Stocks to watch: MAS, AirAsia, Al-Hadharah Boustead REIT, Berjaya Assets, Hartalega

KUALA LUMPUR: A surprise tie-up between MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and AIRASIA BHD [] could lift dampened investor sentiment at the local bourse on Wednesday, Aug 10 after the third straight day of losses.

A total of RM22.72 billion was wiped out from the local stock market capitalization on Tuesday, reducing it to RM1,255.95 billion. For the three days since last Friday, the market lost RM83.387 billion in market capitalization in a shocking sell-off.

The outcome of the Federal Open Market Committee meeting in the US would also play a major influence on equity markets across the world, as all attention will focus on whether the Fed will step in to halt the slide with fresh moves to inject confidence into a faltering economy.

But a surprise fall in British factory output in June and a slight dip in US productivity, as well as higher than expected inflation rate in China could still weigh on investor sentiment at the regional markets.

As for the local bourse, attention will likely be on the two airlines that have inked a deal to swap shares with each other, paving way for meaningful partnership between the two divergent airlines.

Stocks to watch include MAS, AirAsia Bhd, Berjaya Assets Bhd, AL-HADHARAH BOUSTEAD REIT [], HARTALEGA HOLDINGS BHD [] and RANHILL BHD [].

Khazanah Nasional Bhd, which owns 69.5% in MAS, will take up a 10% of shares in AirAsia while Tune Air Sdn Bhd, which owns some 23% in AirAsia will hold 20.5% shares in MAS.

Although AirAsia and MAS officials said it was too early to estimate synergy gains as a result of the partnership, it is estimated that the tie-up can potentially save both airlines as much as RM1 billion annually.

Berjaya Assets posted net profit RM198.04 million in the fourth quarter ended June 30, 2011, due mainly to a favourable fair value adjustment of investment PROPERTIES [] totaling RM243.6 million. The company proposed a final gross dividend of four sen per share.

For FY ended June 30, Berjaya Assets posted net profit RM288.02 million compared to RM235.67 million a year earlier, on the back of revenue RM353.99 million.

Al-Hadharah Boustead REIT’s net profit for the second quarter ended June 30, 2011 jumped 50% to RM23.91 million from RM15.95 million a year earlier, due mainly to an increase in fixed rental income and the doubling of performance-based profit sharing.

Revenue for the quarter rose to RM27.70 million from RM18.06 million. Earnings per unit was 3.81 sen while net assets per share was RM1.43.

The fund declared an income distribution of 4 sen per unit which will be paid in September, 2011.

Hartalega Holdings Bhd plans to expand its business in China with the subscription for 70% of the registered capital of YanCheng Pharmatex Medical Equipment Co Ltd for RM319,410.

Its net profit for the first quarter ended June 30, 2011 rose 32% to RM54.77 million from RM41.61 million a year earlier, due mainly to expansion in production capacity, increase in demand, effective cost control and improvement in production processes.

Ranhill, which bucked the weak market to close 13.5 sen higher at 88 sen after its major shareholder offered to take it over at 90 sen, could see limited upside.

Ranhill said it was not considering seeking an alternative person to make a take-over offer for the offer shares.

It received the notice for the takeover offer at 90 sen per share, or a premium of 15 sen or 20% above the last traded price of 75 sen on Monday.