Friday, October 29, 2010

#Stocks to watch:* MMHE, Tenaga, Sunrise, Southern Acids

KUALA LUMPUR: Key Asian markets are expected to open on a cautious note on Friday, Oct 29 after the mixed close on Wall Street.

The Dow Jones industrial average dropped 12.33 points, or 0.11 percent, to 11,113.95. The Standard & Poor's 500 Index gained 1.33 points, or 0.11 percent, to 1,183.78. The Nasdaq Composite Index added 4.11 points, or 0.16 percent, to 2,507.37.

Reuters reported cautious investors pulled back before expected upheaval from next week's elections and a likely announcement of more stimulus from the Federal Reserve.

Next week could bring significant shifts in both monetary policy and legislative direction, leading investors to largely disregard earnings and economic reports.

At Bursa Malaysia, stocks to watch are Marine and Heavy Engineering Holdings Bhd (MMHE), TENAGA NASIONAL BHD [], SUNRISE BHD [] and SOUTHERN ACIDS (M) BHD [].

The listing of MMHE would attract strong interest and prove the spark for the market which has been consolidating in recent days.

MMHE's institutional price is RM3.80 and retail price RM3.61. Affin Investment Research has a Buy and target price of RM4.50. It said MMHE is the best proxy to Malaysia's upstream O&G activities, given its exposure to the country's fabrication, deepwater engineering & CONSTRUCTION [] and marine conversion sectors.

Tenaga Nasional's earnings surged nearly 200% to RM389 million in the fourth quarter ended Aug 31, 2010 from RM133.4 million a year ago, but was cautious about the outlook due to increase in coal prices in the near term.

The national power company said revenue rose 5.4% to RM7.869 billion from RM7.462 billion.

For the just ended FY10, Tenaga reported net profit of RM3.197 billion, which was 274% above the RM853 million in FY09. The higher earnings in FY10 were boosted by a foreign exchange translation gain of RM632.6 million compared with a loss of RM1.177 billion in FY09. Revenue was RM30.32 billion, up 5.3% from RM28.78 billion.

Sunrise is expected to launch at least four major property projects with gross development value (GDV) totalling RM2.7 billion next year and anticipates to register better results for FY2011 ending June 30, given its large unbilled sales of RM1.2 billion.

Southern Acids is set to unlock its holding of 644.49 acres of land bordering Kota Kemuning, Shah Alam, although its board of directors are still exploring its options.

Nestle (Malaysia) Bhd posted net profit of RM113.18 million in the third quarter ended Sept 30, 2010, up 42% from RM79.76 million a year ago, underpinned by stronger exports and improved domestic economy.


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