Written by Joy Lee
Friday, 05 March 2010 07:44
KUALA LUMPUR: Bank stocks will be in focus on Friday, March 5 after Bank Negara raised the overnight policy rate by 25 basis points to 2.25%.
Though borrowing costs will go up, the strength of the recovery in the economy is expected to continue as continued low interest rates could lead to asset bubbles.
The OPR has been kept at2% for seven consecutive monetary policy committee (MPC) meetings since April 2009. Malaysia is the second Asian country, after Vietnam, to raise lending rates.
On Wall Street, US stocks rose on Thursday as better-than-expected monthly sales from retailers and a drop in the number of Americans filing claims for jobless benefits pointed to stabilization in the economy, according to Reuters.
The Dow Jones industrial average gained 47.38 points, or 0.46 percent, to 10,444.14. The Standard & Poor's 500 Index rose 4.18 points, or 0.37 percent, to 1,122.97. The Nasdaq Composite Index added 11.63 points, or 0.51 percent, to close at 2,292.31.
The S&P 500 is now down 2.4 percent from a 15-month closing high set on Jan. 19, after falling more than 8 percent through Feb. 8.
At Bursa Malaysia, stocks to watch are banks, Maxis Bhd, JAKS Resources Bhd and YUNG KONG GALVANISING IND []ustries Bhd.
Maxis targets to triple the number of subscribers in Sabah and Sarawak to one million collectively by year-end. Currently, the combined subscribers in the two states are just 350,000.
JAKS is due to announce its participation in another property project in Subang Jaya after its venture with STAR PUBLICATIONS (M) BHD []. It is aiming for property development to be one of its main earnings contributors going forward.
Yung Kong will forge a strategic partnership with Nippon Steel Corporation (NSC) for the supply of steel substrate, which was the main raw material for its products.
Yung Kong proposed to issue 21.73 million redeemable convertible preference shares (RCPS) of 50 sen each to NSC at 60 sen per RCPS for a total of RM13.04 million.
The revocation of PHARMANIAGA BHD []'s manufacturing licence by the Ministry of Health (MOH) has not resulted in a recall of pharmaceutical products that it had produced and are out in the market.
Practice Note 17-status Stamford College has proposed to cancel of 50 sen of the par value of each existing share of RM1 each to rationalise its balance sheet.
The capital reduction would eliminate its accumulated losses of RM20.15 million as at Dec 31, 2009.
Stamford College also proposes to diversify into manufacturing of low alloyed, alloyed and long steel products.
