KUALA LUMPUR (Sept 25): The FBM KLCI will likely remain muted on Tuesday in line with global markets that struggled on Monday, as signs of economic weakness in Europe and Spain's unresolved debt crisis curbed a two-month equity rally, leaving the market exposed to a possible pullback.
Basic resources and CONSTRUCTION [] material shares, down 1.8% to 2%, led the selloff, which gained momentum after a closely watched survey showed German business sentiment unexpectedly dropped in September, according to Reuters.
Meanwhile, US stock index futures fell on Monday, indicating that last week's decline would continue as investors questioned the global economy's growth prospects, it said.
German business sentiment dropped for a fifth successive month in September to its lowest level since early 2010, showing even the strongest of Europe's economies is succumbing to an economic downturn despite the European Central Bank's recently announced bond-buying plan. European shares lost 0.6%.
Among the stocks that could be in focus on Tuesday are SCOMI GROUP BHD []; ADVENTA BHD []; Multi-Code Electronics Industries (M) Bhd (Multico); PLANTATION [] counters and "sin" counters, including tobacco and breweries.
Perwaja Holdings Bhd and KINSTEEL BHD [] chairman Tan Sri Abu Sahid Mohamed increased his stake in oil and gas outfit Scomi to 8.67% from 3.07%.
Scomi, in a filing on Bursa Malaysia, said that Abu Sahid had purchased 67 million shares or a 5.6% stake of the company's stock at 35 sen each, valuing the stake at RM23.4 million.
On Monday, the company requested for trading of its shares to be suspended, which will resume on Tuesday.
Earlier this month, Datuk Siew Mun Chuang — an associate of Abu Sahid — surfaced as a substantial shareholder with 62.5 million shares or an almost 5.3% equity interest.
Adventa's net profit for the third quarter ended July 31, was up 28.35% to RM5.16 million from RM4.02 million a year ago.
Revenue for the quarter also climbed 4.7% to RM108.5 million from RM103.6 million previously.
In its filing to Bursa Malaysia on Monday, the group said its increase in earnings was due to improved shipments of its nitrile examination gloves and softening raw material prices.
"The increase was tempered by slower sales of latex examination gloves in Europe and America. The surgical business grew marginally, with the improving cost of materials in comparison to nine months ago," it said.
Multico's net profit for the fourth quarter (4Q) ended July 31 was up 29% to RM3.6 million from RM2.77 million a year earlier.
The automotive parts manufacturer's revenue also rose 8.1% to RM30.99 million from RM28.58 million a year ago.
The group said in a filing to Bursa that the higher revenue was due to sales of a new product of automotive lightings for a car model launched by one of its existing customers in April.
It proposed a second interim single-tier dividend of 3 sen per share, bringing the total single-tier dividend declared for FY2012 to 6 sen per share.
Crude palm oil (CPO) futures for the third month delivery fell RM117 per tonne to RM2,646 on Monday, placing plantation-related counters among major decliners.
A pre-budget report by Citigroup said tax hikes on tobacco could be under consideration in the 2013 Budget given the recent introduction of a new price controls on cigarettes as part of an anti-smoking campaign. Taxes on alcohol could also be increased.
Meanwhile, the gaming sector may also fall victim to Budget 2013. CIMB Research in a note last Friday said fears of higher gaming taxes following the 2013 Budget could be valid this time round.
"The gaming sector is ripe as a source of funding having registered significant growth since gaming taxes were last revised across the board in 1998," it said.