Tuesday, July 13, 2010

#Stocks to watch:* Scomi Marine, DRB-Hicom, KEuro, Minho

KUALA LUMPUR: Investors should brace for some profit taking on Tuesday, July 13 after the local stock market advanced for the sixth straight day as of Monday. The lack of external leads especially from Wall Street could see the local market taking a breather.

On Wall Street, caution prevailed in on Monday, with indexes edging higher as investors kept bets to a minimum in front of earnings.

The Dow Jones industrial average added 18.24 points, or 0.18%, to end at 10,216.27. The Standard & Poor's 500 Index edged up just 0.79 of a point, or 0.07%to 1,078.75. The Nasdaq Composite Index gained 1.91 points, or 0.09%, to close at 2,198.36.

Volume was among the lightest of the year with investors wanting to see if corporate outlooks validate last week's surge, the strongest week in a year.

At Bursa Malaysia, stocks to watch include Scomi Marine'' Bhd, DRB-HICOM BHD [], KUMPULAN EUROPLUS BHD [] and MINHO (M) BHD [].

SCOMI MARINE BHD [] has proposed a sale of its assets to its Indonesian subsidiary PT Rig Tenders (PTRT) for US$171.8 million (RM550 million), an exercise that will leave the company principally as a cash-rich shell.

Under the corporate exercise, Scomi Marine will see it disposing of its coal transportation business to become a marine logistics player.

DRB-Hicom's subsidiaries, Automotive Corporation (M) Sdn Bhd and EON Auto Mart Sdn Bhd will supply vehicles under a RM120 million contract with TENAGA NASIONAL BHD []. The power giant is replacing its fleet of 1,720 ageing vehicles over three years.

Meanwhile, Kumpulan Europlus is targeting to be in the black by 2012, underpinned by its RM10 billion Canal Citry project and its proposed debt settlement exercise.

Latest data showed it had about RM260 million in borrowings as at March 31. Under the corporate exercise, it plans to raise nearly RM91 million by disposing of 700 million shares in TALAM CORPORATION BHD []. KEuro has 26.51% stake in Talam.

KEuro is also hoping the RM3.5 billion West Coast Highway would help boost earnings. The final terms of the concession are still being worked out.

Minho is converting its long term receivable of RM39.81 million from two of its units -- Syarikat Minho Kilning Sdn Bhd (SMKSB) and Idaman Heights Sdn Bhd -- into investment in subsidiaries.

Syarikat Minho Kilning's principal activities are kiln drying and chemical preservative treatment of sawn while Idaman Heights is mainly involved in collecting of rental from its property in Port Klang.

More details of the deal in Tuesday's The Edge FinancialDaily.


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