Thursday, May 21, 2009

Stocks to watch: Plantations, Ramunia, Sime, Public Bank, Axiata

KUALA LUMPUR: Plantations and bigger capitalised stocks would continue to be in focus on May 21 after investors reentered the market on expectations of an extended rally.

The firm crude palm oil prices, which hovered above the RM2,600 per tonne mark and light crude oil price above US$60 would continue to attract investors, analysts said.

Investors’ confidence was clearly demonstrated despite Moody’s move to review nine banks in Malaysia for possible downgrade.

However, more positive newsflow were needed for the KLCI to stay above the 1,040 level. The KLCI is now trading at 15.58 times proce to earnings.

Funds are believed to have picked up the liquid plantation stocks on May 20 on expectations that crude palm oil futures may hit RM3,000 a tonne as demand outstrips supply.

Stocks which could attract interest are Sime Darby and Ramunia Holdings after they extended the signing of the definitive sale and purchase agreement for 14 days from May 21 to June 4.

Public Bank Bhd plans to raise RM1 billion from a sale of 7.5% bonds, according to Bloomberg.

UMW’s net profit in the first quarter fell to nearly RM66 billion from RM141.77 billion a year ago.

Meanwhile, Mycron Steel slipped into the red with net loss of RM22.89 million compared with net profit of RM5.22 million a year ago. Steel manufacturers were in the red in the January-March quarter as steel prices fell following a sharp decline in demand.

Axiata Group hopes to finalise plans for a rights issue for its Indonesian unit Excelcomindo (XL) in June. The latter equires as much as US$600 million to "repair certain parts of its capital structure", according to Axiata's group chief financial officer Yusof Annuar Yaacob.

Analysts said the move to reduce XL's balance sheet leverage will cost Axiata as much as RM1.2 billion to RM1.8 billion based on its 83.8% stake in XL.

Meanwhile, Globetronics Technology Bhd is investing about RM30 million in capital expenditure this year to expand its business, in view of the new deals it hopes to clinch soon.

Its chief executive Heng Huck Lee said Globetronics was in the midst of finalising a deal with a very large global multinational company.

The MNC, he said, was the world number one leader of PC peripherals with a huge market and our product will be used for all segments of the peripherals including entreprise, desktops, mobile units and other new emerging technologies.


Newer Post Older Post Home