Wednesday, August 4, 2010

#Stocks to watch:* Notion VTec, Ann Joo Resources, KFCH, MTD ACPI

KUALA LUMPUR: Investors are expected to turn cautious on Wednesday, Aug 4, taking their cue from the weaker overnight close on Wall Street following the weaker-than-estimated data on consumer spending and housing.

The Dow Jones industrial average fell 38 points, or 0.36%, to 10,636.38. The Standard & Poor's 500 Index shed 5.40 points, or 0.48%, to 1,120.46. The Nasdaq Composite Index lost 11.84 points, or 0.52%, to 2,283.52.

The S&P Consumer Discretionary Sector fell 1.3% while the S&P Retail index lost 1.9%.

Stocks to watch on Wednesday include NotionVTec and other hard-disk drive manufacturers like JCY on concerns of slower demand. RHB had downgraded NotionVTec on Tuesday.

On the watch list include Ann Joo Resources, PLANTATION [] company Kretam Holdings, KFC Holdings, MTD ACPI Engineering, CCK COnsolidated Holdings and Alam Maritim Resources.

Steel company Ann Joo Resources' net profit surged over 30 times to RM70.9 million in its second quarter ended June 30, 2010 (2QFY10) from RM2.2 million a year earlier due to a continuous improvement in productivity coupled with higher export tonnage.

Revenue rose 40% to RM595.4 million'' from RM424.30 million, while basic earnings per share (EPS) rose to 14.11 sen from 0.44 sen.

For the six month period ended June 30, 2010, Ann Joo registered a net profit of RM112.4 million compared to a net loss of RM36.7 million a year ago. Its revenue ballooned to 66% to RM 1.07 billion compared to the revenue of RM 644.43 million for the first half of year 2009.

KFC Holdings expects a double-digit sales growth for its financial year ending Dec 31, 2010 (FY10) against a growth of 10.9% with sales of RM2.3 billion in FY09.

'Despite uncertainties in the economy last year, KFCH still recorded a positive growth and we are confident and hope to sustain that sort of growth momentum,' KFCH managing director Jamaludin Ali said.

KFCH recorded a revenue of RM600 million for its first quarter ended March 31, 2010, up by 14% from the corresponding period last year, while net profit rose 19% to RM34.24 million from RM28.7 million. Basic earnings per share rose to 17.27 sen from 14.47 sen, while net assets per share stood at RM4.16 as at March 31, 2010.

In MTD ACPI ENGINEERING BHD [], the Employees Provident Fund has ceased to be a substantial shareholder after it disposed of 1.25 million shares on July 28.

ALAM MARITIM RESOURCES BHD [] has secured a two-year contract worth RM30.32 million for the provision of one anchor handling tug supply vessel.

The contract is expected to contribute positively to its earnings and net assets for the financial year ending Dec 31, 2010, and beyond.

KRETAM HOLDINGS BHD []'s major shareholders have extended an unconditional takeover offer to acquire all the remaining shares they do not already own at RM1.43 cash per share, after they had acquired more shares and converted their irredeemable convertible unsecured loan stocks (ICULS).

Permodalan Nasional Berhad reduced its stake in CCK CONSOLIDATED HOLDINGS BHD [] to 7.4% or 11.52 million shares after disposing of three million shares on Friday.

In KBB RESOURCES BHD [], Datuk Ang Cho Teing disposed of 8.99 million shares on Tuesday at prices ranging from 10 sen to 12.5 sen. The disposals reduced his stake to 23.37% or 28.04 million shares.

MULTI-PURPOSE HOLDINGS BHD [] (MPHB) intends to maintain its 51% stake in Magnum Corporation Sdn Bhd even if Magnum is relisted.

MPHB said the relisting of Magnum on the Main Market was one of the exit strategies contemplated by CVC Capital Partners.

CVC, which has a 47% interest in Magnum, has its own exit strategies based on timing and expected return, it said.

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