Thursday, August 12, 2010

#Stocks to watch:* Plantations, glove makers, IOI Corp, Yee Lee

KUALA LUMPUR: The sharp overnight fall on Wall Street on Wednesday, Aug 11, will send jitters to the key regional markets when they open for trading Thursday as sustained global economic stagnation looms.

On Wall Street, US stocks erased the year's gains in the broadest sell-off in a month-and-a-half on Wednesday as investors took money off the table and sought refuge in safer assets.

According to Reuters, all three major indexes posted their worst percentage drop since July 16 following the Federal Reserve's bleaker assessment of the economy on Tuesday.

The Dow Jones industrial average was down 265.42 points, or 2.49%, at 10,378.83. The Standard & Poor's 500 Index was down 31.59 points, or 2.82%, at 1,089.47. The Nasdaq Composite Index was down 68.54 points, or 3.01%, at 2,208.63.

The Nasdaq was down 2.7% for the year, while the S&P 500 was down 2.3% and the Dow was down 0.5%.

Stocks to watch on Bursa Malaysia include PLANTATION []s, glove makers, IOI Corp Bhd and Yee Lee Corp Bhd.

Shares of most plantation companies fell on Wednesday, weighed down by a cautious outlook on the sector as crude palm oil (CPO) prices are expected to weaken in the fourth quarter of this year as production hits its peak. Investors would have to watch out for the earnings due later this month and also the companies' forecasts for the remaining quarters.

Share prices of Malaysian listed glove makers have been on a steady downward trend after climbing to all-time highs in the middle of last month.

This week, the selling pressure accelerated after a research house, HwangDBS Vickers, downgraded the sector on Monday, although other research houses immediately came to defend their bullish calls. More details in Thursday's edition of The Edge FinancialDaily.

In IOI Corp, the Employees Provident Fund Board (EPF) disposed of 33.72 million shares in the past seven trading days since July 27 until Aug 5. The shares represented a 0.5% stake in the plantations heavyweight.

After the latest disposals, the EPF's shareholding in IOI Corp was reduced to 12.77% or 814.32 million shares. IOI Corp shares were trading between RM5.10 and RM5.13 during the seven trading days.

YEE LEE CORPORATION BHD []'s unit was appointed by Red Bull Asia FZE to distribute and market Red Bull Energy Drink and Red Bull Sugarfree within Malaysia.

Under the agreement, it will be the distributor with non-exclusive rights to distribute and market Red Bull Energy Drink and Red Bull Sugarfree within Malaysia in its respective borders.

Meanwhile, LIMAHSOON BHD [] has been given six months to complete its proposed restructuring of its RM81.1 million debt'' after it sought the assistance of the Corporate Debt Restructuring Committee (CDRC).

Limahsoon had submitted an application to CDRC on July 26 for assistance to mediate between the company and its financial creditors. The CDRC had given the company six months from Aug 11 to complete the proposed debt revamp.

Bursa Malaysia Securities Bhd has extended the deadline for Ho Hup CONSTRUCTION [] Co. Bhd by another three months to Nov 4 to submit its regularisation plan.

However, the further extension of time granted to Ho Hup was without prejudice to Bursa Securities' right to proceed to suspend the trading of the securities of Ho Hup and to commence de-listing procedures.


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