Written by Joseph Chin
Friday, 28 May 2010 12:41
KUALA LUMPUR: Stocks could extend their rebound on Monday, May 31 after the strong corporate earnings growth in the quarter ended March 31 and improving external environment, especially from the US and Europe.
The only drag on the 30-stock FBM KLCI would be Sime Darby which posted net loss of RM308.63 million in the third quarter. Other stocks to watch would be Axiata Group Bhd, low profile MALAYSIA BUILDING SOCIETY BHD [] (MBSB), TELEKOM MALAYSIA BHD [] and, HAP SENG CONSOLIDATED BHD [].
Sime’s losses contrasted with the net profit of RM150.57 million a year ago as it took a hit from the provisions made in its energy and utilities division totalling RM964 million.
The latest development has seen the conglomerate appoint a legal firm to investigate if fraud had occurred at the E&U division.
It had also commissioned PricewaterhouseCoopers to review the group and its reporting structure. This would continue to weigh on Sime Darby until the findings are revealed.
For the nine months ended March 31, Sime Darby's net profit fell to RM804.20 million from RM1.3 billion a year ago as it was impacted by the provisioning for the energy and utilities division.
Axiata overseas expansion is showing results after net profit surged to RM921.47 million in the quarter ended March 31, 2010 from RM63.89 million a year ago. However, it remains cautious for the remaining year.
Axiata’s gains were driven by improved contribution in key operating companies and one-off gain on disposal of shares in PT XL Axiata Tbk. It recorded a one-off gain of RM173.2 million arising from the merger of Spice and Idea on March 17, 2010. .
Revenue rose 31% to RM3.81 billion from RM2.91 billion a year ago, due to continuous improvement, particularly in XL, Axiata (Bangladesh) Ltd and Celcom. Earnings per share jumped to 11 sen, compared to one sen a year earlier.
Malaysia Building Society Bhd (MBSB) saw its revenue surge to RM279.4 million from RM104.2 million a year ago. Net profit jumped to RM43.2 million from only RM5.8 million a year ago underpinned by growth in loans.
MBSB said net loans, advances and financing grew by 7.6%. The largest contributor to the strong growth was from personal financing. During the quarter, MBSM remained focus on providing personal financing to civil servants, which represent a steady pool of customers.
Deposits from customers grew by 11.9% in the quarter ended March 31 to reach RM8.5 billion from RM7.6 billion on Dec 31, 2009.
As for Telekom Malaysia Bhd, the unrealised exchange gain on translation of foreign currency borrowings propelled the earnings to RM242.94 million despite nearly flat revenue at RM2.12 billion.
Earnings jumped to RM242.94 million from RM27.73 million a year ago mainly due to unrealised exchange gain on translation of foreign currency borrowings of RM166.6 million.
Its revenue growth will continue to hinge on data, Internet and multimedia and other telecommunications services.
Property-PLANTATION []s based Hap Seng Consolidated Bhd’s net profit jumped 127% to RM39.48 million in the quarter ended March 31, due to higher contribution from its plantation, property, and quarry & building materials divisions.
Its plantation division benefited from higher sales volume and the increase in selling price for crude palm oil and palm kernel. It also saw a significant reduction in production costs due to lower fertiliser prices.