Stocks to watch: TM, Maxis, DRB-Hicom, SOP, MPHB

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Business & Markets 2012
Written by Joseph Chin of
Saturday, 25 February 2012 22:40

KUALA LUMPUR (Feb 25): Oil and gas and PLANTATION []s stocks could remain in focus following the high oil prices, providing some support for the local stock market and there could be some dividend-driven investors’ interest in stocks like Telekom Malaysia and Maxis Bhd.

The FBM KLCI, which had trailed its regional peers, saw analysts divided on the outlook for the week ahead.

A senior analyst with a bank-backed research house said the Malaysian stock market was expected to trade sideways with downside bias in the week ahead as the local performance pales in comparison with the regional markets.

He did not see any big surprises in the current October-December quarterly corporate results.

Among the companies to announce their results are PROTON HOLDINGS BHD [], MALAYSIAN AIRLINE SYSTEM BHD [] and SIME DARBY BHD [].

However, the head of retail research at Affin Investment Bank Dr Nazri Khan was a tad more upbeat for the local market.

“Going forward next week, we believe FBMKLCI is likely to have an upside bias on local market relative strength (holding up well despite the volatile February results season),” he said.

He cited external factors such as strong Germany resilience following the painful Greece’s bail-out deal, strong US equities, improved commodities price (crude palm oil, soybean, wheat, corn, gold start to track equities) and rising risk appetite in the global forex market (strong gains in emerging market currency including ringgit).

On Wall Street, the S&P 500 had on Friday closed at the highest level since before the collapse of Lehman Brothers in 2008, continuing a pattern of steady gains on signs of US economic recovery.

However, the continued high oil prices had also cast a pall of gloom over the flagging Euro zone economies with a recession seemed imminent for some weaker economies.

At Bursa Malaysia, Telekom Malaysia and Maxis Bhd would be among the top two stocks to watch on Monday after they announced dividends payouts last Friday while other stocks to watch include DRB-HICOM BHD [], SARAWAK OIL PALMS BHD [] and MULTI-PURPOSE HOLDINGS BHD [] (MPHB).

In a pleasant surprise, TM proposed a capital repayment to its shareholders of about RM1.073 billion or 30 sen per share and a final single tier dividend of 9.8 sen per share.

In terms of earnings, TM’s 49% increase to RM598.30 million in the fourth quarter ended Dec 31, 2011 was largely due to the recognition of deferred tax income on unutilised tax incentives in the current year quarter.

Maxis declared a fourth interim single-tier tax exempt dividend of 8.0 sen per share and also proposed a final single-tier tax exempt dividend of 8.0 sen per share for FY11. Its earnings increased 47.5% to RM900 million in the fourth quarter ended Dec 31, 2011 from RM610 million a year ago.

For FY11, it recorded 10% growth in net profit of RM2.527 billion versus RM2.295 billion in FY10. However, its revenue dipped to RM8.800 billion versus RM8.869 billion in FY10.

DRB-Hicom saw its earnings falling 27.6% for the third quarter ended Dec 31, 2011, to RM79.57 million from RM110.10 million as its automotive division was impacted by the severe floods in Thailand. Its revenue rose 5.6% to RM1.69 billion from RM1.60 billion a year ago.

Sarawak Oil Palms Bhd recorded a 60.35% increase in earnings to RM242.95 million in the financial year ended Dec 31, 2011 from RM151.51 million last year, boosted by higher sales and production of crude palm oil (CPO) and palm kernel. It said FY11 revenue increased by 60.7% to RM1.17 billion from RM728.16 million a year ago.

MPHB’s earnings more than doubled jumped to RM260.14 million in the fourth quarter ended Dec 31, 2011 (4Q2011) from RM85.21 million a year ago, boosted by an exceptional gain derived from the sale of PROPERTIES [] within the group. However, its revenue increased by 2.1% to RM913.91 million from RM894.45 million.