Written by Joseph Chin
Saturday, 06 March 2010 21:37
KUALA LUMPUR: The FBM KLCI is expected to test and cross the psychologically important 1,300 level this coming week, starting March 7, underpinned by the run-up on Wall Street and strong export data.
US stocks advanced and the tech-heavy Nasdaq rose to an 18-month closing high after reports showed fewer job losses and consumer sentiment perked up.
According to Reuters, the Dow Jones industrial average rose gained 1.17% to end at 10,566.20. The broader Standard & Poor's 500 Index added 1.40% to 1,138.70. The Nasdaq Composite Index rose 1.48% to 2,326.35. The Dow and the S&P 500 closed at their highest levels in six weeks.
At Bursa Malaysia, the rising trading volume and buying of index-linked stocks pushed the 30-stock FBM KLCI just a hair breath above the 1,300 level momentarily on Friday. Banks rose on expectations of higher margins after the central bank raised the overnight policy rate by 25 basis points to 2.25%.
Market capitalisation rose by RM10.35 billion to RM1,032.78 billion last Friday from RM1,022.38 billion the previous day.
On the economic front, the strong January export data showed Malaysia’s exports rose the most in 11 years as exports to China and Europe picked up.
At Bursa Malaysia, stocks to watch this week include PPB GROUP BHD [], PHARMANIAGA BHD [], SALCON BHD [] and Keck Seng (Malaysia) Bhd.
PPB Group Bhd expects to deliver "satisfactory" results this financial year despite selling off its sugar manufacturing business in Malaysia.
Sugar refining and cane PLANTATION [] business contributed 40% to the company’s total revenue and 63% to operating profits for the financial year ended Dec 31, 2009.
At the end of last year, PPB sold the sugar business to Felda Global Ventures Holdings Sdn Bhd for a total of RM1.29 billion realising net gains of RM757.59 million or about 64 sen per share from the transaction.
Pharmaniaga, responding to a Bursa Malaysia Securities query, stated its manufacturing licence was revoked following critical findings over the storage and segregation of rejected and quarantined material and products, and the handling of rejected and recalled materials and products.
The critical findings were also over certain aspects of its premises and equipment. It would present all corrective actions taken to date as well as a plan of action to address the remaining audit issues to the Pharmaceutical Services Division (PSD) of the Ministry of Health on March 8.
Meanwhile, Salcon displayed a strong set of earnings when its net profit nearly jumped 300% to RM22 million in FY09 when compared with RM8.8 million in FY08.
Salcon’s earnings improved due to higher contribution and wider profit margin in its CONSTRUCTION [] division. Besides operating water treatment plants, it constructs water and waste water-related infrastructure. For more, read The Edge Malaysia.
Low profile Keck Seng, whose core businesses include oil palm plantations and property development, could pay out more dividends. It had cash of RM332.6 million as at end-2009 while it is debt-free.
According to Edge Malaysia, it is Keck Seng also gad high unutilised tax credit of RM427.6 million to be franked as dividends before end-2013.
Keck Seng, with its cash pile, is seeking opportunities to acquire property and land.
