Written by Joseph Chin of theedgemalaysia.com
Tuesday, 25 January 2011 07:52
Bookmark and Share
KUALA LUMPUR: Stocks on Bursa Malaysia may advance on Tuesday, Jan 25 as hopefully, the recent profit taking by foreign funds may have abated while local investors’ sentiment perk up following the firmer overnight close on Wall Street.
Analysts said local investors should look into the underlying fundamentals of the country and also the companies and seek out oversold counters which offered upside. The earnings season is underway with Public Bank set to deliver its fourth quarter earnings on Tuesday.
On Monday, the Dow Jones industrial average rose 108.68 points or 0.92% to 11,980.52. The Standard & Poor's 500 Index was up 7.49 points, or 0.58% at 1,290.84. The Nasdaq Composite Index was up 28.01 points, or 1.04% at 2,717.55.
The blue-chip Dow neared the psychologically important 12,000, pulled higher by natural resources stocks like Alcoa while the Nasdaq gained more than 1% on large-cap tech shares.
Reuters reported TECHNOLOGY [] shares gained after giant Intel Corp raised its dividend and announced a share buyback led by natural resources and tech shares as investors saw stocks regaining momentum lost late last week.
A share-buyback from Dow component Intel helped revive optimism, which has been reinforced by more strong profit reports. Three-quarters of the 84 S&P 500 companies that have reported results so far in this earnings season have beaten analysts' estimates.
At Bursa Malaysia, selling woes persisted throughout Monday, with selected PLANTATION [] stocks among the main losers as foreign funds took profit but the broader market showed some resilience as the number of declining stocks narrowed.
The FBM KLCI was down 4.46 points or 0.29% to 1,542.97, but off the earlier low of 1,539.48. Turnover was 1.83 billion shares valued at RM2.21 billion. A total of RM7.33 billion was erased from the market capitalisation on Monday.
Stocks to watch on Tuesday include TIME ENGINEERING BHD [], TIME DOTCOM BHD [], Malaysia Smelting Corp Bhd (MSC), MUDAJAYA GROUP BHD [] and Lion Industries Bhd.
The Edge FinancialDaily analyses the latest restructuring exercise undertaken by Time Engineering may end up making the company cash rich and less vulnerable to being a takeover target as it moves its crown jewel, a 24.9% stake in Time dotCom, under the direct ambit of Khazanah Nasional Bhd.
MSC, the world’s third largest supplier of tin, topped the gainers' list on Bursa Malaysia’s the price of tin continued its upward trend and shot to an all-time high on the back of supply disruptions in Africa, China and Indonesia.
On Mudajaya, OSK Research said it was maintaining its Buy call and raised its target price to RM7.44 after its recent meeting with the management rekindled its optimism in Mudajaya.
The research house said the award of the Janamanjung power plant could serve as the immediate catalyst via the civil works (RM1 billion). In India, the company has submitted thre highway proposals via build-operate-transfer totalling RM3 billion. “We switch our valuation method to one based on SOP and raise our TP to RM7.44. Maintain BUY,” OSK Research said.
Shares of the CONSTRUCTION [] company fell 22 sen to RM4.94 on Monday in line with the profit taking.
Lion Industries Corp Bhd’s Antara Steel Mills Sdn Bhd is proposing to undertake a RM300 million Islamic securities programme, which would enable Antara to tap into the domestic capital market at competitive interest rates.
It said Antara will have cash inflow of RM300 million of which RM130 million will be utilised to refinance the outstanding existing Islamic securities which were issued by Antara in year 2005.
“The balance, will be utilised, among others, to fund Antara’s capital expenditure and the working capital requirements of Antara’s plants in Johor and Labuan,” it said.
MTD ACPI ENGINEERING BHD [] has received a notice of an unconditional takeover offer for the remaining 49.23% stake at 53 sen per offer share from Alloy Consolidated Sdn Bhd and two other companies. However, there is limited upside for the shares, which closed at 51.5 sen on Monday.
BORNEO OIL BHD [], whose securities had surged in active trade recently, said it was unaware of the unusual market activity (UMA).
In reply to a query from Bursa Malaysia Securities Bhd on Monday, Jan 24, the board said there was no corporate development relating to the group's business affairs that has not been previously announced that may account for the UMA including those in the stage of negotiation or discussion.