Written by Joseph Chin
Wednesday, 12 August 2009 07:45
KUALA LUMPUR: Trading is expected to be lacklustre except for a few stocks on Aug 12 as investors' sentiment is expected to be dampened by the overnight fall on Wall Street.
On Wall Street, stocks fell after a prominent banking analyst warned the sector's fundamentals have yet to improve, and an unexpectedly large drop in wholesale inventories raised worries about an economic recovery.
The drop in US wholesale inventories in June, which was nearly double expectations, showed businesses remained sceptical about a return in demand.
OSK Investment Research, in its technical report, said the market has been inching up since violating the 1,150-1,175 trading range.
The research house said the consolidation in market action has allowed the small and mid-cap stocks to rally over the last three trading days. The near-term technical outlook of the market still remains firmly bullish. Meanwhile, the daily RSI which closed at the 77.2 pt-level yesterday suggests that the market is still not overbought.
"Today, we will see how the regional markets react to the profit-taking streak on Wall Street. The stock
markets might even be stuck in a rut ahead of tomorrow FOMC rate decision and latest policy directive.
"From the current level, an immediate resistance lies at the 1,187 pt-level followed by the 1,200 psychological ark. An immediate support is still seen at the 1,165 pt-level, followed by the 1,135 ptlevel,
and the 1,100-psychological mark," it said.
At Bursa Malaysia, stocks which could see some trading interest are banks including BCHB and AMMB.
BCHB is scheduled to release its second results after market close while AMMB put up a strong performace in its 1Q results ended June 30.
AMMB's 1Q earnings rose 27% to RM258.24 million, up from RM202.91 million a year ago, boosted by its strong investment banking business
UAC said its net profit rose to RM5.9 million for 2Q ended June 30, 2009 from RM4.9 million a year ago due to stronger demand for its products due to restocking of inventory by customers and also the substantial gains on disposal of shares. The board declared a gross dividend per share of 12 sen.
Scomi Marine's 2Q net profit rose 55% to RM22.48 from RM14.52 million a year ago, underpinned by improved margins through better operations management. Gross profit margin for the quarter was wider at 26.2% on lower bunker and docking expenses.
NSTP and Media Prima should see some trading interest on expectations that Media Prima would take the newspaper publisher private via a share swap exercise.
AmResearch said Media Prima's FY10F's net earnings should improve 20%, resulting in net effect of 5% earnings dilution.
"This would also avoid earnings leakages from NSTP as we expect NSTP's earnings rebounding from an estimated RM5 million in FY09F to RM39 million in FY11F.
"We reaffirm our BUY rating on Media Prima with unchanged fair value of RM1.80 per share, based on a 10% discount to our discounted cash flow valuation of RM2/share. We are putting our BUY recommendation and fair value of RM1.40 a share for NSTP under review pending more clarification on the privatisation deal. At current levels, it is trading at 0.4 times Price/NTA, above its three-year average of 0.36 times," it said.
MAH SING GROUP BHD [ MAHSING 0.000 0.000 (0.000%) Stock Summary
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] requested a one-day trading suspension and markt talk is that it could be related to a sizeable acquisition.
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