Written by Joseph Chin
Tuesday, 11 May 2010 06:40
KUALA LUMPUR: The strong overnight close on Wall Street could provide the much needed boost for the lacklustre Bursa Malaysia on Tuesday, May 11 after the EU put together a US$1 trillion emergency rescue package.
US stocks racked up their biggest one-day gain in over a year on Monday. But there was still caution whether euro-zone nations saddled with high debt loads would be able to manage their finances, according to Reuters.
The Dow Jones industrial average gained 404.71 points, or 3.90 percent, to 10,785.14. The Standard & Poor's 500 Index rose 48.85 points, or 4.40 percent, to 1,159.73. The Nasdaq Composite Index added 109.03 points, or 4.81 percent, to 2,374.67.
At Bursa Malaysia, the FBM KLCI which managed to eke out marginal gains on Monday, could see better sentiment on Tuesday.
While key European markets surged on Monday when the rescue package was announced, there was no significant overall impact on the local market.
However, the convincing close on Wall Street may tempt retail investors to bargain hunt for oversold stocks.
Glove makers could attract attention again following a positive outlook for the stocks.
Stocks to watch are KUALA LUMPUR KEPONG BHD [] (KLK), MULPHA LAND BHD [], MAGNA PRIMA BHD [], Sarawak builder IBRACO BHD [], KUMPULAN PERANGSANG SELANGOR [] Bhd (KPS) and KKB ENGINEERING BHD [].
KLK is following in the footsteps of IOI Corp Bhd, with the proposed acquisition of an oleochemical plant in Germany for €60.5 million (RM251.51 million) as it seeks to expand its manufacturing capacity and product range in Europe.
Mulpha Land has proposed to reduce its share capital by cancelling 90 sen of each RM1 share which will give rise to RM82.2 million to fully set-off its accumulated losses and the remaining balance to be credited to the company's capital reserves.
However, the plan would not go down well with minority shareholders as audited accumulated losses as at Dec 31, 2009 were only RM3.4 million at group level and RM4.8 million at company level.
Investors should also be aware that there is no consolidation of the shares after the share capital reduction as the par value of the shares would be reduced from RM1 to 10 sen.
Magna Prima Bhd has lodged a police report against its former CEO Lim Ching Choy for alleged criminal breach of trust. For more, read The Edge FinancialDaily.
KPS 55%-subsidiary, Konsortium ABASS Sdn Bhd has obtained a court judgement to recover RM70 million from Syarikat Bekalan Air Selangor Sdn Bhd (Syabas).
KKB Engineering's net profit surged two-fold to RM19.04 million in the first quarter ended March 31 from RM6.17 million a year ago as the company benefited from higher gross margin for its steel water pipes.
Ibraco has been categorised as a Practice Note 17 (PN17) company as the property developer's revenue is less than 5% of its paid-up capital of RM99.5 million.
DIS TECHNOLOGY [] Holdings Bhd's (DIST) daily operations have been badly disrupted as the company is currently insolvent, stemming from possible misstatement of RM82.07 million in sales over the financial years ended Dec 31, 2008 and 2009 that came to light in March this year.
