Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Wednesday, 30 January 2013 19:34
KUALA LUMPUR (Jan 30): Based on news flow and announcements to the stock exchange, the stocks to watch on Thursday could include APM AUTOMOTIVE HOLDINGS BHD [], PATIMAS COMPUTERS BHD [], SCOMI GROUP BHD [], IJM Corp Bhd, CAP, Southern Steel, PLANTATION [] and beaten-down stocks.
APM announced that its unit, Auto Parts Holdings Sdn Bhd, had entered into a 60:40 joint venture with Tachi-S (Thailand) Co Ltd to manufacture, assemble and sell automotive seats for original equipment manufacturers in Malaysia.
The investment outlay of RM2.1 million will be financed through internal funds, the company said. However, the JV will not have an impact on the company’s performance in 2013, it added.
Despite this, investors may still get excited about its outlook. APM's shares have risen sharply this month -- from RM4.70 to RM5.94 on Wednesday -- partly due to a weaker yen and analysis that it may benefit from Proton’s restructuring of its supply distribution network.
Meanwhile, Patimas is seeing the entry of China Private Equity Investment Holdings Ltd, which has acquired 5% equity interest in Patimas via a foreign stockbroker, according to its active shareholder Datuk Seri Abdul Azim Zabidi. Azim told Bernama that the Chinese company had submitted the shareholdings acquisition form to Patimas’ company secretary on Monday.
Azim had on Jan 17 said he was in talks to rope in a foreign strategic partner to help revive the fortunes of the Practice Note 17 company. The former chairman of Bank Simpanan Nasional emerged as a substantial shareholder in Patimas early this month after purchasing 45 million shares or 5.44% stake on Jan 11.
Patimas has been in the news lately for being a highly speculative stock. Its share price had risen from 3.5 sen early this month to a high of 18 sen in mid-January, with a daily turnover of over 150 million shares before retreating to its current level of 11.5 sen. For the most part of this month, it was trading within the top 10 most active list. The ICT services and solutions provider incurred a pre-tax loss of RM8.58 million on revenue of RM6.99 million for the second quarter ended Sept 30, 2012.
Scomi might attract some trading interest before its 2.30pm EGM on Thursday if investors are confident the meeting will endorse the resolution to approve a bond issue to IJM Corp to pave the way for the latter to become a 25% shareholder and strategic partner of Scomi.
The deal will allow Scomi and IJM to capitalise on each other’s strengths to further expand their local and global operations in CONSTRUCTION [] as well as oil and gas sectors. According to various news reports, initial opposition to the proposal from two substantial shareholders has subsided.
Scomi CEO Shah Hakim, the proponent of the deal, has said he believes shareholders will support the bond issue as it will help pare down the debts of Scomi. The partnership with IJM will also enhance Scomi's chances of winning RM10 billion worth of monorail jobs globally.
"I feel the impact brought about by our joint cooperation will be one plus one equals to more than two," he was quoted as saying by Sin Chew Jit Poh.
IJM Corp may also see some excitement after Nanyang Siang Pau reported today that the local construction giant was in talks with Chinese infrastructure companies keen on taking up 40% equity interest in Kuantan Port in a bid to deepen the port.
A deeper Kuantan Port will cater for the export of goods from companies that will be housed in the planned RM1.5 billion Malaysia-China Kuantan Industrial Park in Pahang. The park will be launched on Feb 5 by Prime Minister Datuk Seri Najib Razak.
China Automobile Parts Holdings Bhd (CAP), which rose 10 sen above its IPO price of 68 sen to 78 sen on its market debut on Wednesday, may see some profit-taking on Thursday.
The stock hit a high of RM1.28 in active trade today. TA Securities has given the counter a fair value of 72 sen.
Plantation stocks may see some excitement over higher CPO futures prices, which rose sharply on Wednesday due to concern over a possible tight supply of soy oil, Reuters reported.
The outlook for palm oil prices appears to be more positive now as the industry expects CPO stocks to fall this month on the back of Malaysia’s new duty structure and Indonesia’s move to raise the export duty of its crude vegetable oil.
Big-cap index-linked stocks, which plunged today due to an election scare, may continue to fall on Thursday if the jitters before the upcoming general election continue to take its toll on the market. However, these beaten-down quality counters may rebound if investors see value in them.