Written by Fong Min Hun & Joseph Chin
Wednesday, 13 January 2010 08:11
KUALA LUMPUR: Key regional markets, including Bursa Malaysia, should see volatile trade with more downside pressure on Wednesday, Jan 13 after US stocks fell overnight in a broad selloff.
Investors sold financial stocks as they worried about a potential government levy on banks, while Alcoa Inc's disappointing results tempered optimism about the economic recovery.
The Dow Jones industrial average dropped 36.73 points, or 0.34 percent, to 10,627.26. The Standard & Poor's 500 Index fell 10.76 points, or 0.94 percent, to 1,136.22. The Nasdaq Composite Index slid 30.10 points, or 1.30 percent, to 2,282.31.
At Bursa Malaysia, stocks to watch are Alliance Financial Group (AFG), Gadang, Malaysian Merchant Marine, Takaso Resources, Vastalux Energy and MISC.
Alliance Bank's board of directors, which is running the show in the absence of the bank's group CEO Datuk Bridget Lai following an internal probe, has queried her on matters pertaining to the investigation, which include renovations contracts.
However, Lai has spoken out, saying that her immediate priority is to clear her name amid the bank's internal investigation that has been blown "out of proportion" by the rumour mill.
The current development may weigh down the stocks until the probe is completed within two to three weeks.
"The indicative timeframe to complete the investigation is approximately two to three weeks; variance in which will be subject to review and approval by regulators and legal advisors," the bank said on Tuesday.
Meanwhile, GADANG HOLDINGS BHD [] and its joint venture partner Bukit Jerneh Quarry Sdn Bhd have received a letter of acceptance from Malaysia Airports Holdings Bhd for part of the proposed low-cost carrier terminal at the KL International Airport. The contract is worth RM291 million.
MALAYSIAN MERCHANT MARINE BHD [] (MMM) has failed in its bid to take up a 20% stake in the Philippines' Tindalo oilfield development project
Meanwhile, Takaso Resources could see the buying pressure easing off, as reflected in the profit taking on Tuesday, after rising as much as 28 sen or 39% in early trade. Unless there are positive news, investors could be quick to lock in gains.
Sarawak-themed stocks may continue to see trading interest after some stocks reached new 52-week highs, amid news of prominent investment flow and activity in the country?s largest state.
MISC BHD [] has received the go-ahead from its shareholders for a proposed rights issue to raise RM5.2 billion to finance its capital expenditure.
Vastalux, whose share price had been under pressure recently, made several changes to its board. It appointed Amir Baharom, 36, as its CEO. Prior to his appointment, Amir had been with KAF Fund Management Sdn Bhd, overseeing private equity investments.