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Written by Joseph Chin of theedgemalaysia.com
Thursday, 01 December 2011 20:59
KUALA LUMPUR (Dec 2): Investors should brace for some profit taking on Friday after two straight days of gains, propelled by liquidity move by major central banks that raised hopes policymakers would take more steps to tackle the crisis.
However, the surge in share prices of some of the companies might not reflect the cautious outlook for the October-December quarter especially after the less than impressive financial results in the earlier quarter.
Nevertheless, a sentiment-driven rally could also see another trading surge in penny stocks, which had been moderately reined in after Bursa Malaysia Securities clamped down on the trading in the securities of Harvest Court Industries.
Among the stocks to watch would be Tenaga Nasional, oil and gas-related companies, DRB-HICOM BHD [] and LONDON BISCUITS BHD [].
Tenaga has received a letter from the government that provides a fuel cost sharing mechanism to address the utility’s increased cost due to the gas shortage. This could see a rerating of the stock which had been impacted by high fuel costs.
The letter provided that Tenaga, Petronas and the government would each equally share the differential cost incurred by Tenaga due to dispatching on alternative fuels and also imports, from Jan 1, 2010 until Oct 31, 2011 amounting to approximately RM3.07 billion.
Oil and gas related companies could see trading interest after Petronas president and CEO Datuk Shamsul Azhar Abbas said on Thursday the RM300 billion as capital expenditure (capex) over five years was intact.
He had also said the national oil corporation’s growth agenda remains intact to meet rising long term demand for oil and gas. This could spur interests in the oil and gas companies.
Heavy users of electricity would have to take note of Shamsul’s statement that the era of subsidised gas was over.
“Growing reliance on cheap gas discourages end-users from pursuing energy efficiency,” he said, warning that the bulk of tomorrow’s gas requirements would be derived from imports at market prices. “The days of abundant subsidised gas are effectively over,” he said.
DRB-Hicom has issued RM500 million in nominal value of Sukuk in two tranches which would be used for working capital, projects and capital expenditure. The sukuk had been accorded a final rating of AA-IS by Malaysian Rating Corporation Bhd with a stable outlook.
London Biscuits Bhd’s private placement of 10.25 million new shares of RM1 each has been fixed at RM1 per share -- or 22% above the five-days volume weighted average market price up to and including Nov 30 of 82 sen per share. The placement shares represented 10% of its paid-up share capital.
FAVELLE FAVCO BHD [] is mulling plans to manufacture cranes in China following its acquisition of a 60% stake in a Shanghai Favco Engineering Machinery Manufacturing Co Ltd for 10.8 million renminbi or RM5.33 million.
It had subscribed for 10.80 million shares of 1.0 renminbi each in Shanghai Favco.