Written by Melody Song & Isabelle Francis
Thursday, 25 March 2010 07:55
KUALA LUMPUR: Key regional markets are expected to start off on a cautious note on Thursday, March 25 as buyers take a back seat after U.S. stocks retreated on mounting concerns about a spiralling debt burden in some developed economies.
On Wall Street, the Dow Jones industrial average closed down 47.69 points, or 0.44 percent, at 10,841.14, while the Standard & Poor's 500 Index declined 6.23 points, or 0.53 percent, to 1,167.94. The Nasdaq Composite Index fell 15.01 points, or 0.62 percent, to 2,400.23.
The MSCI all-country world stock index plunged 2.4 percent.
Reuters reported a downgrade of Portugal's credit ratings by Fitch set the negative tone in European markets, which have already been fretting about the fiscal situation of Greece and other weaker members of the euro zone.
At Bursa Malaysia, the positive news from Bank Negara Malaysia and fresh corporate developments could help lift investors’ sentiment despite the cautious external events.
BNM projects the economy to expand by between 4.5% and 5.5% in 2010, as recovery gathers momentum after a positive growth of 4.5% in the fourth quarter of last year.
Stocks to watch are those related to the water services industry – GAMUDA BHD [], PUNCAK NIAGA HOLDINGS BHD [] and KUMPULAN PERANGSANG SELANGOR [] Bhd (KPS). Other which would be in focus are Axiata Group Bhd, TELEKOM MALAYSIA BHD [], glove makers and Tanjong plc.
Gamuda made a RM10.75 billion bid to buy the entire Selangor water assets and operations via its 40% associate Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash).
The CONSTRUCTION [] cum utilities stock is expected to see some movement after closing one sen lower at RM2.82 on Wednesday.
Puncak Niaga Holdings Bhd, which owns 70% of the state water distribution arm, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), ended one sen lower at RM2.48 on Wednesday. KPS, which owns 30% in Splash, was down one sen at RM1.41.
TM will announce the pricing structure for its next-generation high-speed broadband service, “UniFi”. TM is also scheduled to hold a press conference in the afternoon to unveil the HSBB retail offerings, packages and pricing.
The bookbuilding exercise of PT XL Axiata Tbk, Axiata Group Bhd's Indonesian operations, has been received favourably by investors.
Glove makers will see trading activity after the US had passed the healthcare reform bill. Stocks to watch are TOP GLOVE CORPORATION BHD [], KOSSAN RUBBER INDUSTRIES BHD [] and HARTALEGA HOLDINGS BHD [].
Nomura Securities Research projects Kossan and SUPERMAX CORPORATION BHD [] as most likely to be key beneficiaries from the changes to the healthcare policies as Kossan had 50% of its sales from US while Supermax had 42%.
Tanjong plc’s net profit increased four-fold to RM126.07 million from RM28.99 million a year earlier for the fourth quarter ended Jan 31, 2010. Meanwhile, its full-year net profit rose 46% while its revenue was marginally higher at RM3.90 billion for FY10 from RM3.69 billion in FY09.
Timber producer JAYA TIASA HOLDINGS BHD [] saw a much stronger increase in its net profit for the third quarter ended Jan 31, 2010 to RM13.76 million from RM152,000 a year earlier on the back of stronger sales in its logs and fresh fruit bunches (FFB) of oil palm.
NGIU KEE CORPORATION (M) BHD [] proposed a capital reduction, which would involve reducing its par value of its shares RM1 to 20 sen each. The credit of RM54.98 million from the reduction would be used to pay off accumulated losses.
Investors should be aware that despite the share capital reduction, there is no consolidation of the shares.