18 July 2011

Stocks to watch: IOI Corp, UOA REIT, MAHB, SP Setia

KUALA LUMPUR: Stocks on Bursa Malaysia may see more downside pressure in the week ahead, starting July 18 due to external headwinds, mainly from the US.

On Wall Street, US stocks ended the week lower. For the week, the S&P 500 ended down 2.1%, while the Dow lost 1.4% and the Nasdaq fell 2.5%.

Mounting uncertainty about the government's ability to reach a debt-reduction deal may keep investors at bay in the coming week, Reuters reported.

Next week's U.S. data including the Philadelphia Fed survey would provide a crucial update on the state of the world's biggest economy after a disappointing set of data in recent weeks, especially last week's monthly jobs report, it said.

At Bursa Malaysia, the FBM KLCI fell 17.49 points to 1,577.25 from the week before while the marker capitalisation was reduced by RM14.07 billion to RM1.342 trillion.

Year-to-date, the KLCI is up 3.84%, making it the fifth best performing market in the key regional markets. At 1,577, the KLCI is trading at a trailing price-to-earnings of 16.82 times.

Two companies which are due to be listed in the week ahead are Inarai Bhd and Catcha Media Bhd.

Inari Bhd posted net profit RM2.6 million for the third quarter ended March 31, 2011 on the back of revenue RM35.8 million. For the nine months ended March 31, the company’s net profit was RM14.7 million on the back of revenue RM77 million.

Catcha Media reported that in the first quarter ended March 31, 2011, it recorded revenue and pre-tax profit of about RM5.728 million and about RM12,000 respectively.

It said the pre-tax profit was mainly due to the lower revenue achieved in the current quarter as a result of the seasonality associated with media business, significant increase in headcounts and associated payroll expenses in both publishing and online media business in anticipation of the growth of revenue in the future as well as the listing expenses incurred in the current quarter under review.

Stocks to watch on Monday include IOI Corp Bhd. UOA Real Estate Investment Trust (UOA REIT), Malaysia Airports Holdings Bhd (MAHB) and SP SETIA BHD [].

The Edge weekly reports executive chairman Tan Sri Lee Shin Cheng as saying that going by its present growth rate, the company's property business could grow to three times its present size and become a distinct and substantial core business for the group.

UOA REIT’s net profit rose 62% to RM10.68 million in the second quarter ended June 30, 2011, from RM6.59 million a year ago.

Its revenue increased by 88% to RM20.28 million from RM10.78 million. Earnings per share were 2.53 sen compared with 2.68 sen.

MAHB’s decision not to install aerobridges at the new Low Cost Carrier Terminal, or KLIA 2, will save the company up to RM104 million.

Its chairman Tan Sri Aris Othman said the amount was for 80 aerobridges, costing RM1.3 million each. Although aerobridges could provide convenience, it would be a waste if airlines would not use it.

SP Setia share price closed 12 sen lower to RM3.89 on Friday after hitting an intra-day low of RM3.84 the lowest since early March as analysts downgraded it to underperform.

CLSA Asia-Pacific Research had downgraded SP Setia to Underperform from Outperform with a revised target price of RM4.30, based on a 10% discount to RNAV of RM4.80. It said this was in line with the discount applied to other property names under its coverage.

“Given that SP Setia is a pure property developer play, we believe that the 10% discount is justified from zero discount previously. We do not see any compelling reason for SP Setia to be valued at a premium compared to the rest of the property companies given that the visibility of the physical property market has been reduced by the mixed signals,” it said.

However, CLSA said it did not change its earnings estimates for FY11 and FY12 as these will continue to be supported by the strong unbilled sales recorded at RM1.8billion as at FY10, which had subsequently increased to RM3billion as at H111.

“For FY13 earnings estimates, we see potential downside risk if the mixed signals above tilted towards more negative outlook. Another potential headwind could be the change in government policy in tightening the lending requirement, which at this stage, still unclear as it remains at the proposal stage,” it said.

KL shares to trade in narrow range

Share prices on Bursa Malaysia are likely to tread cautiously next week in a narrow range of between 1,560 and 1,590 points on continued investor concern over the U.S. and European debt situation.

Global economic developments especially Europe's debt crisis and Wall Street's bearishness weighed down on sentiment in a week marked by the proposed RM11.85 billion merger between Kencana Petroleum and SapuraCrest Petroleum.

Affin Investment Bank's Head of Retail Research Dr Nazri Khan told Bernama that investors were eagerly awaiting the outcome of the European Central Bank (ECB) meeting Friday night which is expected to provide leads to the market.

He said the outcome will determine whether the ECB is robust enough to prevent any default by European banks.

Dr Nazri said the local bourse was expected to trade within a range of 1,560 and 1,590, supported by more news on the Economic Transformation Programme and the financial sector master plan which is yet to be announced.

The market, which opened the week easier, rebounded following positive news from Italy, but retreated later the week on concerns of negative sentiment over global debt problems.

For the week just ended, the market was bearish due to lack of interest and a continued sell-off in selected heavyweights after recent gains.

Kencana and SapuraCrest hogged the limelight as the biggest merger deal ever this year, with Kencana trading at noon on Tuesday 14 sen higher at RM2.94 and SapuraCrest adding five sen to RM4.54.

By the week's end, Kencana rose three sen to RM2.99 and SapuraCrest Petroleum was unchanged at RM4.51.

On a Friday-to-Friday basis, the FBM KLCI dropped to 1,577.25 from 1,594.74 points and the Finance Index eased 181.35 points to 14,857.39.

The Plantation Index fell 136.19 points to 7,773.79 and the Industrial Index shed 27.06 points to 2,855.56.

The FBM Emas Index decreased 124.72 points to 10,809.61, the FBMT100 declined 117.03 points to 10,591.15 and the FBM Ace Index was lower by 69.07 points to 4,111.58.

Weekly volume dwindled to 3.798 billion shares valued at RM7.22 billion from 4.66 billion shares valued at RM8.63 billion last week.

Turnover on the Main Market fell to 2.89 billion shares worth RM7.034 billion from 3.52 billion shares worth RM8.38 billion previously.

Volume on the ACE market was lower at 447.57 million units valued at RM78.42 million against 477.78 million units valued at RM76.28 million previously.

Warrants dropped to 435.669 million units worth RM263.18 million from 640.58 million units worth RM168.95 million last Friday.--Bernama

hlk open thread wor..........

when you open thread....very volotile leh [You must be registered and logged in to see this image.]

hlk u din subscribe any ipo???

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sorry i cant help it....too funny

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improve your performance when working with the Cibai

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phoenix wrote:hlk open thread wor..........

when you open thread....very volotile leh [You must be registered and logged in to see this image.]

... happy trading ! ...

Greetings to all.
Some people dream of success... while others wake up and work hard at it.

phoenix wrote:hlk u din subscribe any ipo???

mkt sentiment not so good ...

Chandra wrote:Greetings to all.
Some people dream of success... while others wake up and work hard at it.

good morn chandra

hlk wrote:

Chandra wrote:Greetings to all.
Some people dream of success... while others wake up and work hard at it.

good morn chandra

Good Morning HLK. Hope we huat together with the rest of the geng and also hope there are more newcomers join us today[You must be registered and logged in to see this image.]

morning Max sifu, Dai Si Jie and comrades [You must be registered and logged in to see this image.]

Uncle Heart ❤ wrote:morning Max sifu, Dai Si Jie and comrades [You must be registered and logged in to see this image.]

Good Morning Bern.

Chandra wrote:

hlk wrote:

Chandra wrote:Greetings to all.
Some people dream of success... while others wake up and work hard at it.

good morn chandra

Good Morning HLK. Hope we huat together with the rest of the geng and also hope there are more newcomers join us today[You must be registered and logged in to see this image.]

Uncle Heart ❤ wrote:morning Max sifu, Dai Si Jie and comrades [You must be registered and logged in to see this image.]

good morn sifu n bern

good morn phoenix

morn all [You must be registered and logged in to see this image.]

msm close at 42cts during pre closing.........today gap up to 52cts....

airasia chiong ma?

the big guy aa-cj waiting to reap liao..

phoenix wrote:msm close at 42cts during pre closing.........today gap up to 52cts....

should we watching?....heheheheheh....fast money![You must be registered and logged in to see this image.]

W wrote:airasia chiong ma?

the big guy aa-cj waiting to reap liao..

air-cj is "priceless" bb now .. collector items not for sale [You must be registered and logged in to see this image.]

W wrote:airasia chiong ma?

the big guy aa-cj waiting to reap liao..

morn W

Uncle Heart ❤ wrote:

W wrote:airasia chiong ma?

the big guy aa-cj waiting to reap liao..

air-cj is "priceless" bb now .. collector items not for sale [You must be registered and logged in to see this image.]

mm don dare to supply liao..[You must be registered and logged in to see this image.]