Written by Joseph Chin
Saturday, 16 January 2010 11:42
KUALA LUMPUR: Regional markets including Bursa Malaysia will likely start off the new week of Jan 18 on a volatile note after US stocks fell on Friday when JPMorgan Chase & Co reported deep fourth-quarter loan losses and raised concerns about bank profits.
The Dow Jones industrial average dropped 100.90 points, or 0.94 percent, to 10,609.65. The Standard & Poor's 500 Index fell 12.43 points, or 1.08 percent, to 1,136.03. The Nasdaq Composite Index lost 28.75 points, or 1.24 percent, to 2,287.99.
At Bursa Malaysia, sentiment is likely to be cautious in the early part of the week though there could be some buying interest in selected index linked stocks. The 30-stock FBM KLCI could again test the 1,300 level later in the week, depending on the news flow and external markets.
Stocks to watch include glove makers, semiconductor related counters, Affin Holdings, Tenaga Nasional, Putrajaya Perdana and Loh & Loh.
Glove makers fell last Friday as speculators cashed out but analysts believe there is still upside for the sector due to growing demand for latex gloves. Instead, they see profit-taking activities as an opportunity to pick up the stocks.
Semiconductor stocks could see some profit taking after the surge on Friday, though analysts see the worst is behind for the industry.
Affin Holdings is seeking a controlling stake in Indonesia's PT Bank Inda Perdana after Bank Negara Malaysia had given its approval for the bank to start negotiations with Bank Inda's existing shareholders for a possible acquisition of a controlling stake.
Tenaga Nasional is scheduled to release its 1QFY8/10 results on Jan 20 and CIMB Equities Research expects core net profit to come in at RM450 million to RM500 million, which is 11%-23% higher quarter-on-quarter but up to 10% lower on-year.
CIMB Research expects the results to be broadly in line if core net profit came in around 19%-21% of its full-year projection as the remaining quarters should be better due to stronger pick-ups on the demand front.
"We retain our FY10-12 earnings projections pending the results release. The upcoming 1QFY10 results announcement is likely to be relatively uneventful as the focus will be on the government's impending
decision on the scheduled January 2010 tariff review. Tenaga remains a Trading Buy with an unchanged P/BV-based target price of RM10.90," it said.
Putrajaya Perdana and Loh & Loh could see trading interest after PetroSaudi International Ltd provided more details to privatise and delist UBG BHD [], PUTRAJAYA PERDANA BHD [] and Loh & Loh in a corporate exercise which is expected to cost RM1.4 billion.