Written by Joseph Chin
Tuesday, 09 March 2010 07:48
KUALA LUMPUR: The overall market may take a breather on Tuesday, March 9 after Monday’s surge which drove the FBM KLCI to a two-year high after a lacklustre overnight close on Wall Street.
However, there could some momentum buying on bank stocks and selected index-linked stocks as investors view the market still has more upside.
On Wall Street, TECHNOLOGY [] shares pushed the Nasdaq higher on Monday on an otherwise flat day for U.S. stocks, led by BlackBerry maker Research in Motion and Cisco Systems, according to Reuters
The Dow Jones industrial average dropped 13.68 points, or 0.13%, to end at 10,552.52. The Standard & Poor's 500 Index shed just 0.20 of a point, or 0.02%, to 1,138.50. The Nasdaq Composite Index gained 5.86 points, or 0.25%, to 2,332.21, its highest close in 18 months.
Stocks to watch include banks, which fuelled the FBM KLCI to a two-year high, PLANTATION []s and the call warrants of JCY International Bhd, Malaysian Airline System (MAS), Supermax Corp Bhd and MULTI-PURPOSE HOLDINGS BHD [] (MPHB).
Meanwhile, several banks raised their lending rates by 25 basis points after Bank Negara upped the overnight policy rate by 25 basis points to 2.25%.
Local banks' earnings will benefit from higher net interest margin (NIM), given the 25-basis point (bp) rise in key interest rates, research houses said.
CIMB Group Holdings Bhd expects to register 12% loan growth in 2010, slightly higher than the 11% recorded last year.
CIMB Bank Bhd has issued 50 million European-style call warrants (CWs) each over the shares of JCY, MAS, Supermax and MPHB. The issue price for the JCY-CW is 15 sen, while for MAS-CW is is 18 sen, Supermax 17.5 sen and MPHB 17.5 sen.
MAS’s rights issue of 1.67 billion rights shares at RM1.60 each was oversubscribed by 7.67%. Total valid acceptances and excess applications received were 1.799 billion rights shares amounting to RM2.878 billion at the close of acceptances last Wednesday.
Among plantations, Kuala Lumpur Kepong is expecting a sharp increase in its earnings following the higher crude palm oil prices. For the second quarter, KLK is looking at CPO to trade between RM2,400 and RM2,500 per tonne.
YTL Corp Bhd is proposing to acquire Japan-based skiing resort Niseko Village KK, fully settle certain debts owing by the latter and acquire certain PROPERTIES [] for a total of RM223 million.
PANTECH GROUP HOLDINGS BHD [] is strengthening its presence in the oil-rich Gulf region by establishing a 15 million riyal (RM13.37 million) plant in Dammam, Saudi Arabia, to produce carbon steel fittings.
