KUALA LUMPUR (Oct 11): The FBM KLCI could trend lower and extend its losses on Thursday, as investor sentiment could remain weak in line with the tepid mood at most global markets after gloomy global outlook from both the World Bank and the International Monetary Fund (IMF) earlier in the week.
Global equity markets felt the brunt of the outlook, with European shares falling for the third day running on Wednesday, while the euro and Spanish and Italian bonds came under fresh pressure as economic anxiety was compounded by stuttering progress in the eurozone's battle against its debt crisis, according to Reuters.
Having rallied 15%-20% between June and September, the majority of major markets, from equities to commodities, have been trading far more cautiously in recent weeks as the benefit of central bank support has made way for a return of concerns about growth and European debt, it said.
Meanwhile, the unresolved sovereign debt crisis in Europe will continue to threaten the sovereign creditworthiness of Asia-Pacific countries next year as it remained centered the possibility of an unexpectedly severe deterioration in the EU's economic and financial situation, said Standard & Poor's Ratings Services.
"Reforms that address fundamental imbalances in the currency union are still in the early stages of implementation," said Standard & Poor's credit analyst Tan Kim Eng in a statement on Wednesday.
Among the stocks that could be in focus at Bursa Malaysia on Thursday are TOP GLOVE CORPORATION BHD []; GOLSTA SYNERGY BHD []; Asia Media Group Bhd; and PHARMANIAGA BHD [].
Top Glove is expected to release its fourth quarter 2012 financial year (4QFY12) results on Thursday.
MIDF Research has maintained its Buy rating on Top Glove, and said it expects total revenue of RM2.31 billion for FY12, translating into a 12.4% year-on-year (y-o-y) growth.
The research house in a note Wednesday said that higher sales volume, as a result of lower average selling price (ASP), was the main contributing factor for the higher revenue.
"The lower ASP was made possible by the significantly lower latex price, which on average has plunged by 21.4% year-on-year (y-o-y) in FY12. Moreover, slightly stronger US dollar, which on average has inched up 2.0% y-o-y in FY12, has also contributed towards the higher revenue.
"Pending the results announcement, we retain our Buy recommendation as well as target price (TP) at RM5.20. However, based on its track record, we are highly confident with the management’s capability to deliver on its earnings. Hence we are sanguine that an upward revision to its TP is in the offing," it said.
Bursa Malaysia Securities queried Golsta over the unusual market activity (UMA) in the trading of the company's shares.
It said on Wednesday that the query was regarding the sharp rise in the price of the shares recently.
Bursa Malaysia Securities also queried Asia Media over the UMA in the trading of the company's shares and the sharp fall in the price of the shares. Asia Media lost 16 sen to close at 42 sen.
Pharmaniaga could extend gains on the back of a report from HwangDBS Vickers Research which said the materialisation of the company's Indonesian brownfield manufacturing facility would be a major catalyst for the stock.
HwangDBS said that Pharmaniaga is in the final stages for the acquisition of a brown field manufacturing facility in Indonesia.
HwangDBS said that the acquisition would allow the group to manufacture pharmaceutical products in Indonesia and also import its Malaysian-made products to be sold there.
"This acquisition — if it materialises — could be a major catalyst for the stock given the sheer size of the Indonesian population (237 million versus 28 million in Malaysia) and its already established distribution network there," said the research house.
The above is correct as at 5.45pm, Wednesday, Oct 10.