Wednesday, October 6, 2010

#Stocks to watch:* MTD, Sunway, E&O, Mitrajaya

KUALA LUMPUR: Markets are expected to extend their gains on Wednesday, Oct 6 underpinned by the firmer overnight close on Wall Street where the key indices rose between 1.8% and 2.4%.

US stocks rallied to a nearly five-month high on Tuesday on growing conviction that central banks will do even more to boost struggling economies worldwide.

According to Reuters, the Bank of Japan lit the fuse overnight when it unexpectedly cut rates closer to zero and said it would pour money into the markets through asset purchases. This move came as markets increasingly believe the U.S. Federal Reserve will stimulate the world's largest economy in a similar fashion.

However, Nobel Prize-winning economist Joseph Stiglitz warned the ultra-loose monetary policies by the U.S. Federal Reserve and the European Central Bank are throwing the world into "chaos" rather than helping the global economic recovery.

The Dow Jones industrial average gained 193.45 points, or 1.80 percent, to 10,944.72. The Standard & Poor's 500 Index rose 23.72 points, or 2.09 percent, to 1,160.75. The Nasdaq Composite Index jumped 55.31 points, or 2.36 percent, to 2,399.83.

Stocks to watch on Wednesday include MTD CAPITAL BHD [] and IJM Corp, SUNWAY HOLDINGS BHD [], Eastern & Oriental Bhd, MITRAJAYA HOLDINGS BHD [], Malaysian Genomics Resource Centre Bhd (MGRC) and AIRASIA BHD [].

MTD Capital Bhd has decided to exit its Indian highway operations and is disposing of the companies involved in the projects to IJM Corp Bhd for RM43.85 million.

Sunway Holdings will not go ahead with its integrated city proposal with the XuanCheng Municipal Government after the MoU expired on Tuesday and there are no plans to extend it.

Sunway said at the expiry of the MoU, 'the board of Sunway does not intend to enter into any definitive agreement in the immediate future'.

The integrated city plan would consist of an international-standard entertainment park, exhibition centre, hotels, shopping malls, offices and residential units on land to be acquired from XuanCheng Municipal Government.

Meanwhile, E&O said it had submitted a bid relating to the Penang Turf Club land. 'Details are restricted by the confidentiality requirements of the competitive bidding process,' it said.

Mitrajaya has secured a contract to build phase 1A of the Pekan Heritage Tourism Development in Pahang for RM11.36 million from the East Coast Economic Region Development Council.

In AirAsia, whose share price had risen strongly in recent days, saw US-based fund Wellington Management Company, LLP disposing of 9.77 million shares from Sept 27 to Oct 1, reducing its direct stake to 5.44% or 150.33 million shares.

It was a disappointing debut for MGRC whose share price ended its first trading on Tuesday, Oct 5 on a disappointing note, closing down nearly 13% or 14 sen to 94 sen. Its offer price was RM1.08

This was a sharp reversal from early trade when it rose as much as to RM1.21, up 13 sen. It opened at RM1.20.


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