Stocks To Watch YTL Corp, CIMB, Top Glove, Glomac, mid-cap firms, Malaysia Airports.

Will YTLpower fly tomorrow???

Business & Markets 2013
Written by Ho Wah Foon of   
Thursday, 13 June 2013 20:32

KUALA LUMPUR (June 13): Based on corporate developments announced today, stocks that may attract interest tomorrow could include YTL Corp, CIMB, Top Glove, Glomac, mid-cap quality firms and MAHB.

YTL CORPORATION BHD [] hopes to win the award for the Kuala Lumpur-Singapore High-Speed Rail (HSR) project estimated to cost RM30 billion, said Tan Sri Francis Yeoh today.

“I want the project, after years of saying that,” said Yeoh, the managing director of YTL, in response to questions raised by reporters at the at Invest Malaysia 2013 conference today.

Indeed, it was Yeoh who first mooted the HSR project to link Kuala Lumpur and Singapore in the 1990s.

But he said he hopes there is government transparency in the award of the project.

Yeoh also said YTL Corp, now sitting on a cash pile of RM14 billion, is on the look-out for new investments. However, it has yet to find a valuable asset.

He also said he is keen to take subsidiaries of YTL private, but did not give details. "As a shareholder in my subsidiaries, of course I want to own more of them. Their cash flow and profitability are tremendous," he told reporters.

CIMB Group Holdings Bhd aims to increase its overseas business contribution to 60% from current 40% over the next few years, Bernama reported.

CIMB Group Managing Director/CEO Datuk Seri Nazir Razak said the bank has put in place plans to increase overseas contributions to its bottomline, which include business expansions in Thailand and Singapore.

Besides that, CIMB Thai would be opening the bank's maiden branch in Laos sometime this year.

"The Philippines deal that is about to be concluded will also be positive towards this aim of 60%.

"CIMB is building a regional franchise. In that respect, we are still in early phases in markets like Thailand and Singapore. We hope those are the markets that we can get higher growth this year and beyond," he told reporters on the sidelines of the Invest Malaysia 2013 conference here today.

But Nazir said the move to increase overseas business contributions does not mean CIMB would slow down its domestic banking operations or expansion plans.

TOP GLOVE CORPORATION BHD [] reported a 25% fall in third quarter net profit from a year earlier. The decline came on lower selling prices for its products and foreign exchange (forex) losses.

Top Glove said net profit came to RM40.27 million in the third quarter ended May 31, 2013 (3QFY13) versus RM53.81 million previously. Revenue rose to RM604.08 million from RM603.3 million.

"The group faced headwinds in the form of very volatile exchange rate of ringgit against other foreign currencies during the quarter," Top Glove said.

The firm said it had registered unrealised losses of RM10.9 million on its US dollar forex forward contracts and Australian dollar fixed-income investments.

Top Glove said 3QFY13 revenue had grown on a 17% rise in sales volume, but lower average selling prices had fallen on lower raw material prices.

Meanwhile, cumulative nine-month net profit rose to RM148.08 million from RM138.7 million while revenue climbed to RM1.77 billion from RM1.71 billion.

Top Glove plans to pay a first interim net dividend of seven sen a share for 3QFY13.

GLOMAC BHD [] is poised to surpass last financial year's net profit and this will translate into a bigger dividend for this year, said its group managing director/CEO Datuk FD Iskandar.

In the financial year ended April 30, 2012 (FY12), the property developer paid dividends of 5.5 sen per share.

For FY13, Iskandar said Glomac hopes to “at least match” the figure for FY12.

Iskandar said Glomac has a target of RM750 million in new sales. So far, the group has reaped new sales of RM519 million.

Mid-cap quality stocks may be in focus after Prime Minister Datuk Seri Najib Razak urged government institutions to invest or trade in these companies.

In making this call to government linked investment firms and EPF today, Najib said by setting a specific objective to increase the velocity of shares traded, they could make a significant contribution to market vibrancy.

"Their participation will provide another avenue for companies to get access to primary and secondary funding to bring their businesses to the next stage of
development," he said in his keynote address at Invest Malaysia 2013 conference.

Najib, also Finance Minister, said Malaysia possesses a collective savings pool of more than RM1 trillion, and the fund management industry that includes public sector funds, is a great mobiliser of capital.

Malaysia Airports Holdings Bhd (MAHB) share is likely to come under pressure again after AIRASIA BHD [] requested the government to probe the delay in completing the CONSTRUCTION [] of the new low-cost airport, klia2.

AirAsia’s chief executive officer Aireen Omar said an independent body should evaluate the current progress of the project, when it can be completed and how much it is going to cost, Bernama reported.

"Unless the true cause of the delay is made known, AirAsia feels there may be more finger pointing (against AirAsia or contractors) which will do nothing towards the completion of the project," she said in a statement here today.

Aireen also rubbished claims by certain quarter that the delay was only caused by AirAsia's 'indecisiveness' on the baggage handling system (BHS) and aerobridges.

"The BHS and aerobridges are only smaller components and should not be the main factor in the delay," she said.

In June 2011, MAHB had accused AirAsia, the main airline to use klia2, for the construction's delay, due to the latter's request to raise passenger capacity to 45 million per annum from 30 million previously.

MAHB also said AirAsia declined to use aerobridges and also decided at the last minute to switch from a semi-automated BHS to a fully-automated.

Last month, MAHB announced the airport's fifth delay, with no new date given.