Business & Markets 2012
Written by Surin Murugiah of theedgemalaysia.com
Saturday, 01 December 2012 11:43
KUALA LUMPUR (Dec 1): The FBM KLCI could trend higher on the first trading day of December after capping its worst November in nine years last week, during which it lost a massive 63.84 points month-on-month, erasing some RM47.83 billion off the market capitalisation.
But the gains in early December could be limited, given still worrying external developments.
US stocks ended last Friday flat as politicians remain at odds about how to avoid the so-called fiscal cliff, while credit ratings agency Moody's cut its rating for the euro zone rescue funds ESM and EFSF to Aa1 from Aaa following its downgrade of France earlier in November.
However, Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said that going forward, he expects the FBM KLCI to be firmer on positive development surrounding USA fiscal cliff, supportive global economic data (above expectation USA third-quarter GDP revisions, USA weekly jobless numbers, USA home sales, Germany Unemployment Change & Japan Household spending) and bullish price reversal in the global equity market (Dow, S&P 500 and Nasdaq back above psycho level 13000, 1400 and 3000 respectively while Nikkei and Hang Seng broke above 9000 and 22000 respectively)
He said that on the technical front, the FBM KLCI upside follow through above 1600 psychological resistance and the crucial 200 day moving average confirm a bullish breakout above the recent congestion since early November (after making 5.3% correction from 1,679 to 1,590).
“We are currently pegging 1,630 and 1,620 as the next zone of resistance while support zone stands at 1600 and 1,580 levels.
“As for weekly stock picks, our featured top five bluechips for retail are Public Bank, Hong Leong Bank, Petronas Dagangan, SapuraKencana Petroleum and WCT BHD [],” he said.
Among the stocks that could be in focus next week are MALAYSIAN AIRLINE SYSTEM BHD [] (MAS), TELEKOM MALAYSIA BHD [], Malaysia Steel Works (KL) Bhd, SCOMI GROUP BHD [] and PROTASCO BHD [].
The Edge weekly in its latest edition reported that MAS snapped consecutive six quarters last week when it announced a return to profitability, a first clear sign that the management team led by managing director Ahmad Jauhari Yahya could deliver on the promise to turn around the embattled national carrier.
It reported that the Ahmad Jauhari as saying that brickbats against the national carrier were misplaced on its planned RM1.3 billion rights issue.
“We needed the capital to invest in new equipments to deliver our turnaround plan,” the Edge quoted him as saying.
Telekom Malaysia Bhd (TM)’s third quarter earnings eased to RM301.4 million year-on-year despite the absence of a major one-time gain as it booked foreign exchange gains and saved on finance cost.
Year-to-date net profits, however, jumped 52% to RM900.5 million on a taxation boost.
No dividend was proposed for the quarter, the same as last year.
Net profit for the third quarter ended Sept 30, 2012 (3Q2012) eased 0.3% to RM301.4 million from RM302.2 million in 3Q2011, despite the absence of the RM283.5 million one-time gains from selling its Axiata Group Bhd shares as it booked deferred tax income on unutilised tax incentives. Numbers were also helped by a RM64.8 million unrealised foreign exchange (forex) translation gains on its non-Ringgit borrowings versus a RM122.5 million forex loss in the 2011 corresponding quarter.
Integrated steel manufacturer Malaysia Steel Works (KL) Bhd (Masteel) saw its net profit for third quarter ended Sept 30, 2012 (3Q12) plunge 56.5% year-on-year (y-o-y) to RM7 million, despite a 4.2% rise in revenue to RM312.9 million.
In a press release, Masteel indicated that higher production costs and weaker selling prices had affected its profitability.
For the nine months to Sept 30, 2012, the steel maker posted a net profit of RM21.15 million, down 44% y-o-y, while revenue stood at RM996.98, down 8.8%.
Scomi Group Bhd reported a net profit of RM25.47 million in the third quarter ended Sept 30 (3QFY12) against losses a year earlier as gains from the sale of its discontinued oil and gas (O&G) support services operations in Nigeria boosted its bottom line.
Scomi told Bursa Malaysia on Friday its 3QFY12 net profit compares with a net loss of RM9.12 million a year earlier. Revenue fell 2% to RM343.48 million from RM351.27 million on lower income from its energy logistics unit, the company said.
“This (discontinuing operations) comprises the results of the businesses which have either been or are in the process of being disposed,” Scomi said.
Meanwhile, the Edge weekly also reported that a new major shareholder had emerged in Protasco, known for its concession to maintain 6,200km of federal roads in several states in the peninsula as well as Sarawak.
It said businessman Tey Por Yee had emerged as the biggest shareholder with a 27.11% stake through his private company Kingdom Seekers Ventures Sdn Bhd.
Tey is the founder, managing director and CEO of Netxnation Communications Bhd, in which he holds a 16% stake.