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Written by Joseph Chin of theedgemalaysia.com
Thursday, 22 September 2011 21:10
KUALA LUMPUR: After seeing RM31.83 billion erased from the Malaysian market capitalisation on Thursday, Sept 22 which saw the FBM KLCI falling to a more than a 13-month low, analysts said investors would stay on the sidelines.
Any hope of a mild recovery was quashed despite some positive corporate news on the local front. Investors would be bracing for more selling, especially since the KLCI fell below the critical 1,400 level.
Technical analysts said the next support level could be 1,360 after the KLCI closed down 31.23 points to 1,387.81. Of concern was the broader market as declining counters hammered gainers by 802 to 85. Malaysia saw a net offshore selling of US$48 million on Thursday, Reuters said.
Reuters also reported European stocks sank on Thursday, hitting a 26-month low as the Federal Reserve's bleak outlook for the U.S. economy and data showing the Chinese and German economies losing steam sent investors rushing out of risky assets.
The UK’s FTSE 100 fell 4.95%, France’s CAC 40 5.5% and Germany’s DAX 4.8%. The MSCI All-Country World Index slid 2.7% at 8.31am, New York time, extending its declines from its May peak to more than 20%.
Oil prices fell by more than US$4 a barrel on Thursday, with US futures touching US$81.86 barrel as a combination of signals heightened worries about global economic growth and a rallying U.S. dollar added to downward momentum. Brent crude oil fell by more than US$4 to touch US$105.87 a barrel, the news agency reported.
At Bursa Malaysia, despite the selldown on equities, investors could perhaps depend on commodities and oil and gas stocks to be among the more resilient counters. Some banks had been sold on worries about a weaker economic growth which would weigh down earnings.
Among the stocks to watch are Eversendai Corporation Bhd, WCT BHD [], ECM Libra Financial Group Bhd and BERJAYA LAND BHD [].
Other counters which could see some trading interest are Boilermech Holdings Bhd, Malaysia Airports Holdings Bhd (MAHB)and SAPURACREST PETROLEUM BHD [].
Eversendai’s subsidiaries have secured RM371 million contracts for projects in India and Middle East.
Eversendai CONSTRUCTION [] Pte Ltd was appointed as major sub-contractor to Samsung C&T Pvt Ltd for the shell and core works related to the Worli mixed use development in Mumbai, India.
Malaysia Airports Holdings Bhd (MAHB) is privatising the construction and financing of the integrated complex at KLIA2 under a 25-year concession period to Segi Astana Sdn Bhd – joint venture between WCT Bhd and MAHB. The construction cost is RM530.3 million.
Boilermech Holdings Bhd declared an interim dividend of 12.5% per 10 sen amounting to RM3.225 million for the financial year ending April 30, 2012 has been declared.For the 1Q ended July 31, 2011, it posted net profit of RM3.62 million on the back of RM35.14 million in revenue. Earnings per share were 1.38 sen.
ECM Libra Financial Group Bhd’s earnings soared 189% to RM14.62 million in the second quarter ended July 31,2011 from RM5.06 million a year ago, contributed by brokerage income, fee income and gains from trading and investment securities.
Revenue rose 38.64% to RM45.86 million from RM33.08 million. Earnings per share were 1.79 sen compared with 0.62 sen.
Berjaya Land Bhd posted a 28% decline in net profit at RM56.08 million in its first quarter ended July 31, 2011 from RM77.89 million a year ago due to lower profit contribution from the hotels and recreation business.
Revenue was 2.1% higher at RM1.00 billion compared with RM978.94 million. The pre-tax profit was RM94.80 million, down 15.6% from RM112.40 million. Earnings per share were 0.04 sen compared with 0.89 sen.
“In addition, the preceding year corresponding quarter's results included an exceptional gain on disposal of an associated company amounting to about RM53.2 million,” it said.
SapuraCrest Petroleum Bhd’s unit TL Offshore Sdn Bhd has issued two letters of awards to Cosco Nantong Shipyard Co. Ltd to build two ships costing a total of US$227 million. SapuraCrest said Cosco was to build two pipe-lay cum heavylift offshore construction vessels.