Stocks to Watch* Latexx, BIMB, Atlan, Ingress, Hua Yang



KUALA LUMPUR (Oct 9): The FBM KLCI could snap its losing streak on Tuesday and stage a mild rebound, after having pared down most of its losses a day earlier, lifted by gains at select blue chips.

The local market has remained fairly resilient despite growing concerns of global growth woes, as evident from its performance on Monday.

Global markets mostly fell as the World Bank on Monday cut its 2012 growth forecast for developing East Asia.

The bank maintained its 2012 gross domestic (GDP) forecasts for Indonesia and Thailand, and raised the outlook for Malaysia and the Philippines.

The International Monetary Fund (IMF), meanwhile is scheduled to release its World Economic Outlook on Tuesday, which could further dampen global sentiment if the reports are adverse and in line with the World Bank's forecasts.

But the FBM KLCI is seen to remain firmer, supported by domestic strengths.

MIDF Research head Zulkifli Hamzah said he believed the KLCI could still register new highs this week in the absence of any disruption to global sentiment.

He said market volatility was currently at a healthy level and should support the market momentum.

"The ingredients for a market rally in the short term is there," he said.

Zulkifli, however, said that the concerns of the World Bank were valid in the sense that East Asia was likely to be dragged by slowdown in Europe, and the coming corporate earnings season may surprise on the downside.

Meanwhile, Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan in a note Monday said that going forward the FBM KLCI would trend higher on regional strength and local funds accumulation ahead of the general election and post-budget-2013 with focus on potential corporate tax cut to boost the country's competitiveness.

"The local benchmark should also get support from the traditionally bullish fourth quarter and positive external backdrops.

"As for stock picks, given the seasonally bullish October-December quarters, we opt for blue chips that possess resilient business models and good positioning to benefit from Budget 2013. These includes the likes of banks, telcos and consumers stocks such as Public Bank, Hong Leong Bank, TM, Maxis, Digi, AEON, Padini and Dutch Lady," he said.

Among the stocks that could be in focus on Tuesday are LATEXX PARTNERS BHD []; BIMB HOLDINGS BHD []; ATLAN HOLDINGS BHD []; INGRESS CORPORATION BHD []; and HUA YANG BHD [].

Trading in the securities of Latexx resumes on Tuesday, after it requested for a trading halt on Monday.

Austria-based Semperit AG Holding is offering RM2.30 per share and RM1.77 per warrant to takeover glove-maker Latexx, according to a statement announcing the RM603 million offer from the Vienna-listed company on Monday.

The offer of RM2.30 per share by Semperit's wholly-owned Semperit Investments Asia Pte Ltd is conditional upon Semperit gaining more than 50% of Latexx.

Latexx chairman and CEO Low Bok Tek had agreed to divest his entire 29.3% stake in the company and 35 million warrants, the statement said.

Semperit, which wants to expand its global footprint, also entered into a put and call options with eight other Latexx shareholders to acquire from them another 9.1% equity interest of the company and 9.6 million warrants.

BIMB has received Bank Negara Malaysia's approval in principle to start talks with Dubai Financial Group LLC (DFG)and Lembaga Tabung Haji to acquire DFG's equity interest in Bank Islam.

In a filing Monday, BIMB said the negotiations are to be completed on or before March 31, 2013.

Atlan net profit for the second quarter ended Aug 31, 2012 surged 75.22% to RM15.84 million from RM9.04 million a year earlier, due mainly to higher revenue.

The company said on Monday that its revenue for the quarter rose to RM199.06 million from RM172.53 million.

Earnings per share increased to 6.24 sen from 3.59 sen in 2011, while net assets per share was RM1.54.

Ingress has clinched jobs worth a total RM51.6 million from three automotive firms for the supply of car components over five years.

In a filing to Bursa Malaysia Monday, the company said it received Letters of Intent (LOI) from Perusahaan Otomobil Nasional Sdn Bhd (Proton), PT Asahimas Flat Glass Tbk and Honda Automobile (Thailand) Co Ltd.

Hua Yang Bhd's wholly-owned unit Bison Holdings Sdn Bhd has purchased 29.21 acres of land in Selangor for RM158 million from Mentari Hari Sdn Bhd, for a proposed mixed development with an expected gross development value (GDV) of RM1.52 billion.

Hua Yang in a filing to Bursa Malaysia Securities said that it had entered into a conditional sales and purchase agreement with Mentari Hari to buy five vacant plots — three commercial and two industrial — of leasehold land in Petaling Jaya.

The development is expected to cost some RM1.22 billion, and would generate approximately RM300 million in gross development profit, it said.