Written by Joseph Chin
Tuesday, 18 August 2009 07:49
KUALA LUMPUR: Investors will have to brace for more selling pressure on Tuesday, Aug 18 after key US indices fell as much as 2.7% overnight, following the spillover effect from Asian markets' tumble.
On Wall Street, the Dow Jones industrial average dropped 186.06 points, or 2%, to end at 9,135.34. The Standard & Poor's 500 Index slid 24.36 points, or 2.43% to 979.73. The Nasdaq Composite Index lost 54.68 points, or 2.75%, to 1,930.84.
On Monday, investors in the Shanghai and Shenzen markets were on a profit-taking spree which saw the markets dropping 5.79% and 6.56% respectively. At the Bursa Malaysia, the FBM KLCI slid 1.64% or 19.52 points to 1,169.05, its biggest single-day drop since June 16.
The factors for the tumble in the markets were weaker US consumer confidence and concerns that markets had run ahead of fundamentals; weaker outlook for China's economy and the long recovery ahead for Japan. Commodity prices also skidded.
As for Bursa Malaysia, investors should base their investment strategies on companies with strong fundamentals, strong management, transparency and strong cashflow to tide through another bout of selling.
Investors should hold on to their core holdings - stocks with strong fundamentals - and these next two weeks should provide an indicator as the companies report their April to June earnings or losses.
Factors to watch out for are -- rising inventories, weak cashflow, foreign exchange losses or gains and also writebacks -- before making their next move. Companies which are reluctant to be transparent to investors should be shunned.
Stocks to watch today following the recent corporate results and news include PLANTATION [ PLANTATION 5,852.720 -86.660 (-1.459%) ] stocks after crude palm oil futures tumbled RM90 to RM2,371, oil and gas companies, POS MALAYSIA BHD [ POS 0.000 0.000 (0.000%) ], TA ANN HOLDINGS BHD [ TAANN 0.000 0.000 (0.000%) ], DREAMGATE CORPORATION BHD [ DGATE 0.185 -0.005 (-2.632%) Stock Summary
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] and BINA DARULAMAN BHD [ BDB 0.000 0.000 (0.000%) ].
Pos Malaysia reported a 24.33% increase in net profit to RM15.79 million in the second quarter (2Q) ended June 30, 2009, compared with the corresponding quarter last year, boosted by a RM1.9 million writeback of impairment in value of marketable securities.
Ta Ann Holdings posted a net profit of RM22.77 million in 2Q, up 12% from RM20.30 million a year ago boosted by RM7.7 million in unrealised exchange gain.
Dreamgate Corporation incurred a net loss of RM17.57 million in the second quarter ended June 30, 2009 (2Q09), versus a net profit of RM8.11 million a year earlier due to foreign exchange losses of RM6.7 million and lower contribution from all divisions. Revenue was more than halved to RM41.4 million from RM84.69 million.
Bina Darulaman recorded a net profit of RM3.13 million in the second quarter (2Q) ended June 30, 2009, down 30% from RM4.5 million a year earlier due to fewer jobs.
Revenue fell 13% to RM49.98 million from RM57.21 million. Earnings per share was 4.72 sen from 6.79 sen.
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