Written by Joseph Chin
Saturday, 15 May 2010 10:28
KUALA LUMPUR: The weaker close on Wall Street will again weigh on the already cautious investors’ sentiment on key regional markets including Bursa Malaysia when trading resumes on Monday, May 17.
On Wall Street, US stocks fell on Friday following a combination of weak earnings from retailers, Senate backing for limits on credit card fees and concerns over the sustainability of European public debt.
The Dow Jones industrial average dropped 162.79 points, or 1.51%, to end at 10,620.16. The Standard & Poor's 500 Index fell 1.88% to 1,135.68. The Nasdaq Composite Index lost 1.98% to close at 2,346.85.
At Bursa Malaysia, stocks to watch include CIMB Group Bhd, F&N, PacificMas and Sime Darby.
CIMB Group had on Friday night announced it is buying a 17.10% equity interest in PT Bank CIMB Niaga Tbk for RM1.7 billion from Khazanah Nasional Bhd which would be satisified via new CIMB Group shares. CIMB Group currently holds 78.26% stake.
Banks would also be in focus after announcing their decisions to raise their interest rates after Bank Negara Malaysia upped the overnight policy rate by 25 basis points.
Fraser & Neave Holdings Bhd is divesting its entire stake in Malaya Glass Products Sdn Bhd (MGP) for total cash consideration of US$221.7 million (RM710.8 million). With the settlement of inter-company loans, total cash proceeds will be around US$259.6 million (RM832.2 million).
F&NHB expects to realise an estimated gain of about RM 324.7 million or 91 sen per share from the divestment.
PACIFICMAS BHD [] has received Bank Negara Malaysia's approval to start talks with a foreign party, Fairfax Asia Ltd to dispose of its insurance unit, The Pacific Insurance Bhd.
Heavyweight Sime Darby's huge cost overruns and projects losses weighed heavily on the market and it ended the day down 40 sen to RM8.25, wiping about RM2.3 billion from its market capitalization after losses from its energy and utilities divisions.
Sime Darby will announce its results on May 27.
Other stocks with fresh corporate developments are SEALINK INTERNATIONAL BHD [] which has secured and commenced a long term charter for an offshore support vessel to Australia, and it has also sold an offshore vessel abroad for a total of RM88 million for the two transactions.