Saturday, September 4, 2010

#Stocks to watch:* RCE Cap, AZRB, Jetson, EON Cap

KUALA LUMPUR: Key regional markets including Bursa Malaysia are expected to kick off the new week, Monday, Sept 6 on a firmer note after Wall Street climbed as anxiety of a double-dip recession eased.

On Wall Street, stocks jumped and commodities rose on Friday, after data showing fewer U.S. job losses than expected reinforced other reports this week to ease fears the American economy is on the cusp of a new recession.

According to Reuters, the US Labor Department said non-farm payrolls fell 54,000 in August. Private employment, considered a better gauge of labour market health than government hiring, added 67,000 jobs after an upwardly revised 107,000 gain in July.

The Dow Jones industrial average closed up 127.83 points, or 1.24%, at 10,447.93. The Standard & Poor's 500 Index gained 14.41 points, or 1.32%, at 1,104.51. The Nasdaq Composite Index added 33.74 points, or 1.53%, at 2,233.75.

At Bursa Malaysia, stocks to watch on Monday include RCE CAPITAL BHD [], AHMAD ZAKI RESOURCES BHD [] (AZRB), KUMPULAN JETSON BHD [], EON CAPITAL BHD [] and Mudajaya Corp Bhd.

The Edge Weekly reports that though more financial institutions are entering the niche market of providing loans to government servants via civil service cooperatives but RCE Capital is confident it will maintain its market share.

RCE posted net profit of RM23.63 million in the first quarter ended June 30, 2010 versus RM18.53m a year ago. The group recorded a higher profit before tax of RM33.7 million the 1Q, up 12.4% or RM3.7 million from RM30.0 million in the preceding quarter.

AZRB has initiated legal actions against Saudi Arabia's Alfaisal University over the latter's decision to liquidate the performance and advance bonds totalling 52.56 million riyals (RM43.94 million).

The dispute arose over the contract agreement with the university for the Alfaisal University campus development project, phase one and two, in Riyadh.

Last Friday, Kumpulan Jetson Bhd said the Naza Group's TTDI KL Metropolis Sdn Bhd (TKLM) has terminated the shareholders' agreement with Jetson to build a new trade exhibition centre for the Malaysia External Trade Development Corporation (Matrade) on a joint-venture basis.

Jetson said on Friday, Sept 3 the termination arose from disagreements on certain commercial terms relating to the project costs for the Matrade centre in Jalan Dutamas which was expected to cost RM628 million.

However, though the shareholders' agreement has been terminated, Jetson could probably play a role as the contractor to undertake the project.

In EON Capital, the High Court judge has fixed Monday to deliver his decision on certain interlocutory applications filed by the parties to a petition.

Primus (Malaysia) Sdn Bhd had filed a law suit against the board members and certain shareholders of EONCap.

The suit was to seek various court declarations and orders as well as some RM1.12 billion in damages from EONCap directors should HONG LEONG BANK BHD [] (HLBB) succeed in acquiring EONCap's assets and liabilities.

Mudajaya could continue to see trading interest after its share price could retreat after the price surge last Friday.

The latest development was the appointment of Asgari Mohd Fuad Stephens as its chairman and there are expectations he would help put Mudajaya on firmer footing after the recent controversy over its Indian independent power plant project.

Asgari is the director and founding member of Intelligent Capital Sdn Bhd. According to Mudajaya, he has extensive experience in both public and private equity investing in Malaysia. He was former chairman of Leighton Asia (southern), part of the Leighton Group, Australia's largest project development and contracting group.

The share price surged 53 sen to RM4.48 with 9.65 million shares done, as interest in the stock was also spurred by a share buyback. Mudajaya also disclosed that it had bought back 100,800 shares for a total of RM394,584 at prices ranging from RM3.86 to RM3.90.


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