Stocks to Watch CIMB, Muhibbah, S P Setia Bhd

Business & Markets 2012 Written by surin murugiah of Monday, 02 April 2012 21:05
KUALA LUMPUR (Apr 2): The FBM KLCI could extend its gains on Tuesday after finishing 0.5% or 7.45 points higher at an all-time high of 1,603.78 on Monday, riding on the improved sentiment at global markets after surprisingly firm China manufacturing data on Monday.

MIDF Research had on Monday raised its end-2012 target for the FBM KLCI to 1,600 points from the earlier 1,530 points. The tendency to "buy on weakness" among the local institutions will help our equity market to outperform its regional peers during a cyclical downturn, the research house said in a note on Monday. 

World stocks rose on Monday, underpinned by surprisingly firm China manufacturing data on Monday, though further evidence that the world's second biggest economy is slowing, along with eurozone debt jitters, kept demand for riskier assets in check, according to Reuters. Wall Street was set to start the second quarter flat as the focus turned to equivalent US figures later in the day, with investors keen to see if recent momentum in the world's largest economy could be maintained, it said. Meanwhile, European shares had eked out modest gains at the start of the second quarter after data last Sunday showed China's official Purchasing Managers' Index (PMI), which covers large factories, jumped to an 11-month high of 53.1 in March, beating forecasts, Reuters said. 

 Among the stocks that could be in focus on Bursa Malaysia are CIMB Investment Bank (CIMB), MUHIBBAH ENGINEERING (M) BHD [] and S P Setia Bhd. CIMB is acquiring most of the Asia Pacific cash equities and associate investment banking of the Royal Bank of Scotland (RBS) for the sum of RM849.4 million, group CEO Datuk Seri Nazir Razak said on Monday. The assets are valued at the effective price-to-book ratio is about 0.98 times. Nazir said that the deal transforms CIMB into an Asian Pacific investment bank, and that the exercise will also see the merged businesses absorbing 350-400 RBS staff to join CIMB. Muhibbah announced that its 50:50 joint venture (JV) with Australia's Monadelphous Group Ltd has won an additional contract for the CONSTRUCTION [] and commissioning of a shiploader associated with the Wiggins Island Coal Export Terminal Pty Ltd ("WICET"), worth A$60 million (RM192 million). 

Muhibbah had on Dec 23 last year said the JV won a A$330 million contract for the construction of an approach jetty and ship berth in Queensland, Australia. The facilities will be constructed for a project by WICET, which is privately-owned and funded by a group of Queensland coal exporter. S P Setia has roped in Rimbunan Hijau Group as a joint venture (JV) partner to develop and operate an industrial park in China's Guangxi province. In a statement to the Bursa Malaysia on Monday, S P Setia said both companies have formed JV entity Qinzhou Development (M) Consortium Sdn Bhd. The JV entity has, in turn, signed a JV framework agreement with Qinzhou Jingu Investment Co Ltd to develop the China-Malaysia Qinzhou Industrial Park on an approximately 13,590.5 acres (5,436 ha) site.