Stocks to Watch* Sime Darby, S P Setia, HSL, plantations

KUALA LUMPUR (July 6): The FBM KLCI could end the week on a positive note and close higher on Friday, extending its gains riding on improving sentiment at regional and European markets in early trade.

Most Southeast Asian stock markets ended higher on Thursday after a rangebound session ahead of the European Central Bank's (ECB) policy decision, with Singapore leading through gains in developers such as Capitaland Ltd, which were supported by strong property demand, according to Reuters. Meanwhile, European shares rose on Thursday, reigniting a recent strong rally as investors awaited policy action from the ECB to help shore up the euro's struggling economy, it said.

The FBM KLCI reversed its earlier losses and closed higher on Thursday, in line with the mixed regional markets. It clawed back to edge up 0.68 of a point to 1,614.43, lifted by select blue chips including Genting-related stocks. The index had earlier fallen to its intra-day low of 1,607.31.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi said that with the firmer tone that emerged last week, the stronger support levels are seen at the 1,582-, 1,599- and 1,613-levels, whilst the recent resistance level of 1,614 would offer token selling activities. "Should the index surpass the only resistance area, we think that the market barometer would try to touch the next three target areas of 1,620, 1,629 and 1,650. We believe that investors may still try to nibble on weakness, despite the bearish divergent chart signals," he said.

Among the stocks that could be in focus on Friday are SIME DARBY BHD [], S P Setia Bhd, HOCK SENG LEE BHD [] (HSL) and PLANTATION []-related counters.

A Malaysian consortium comprising Sime Darby, S P Setia and the Employees Provident Fund (EPF) have acquired London's iconic Battersea Power Station for £400 million (RM1.98 billion). In a statement on Thursday, Sime Darby and S P Setia said the three parties formally entered into a joint venture agreement on Wednesday in Jersey, Channel Islands to form the Battersea Project Holding Co Ltd (BPHCL). Sime Darby and S P Setia each have a 40% stake in BPHCL, while the EPF has the remaining 20%.

HSL's value of projects in hand for rose to a record RM2.07 billion after the company secured a contract worth RM291 million to design and build the Universiti Teknologi Mara (UiTM) campus in Mukah, central Sarawak. In a statement on Thursday, HSL said the new contract would be undertaken for concessionaire K P Mukah Development Sdn Bhd. The scope of works for the project includes sand filling, piling, civil infrastructure works, the numerous specialist campus buildings and mechanical and electrical works, it said.

Meanwhile, Malaysian crude palm oil (CPO) futures rose to the highest in more than five weeks on Thursday, as investors anticipated a dry-weather rally would continue after US markets reopened from a holiday, according to Reuters.