Written by The Edge Financial Daily
Friday, 16 April 2010 07:55
KUALA LUMPUR: Investors may be cautious on Friday, April 16 despite the late buying the previous day which pushed the key FBM KLCI into the positive zone while the market did not react strongly to the positive earnings outlook from Public Bank.
With the weekend ahead, most investors might be reluctant to take fresh positions despite the firmer overnight close on Wall Street where US stocks posted their sixth straight day of gains on Thursday.
An encouraging profit forecast from United Parcel Service lifted transportation shares, though concerns about a rise in weekly jobless claims limited the market's advance.
The Dow Jones industrial average rose 21.46 points, or 0.19 percent, to end at 11,144.57. The Standard & Poor's 500 Index edged up 1.02 points, or 0.08 percent, to 1,211.67. The Nasdaq Composite Index gained 10.83 points, or 0.43 percent, to close at 2,515.69.
Stocks to watch include KNM GROUP BHD [], KENCANA PETROLEUM BHD [], SAAG CONSOLIDATED (M) BHD [] and HEXAGON HOLDINGS BHD []. Also on the watch list would be glove makers, WARISAN TC HOLDINGS BHD [] and YTL Corp Bhd.
KNM could continue to see heavy trading amid continued selling pressure after the shares fell to a near one-year low on Thursday.
However, investors would have to assess what would be the net asset value of the company, excluding its debts, future contracts, to determine the fair value of the shares.
Major shareholder and managing director Lee Swee Eng’s aborted takeover of the company’s business rankled investors and research houses alike and the oil and gas (O&G) fabricator’s share price dropped amid heavy trading yesterday.
The stock fell 7.5 sen or 10.2% to 66 sen, off its intra-day low of 64 sen, with a total 168.83 million shares done.
Most speculated that an unattractive final offer price, which may be well below the 90 sen initially offered, as well as the recent RM1.4 billion tax incentive granted to KNM unit KNM Process Systems Bhd may have led talks to a dead end.
Kencana Petroleum Bhd's unit Kencana Nautilus Sdn Bhd and its partner Yinson Marine Services Sdn Bhd have secured a service contract to provide the provision of offshore support vessel.
Kumpulan Wang Persaraan has emerged as a substantial shareholder in Kencana with a 5.61% stake or 92.98 million shares. The shares were purchased from the open market.
In SAAG Consolidated (M) Bhd, a Bursa Malaysia filing showed Doraley Assets Management Ltd disposed of 43.49 million shares on April 7 and 8, reducing its stake to 6.65% or 105.27 million shares.
Hexagon Holdings Bhd is expected to resume CONSTRUCTION [] of a cracking and separation plant in Kuantan following the go-ahead from its client. The client had on Tuesday directed it to resume the construction, which had been suspended since February 2009.
Meanwhile, analysts maintained their positive view on PUBLIC BANK BHD [] following the announcement of its first-quarter results ended March 31, 2010 (1QFY10).
AmResearch said it remained positive on Public Bank and maintained its BUY recommendation with an upgraded fair value of RM13.00 a share.
“Our fair value is based on fair P/BV of 3.9 times, derived from ROE of 25.5% FY10F. Public Bank reported net earnings of RM685.3mil (+1.0% QoQ, +16.3% YoY), taking annualised net earnings to RM2.741 billion,” it said.
YTL Corp Bhd is planning to inject its new acquisition of Japan-based ski resort Niseko Village into its Starhill REIT (real estate investment trust) along with its other hospitality PROPERTIES [], said its managing director Tan Sri Francis Yeoh.
Warisan TC Holdings Bhd's (WTCH) 70%-owned Kereta Komersil Seladang (M) Sdn Bhd (KKS) has secured the franchise from China's Changsa Foton Vehicle TECHNOLOGY [] Ltd for the assembly and distribution, after-sales service and distribution of parts of the latter's completely-knocked down (CKD) commercial vehicles.
LION DIVERSIFIED HOLDINGS BHD [] (Lion Div) has disposed of its 3% interest amounting to 4.98 million shares in Mineral Resources Ltd (MRL) for Australian dollar 37.11 million or about RM111.33 million.
The proceeds from the disposal amounting RM111.33 million has been and will be utilised for the Lion Div group working capital requirements.