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Written by Joseph Chin of theedgemalaysia.com
Saturday, 10 December 2011 17:19
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KUALA LUMPUR (Dec 10): Stocks on Bursa Malaysia could be given a boost on Monday following the firmer close on Wall Street as EU leaders worked out a plan to restore market confidence.
The Dow Jones industrial average ended up 186.56 points, or 1.55%, at 12,184.26. The Standard & Poor's 500 Index was up 20.84 points, or 1.69%, at 1,255.19. The Nasdaq Composite Index rose 50.47 points, or 1.94%, at 2,646.85.
For the week, the Dow rose 1.4%, the S&P gained 0.9% and the Nasdaq was up 0.8%.
As for Bursa Malaysia, the FBM KLCI fell 12.79 points or 0.87% to 1,460.13, weighed by losses including at KL Kepong, GENTING BHD [], PPB, AMMB and Gamuda.
Hong Kong’s Hang Seng Index lost 2.73% to 18,586.23, South Korea’s Kospi fell 1.97% to 1,874.75, Japan’s Nikkei 225 was down 1.48% to 8,536.46, Taiwan’s Taiex lost 1.28% to 6,893.30, the Shanghai Composite Index shed 0.62% to 2,315.27 and Singapore’s Straits Times Index lost 1.24% to 2,694.60.
However, whether the rebound could last in the week ahead also remains to be seen.
Affin Investment Bank head of retail research Dr Nazri Khan is more cautious as he believes the FBM KLCI is likely to pullback lower to 1,430 to 1,420 support level on absence of an EU catalyst and lack of momentum from last week liquidity boost rally.
“We reckon the bearishness are driven by two important factors namely : (1) further caution from S&P 500 warning to massively downgrade EU countries and (2) investors losing expectation over EU summit to produce a financial bazooka to contain the debt crisis,” he said.
Stocks which could see trading interest on Monday include IGB Group Bhd, Axiata Group Bhd, NOTION VTEC BHD [] and SYF RESOURCES BHD [].
On Monday, Broadcast Australia will ink and agreement with Axiata Group Bhd’s unit Axiata Celcom wherein the former will be Celcom’s technical partner to bid for the RM2 billion digital terrestrial television broadcasting (DTTB) project.
Celcom would ultimately be providing infrastructure for the (DTTB) network and rent it out for stable income in the future.
Celcom, which invested RM1 billion in the 3G infrastructure this year and plans to spend another RM1 billion next year.
The Edge weekly reports that the IGB group is said to have engaged investment banks to look into structuring a real estate investment trust. The property group is hoping to launch the REIT by first half of 2012.
It also reported that Notion VTec Bhd is hoping to grow its hard disk drive segment by 40% next year with the growing momentum in its 2.5in HDD base plate business, which is expected to turn profitable in the second quarter.
Meanwhile, SYF is now on firmer footing after regularising its financial condition. It recorded net profit of RM39.24 million in the first quarter ended Oct 31, 2011 when compared with net loss of RM581,000 a year ago after the waiver of debts and overprovision of interest.
Its revenue was 6.3% higher at RM42.98 million compared with RM40.44 million a year ago. Its earnings per share were 43.37 sen compared with loss per share of 0.69 sen.