KUALA LUMPUR (March 29) : While trading momentum in the Malaysian stock market has improved, analysts said cautious sentiment ahead of the country’s general election could prompt traders to safeguard their profits against the backdrop of challenging external macro dynamics. Apart from less optimistic sentiment on economic growth prospects in the US and China, analysts also foresee the return of inflation as a key theme in financial markets, spurred by rising crude oil prices.
“We remain neutral on Malaysia. On the positive side, we currently do not expect its rates to increase, and we like the defensiveness of the market, with about one-third of its total market cap in defensive sectors, such as telecoms and utilities. “National elections are likely to add to market volatility as well, although we expect the event to be market-neutral,” HSBC Global Research wrote in a note. The FBM KLCI of 30 stocks erased earlier gains to finish 4.35 points lower at 1,583.75 points on Wednesday.
Stocks to watch on Thursday include GAMUDA BHD , SYARIKAT TAKAFUL MALAYSIA BHD , Bintai Kinden Corp Bhd and WCT BHD . Other companies which could attract interest are NEXTNATION COMMUNICATION BHD  and ENG TEKNOLOGI HOLDINGS BHD .
Infrastructure-based Gamuda’s earnings rose 45.1% to RM136.47 million in the second quarter ended Jan 31, 2012 compared with RM94.02 million a year ago. For the first half, earnings increased by 47.2% to RM268.79 million from RM182.55 million in the previous corresponding period. Syarikat Takaful’s share price rose 5% or 15 sen to close at RM3.05 after CIMB Equities Research said the Islamic insurance firm should trade higher at RM4.60 in anticipation of its growth potential. Bintai Kinden and joint venture partner Samsung C&T Corp have clinched S$166.24 million (about RM405 million ) worth of projects from Singapore’s Land Transport & Authority. The jobs include the supply and installation of electrical services apart from tunnel ventilation and environmental control systems
Singapore-based Oversea-Chinese Banking Corp Ltd has emerged as a substantial shareholder in CONSTRUCTION  firm WCT Bhd after acquiring a 5.01% stake in the builder. Nextnation plans to raise up to RM15.49 million under a private placement of 137.21 million new shares to finance the telecommunication software developer’s commercial land acquisition, and capital needs. Trading of Nextnation shares were suspended from 2.30pm to 5pm on Wednesday. The board of Eng Teknologi has accepted the revised takeover offer of RM2 a share by the founders and major shareholders of the hard disk drive component manufacturer. SYF RESOURCES BHD  swung into the black with net profit of RM3.22 million in the second quarter ended Jan 31, 2012 compared with net losses of RM431,000 a year ago due to higher sales with lower raw material costs. For the first half ended Jan 31, 2012, it posted net profit of RM42.46 million compared with net loss of RM1.01 million in the previous corresponding period.