Written by The Edge Financial Daily
Thursday, 08 April 2010 07:12
KUALA LUMPUR: Key regional markets may see a pull-back on Thursday, April 8 as investors lock in gains after US stocks fell in a broad late-day drop on Wednesday.
On Wall Street, a top Federal Reserve official’s comments that interest rates should not stay low for much longer, giving investors an excuse to take profits, according to Reuters.
The Dow Jones industrial average fell 72.47 points, or 0.66 percent, to 10,897.52. The Standard & Poor's 500 Index slipped 6.99 points, or 0.59 percent, to 1,182.45. The Nasdaq Composite Index lost 5.65 points, or 0.23 percent, to 2,431.16.
On Bursa Malaysia, stocks to watch include DAYANG ENTERPRISE HOLDINGS BHD [], KNM GROUP BHD [], SUNWAY CITY BHD [] group and PIE Industrial.
Dayang’s subsidiary Dayang Enterprise Sdn Bhd clinched a RM400 million contract from Shell Sarawak Bhd to provide top-side maintenance execution services over a period of five years, with an option to renew for one year. This is expected to contribute positively to the group's earnings from 2010 to 2015.
KNM Group Bhd, whose business is being targeted by its managing director Lee Swee Eng and his co-bidders, was granted a RM1.42 billion tax incentive over four years following its acquisition of German-based Borsig GmbH by its unit KNM Process Systems Sdn Bhd in 2008.
KNM Group was granted the tax break by the Ministry of Finance for expenses incurred during the acquisition of Borsig in 2008, which had cost KNM RM1.7 billion.
The tax break is spread over four years for its local operations, and the actual incentives that can be realised is RM356 million according to the 25% tax rate. Analysts, however, are not confident that the tax break would encourage bidders to raise their valuations of the company.
Meanwhile, AmResearch said as KNM's overseas income cannot be used to offset this tax credit, it expects the group to shift as much of its fabrication jobs to Malaysia.
“In FY09, Europe and America accounted for 72% of group revenue. Based on KNM's existing order book of RM1.8bil (excluding the RM500 million Verwater job), we understand that 30% - 35% stems from jobs in Malaysia,” it said.
Sunway City Bhd group is undertaking a corporate exercise to unlock the value of its PROPERTIES [] which will see it injecting its shopping malls, office towers, hotels and hypermarket into its proposed multi-billion ringgit Sunway real estate investment trust (REIT) which will be listed on Bursa Malaysia.
SunCity Group said the proposed properties include the Sunway Pyramid shopping mall; 19-storey, five-star Sunway Resort Hotel & Spa; nine-storey Pyramid Tower Hotel; the Menara Sunway office tower block; five-storey Sunway Carnival Mall in Penang; 17-storey Sunway Hotel Seberang Jaya, SunCity Ipoh Hypermarket and the 33-storey Sunway Tower.
PIE Industrial Bhd has proposed a special dividend of 23 sen per share and also a first and final dividend of 12 sen for the financial year ended Dec 31, 2009.
The prospects for POS MALAYSIA BHD [] looks bright now after the government gave the green light for the company to raise the country's postage rate.
The negotiations on the consolidation of Selangor's water assets between the water concessionaires, the state and the federal government would be finalised by next week, Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim said.
Investors should note that the Minister of Water, Green TECHNOLOGY [] and Energy had said on Wednesday, the offer by GAMUDA BHD []’s associate to buy out water assets in Selangor for RM10.75 billion was against the spirit of the Water Services Industry Act 2006.
Bernama quoted Datuk Seri Peter Chin Fah Kui as saying water companies should not own assets but just focus on operations and maintenance. The Act was aimed at promoting an asset-light environment for water companies.
The ringgit strengthened further against major currencies, on the back of mounting speculation the Chinese government would adopt a more open policy for the yuan.
