Business & Markets 2012
Written by Surin Murugiah of theedgemalaysia.com
Friday, 19 October 2012 18:10
KUALA LUMPUR (Oct 19): The FBM KLCI is likely to trend higher next week and sustain its momentum in remaining above the important 1,660-point level.
On Friday, the FBM KLCI closed 0.93 of a point at 1,666.35, rising 12.99 points week-on-week. It had earlier risen to its intraday and fresh all-time high of 1,669.98.
Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said the he expects the local benchmark FBM KLCI to trend higher next week, in tandem with Asian regional strength supported by an active flow of Chinese economic data and anticipation of more aggressive stimulus following the upcoming European Union Summit.
"We also believe that the Moody reports maintaining Spain's investment grade credit rating as well as better-than-expected China 3Q GDP [third quarter gross domestic product] data as positive triggers for risk-taking sentiment," he said.
MIDF Research head of equity Syed Muhammed Kifni said that foreign funds were still net buyers into the Malaysian market.
He said that official data showed that during the week, up to Thursday, there were net inflows of foreign funds amounting to RM233 million.
"Our local benchmark traded at all-time high today before profit taking in afternoon session erased some of earlier gains. Most other regional markets ended in negative territory.
"The selling pressure was arguably precipitated by the lower openings in Europe due to the failure of the EU Summit to reach an agreement on how Europe's rescue facility will be used to revive its distressed banks. In our opinion, the immediate resistance for KLCI lies at 1,670 points," said Syed Muhammed.
Among the stocks that could be in focus next week are TELEKOM MALAYSIA BHD  (TM); GREEN PACKET BHD ; BURSA MALAYSIA BHD ; IJM CORPORATION BHD  (IJM Corp); and SCOMI GROUP BHD .
TM has denied seeking permission from the Finance Ministry to make a RM1.8 billion bid for Green Packet Bhd's wireless broadband unit Packet One Sdn Bhd (P1), as reported by the Business Times (BT) section of the New Straits Times on Friday.
In a filing on Friday, TM said that the article is misleading as it is based on speculation.
"TM has not announced any interest to bid for the stake nor seek any approval to do so.
"TM is however always in search of value creating opportunities as part of our strategy and rest assured, will make any necessary announcements to our stakeholders, where so required," it said.
TM said it had written to BT, and requested that clarification to be published for the benefit of BT readers and public at large.
Green Packet fell in active trade last Friday on profit taking after a substantial rise of some 40% in the price of the mobile broadband player's shares.
Green Packet's corporate developments had been a subject of market speculation last week. The local business media has speculated that Green Packet plans to exit the broadband service business by disposing of its entire 61% stake in Packet One Networks (M) Sdn Bhd.
Bursa Malaysia's net profit for the third quarter (3Q) ended Sept 30, 2012 fell, as the stock exchange operator's revenue declined on reduced income from equity market trades, while a higher effective tax rate had also curbed the company's bottom line.
In a statement on Friday, Bursa Malaysia said its net profit fell 4% to RM37.04 million in 3Q ended Sept 30 from RM38.62 million a year earlier, while revenue declined 1% to RM106.21 million from RM107.31 million.
IJM Corp said that said that the subscription to Scomi's bonds, which was a part of the group's stake acquisition in the marine and civil engineering outfit, would be done by the end of this year.
IJM Corp's executive deputy chairman Tan Sri Krishnan Tan last Friday said the acquisition of Scomi was purely hinged on the economic consideration for the group to expand into the oil and gas (O&G) services business in the country and within the region.