Written by The Edge Financial Daily
Friday, 14 August 2009 00:44
KUALA LUMPUR: With market sentiment firmer, especially with the buying spreading out to small cap stocks including property counters, gains could extend on Aug 14 after the firmer close on Wall Street.
However, with the weekend ahead, there could also be pockets of selling on some stocks which had run up as investors lock in gains and await fresh news.
Small cap property stocks have had a good run on Aug 13 and there could be rising interest as investors view an economic recovery would be an opportunity to pick up the laggards and companies with strategic landbanks. These stocks include E&O and SP Setia.
On Wall Street, Stocks rose on Thursday as better-than-expected earnings by Wal-Mart Stores Inc helped offset disappointing government numbers on retail sales and jobs.
The Dow Jones industrial average rose 36.58 points, or 0.39 percent, to 9,398.19. The Standard & Poor's 500 Index gained 6.92 points, or 0.69 percent, to 1,012.73. The Nasdaq Composite Index added 10.63 points, or 0.53 percent, to 2,009.35.
Financial stocks were among the bright spots, a day after hedge fund manager John Paulson -- who had made a fortune betting against financial companies after foreseeing the credit crisis -- disclosed that he had bought large stakes in several banks, including Bank of America.
Stocks to watch on Bursa Malaysia include Coastal Contracts, Green Packet, Fajarbaru, Wellcall and small cap property counters.
COASTAL CONTRACTS BHD [ COASTAL 1.950 0.040 (2.094%) ] has secured sales worth RM70 million for two units of offshore support vessels and one unit of tugboat.
The Sabah-based shipbuilder company said the new orders are expected to contribute positively to its earnings per share (EPS) and net assets per share for the financial years ending Dec 31, 2009 to Dec 31, 2011.
WiMAX licence holder, GREEN PACKET BHD [ GPACKET 0.845 0.010 (1.198%) ] has set the price of its rights issue.
The company is planning an issue of one rights share and one detachable warrant for every two existing ordinary shares of 20 sen each, on an entitlement date to be determined.
The issue price of the rights share is fixed at 50 sen per share and the exercise price of the free detachable warrant is fixed at 95 sen.
Green Packet posted a higher net loss of RM27.9 million for its second quarter ended June 30, 2009 compared to the same quarter last year of a net loss of RM4.9 million .
In contrast, revenue grew 151.5% to RM56.5 million in the quarter.
The company said the net loss in the quarter was mainly attributed to heavy promotional activities and subscriber acquisition costs for the broadband business.
Infrastructure contractor Fajarbaru Builder Group Bhd is making a private placement of up to 10% of its issued and paid-up capital, aiming to raise between RM14.6 million to RM18.7 million.
Based on the company's issued and paid-up share capital on Aug 11, up to 17.3 million new shares may be issued. The proceeds after expenses, will be utilised to fund working capital requirements.
Manufacturer of industrial rubber hoses WELLCALL HOLDINGS BHD [ WELLCAL 1.420 0.000 (0.000%) ] has declared a tax-exempt dividend of three sen per share in respect of the financial year ending Sept 30, 2009 with an entitlement date of Sept 3.
The company posted a 44.25% quarter-on-quarter drop in revenue to RM16.6 million in its third quarter ended June 30 results announced yesterday, due to the contraction in demand for industrial rubber hoses caused by the global financial crisis.
However, it saw margins improve with only small drop in net profit to RM3.13 million, compared to RM4.27 million from the second quarter this year, benefiting from lower cost of raw material and favourable foreign exchange gain.