Thursday, August 5, 2010

#Stocks to watch:* Affin, AirAsia, plantations, Zelan

KUALA LUMPUR: Key regional markets are expected to start on a firmer note on Thursday, Aug 5, after US stocks closed higher overnight, boosted by retailers' earnings and a slight improvement in private employment.

Data from the Institute for Supply Management showed the services sector grew at a faster pace than expected in July. In a separate report, payroll-processing company ADP said private employers added more jobs in July than forecast, according to Reuters.

Friday's government report on jobs is expected to show a drop of 65,000 in July as Census jobs dried up.

The Dow Jones industrial average gained 44.05 points, or 0.41%, to 10,680.43. The Standard & Poor's 500 Index added 6.78 points, or 0.61%, to 1,127.24. The Nasdaq Composite Index advanced 20.05 points, or 0.88%, to 2,303.57.

At Bursa Malaysia, stocks to watch include AFFIN HOLDINGS BHD [], AIRASIA BHD [], PLANTATION []s and ZELAN BHD []. The FBM KLCI, which snapped its eight straight days of gains, could resume its upward trend.

Affin Holdings Bhd's unit Affin Bank Bhd has marked its first overseas venture with its proposed acquisition and subscription of an 80% stake in Indonesia's PT Bank Ina Perdana for an estimated RM138 million.

Affin Holdings said it wanted to tap into the growth potential in Indonesia especially with PT Bank Ina Perdana's niche positioning as a retail bank in the SME sector. This acquisition would fit in nicely with Affin Bank's long term plan to further grow its business and increase its shareholders value.

AirAsia deferred in the delivery dates of seven Airbus A320 planes to 2015 from the original scheduled delivery of 2011 due to infrastructural constraints with the current airport facilities.

The delivery of 15 aircraft in 2011 shall be reduced to eight aircraft. The low-cost carrier said the number of deliveries in 2015 will also be increased from two aircraft to nine aircraft.

AirAsia said no penalties are payable by AirAsia in revising the delivery schedule of the 2011 aircraft.

Plantation stocks are expected to see more positive trading interest after crude palm oil prices rallied in line with soybeans on concerns of lower yields. CPO third-month futures rose RM28 to RM2,590.

Zelan's shares soared 17.5 sen or 28.9% yesterday to a six-month high of 78 sen on news of the entry of a new substantial shareholder.

US-registered Grantham, Mayo, Van Otterloo & Co LLC acquired 28.28 million Zelan shares or a 5.02% stake in the company on Aug 2.

Genting Malaysia Bhd's subsidiary Genting New York LLC (Genting NY) has won the bid to develop and operate a video lottery facility at the Aqueduct Racetrack in New York with a proposal that includes a US$380 million (RM1.2 billion) as an upfront licensing fee.

MULTI-PURPOSE HOLDINGS BHD [] (MPHB) is mulling plans for a possible relisting of Magnum Corp Bhd.

MPHB said it was currently at a very preliminary stage of looking at the possible relisting of Magnum and was exploring various options for the said listing plan.

Shell Refining company (Federation of Malaysia) Bhd posted losses of RM46.78 million in the second quarter ended June 30, 2010 compared with net profit of RM220.95 million a year due to stockholding losses on lower crude and product prices.

Shell Refining said on Wednesday, Aug 4 that revenue rose to RM2.708 billion from RM2.306 billion. Loss per share was 17.2 sen versus earnings per share of 73.44 sen. It declared dividend per share of 20 sen, which was the similar amount a year ago.

"This financial result is mainly attributed to stockholding losses with lower crude and product prices, although refining margins remain satisfactory. Stockholding losses after tax were recorded at RM32 million compared to stockholding gains of RM162 million in the corresponding period in 2009," it said.

Shell Refining also said the company would build a new 6,000 tonnes per day diesel processing unit at its Port Dickson refinery.

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