Stocks to watch: Coastal Contracts , Sanichi, Dialog, JCY,

KUALA LUMPUR (Dec 16): Regional markets including Bursa Malaysia
could trade on a cautious note on Friday as investors’ risk appetite for
equities would be restrained by worries about the global economy and
Europe's debt crisis.

Reuters reported major Southeast Asian stock markets fell on
Thursday, extending the decline for the third day, led by banks and
commodities as a decline in Chinese factory output added to worries
about the global economy and Europe's debt crisis.

Concern over the situation in the euro zone rose after Fitch Ratings downgraded five big European banks on Wednesday.

At Bursa Malaysia, stocks which could see trading interest include COASTAL CONTRACTS BHD [], SANICHI TECHNOLOGY [] BHD [], DIALOG GROUP BHD [] and hard-disk drive manufacturer JCY International Bhd.

Coastal Contracts’s year-to-date order wins rose to RM690 million
after the company secured new contracts worth RM233 million for the sale
of three offshore support vessels, two landing crafts and two barges.

“With this latest batch of contracts, the value of Coastal Group’s
secured vessel sales orders currently stood at about RM610 million, with
deliveries through 2012,” it said.

Sanichi, whose shares inched up in very active trade on Thursday,
could see continued trading action. It received a letter of intent from
China’s Guangxi Huayin to purchase 150,000 tonnes of steam coal per
month, totaling 1.80 million tonnes for a one-year period.

Sanichi said Guangxi Huayin is one of the largest and most advanced
aluminium producers in China and the shareholders include the Aluminium
Corporation of China with a 33% stake.

Meanwhile Dialog Group Bhd, which is undertaking a cash call to raise
funds for more investments in the upstream oil and gas opportunities,
has fixed the rights shares at RM1.20 each and the exercise price of the
warrants at RM2.40 each.

The issue price would be a discount of about 46% to the theoretical
ex-rights price of RM2.23 per share, based on the five-day
volume-weighted average market price (VWAMP)up to Dec 14 of RM2.43.

As for the warrants, it said the exercise price was 8% above the
theoretical ex-rights price of RM2.23 per share, based on the five-day
VWAMP up to Dec 14 of RM2.43.

JCY could see continued trading interest as it was not impacted by
the severe floods in Thailand unlike other hard-disk drive manufacturers
which had major operations in Thailand.

CIMB Equities Research said believed a full restoration to pre-flood
production was at least six to nine months away, but suppliers with
strong balance sheets to invest could benefit from greater allocations
in the near term.

“Improvements in average selling prices (ASP) for drive makers should
also be positive for the industry,” it said. It advised investors to be
selective as it believed volume would remain hindered by component
shortages.

“Buy JCY as we expect strong near-term earnings on higher ASPs and allocations,” it said.