Written by Joseph Chin
Thursday, 24 June 2010 07:40
KUALA LUMPUR: Market sentiment could be somewhat cautious on Thursday, June 24 after the very late rally on Bursa Malaysia, supported by several heavyweights, while investors digest news from Wall Street’s weaker closing and the Federal Reserve's assessment of the US economy.
US stocks mostly fell in a volatile session on Wednesday after the Federal Reserve downgraded its assessment of the economic recovery as it vowed to keep cheap money flowing, according to Reuters.
The Dow Jones industrial average edged up 4.92 points, or a marginal 0.05%, to finish at 10,298.44. But the Standard & Poor's 500 Index dipped 3.27 points, or 0.30%, to close at 1,092.04. The Nasdaq Composite Index fell 7.57 points, or 0.33%, to close at 2,254.23.
However, despite the cautious stance, sentiment at Bursa could be given a lift on expectations of more funds flowing in from China.
The latest development has seen China recognising Malaysia as an approved investment destination under China's Qualified Domestic Institutional Investor (QDII) scheme administered by the China Banking Regulatory Commission (CBRC).
The Securities Commission said the recognition marks a major step forward for the Malaysian capital market. "It will facilitate the flow of Chinese funds into Malaysia and open up business opportunities for the Malaysian capital market intermediaries," it said.
Meanwhile, stocks to watch include M3NERGY BHD [], LINEAR CORPORATION BHD [], BERJAYA SPORTS TOTO BHD [] (BToto), KENMARK INDUSTRIAL CO. (M) BHD [] and RAMUNIA HOLDINGS BHD []
The Edge FinancialDaily analyses whether shareholders of M3nergy will decide to accept the conditional takeover of the oil and gas provider this time around at RM1.85 per share? This is the second takeover offer for the company in a span of nearly two years.
And not surprisingly, the latest development saw Adamus Avenue Sdn Bhd announcing the offer has been extended beyond the first closing date, which is Thursday, June 25 to Friday, July 9.
M3nergy said Adamus’ written notice dated June 23, which sets out the details of the revised timing of the offer, has been despatched to the shareholders of M3nergy and holders of the ESOS options.
The Edge FinancialDaily also analyses the outlook for Linear. After explosive revelations of all that transpired at Linear, perhaps the immediate question on investors' minds is whether the beleaguered company will soon see some light at the end of the tunnel.
BToto says its unit Sports Toto Malaysia Sdn Bhd proposed to undertake a medium term notes (MTNs) programme of up to RM800 million and it has received the approval fro the Securities Commission.
The anticipated initial drawdown of the MTNs is expected to be sized approximately RM500 million, the proceeds of which will be principally utilized towards the refinancing of the BToto Group’s existing bank borrowings and for working capital.
Meanwhile, more woes ahead for Kenmark, which received a letter of demand for RM50.98 million, which is the principal sum and interest accrued for an unsecured term loan of RM50 million.
Kenmark said on Wednesday, June 23 the letter of demand was issued by Messrs Zul Rafique & Partners acting for CapOne Bhd and Malaysian Trustees Bhd.
Ramunia posted a net profit of RM16.41 million in the second quarter ended April 30, 2010 (2QFY2010) after reporting net loss of RM13.34 million a year ago, due to a one-off gain from disposal of assets to Sime Darby Engineering Sdn Bhd (SDE) of RM20.72 million.
Ramunia said on Wednesday, June 23 that revenue fell 44% to RM48.94 million from RM87.19 million while registering basic earnings per share of 2.53 sen versus a loss per share of 2.37 sen previously.
For the six months ended April 30, 2010, Ramunia recorded a net profit of RM19.83 million versus a net loss of RM19.11 million the same period last year while revenue dropped 54% to RM81.87 million from RM177.21 million.