Written by Joseph Chin
Saturday, 19 December 2009 11:28
KUALA LUMPUR: While the overall market breadth is expected to be lacklustre in the new trading week ahead on Monday, Dec 21, in the absence of strong external leads including Wall Street, focus will be on Hong Leong Bank and EON CAPITAL BHD [].
On Wall Street, stocks closed higher on Friday in choppy trade as quarterly results from Oracle and Research In Motion lifted the Nasdaq more than 1%, but the US dollar's climb curbed gains in both the Dow and the S&P 500.
The Dow Jones industrial average added 0.20% to 10,328.89, the Standard & Poor's 500 Index gained 0.58% to 1,102.47 while the Nasdaq Composite Index climbed 1.45% to 2,211.69.
Stocks to watch in the shorter trading week are Hong Leong Bank, EON Cap, MNRB HOLDINGS BHD [] and PA Resources Bhd.
Hong Leong Bank said last Thursday that Bank Negara did not have any objection for it to commence negotiations with certain shareholders of EON Capital Bhd for a potential acquisition of the assets and liabilities, including equity interests, in EON Capital.
Reports have said EON Cap's major shareholders Rin Kei Mei and Tan Sri Tiong Hiew King, who collectibly own 32.57% stake in EON Cap could be keen to dispose of their stakes to Hong Long Bank at RM8.20 per share.
However, in a joint statement issued by Rin and the Tiong family on Saturday, Dec 19, they have dismissed specualtion that they are willing to sell their equity stakes in EON Capital Bhd at RM8.20 per share to HONG LEONG BANK BHD []
MNRB Holdings Bhd should see some reaction after Malaysian Rating Corp Bhd (MARC) downgraded its rating on the former's Islamic medium term notes (IMTN) issuance programme of RM200 million to AA- IS from AA IS.
MARC's rating downgrade reflected its concerns over a weakening of MNRB’s liquidity profile in addition to reduced cash flow prospects arising from a perceived trend toward lower dividend payouts by its main operating subsidiary, Malaysian Reinsurance Bhd (Malaysian Re).
MARC said Malaysian Re’s ability to declare dividends has been constrained by the higher capital requirement imposed on the reinsurer under the risk-based capital framework effective 2009 as well as its own weak earnings performance.
Meanwhile, PA Resources has proposed to undertake a corporate exercise which involves a renounceable rights issue of up to 66.79 million rights shares on a one for two basis abd also one free warrants for every one rights shares subscribed.
It also proposed to increase its authorised share capital from RM100 million comprising of 200 million shares to RM150 million comprising 300 million shares.