Stocks to watch Genting, JCY, AirAsia, F&N, Naim Indah

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Written by Surin Murugiah of
Saturday, 04 February 2012 16:08

KUALA LUMPUR (Feb 4): Trading on Bursa Malaysia will resume on Wednesday, Feb 8 after the extended weekend to observe the Prophet Muhammad and Thaipusam public holidays, and analysts are expecting the FBM KLCI to trend higher.

However, GENTING BHD [] shares could come under some pressure after a bill that would have ushered in the largest gambling expansion in Florida history was withdrawn by its legislative sponsor on Friday.

The bill, which proponents said could lead to 100,000 new jobs for the state, faced a probable defeat at its first stop - the House Business and Consumer Affairs Subcommittee, according to Reuters.

Rules in the Florida House of Representatives prohibit the chamber from taking further action on a bill that has failed to pass at least one committee, so the measure is dead for 2012, it said.

Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said that despite the holiday shortened session, the FBM KLCI would trend higher next week on continuous fund inflow, stronger ringgit, good progress made in the Eurozone, continuous USA economic recovery and stronger global manufacturing data.

Given the solid January gains for the local equities (FBM100 [], FBMFledgling, FBMSmallCap & FBMAce gaining 1%, 5%, 8% and 10% respectively with smaller-caps outperforming larger-caps stocks), the FBM KLCI was likely to get more momentum and follow through into February, he said.

Nazri said punters would also likely continue churning of penny stocks last week (with 90% top 40 active volume below RM1 including DBE, Focus, Tebrau, Nicorp, Compugates) even after the Chinese New Year celebration.

“We also expect growing hype on the upcoming floatation of Felda and Integrated Healthcare Holding IPO in 2Q2012 (with estimated market cap RM20 billion and RM8 billion market cap respectively) to raise interest in the local PLANTATION [] and healthcare stocks.

“Overall, we expect the market to continue rising with 1,560 level as the near term target,” he said.

The other stocks that could be in focus on Wednesday are JCY International Bhd, AIRASIA BHD [], Fraser & Neave Holdings Bhd and NAIM INDAH CORPORATION BHD []

Shares of hard-disk drive (HDD) maker JCY extended their gains last Friday ahead of the release of its earnings for the first quarter ended Dec 31, 2011 this week.

JCY had in early January, stated the group was likely to record a surge in earnings for the quarter ended Dec 31, 2011.

AirAsia’s joint venture with All Nippon Airways Co., Ltd has obtained an air operators certificate (AOC) from the Japanese Civil Aviation Bureau.

“The AOC shall enable AirAsia Japan to operate aircraft in its fleet for commercial flights to international and domestic destinations,” AirAsia said on Friday.

F&N’s 1Q earnings fell 61% to RM41.74 million RM107.08 million a year ago, due to the absence of contribution from the Coca-Cola business.

It said on Friday, the earnings were also impacted by the different timing in the accounting of operating losses in Thailand due to the severe floods last year and recovery under its business interruption insurance policy.

F&N said other factors were higher raw material costs particularly skimmed milk powder and sugar and lower sales in Dairies Malaysia.

Meanwhile, Naim Indah Corp’s major shareholder, Crest Energy Sdn Bhd is said to be in discussions with various parties to dispose of the shares.

Naim Indah however said last Friday that no details of the proposed disposal, including the price, had been finalised.