Written by Yong Min Wei
Wednesday, 03 February 2010 07:53
KUALA LUMPUR: Blue chips may extend their gains for the second day on Wednesday, Feb 3 after the firmer close on Wall Street raised their risk appetite for equities.
On Wall Street, US stocks rallied on upbeat earnings and economic data on Tuesday, Feb 2 while European shares advanced, helped by miners benefiting from Australia's interest rate policy.
The Standard & Poor's 500 stock index rose 1.3 percent, to 1,103.32 and the Dow Jones Industrial average gained 1.09 percent, to 10,296.85.
At Bursa Malaysia, stocks to watch include HONG LEONG BANK BHD [], EON CAPITAL BHD [] (EONCap), KUB MALAYSIA BHD [], HUNZA PROPERTIES [] BHD [] and LONDON BISCUITS BHD [].
EONCap's board had rejected Hong Leong Bank's RM4.29 billion cash offer or RM7.10 per share offer as it described the offer as significantly undervaluing EON Cap. MEanwhile, Hong Leong Bank said the offer had lapsed yesterday.
EONCap, which owns EON Bank Bhd, said after fully consulting its advisers and considering all available information, its board of directors decided the offer was not in the interest of the company and its shareholders.
The rejection appears to derailed HLBB's plan to become the country's fourth-largest banking group with total assets of about RM111 billion, up from its current sixth position with close to RM77 billion worth of assets.
According to analysts, investors will want to see what is Hong Leong Bank's next move. Industry observers believe EONCAp's move to reject HLBB’s offer is the start to a long drawn battle for the targeted banking group.
There are expectations that analysts will likely revise their call downwards to the original fair value of the stock before the offer was made.
An analyst told The Edge FinancialDaily EON Cap’s fundamental value is around the RM6 to RM6.50 region.
He added there could be changes in the valuation if there is another suitor but this seems unlikely now. He said Mulpha's offer did not bring about any synergies.
KUB’s unit has secured a RM29.78 million contract from the government to upgrade the digital TV Playout Centre for Radio Television Malaysia (RTM).
Hunza's 2Q earnings surged 92% to RM13 million from RM6.76 million a year ago on the back of a revenue of RM59.40 million versus RM24.61 million previously.
London Biscuits has proposed to buy a 32% stake in poultry-based TPC PLUS BHD [] for RM7.68 million, as it seeks to ensure regular supply for its expanding cake confectionery business.
ETI Tech Corp Bhd has raised the ante in the green revolution with its lithium-based battery, replacing the conventional lead acid-based battery, for use in the solar home syste
