Stocks to watch: AFG, Baswell, Affin, Ho Hup


Written by Joseph Chin
Tuesday, 19 January 2010 08:05

KUALA LUMPUR: After a volatile session on Monday which saw blue chips close off their day's low, the market sentiment could continue to remain cautious on Tuesday, Jan 19.

The US markets were closed on Monday while key regional markets of Hong Kong and Japan closed broadly lower.

Stocks to watch on Bursa Malaysia include glove manufacturers and Public Bank - ahead of its earnings - while other companies which would be in focus are Alliance Financial Group, Baswell Resources, Affin and Ho Hup. Also on the watch list are MALAYSIAN RESOURCES CORP [] Bhd (MRCB) and Petra Perdana.

The Employees Provident Fund (EPF) is trimming its shareholding in Alliance Financial Group, which has been in the limelight lately due to the spat between its CEO Datuk Bridget Lai and its board.

Baswell Resources' stock hit its 52-week high of 67.5 sen yesterday, before tapering off to end the day at 58 sen, up 4.5 sen gain from last Friday's close on the entry of new shareholders and the possible takeover. For more, see The Edge FinancialDaily.

Shares of Affin jumped as much 12 sen or 5% yesterday as investors reacted to news on the financial services group's intention to acquire a bank in Indonesia, the Malaysian entity's first foray overseas.

Public Bank's share surged to an all-time high of RM11.86 in anticipation of its FY09 results, which is due to be announced over the next couple of days.

MRCB's renounceable rights issue of up to 482.27 million new shares will go ex on Jan 28. The entitlement date for the rights shares is Feb 2. The corporate exercise involved the rights issue on the basis of one rights share for every two shares held on Feb 2 at 5pm at an issue price of Rm1.12 per rights share.

In Ho Hup, news reports said the board of directors alleged that RM236 million may have been lost over six years resulting from a land transaction made below market value, unauthorized cash payments and the shipping of heavy machinery to Madagascar.

Investors should note the statement was issued via a public relations company and there was no official statement made by the company to Bursa Malaysia.

However, Ho Hup did respond to the proposed alternative regularization plan made by Low Chee & Sons and Choo Soo Har @ Chou Kam Cheong.

Ho Hup said following the various consultations with the regulators, it is imperative for companies classified under PN17 status to substantially restructure its balance sheet, such that it
is able to begin on a clean slate post restructuring.

"The proposed alternative regularisation proposal does not clearly address the accumulated loss position of Ho Hup Group nor provide certainty that such losses will be substantially eliminated immediately upon completion of the proposed alternative regularisation proposal," Ho Hup said.

Financially troubled interior fit-out group LCL Corp Bhd has defaulted on more loans from AmBank (M) Bhd totalling some RM2.9 million.

Of the loans from AmBank, RM2.3 million was to its subsidiary LCL Furniture Sdn Bhd while the remaining RM573,249 was to another subsidiary LCL Trading Sdn Bhd.

In Petra Perdana, it was reported the Securities Commission was looking into the submission of executive director Shamsul Saad, purportedly relating to "breaches in procedures" over the sale of a block of Petra Energy shares belonging to Petra Perdana and also the sale of vessels by Petra Perdana to Petra Energy.