Stocks to watch* Telekom Malaysia, MCIL, Cybertowers

KUALA LUMPUR (July 17):  The FBM KLCI could extend its gains and chart a fresh new high on Tuesday, on the back of a possible lift from Telekom Malaysia and other blue chip stocks.

The benchmark index had started the week on a firm note and closed at a new all-time high of 1,635.96 on Monday.

The one factor that could limit some of the index’s gains is the gloomy global economic outlook that caused a pause in the recent the rally at regional markets.

The worsening outlook for the world economy and uncertainty about Spain's bank bailout pushed the euro to a 3-1/2 year low against sterling and drove safe-haven German bond prices higher on Monday, according to Reuters.

World equities were also lower but investors were trading cautiously ahead of the start of U.S. Federal Reserve Chairman Ben Bernanke's two-day congressional testimony on Tuesday, it said.

They are waiting to see if he hints at new monetary policy steps to support the U.S. economy after central banks from Europe, China and Brazil earlier this month cut interest rates to bolster fragile growth, said Reuters.

Among the stocks that could be in focus on Tuesday TELEKOM MALAYSIA BHD [], MEDIA CHINESE INTERNATIONAL LT []d (MCIL) and CYBERTOWERS BHD [].

Telekom Malaysia announced the entitlement date for its capital repayment to shareholders of 30 sen per share totaling RM1.07 billion via share capital reduction.

The payment is to be made on August 15 and would go ex on July 27, it said.

MCIL proposed a distribution via a proposed special dividend of about RM700.00m or 41 sen per share.

The announcement by MCIL late Monday confirmed a report by The Edge Financial Daily earlier on Monday that the company was undertaking a capital management programme that will see its shareholders rewarded with a bumper dividend.

Citing industry executives, the Edge Financial Daily said the leading Chinese media company that publishes four newspapers, including the widely circulated Sin Chew Daily, was looking at paying out more than RM680 million, or close to 40 sen per share, to shareholders.

The company has seen a strong cash fl ow from operations in recent years that has allowed it to undertake the capital management programme. “Its strong positioning in the Chinese media segment has allowed it to have a predictable cash flow to facilitate the capital management exercise,” said an executive.

Cybertowers Bhd shares continued sliding on Monday despite the company saying it was unaware of the cause for its share price to hit limit down last week.

Bursa Malaysia Securities Bhd had last Thursday via an unusual market activity (UMA) query directed the company to issue a statement for public release after making due enquiry with its directors and major shareholders for the cause of the UMA in the company’s shares

Following the UMA query by Bursa Securities last week, Cybertowers had said it was unaware of the cause for its share price to hit limit down.

In reply to the UMA query, Cybertowers said after due inquiry with its directors and major shareholders, it was unaware of its cause, adding there was no corporate development relating to its business and affairs that had not been previously announced which could have accounted for it, including those at the stage of negotiations or discussions.

It was also unaware of any other possible explanation to account for the UMA, and it was also in full compliance with its Main Market listing requirements, in particular for the disclosure of material information, it said.