Rabu, 16 April 2014

The Star Online: Business

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The Star Online: Business

Alibaba steals Yahoo's thunder ahead of IPO

Posted: 16 Apr 2014 06:56 PM PDT

NEW YORK:If Yahoo appears back in favour, it can thank Alibaba, the Chinese web giant in which it holds a big stake and which is set for a public stock offering.

Yahoo shares soared 6.26% to close at US$36.35 on Wednesday on the heels of a better-than-expected quarterly report, but it was in part because some were more focused on the Alibaba financial results buried in the document.

"The salient point of Yahoo's first quarter results was the very strong December quarter results from Alibaba," said Jordan Rohan, analyst at the brokerage Stifel.

"Alibaba's results paint a favourable picture for a favourable IPO despite the recent period of weakness in the Internet sector."

The Chinese firm has not yet released details on its finances, but Yahoo's figures showed Alibaba with a 2013 fourth quarter profit of US$1.35bil on some US$3bil in revenues.

That indicates 66% growth, up from 51% in the past quarter.

The data from Alibaba "gives us decent conviction that the valuation will ultimately be higher than US$200bil," Rohan said, dwarfing Yahoo's market value of around US$36bil.

Other analysts say a more realistic value for Alibaba could be in the range of US$130-150bil.


Yahoo holds a 24% stake in Alibaba andm under the latest plansm is expected to sell about 10% of the capital in the Chinese group in the initial public offering.

The US firm bought 40% of Alibaba in 2005 for US$1bil and now stands to reap a handsome profit from that. Yahoo sold part of its stake in 2012, getting a gain of US$7.6bil.

Collin Gillis, analyst at BCG, said the agreement could make Yahoo the majority seller on the IPO "and potentially reduce Alibaba's incentive to aggressively price the offering."

Gillis said the IPO would give Yahoo a fresh cash infusion, adding: "We expect the cash proceeds to primarily be used to repurchase shares and to pursue acquisitions."

Alibaba is preparing what is expected to be the biggest tech sector IPO since Facebook's in 2012. It comes amid intense activity in the Web sector, but also concerns about excessive valuations.

But the transaction could give new momentum to Yahoo, which has struggled since losing its position as the leading Web search engine but is refocusing under chief executive Marissa Mayer.

Mayer, a former Google executive, said her efforts are showing signs of turning things around.

"If you look at our core businesses, which we define as search and display, you see an important shift," Mayer said in an earnings call. "Our search revenue grew 9% year over year, marking our ninth consecutive quarter of growth."

Mayer said Yahoo's mobile service was attracting more than 430 million monthly users. "More than half of Yahoo's total monthly audience joins us on a mobile device," she said.


Analyst Brian Pitz at Jefferies suggested the stars are lining up for Mayer and Yahoo, and said the firm is a "compelling" stock to buy.

"The core business is showing slow signs of an inflection, cash flow is being used to buy stock, and the Asian investments are showing strong performance, so we think the stock has compelling risk/reward," Pitz said in a note to clients.

Yahoo's future remains clouded by an uncertain outlook for growth, and it is unclear whether Mayer will be aggressive in areas like video programming or simply conserve capital and buy back shares.

Some say the company has yet to show it has turned a corner, and data this week from comScore showed a new low point in its search engine market share of 10.1%.

"Yahoo management emphasised a focus on responsible stewardship of capital, which likely includes buybacks and asset acquisitions going forward," says a note from Brian Wieser at Pivotal Research.

Wieser noted that Yahoo has lost ground in advertising to social media and that "with most all of the company's current market value wrapped up in the value of Yahoo's minority stakes in Yahoo Japan as well as Alibaba Group, it is important to consider that Yahoo may be unsuccessful in unlocking full value." – AFP

KLCI stages mild rebound

Posted: 16 Apr 2014 06:22 PM PDT

KUALA LUMPUR: The FBM KLCI staged a mild rebound early Thursday, supported by some buying of selected blue chips including Genting Bhd, although the initial mood was still lacklustre  following the weaker closing the previous day.

However, market sentiment could improve following the firmer key Asian markets and the overnight close on Wall Street.

At 9.01am, the KLCI was up 2.63 points to 1,848. Turnover was 89.30 million shares valued at RM34.37mil. There were 144 gainers, 53 losers and 145 counters unchanged.

Reuters reported Asian share markets were trying to rally on Thursday as dovish comments from the head of the US. Federal Reserve coupled with an upbeat economic assessment from the central bank lifted Wall Street for a third straight session.

BIMB Securities Research said despite the firmer overnight close on Wall Street, Malaysian equities could remain volatile.

On Wednesday, the KLCI closed down 8.51 points or 0.46% to 1,845.37 weighed by losses in plantation and banking counters.

"We believe the local market to remain volatile for the time being and investors shall remain cautious as our market remains trading at a premium over

other regional indices. Expect to see immediate support at 1,840/35 while resistance at 1,850/55," said BIMB Research.

Aeon Credit rose 70  sen to  RM14.90 after  reporting a strong set of financial results for the financial year ended February 2014.

Petronas Dagangan rose 16 sen to  Rm30.30 with just 100 shares done. Hong Leong Bank added 12 sen to RM14.08 with 100 shares also.

Among the plantations, PPB Group rose 10 sen to  RM16.24 and United Plantations eight sen higher at RM25.

MISC added eight sen to RM6.83 and Genting Bhd six sen to RM9.58.

Malaysia Airlines  rose 1.5 sen to 23 sen with 40 million shares done on expectations that the current low price could make it attractive to be privatised.

BAT fell the most, down 36 sen to RM61.20 in thin trade.

Hong Leong Capital fell 18 sen to RM12 and HLFG 12 sen to RM15.12.

Infrastructure-property based Gamuda was down nine sen to RM4.50.

Zhulian lost nine sen to RM2.76 after its  earnings fell 42.2% to RM17.17mil in the first quarter ended Feb 28, 2014 from RM29.74mil a year ago as it was impacted by weaker demand from the Thai market.

Bursa fines, reprimands ex-remisier

Posted: 16 Apr 2014 04:50 PM PDT

PETALING JAYA: Bursa Malaysia Securities Bhd has publicly reprimanded and imposed a fine of RM100,000 on former remisier Goh Hong Lim for manipulating the share price of Tomei Consolidated Bhd.

"Bursa places a strong emphasis on the need to maintain a fair and orderly market and will not tolerate any acts or practices which could lead to false trading, manipulative activities and compromising the integrity of the market," said the exchange.

At the time of the breach, Goh was a commissioned dealer's representative of HwangDBS Investment Bank Bhd at its Taman Tun Dr Ismail, Kuala Lumpur branch.

The exchange has ordered to strike off Goh for his offences.

He had contravened and triggered the provisions of Rules 401.1(3), 404.3(1) and 1302.1(1)(a) & (g) of Bursa's pre-revamped rules.

Bursa said Goh had engaged in numerous manipulative and false dealing activities over a period of time in several client accounts.

These dealings included activities which involved bidding down, bidding up, front-running and coordinated trading activities which had the effect of creating a misleading appearance of active trading in Tomei.

"Goh had influenced Tomei's share price by pushing the price down during the period of price fixing for its placement shares," said Bursa.

Kredit: www.thestar.com.my

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