Saturday, October 30, 2010

#Stocks to watch:* MMHE, Freight Management, MAHB, L&G

KUALA LUMPUR: Key regional markets are expected to continue their consolidation on Monday, Nov 1 after US stocks ended on a flat note on Friday, ahead of the US Federal Reserve meeting on Wednesday but Bursa Malaysia could buck the other markets due to domestic factors and liquidity.

According to Reuters, investors kept trading to a minimum this week in anticipation of next Wednesday's announcement. Activity the last several weeks has been heavily influenced by hopes for a large round of asset buying.

Last Friday, the Dow Jones industrial average added 4.54 points, or 0.04%, to 11,118.49. The Standard & Poor's 500 Index shed just 0.52 of a point, or 0.04%, to 1,183.26. The Nasdaq Composite Index edged up just 0.04 point to 2,507.41.

For the month of October, though, it was a solid upswing, with the S&P 500 gaining 3.7 percent, while the Dow advanced 3.1 percent and the Nasdaq jumped 5.9 percent.

After a two-month rally in the stock market, some investors are about to see if they get what they wished for: more Republicans in Congress and lots of cheap money.

At Bursa Malaysia, there could be some profit taking after the late rally on Friday, which pushed the FBM KLCI nearer the all time closing high of 1,516 on Jan 11, 2008.'' The FBM KLCI closed 6.22 points higher at 1,505.66 as market sentiment turned for the better despite the weaker regional markets.

Marine and Heavy Engineering Holdings Bhd (MMHE) was in focus, closing at RM4.51, up 71 sen from its institutional offer price of RM3.80. The retail price was RM3.61.

However, sentiment could be underpinned ahead of the launch of the prospectus of Petronas Chemicals Group Bhd next Tuesday.

Stocks to watch include MMHE, whose share price had exceeded nearly all analysts' expectations, Freight Management, Malaysia Airports Holdings Bhd (MAHB) and Land & General Bhd.

Freight Management is focusing its expansion plans across Asean to diversify its earnings base so that it is not exposed to risks in one country segment alone, according to The Edge Weekly.

MAHB posted net profit of RM61.82 million for the third quarter ended Sept 30, 2010, down 25.9% from the RM83.43 million a year ago due to a higher share of losses in an associate company.

MAHB said revenue rose 18.2% to RM446.28 million from RM377.36 million. Earnings per share were 5.62 sen versus 7.59 sen.

L&G share price is trading at fresh highs as the company is now cash rich and almost debt free following a debt restructuring, capital reduction exercise and redemption of its final tranche of secured paper, according to The Edge Weekly.

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