Written by Joseph Chin
Friday, 01 January 2010 21:31
KUALA LUMPUR: With the FBM KLCI up 45% at the close of 2009, timing and stock selection would be important for investors while companies which could continue to attract attention are banks and industrial products as the government's pump-priming activities kick-off.
On Wall Street, US stocks ended 2009 on Thursday, Dec 31 with their best gains since 2003, driven by optimism about the economy's recovery and a brighter outlook for profits, according to Reuters.
The broader Standard & Poor's 500 index rose 23.5% for the year, while the Dow climbed 18.8% and the Nasdaq jumped 43.9% from its close on Dec 31, 2008.
For the week ahead, stocks which could attract trading attention are Octagon Consolidated, CENTURY LOGISTICS HOLDINGS BHD [], Guoco Group, JAKS Resources and Ramunia.
Octagon swung into the red with losses of RM3.72 million in the 4Q, compared with earnings of RM4.39 million a year ago. For the FY09, net loss was RM15.19 million compared with net profit of RM9.23 million in FY08.
The 4Q09 net loss was mainly due to lower turnover of the coatings division, writing off of bad debts, higher overheads and finance cost incurred by the clean TECHNOLOGY [] division, especially, the waste tyre pyrolysis project which was under testing in the quarter under review.
In Century Logistics, BURSA MALAYSIA BHD [] has fixed the exercise price of the company's three-year 2010/2013 warrants at RM1.68 instead of RM1 which was earlier fixed by the company.
The corporate exercise involves a renounceable rights issue of up to 40.83 million warrants on the basis of one warrants for two shares at an issue price of five sen per warrant held at 5pm on Jan 6.
"The reference price is RM 1.68. The basis of the reference price is merely a benchmark so that the shares can be traded within the trading limits. The fair value of the shares should be determined by the market forces," said Bursa Malaysia. Century shares closed at RM2 on Thursday, Dec 31.
Century had earlier fixed the exercise price of the warrants at RM1 based on the par value of the shares of RM1 each, the five-day weighted average market price (WAMP) of shares up to Dec 17 of RM1.78. The exercise price of the warrants of RM1 was a discount of 78 sen or 43.82% from the five-day 5-WAMP of Century shares.
Meanwhile,Quek Leng Chan's Guoco Group could see some trading interest after Hong Kong's Bank of East Asia sold HK$5.11 billion in new shares to two banks to protect it from a hostile takeover by Guoco.
Analysts had said BEA's move was to make it more difficult and more expensive for Guoco to incrementally build up its stake in the market.
Guoco Group, a conglomerate owned by Quek Leng Chan, surprised the market when it snapped up a 5% stake in BEA in January this year and has since increased its holding to about 8%.
JAKS Resources reported 4Q net loss of RM3.13 million versus net profit of RM664,000 a year ago. For FY09, net loss was RM6.74 million versus net profit of RM2.9 million in FY08.
Turnover of RM62.3 million for 4Q09 was 89% higher than a year ago mainly due to the recognition of works done for the projects in the CONSTRUCTION [] division.
However, it posted loss before tax of RM580,000 in 4Q09 versus pretax profit of RM4.2 million a year ago due to lower selling price for the steel related products, lower margins and competitive market environment.
For FY09, turnover was RM278.1 million, up 25% from FY08 mainly due to higher recognition of works done for certain projects in the construction division.
On a year-to-year comparison, JAKS posted pretax loss of RM2.4 million in FY09 versus pretax profit of RM7.2 million.
Although the increase in the group’s turnover generated better results in the construction division, the weakened selling price for the steel related products and lower margins had generally affected the performance of the manufacturing division.
Meanwhile, Ramunia's new 100.648 million shares arising from the conversion of 100.648 million irredeemable convertible preference shares (ICPS) will be listed and quotation with effect on Monday, Jan 4.