Thursday, July 22, 2010

#Stocks to watch:* Mudajaya, Tatt Giap, UEM, Kulim, QSR

KUALA LUMPUR: Key regional markets are expected to open weaker on Thursday, July 22, weighed down by overnight losses on Wall Street after Federal Reserve Chairman Ben Bernanke said the US economy faces "unusually uncertain" prospects.

Bernanke's downbeat economic assessment slammed U.S. stocks even after Morgan Stanley and Apple Inc easily beat Wall Street's expectations

The Wall Street bank and the tech bellwether, known for its iPhone and iPad, were the latest U.S. corporations to turn in solid results in the second-quarter reporting season, according to Reuters.

The Dow Jones industrial average closed down 109.43 points, or 1.07%, at 10,120.53. The Standard & Poor's 500 Index fell 13.89 points, or 1.28%, at 1,069.59. The Nasdaq Composite Index slid 35.16 points, or 1.58%, to 2,187.33.

At Bursa Malaysia, the 1,350 target for the FBM KLCI could be put off briefly as the weak closing on Wall Street would dampen investors' confidence.

However, investors should take the longer term view of the market amid the barrage of economic data coming out of the US and possible measures to shore up confidence.

Stocks to watch at Bursa Malaysia include MUDAJAYA GROUP BHD [], Tatt Giap Group Bhd, companies in the UEM Group stable, Kulim (Malaysia) Bhd, Kenmark Holdings Bhd and MALAYSIAN PACIFIC INDUSTRIES [] Bhd.

The Edge FinancialDaily reports that market speculation of a potential change in a substantial shareholding of Mudajaya Group Bhd has sent shares of the CONSTRUCTION []-cum-independent power (IPP) player surging. Mudajaya was the top performing stock on the local bourse on Wednesday, rising 55 sen or 10% to RM5.

Tatt Giap makes its debut on the Main Market of Bursa Malaysia. Its offer price is 58 sen per share.

UEM Group is scheduled to unveil its plan for the group later Thursday morning. Among the companies in the group are PLUS EXPRESSWAYS BHD [], TIME ENGINEERING BHD [], UEM Land Bhd and FABER GROUP BHD [].

Kulim is selling its entire 91.38% interest in Natural Oleochemicals Sdn Bhd (NatOleo), a stake it has held since 1994, to Wilmar International for RM450 million cash.

In the latest update from Kenmark,'' the company said it had resumed its printing operations while its other divisions located in Port Klang have completed all outstanding orders.

"The wood division and plastic and mould division have completed all outstanding orders and the company is now pursuing new work orders from existing and potential new customers," it said.

After almost seven years, the Washington-based International Trade Commission (ITC) has determined that Malaysian Pacific Industries Bhd's (MPI) units had neither violated the Tariff Act nor infringed on Amkor TECHNOLOGY [] Inc's patents.

In a filing to Bursa Malaysia yesterday, MPI said the ITC in its final determination had found that Amkor's patents were invalid and were not infringed upon.

Nomura Research is upbeat on QSR, which is the most diversified KFC franchise owner in the region, with 830 KFC and Pizza Hut stores across ASEAN and India.

'We see 12-40% earnings growth over the next three years, driven by a young and high poultry-consuming population. Strong catalysts also exist via its start-up India presence. Its single-digit FY11F P/E compares favourably historically and versus its peers. We initiate on QSR with a BUY rating and PT of RM5.47,' it said.

The catalysts include continued store openings in Malaysia and India; 2) sustained positive consumer sentiment; and 3) confidence in robust economic recoveries across the region.

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