|Business & Markets 2012|
|Written by surin murugiah of theedgemlaysia.com|
|Saturday, 28 April 2012 13:13|
On the local scene, the outcome of the Bersiih 3.0 rally, and how the ruling Barisan Nasonal government handles the issue will also play heavily on investor sentiment.
U.S. stocks advanced on Friday and posted their best weekly gains in a month as stronger-than-expected earnings from Amazon.com and Expedia Inc reinforced confidence in corporate performance, according to Reuters.
Wall Street managed a fourth day of gains as the strong earnings season outweighed a surprisingly weak reading on first-quarter economic growth, it said.
Next week's release of a slew of economic data on the U.S. labor market and the beginning of the latter half of corporate earnings will be keenly watched to see if they are enough to allow stocks to break above the recent trading range, it said.
Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said he expects the FBM KLCI to trend lower in response to rising solvency risk and borrowing cost in Europe (Spain & Italy) and rising local political uncertainties.
“Despite positive comments from the USA Fed on possible monetary stimulus, a weaker than expected read on April Euro zone sentiment and rising European bond yield seemed to bring struggling European growth and debt concerns back into focus.
“Following Standard & Poor's downgrade of Spain's long-term sovereign credit rating by two notches (from A to BBB+ with a negative outlook), we expect more selling to weigh on European equities and increase the risk-off appetite for German Bunds and USA Treasuries,” he said.
Among the stocks that could be in focus are WZ Steel Bhd, PENSONIC HOLDINGS BHD , Bumi Armada Bh and CHIN TECK PLANTATION S BHD .
WZ Steel Bhd is acquiring an industrial land in Indonesia’s West Java province for IDR 14.58 billion (RM5.02 million) to build a new factory in the neighbouring country.
In a statement Friday, WZ Steel said it is buying the leasehold tract within the Delta Silicon industrial area in the Lippo Cikarang enclave, from Indonesia-based property developer PT Lippo Cikarang Tbk.
Pensonic Holdings Bhd posted a third quarter net loss on higher as higher revenue failed to mitigate the impact of rising operating cost for the electrical and electronic appliances manufacturer.
Pensonic said net loss came to RM1.14 million in the quarter ended February 29, 2012 against RM896,000 a year earlier. Revenue grew 7% to RM85.08 million from RM79.65 million.
“The decrease was mainly due to lower margin recorded as a result of active promotional activities carried out and also the increases in administration, selling and distribution expenses in current quarter for future expansion,” it said.Bumi Armada Bhd in response to news reports that Ananda was paring down his stake said that enquiries with its major shareholders and directors, it clarified that Ombak Damai Sdn Bhd, Wijaya Sinar Sdn Bhd and Karisma Mesra Sdn Bhd had participated in a book-building exercise conducted by CIMB Investment Bank Bhd .
It said Ombak Damai had participated with 9 million, while Ombak Damai and Karisma Mesra with a joint 284 million shares respectively, accounting for a total of 293 million Bumi Armada shares.
The Edge Financial Daily on Friday reported that Tycoon Ananda Krishnan and his bumiputera partners will sell roughly 15% of offshore services provider Bumi Armada Bhd in private placements to local and foreign institutional investors in a deal that will raise close to RM2 billion.
Financial executives involved in the placement told The Edge Financial Daily that the sale of roughly 440 million shares in Bumi Armada would cut the joint holdings of Ananda and his bumiputera partners to 55% in the company.
Chin Teck net profit for the second quarter ended Feb 29 2012 fell 33.58% to RM9.19 million from RM13.83 million a year earlier due mainly to substantial decrease in profit contribution from its associates.
The company said on Friday that its revenue for the quarter fell 2.44% to RM28.22 million from RM28.93 million in 2011 due to lower average selling prices of FFB, crude palm oil and palm kernel.
For the six moths ended Feb 29, Chin Teck’s net profit fell to RM24.48 million from RM2998 million on the back of revenue of RM60.69 million.