Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Thursday, 19 September 2013 20:15
KUALA LUMPUR (Sept 19): Based on news flow and corporate announcements today, stocks that may attract attention tomorrow could include index-linked stocks, government-linked stocks, KESM, Alam Maritim, Hai-O, Berjaya Media and glove makers.
Index-linked stocks, which rose to push up the benchmark FBM KLCI by 1.2% today, could be in focus again if they continue to rally tomorrow following the delay by the US Federal Reserve to start stimulus reduction.
Fed chairman Ben Bernanke’s refusal to commit to any reduction this year has caused Asian and global markets to rally today and rise to multi-month highs.
“With the large concern on the cut in quantitative easing out of the way, we predict the local market will continue to scale new highs… For now buy on rally is the best course of strategy,” said M&A Securities.
Government-linked corporations (GLCs) may get a boost if the market is confident that Prime Minister Datuk Seri Najib Tun Razak, who announced today his decision to defend the post of Umno president in his party election on Oct 19, will retain the top post.
The Prime Minister said party members had shown strong support and confidence in him.
"Based on the feedback I received, the state Umno liaison bodies have made a resolution that I should continue to lead the party as Umno president.
"In addition to the opinions and views voiced at the meetings of the Umno branches, a majority of the Umno members want me to continue to lead the party as Umno president,” he told reporters after opening the Middle Temple Conference.
KESM INDUSTRIES BHD [] reported its revenue had declined by RM5.3 million or 8%, from RM69.7 million in the preceding year’s fourth quarter, to RM64.4 million for the current quarter ended 31 July 2013 on lower sales in electronic manufacturing services.
But there was a turnaround in earnings, resulting in a profit of RM4.1 million as opposed to loss of RM2.6 million in the fourth quarter of previous year.
The improved earnings were mainly due to an exchange gain of RM0.9 million and lower impairment loss of trade receivables by RM6.9 million, the company said.
Alam Maritim Resources Berhad (AMRB) announced that its wholly-owned subsidiary, Alam Maritim (M) Sdn Bhd, has recently been awarded a contract for the provision of one unit anchor handling tug supply vessel for an oil and gas company.
The value of the contract is about RM45 million. The contract is for three years with an extension option for another one year. The contract commences in September 2013.
The contract is expected to contribute positively to the earnings of AMRB for the financial year ending Dec 31, 2013 up to 2017, said the company.
HAI-O ENTERPRISE BHD [] said for the first quarter ended 31 July 2013, it recorded lower revenue and pre-tax profit of RM54.7 million and RM11.8 million respectively, compared to RM61 million and RM 13.8 million for the corresponding quarter of preceding year.
“The decrease in the group’s revenue was mainly driven by the lower sales recorded in the multi-level marketing division which is the main contributor to the group,” said Hai-O in a press statement.
The company said the group will remain profitable in the next quarter.
BERJAYA MEDIA BHD [] posted a net profit of RM1.06 million for its first quarter to end-July 2013, lower than RM1.28 million in the first quarter of previous year.
But revenue rose slightly to RM14.603, from RM13.32 million.
The increase in revenue for the quarter was mainly due to higher advertising income recorded Sun Media Corporation Sdn Bhd, it said.
The lower profit was mainly due to the preceding year corresponding quarter's results having included an amount of legal compensation of RM1.26 million.
Glove Stocks, which declined sharply in afternoon trades today after the glove sector was downgraded by Alliance Research, may come under pressure following a jump in the ringgit vis a vis dollar rate today.
Four major glove stocks -- Top Glove, Supermax, Kossan and Hartalega – were among top 10 losers today.
As the ringgit may firm further from now on due to the Fed decision, the earnings of gloves stocks may be trimmed as their export sales are denominated in US dollars. Hence a stronger ringgit is not in their favour.