Stocks to Watch Sumatec, PDZ, Marco, Globaltec, KLK, IOI Corp

Business & Markets 2014
Written by Levina Lim of  
Wednesday, 20 August 2014 19:40

KUALA LUMPUR (August 20): Based on news flows and corporate announcements today, stocks that may be in focus tomorrow (Aug 21) may include:

Sumatec Resources Bhd fell 27.9% today to close at 44 sen, having dropped 17 sen from its five-year high of 61 sen yesterday, as investors took profit after the stock’s strong rally since early July when it was traded at around 32 sen.

Its CEO Chris Dalton told The Edge Financial Daily this evening that the company was not concerned on the stock’s plunge, citing that the sell down today could be due to market volatility.

“With our second financial quarter results to be announced by the end of August after the board meeting, we expect to proceed on applying for PN17 upliftment as per planned,” he said.

Sumatec was the second most actively traded stock on Bursa Malaysia today with 739.2 million shares changing hands.

Meanwhile, stocks linked to Tan Sri Robert Tan, such as PDZ Holdings Bhd and Marco Holdings Bhd, also tumbled at market close. PDZ fell 21.3% or 8 sen to close at 29.5 sen while Marco shed 10.6% or 2.5 sen to 21 sen.

Both stocks have experienced strong rallies since the beginning of August, on potential oil and gas ventures as well as rumoured corporate exercises involving new shareholders.

Despite the benchmark FBM KLCI gaining 0.36% to finish at 1,878.89 points, penny stocks like Sumatec, PDZ and Marco were among the top losers on the local bourse, which had seen 758 decliners outpaced 227 gainers with 245 counters remaining unchanged.  

Investors’ focus on small and mid-cap stocks drove Bursa Malaysia’s trading volume to a record 7.67 billion shares.

Globaltec Formation Bhd was the most actively traded stock with over 1 billion shares changing hands today, with its share price gaining 14.3% to close at 12 sen, doubling from 6 sen early this month.

Controlled by Datuk TC Goh, the precision tooling and automotive parts manufacturer received an unusual market query from Bursa Malaysia on its rise in share price and volume, with Globaltec replying it was unaware of any unannounced corporate development or rumour relating to the group’s business and affairs.

On Aug 8, Globaltec announced that it has subscribed for a 60% stake in New Century Energy Resources Ltd (NCER) and New Century Energy Services Ltd (NCES) for an aggregate of US$200,000 (RM640,000).

The investment is said to pave for Globaltec’s diversification into the oil and gas industry, as the next part of the deal involves NCER subscribing for shares in Australian listed NuEnergy Gas Ltd.

NuEnergy Gas is the owner and operator of three coalbed methane concessions in the south and central of Sumatra, Indonesia.

Kuala Lumpur Kepong Bhd (KLK)’s net profit jumped 13% to RM213.7 million in the third quarter ended June 30, 2014, from RM189.2 million, mainly underpinned by higher palm oil price and fresh fruit bunches (FFB) production.

Revenue leapt 34.4% to RM2.92 billion from RM2.18 billion in the same quarter a year ago.

In a statement to Bursa Malaysia, KLK said its plantation segment recorded strong performance due to favourable selling prices of palm products, higher FFB production and a reduction in production cost.

KLK closed at RM23.86 today, up 74 sen or 3.2%.

Meanwhile IOI Corp Bhd’s (IOIC) net profit rose by 50.5% to RM407.5 million in the fourth quarter ending June 2014 (4QFY14), from RM270.7 million, mainly due to translation gain on foreign currency denominated borrowings and gain arising from the demerger of the property business from the group.

For the full year, IOI Corp's net profit from continuing operations (excluding the de-merged property development unit) fell 1.6% y-o-y to RM1.25 billion.

“Given the current low crude palm oil prices, we anticipate more demand coming from the biodiesel and biofuel sector. Going forward, we also expect higher contribution from our associate in Indonesia, Bumitama Agri Ltd, as more of their young palm trees reach optimum production age,” said IOI Corp in its results announcement.