Business & Markets 2012
Written by Surin Murugiah of theedgemalaysia.com
Saturday, 24 November 2012 13:36
KUALA LUMPUR (Nov 24): The FBM KLCI could snap its losing streak next week and trend upward after having fallen some 14.96 points week-on-week last Friday, and lost a total of 58.75 points to date for the month of November, something analysts consider an oversold situation at the local market.
Global stocks and the euro gained on Friday on signs of progress in talks on releasing aid to Greece and after an influential German survey found business sentiment had improved in Europe's largest economy, according to Reuters.
US stocks rose for a fifth day, getting a lift from bellwether TECHNOLOGY [] shares such as Intel and Microsoft, both up about 2%, it said.
However, with the S&P 500 above 1,400 following five days of gains, traders will be hard pressed not to cash in on the advance at the first sign of trouble during negotiations over tax hikes and spending cuts that resume next week in Washington, said Reuters.
President Barack Obama and U.S. congressional leaders are expected to discuss ways to reduce the budget deficit and avoid the "fiscal cliff" of automatic tax increases and spending cuts in 2013 that could tip the economy into recession, it said.
Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said that going forward, he expects the FBM KLCI to stage an oversold rebound on hopes that new China political leadership will push for more stimulus to support economic growth and expectation that the Bank of Japan will pursue more aggressive monetary policy (BOJ proposed 1 trillion yen second round fiscal stimulus).
“Despite the light global volume given the closure of developed markets for Thanksgiving Day, we believe encouraging signs from the Chinese economy may support global equity and commodity prices and offset fresh uncertainty over the outlook for the eurozone.
“Given the oversold market situation (a total FBM KLCI decline of 65 points or 3.8% within four straight down weeks & sixteen straight down days), we expect the current technical weakness to be overly stretched,” he said.
Among the stocks that could be in focus next week are Hiap Huat Holdings Bhd, S P Setia Bhd, LATEXX PARTNERS BHD [], Gunung Capital Bhd and AIRASIA BHD [].
ACE Market bound Hiap Huat, set to be listed on Monday, is a used oil recycler and its core activity is collecting, recycling, re-refining and producing recycled products.
The group stores, treats and recycles waste oil collected from industrial and commercial companies and then formulates them into end products ready to be used by end consumers.
The Malaysian consortium leading the gargantuan London Battersea Power Power Station redevelopment project aims to sell the 800 apartment units in Phase 1 of the project within six months from welcoming orders in January 2013.
“We hope to sell all 800 units within six months… That will be a record as the highest a developer has sold in the UK is 200 units within six months of launch... We’re targeting an international audience,” SP Setia’s president and CEO Tan Sri Liew Kee Sin said.
“Sales start in January and we’ve planned a global marketing roadshow starting from Malaysia to Singapore, Hong Kong, Brunei, Jakarta, Europe, Dubai, Istanbul (Turkey) and then finishing in UK in April, by which a show office will be ready [in London],” he told reporters on sidelines of the company’s extraordinary general meeting (EGM) last week.
Rubber glove manufacturer Latexx saw a sharp drop of 49% year-on-year in net profit for the third quarter ended Sept 30 to RM6.47 million from RM12.73 million due mainly to lower selling price.
Revenue for the period fell 7.07% to RM113.18 million from RM121.8 million in the previous corresponding quarter.
“The decrease in the group’s revenue in the current quarter was attributed to the lower selling price mainly as a result of more favourable raw material prices,” said the group in a filing Friday.
Gunung Capital Bhd net profit for the third quarter ended Sept 30, 2012 jumped 43.19% year-on-year to RM3.05 million from RM2.13 million.
The company said on Friday that its revenue for the quarter increased to RM18.34 million from RM18.1 million a year earlier.
Earnings per share rose to 2.90 sen from 2.10 sen, while net asset per share was 54 sen.
For the nine months ended Sept 30, Gunung’s net profit rose to RM10.75 million from RM6.62 million, on revenue RM59.89 million versus RM55.22 million in 2011.
Meanwhile, the Edge weekly in its latest edition reported that the Department of Civil Aviation (DCA) in granting six-month renewal of license for AirAsia pilots instead of the normal two years, had recommended that the low-cost carrier revamp the unit in charge of overseeing the pilots.
The Edge said the rebuke came after the aviation authority was not satisfied with the lack of details in the log books submitted by the pilots for inspection, citing industry executives familiar with the matter.
It said the DCA and AirAsia did not respond to questions from the Edge.