Written by The Edge Financial Daily
Friday, 23 April 2010 07:54
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KUALA LUMPUR: Stocks on Bursa Malaysia are expected to see lacklustre trading on Friday, April 23 as investors could be unconvinced by the late nudge on Thursday which pushed the FBM KLCI into the positive territory.
The FBM KLCI ended at 1,337 on Thursday on last minute buying of index-linked stocks. However, sentiment could be helped by the 30-stock index futures market which closed eight points higher at 1,342.
In the US, stocks managed to recover on Thursday, helped by strong earnings from consumer companies including Starbucks Corp, reflecting that First-quarter earnings are on track to set a record for the percentage of companies beating estimates.
The stronger corporate earnings helped buoy sentiment despite Greece's shaky finances, according to Reuters.
The Dow Jones industrial average climbed 9.37 points, or 0.08 percent, to 11,134.29. The Standard & Poor's 500 Index rose 2.73 points, or 0.23 percent, to 1,208.67. The Nasdaq Composite Index gained 14.46 points, or 0.58 percent, to 2,519.07.
Stocks to watch on the local bourse include Axiata Group Bhd, GENTING BHD [], F&N Holdings Bhd, MAH SING GROUP BHD [] and Yeo Hiap Seng (Malaysia) Bhd. Others include PENSONIC HOLDINGS BHD [], British American Tobacco (Malaysia) Bhd and Nestle (Malaysia) Bhd.
Axiata will be in focus following the successful placement of its US$300 million 10-year bonds. It announced some headline KPI targets for FY10, which include included revenue growth of 12.1%, with a target of earnings before interest, tax, depreciation and amortization of 14.1%.
Axiata’s bonds issuance was a strong endorsement of the company’s prospects considering that a similar bond issue by higher-rated Petroliam Nasional Bhd (Petronas) carried a similar yield.
Genting’s shares could be in focus after its 51.73%-subsidiary Genting Singapore Plc fell to its lowest level in seven weeks. Investors are concerned that visitor numbers will drop when a second casino resort in the city-state opens next week.
Fraser & Neave will sell off its Ampang Hilir 233 project for RM53.8 million, earning the group RM21.98 million which it will use in its operations. It said the proposed disposal would enable the group to immediately realise the profit from the disposal.
Meanwhile, Mah Sing’s acquisition from Fraser & Neave Holdings Bhd will allow the group to immediately launch a new project called M Suites@Jalan Ampang, in line with its business model of having a quick turnaround for niche projects.
Yeo Hiap Seng reported a net profit of RM5.62 million in the first quarter ended March 31, 2010, from a net loss of RM8.73 million a year ago. It also announced several boardroom changes with the appointments of Tjong Yik Min as its new CEO and director and Koh Boon Hwee as chairman. The counter closed 3 sen higher at RM1.38 yesterday.
Pensonic saw net profit fall 48.2% to RM442,000 from RM853,000 in 3Q10 despite a 17.2% rise in revenue following a shift in focus by the company to concentrate on high-margin items while reducing operational costs.
British American Tobacco posted a lower net profit of RM191.9 million in its first quarter ended 31 March, 2010, citing higher finance costs and higher tax rate.
It said the tobacco industry remains challenging despite the stabilisation in industry volume for the first quarter, as a trend of high levels of illicit trade and implementation of regulations requiring withdrawal of packs less that 20 sticks in June hurt industry margins.
After just over a month in the hot seat as non-executive director tasked with turning the beleaguered Ho Hup CONSTRUCTION [] Company Bhd around, Hew Thin Chay has resigned from his position on the board, citing personal commitments.
Nestle expects to achieve stronger export growth this year following improvement in demand, said its managing director Robert Peter Vogt. It has planned RM140 million on capital expenditure for capacity expansion, innovation and investments.