Written by Joseph Chin
Tuesday, 22 June 2010 07:41
KUALA LUMPUR: Key regional markets may see some profit taking on Tuesday, June 22 after Monday’s rally which was spurred by China’s move to signal about its yuan flexibility.
On Wall Street, US stocks once again succumbed to late-day selling in light trading on Monday, as hopes China's newfound dedication to yuan flexibility turned to doubts about the speed and magnitude of Beijing's intentions, according to Reuters.
The market's overall bearish tone eroded the initial optimism around the benefits of the yuan move. The Dow Jones industrial average fell 8.23 points, or 0.08 percent, at 10,442.41. The Standard & Poor's 500 Index was down 4.30 points, or 0.38 percent, at 1,113.21. The Nasdaq Composite Index was down 20.71 points, or 0.90 percent, at 2,289.09.
At home, overnight corporate developments will be the focus of trading attention. The stock to watch is EON CAPITAL BHD [], which holds its AGM at Crowne Plaza Mutiara Hotel, Kuala Lumpur at 10am on Tuesday.
It will be an exciting AGM after Primus Pacific Partners filed legal action at the High Court of Malaya against a number of respondents, including certain members of the board of directors as well as certain shareholders of EONCap.
Primus, which holds 20.2% of EON Cap, said it have to make a “reluctant and difficult decision to file a legal action in order to safeguard the interests of the company, the management team, employees, and all of EON Capital's shareholders". (See updated statement issued by Primus)
In the petition filed by Primus, it is alleged that the directors of the company (except for Ng Wing Fai) have failed to exercise their fiduciary duties and subjected the interests of the Company as a going concern to the interests of shareholders wanting to make an exit from the company.
Other stocks to watch are KENCANA PETROLEUM BHD [], Selangor PROPERTIES [] Bhd and Malaysia Airlines, Scomi Engineering and DFZ CAPITAL BHD [].
Kencana is acquiring shares in three companies from Mermaid Drilling (Singapore) Pte Ltd, together with intercompany loans and debts for US$66.6 million (RM213.12 million). The equity acquisition will amount to US$43.65 million.
The move will make Kencana the only Malaysian group with a wholly-owned offshore drilling subsidiary and will fit in with the group’s plans to expand its recurring income and get businesses with higher margins.
SELANGOR PROPERTIES BHD [] posted net loss of RM25.62 million in the second quarter ended April 30, 2010 due to a foreign exchange loss of RM38.8 million as the ringgit strengthened against the Singapore dollar, US dollar and Australian dollar.
It said on Monday, June 21 that the net loss was lower than the RM38.6 million a year ago when it was affected by the provision for impairment loss on its investment in real estate funds.
Meanwhile, MAS, expressing disappointment with the prolonged delay in the delivery of the A380 super jumbo aircraft and may choose to cancel its six orders.
"We do not rule out anything," said its managing director and chief executive officer Tengku Datuk Azmil Zahruddin.
MAS is also investing RM450 million over the next five years to strengthen its position as an airline offering value to customers, which will see the airline boosting its service standards and offerings.
SCOMI ENGINEERING BHD [] is planning to propose a monorail system in the Greater KL to support the proposed mass rapid transit (MRT) project under the 10th Malaysia Plan (10MP).
Its president Syahrunizam Samsudin said that a new monorail system would be ideal to connect the feeder areas and the trunk line that is served within the MRT’s 20-kilometre circular radius of the city.
"The MRT is a major trunk line in the Greater KL that was proposed under the 10MP, but we see a gap between the feeder areas and sub-urban areas going into the trunk line. This is where the monorail comes in," he said
DFZ Capital Bhd's earnings surged 152% to RM23.28 million in the first quarter ended May 30, 2010 from RM9.23 million a year ago mainly due to contributions from the newly acquired subsidiaries. Revenue was slightly higher at RM127.81 million from RM120.27 million. It proposed 5.0 sen dividend.
When compared with the fourth quarter ended Feb 28, 2010, revenue for the current quarter fell about RM27.1 million mainly due to more sales from customers during the year end school holidays and festive season.