrs. Merkel continued to have faith that American leaders would reach a compromise — but he declined to say whether Mrs. Merkel might have phoned Mr. Obama to ask him to heed his own advice.

Her finance minister, Wolfgang Schäuble, had a sterner suggestion. “The parties in the U.S. should be conscious of their responsibility to global financial markets,” he said Friday.

In Brussels, seat of the European Union, one E.U. official said, “Of course we are concerned because this fuels global uncertainty, which makes it harder to dampen down the European debt crisis.” The official insisted on anonymity because of the international politics in play.

European banks are also big holders of American debt, and many of them have probably been planning how to protect themselves in case of a United States sovereign debt downgrade, including hedges against sharp movements in the dollar, said Stefan Schneider, chief international economist at Deutsche Bank in Frankfurt.

Businesses are also bracing for a rough ride. Friedrich Eichiner, chief financial officer of the German automaker BMW, paused at a company event in Frankfurt on Friday to reflect on what would happen if no compromise were reached, or the United States got a credit downgrade.

“It could naturally lead to grave turmoil on the financial markets with unpredictable consequences,” Mr. Eichiner said. “The governments of this world, especially in the West, are not prepared for a second financial crisis.”

Offline zuolun

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Re: Coastal
« Reply #199 on: July 30, 2011, 10:19:00 AM »
Peter Shiff: Problem is the debt, not the ceiling

Jul 29, 2011

Schiff is against raising the debt ceiling, and says the US can’t keep borrowing and printing money. “If you keep doing drugs because you don’t want rehab, you end up dieing of an overdose, and that’s what’s going to happen in the US economy.”

Schiff points out that the government is still collecting over $2-trillion a year in taxes, which is all it was spending around a decade ago. “That’s plenty of money,” says Schiff.

“The real problem is not the debt ceiling. The problem is the debt, and raising the ceiling makes that problem bigger.”

Many people are poor and unemployed because of the resources the government is draining from the private sector, Schiff argues. He says that the disparity between the richest and poorest is a result of government policies, central planning, and central banking that bleeds Main Street and feeds Wall Street. Schiff does not see this coming to an end unless the government stops running up these deficits.

http://www.youtube.com/watch?v=-XU447datzY

http://www.youtube.com/watch?v=wlnacfzy9vo