Wednesday, August 11, 2010

#Stocks to watch:* Glovemakers, Chinese shoemakers, Ngiu Kee, BDRB

KUALA LUMPUR: Stocks are expected to open on a cautious note on Wednesday, Aug 11 after US stocks lost ground and the Federal Reserve signalled it would act as necessary to preserve the fading economic recovery.

On Bursa Malaysia, the FBM KLCI futures closed lower than the cash market on Tuesday as investors turned cautious in line with the key regional markets.

The FBM KLCI closed 0.95 of a point lower at 1,359.71. Turnover shrank to 675.94 million units. The futures market closed 9.5 points lower at 1,356.

On Wall Street, the Dow Jones industrial average ended down 54.50 points, or 0.51%, at 10,644.25. The Standard & Poor's 500 Index fell 6.73 points, or 0.60%, at 1,121.06. The Nasdaq Composite Index closed lower 28.52 points, or 1.24%, at 2,277.17.

The S&P rebounded back above its 200-day moving average. All three major indexes had been down more than 1 percent before the Fed's decision and on evidence that China's rapid growth was easing.

Glovemakers could again come under focus on concerns about more headwinds and higher costs ahead.

HARTALEGA HOLDINGS BHD []'s net profit rose 57% to RM41.46 million in the first quarter ended June 30 from RM26.37 million a year ago, underpinned by higher demand and increase in average selling price of both nitrile and latex gloves.

Revenue rose 35.6% to RM169.96 million from RM125.33 million. Earning per share were 17.11 sen versus 10.88 sen. Pre-tax profit rose 64.4% to RM53.76 million from RM32.06 million.

Meanwhile, China-based companies whose attractive valuations have been largely ignored by the investing community may start to attract investors' attention as they scout for undervalued stocks on Bursa Malaysia Securities. The question is, can the momentum be maintained?

Four companies from China listed on Bursa, all of which are in the shoemaking industry,'' are K-Star Sports Ltd, Multi Sports Holdings Ltd, Xidelang Holdings Ltd and Xingquan International Sports Holdings Ltd.

In Ngiu Kee Corp (M) Bhd (NKCB), the company said it was still in the midst of restructuring the outstanding loan with Bank Islam Malaysia Bhd.

'The board also wishes to inform that the company's auditors have expressed a modified opinion with emphasis on NKCB's going concern in the company's latest audited consolidated financial statements for the financial year ended March 31, 2010 and the shareholders' equity of NKCB on a consolidated basis is less than 25% of the issued and paid-up share capital (excluding treasury shares) of NKCB and such shareholders' equity is less than RM40 million,' it said.

BANDAR RAYA DEVELOPMENTS BHD [] (BDRB) confirmed it is in talks with a Chinese party for a potential collaboration with its 56.76%-owned subsidiary MIECO CHIPBOARD BHD [].

BDRB said the collaboration could possibly involve equity participation in Mieco. The property developer said the discussion was preliminary and exploratory in nature at this stage.

In SOUTHERN STEEL BHD [], the company announced that HwangDBS Investment Bank Bhd did not get the Securities Commission's approval to be the independent adviser to the independent and/or non-interested directors of Southern Steel and holders of the offer shares.

Signaland Sdn Bhd had offered RM2.05 cash for each offer share.

ES CERAMICS TECHNOLOGY [] BHD [] has revised its corporate exercise and now plans to undertake a renounceable rights issue of up to 57.45 million new shares of 10 sen each together with up to 57.45 free detachable new warrants.

The rights issue is on the basis of one rights share together with one warrant for every one existing ordinary share in ES Ceramics.

It also proposed a bonus issue of up to 57.45 million new shares on the basis of one bonus share for every one rights share subscribed by the existing shareholders and/or their renounces.

The exercise included a proposed exemption sought by Datuk Kamal YP Tan from the obligation to extend a take-over offer for all the remaining shares not already owned.

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