Business & Markets 2012
Written by Surin Murugiah of theedgemalaysia.com
Saturday, 13 October 2012 12:25
KUALA LUMPUR (Oct 13): The FBM KLCI is expected to stage a technical rebound on some bargain hunting next week after posting a 6.87 point week-on-week loss last Friday, as investors spooked by global economic uncertainties remained on the sidelines.
Affin Investment Bank vice president and head of retail research Dr Nazri Khan said the local equity market became technically oversold during the week's downdrift.
However, the gains at the local market are likely to be muted given the still opaque global economic outlook, as well as pre-general election jitters that could keep investors’ mood tepid.
The lack of fresh corporate developments, as well as gloomier outlooks so far from Standard & Poor's 500 companies and no positive outlooks, as reported by Reuters could cap gains at the local bourse.
Meanwhile, US stocks wrapped up their worst week in four months, last Friday, led lower by financial shares as results from Wells Fargo and JPMorgan ignited concerns about shrinking profit margins for big lenders.
Among the stocks that could be in focus are ATLAN HOLDINGS BHD [], JCY International Bhd and PLANTATION []s.
The Edge weekly in its latest edition reported that Tan Sri Vincent Tan Chee Yioun was building a presence in duty-free chain operator Atlan, a move that could lead to a change of control in the company and possibly a general offer situation.
The Edge reported that Tan’s Berjaya Corp Bhd, which already had 9.3% equity interest in Atlan, was set to raise its holding to just over 25% with its plan to acquire a strategic stake in company held by little-known Cipta Nirvana (M) Sdn Bhd.
JCY International could continue to see some selling pressure after it fell to a 10-month low last week against weaker prospects for hard disk drive (HDD) mechanical component manufacturer.
The edgemalaysia.com last Friday reported that at current prices, analysts said JCY shares were trading at attractive valuations, in price-to-earnings ratio (PER) terms, compared to its customers Seagate and Western Digital.
"Valuation for JCY shares is cheap," it cited OSK Research Sdn Bhd analyst Chan Jit Hoong as saying last week.
Plantation stocks could be in focus after crude Palm Oil (CPO) futures contracts reversed its three-day uptrend, plunging as much as 5.7% last Friday from profit-taking after the government announced it would cut CPO export taxes from Jan 1, 2013.
At closing, December CPO contracts managed to cut earlier losses, declining by RM20 or 0.91% to RM2,500 per tonne, with 23,562 contracts traded and open interest standing at 66,682 trades.
Scientex Bhd is likely to extend its gains on the proposed acquisition of two GW Plastic’s unit, GW Plackaging Sdn Bhd and GW Packaging in deal worth RM238.2 million.
The deal would position Scientex as the third largest cast film maker in the world with production capacity of 155,000 tonnes from 120,000 tonnes previously.