Written by Joseph Chin
Thursday, 27 August 2009 20:59
KUALA LUMPUR: Market sentiment is expected to stay lacklustre on Aug 28, ahead of the long weekend for the Merdeka holidays and also in tandem with the cautious overseas markets, especially key regional bourses.
However, a firmer overnight close on Wall Street would galvanise investors' interest again before some profit taking caps the gains.
Stocks to watch include shipbuilding group TAS Offshore Bhd, which makes its debut on the Main Board, the Lion Group, MALAYSIAN RESOURCES CORP []oration Bhd (MRCB) and Sime Darby.
TAS' IPO had the highest oversubscription rate among the IPOs this year at 19.47 times. The issue price is 90 sen.
According to OSK Investment Research, TAS, which operates a 12.3-acre fully equipped shipbuilding yard in Sibu, builds about 23 vessels per annum. Since it started in the shipbuilding business, it has built over 150 vessels which are constructed based on international standards. Besides upgrading its existing shipbuilding yard, the group is setting up a new shipbuilding yard occupying at least 60 acres.
At present, most of the vessels it builds constructs are based on contracts from customers. Going forward, the management plans to build vessels based on common specifications for sale as it believes that the new business model would enhance profit margins from 10%-20% to 30%-40%. The Group also plans to build, own and charter its own Offshore Supply Vessels.
Meanwhile, LION DIVERSIFIED HOLDINGS BHD [] sunk deeper into the red in 4Q ended June 30, 2009 with net losses of RM361.49 million compared with net loss of RM1.98 million a year ago, mainly due to losses by its associates.
MRCB recorded higher profit in its second quarter ended June 30, 2009 of RM12.04 million, an improvement from the RM153,000 in the first quarter, driven by higher realization of progress works.
Its earnings were also boosted by recognition of approved variation order claims for both the engineering and CONSTRUCTION [] and transmission works of which the related project costs incurred had been accounted for in previous financial year.
Sime Darby's 4Q net profit was RM984.04 million, down 3.6% from RM1.02 billion a year ago but the conglomerate was generally upbeat about the new financial year, underpinned by a global economic recovery. It said market conditions under which the group operated appeared favourable, though uncertainty still persisted in certain market segments.
Oil and gas player KNM GROUP BHD [] saw its net profit drop by 25.8% year-on-year for its second quarter of FY2009 to RM71.42 million from RM96.29 million. Revenue for the period came in lower at RM439.26 million compared to RM599.4 million that was posted for the previous year’s corresponding quarter.