Written by Joseph Chin
Saturday, 17 April 2010 22:02
KUALA LUMPUR: Key regional markets are expected to face selling pressure when they reopen on Monday, April 19, tracking the losses in world markets. Worries about the fallout from US regulators’ decision to charge Goldman Sachs Group Inc with fraud related to subprime mortgages, saw investors shift into safe-haven US government debt.
According to Reuters, defaults on subprime mortgages and the unraveling of related derivatives and debt played a major role in the credit crunch that led to a meltdown on Wall Street and the worst US recession since the 1930s.
The Dow Jones industrial average fell 125.91 points, or 1.13 percent, at 11,018.66, while the Standard & Poor's 500 Index was off 19.54 points, or 1.61 percent, at 1,192.13. The Nasdaq Composite Index lost 34.43 points, or 1.37 percent, at 2,481.26.
On Bursa Malaysia, blue chips could see continued selling pressure following the weak world markets. The FBM KLCI futures fell five points to 1,336 on Friday while the spot FBM KLCI ended the day down 6.06 points to 1,332.77. For the week, the market capitalisation was down RM7 billion to end at RM1.074 trillion.
Stocks to watch the week ahead will be glove makers, which had come under selling pressure in nearly two weeks, following the de-rating for the sector, while other analysts saw the selling as opportunity to pick up the stocks which still had fundamental values.
Other companies are Ho Hup CONSTRUCTION [] Company Bhd, JobStreet Corp Bhd and PERISAI PETROLEUM TEKNOLOGI [] Bhd, LIMAHSOON BHD [], DRB-HICOM BHD [] and SAAG CONSOLIDATED (M) BHD [].
In Ho Hup, it had applied to Bursa Malaysia Securities for extension of time until May 31 to submit its audited financial statements for the year ended Dec 31, 2009. The original date is April 30.
JobStreet had from Jan 6 to April 12 had acquired 1.14 million shares in 104 Corporation from the open market in Taiwan Stock Exchange, representing 3.4% of its paid-up.
The Edge weekly expects the equity tie-ups with Australia-listed SEEK and 104 Corp. to spur growth. It reports that JobStreet is back on the fast track riding its equity partnerships.
Meanwhile, Singapore-listed Ezra is likely to chart new territory for Perisai. The Edge weekly reports the new substantial shareholder may inject its deepwater assets into the oil and gas company.
In Limahsoon Bhd, Syarikat Vanlin Sdn Bhd disposed of 27 million shares from April 13 to 14, reducing its stake to 20.7% or 16.97 million shares.
In DRB-Hicom, Khazanah Nasional Bhd disposed of 2.49 million shares on April 12 and 13 to reduce its stake to 99.56 million shares.
In SAAG, Doraley Assets Management Limited disposed of 35 million shares recently to cease to be a substantial shareholder.