KUALA LUMPUR: Investors could be heaving a sigh of relief after the volatile January, which saw the FBM KLCI surge to fresh record high of 1,574.49 on Jan 17 but to end only marginally higher as foreign funds took profit.
Fresh developments including the awarding of a marginal oil and gas field concession could lift the sector and sentiment while glove makers could be in focus again following the proposed takeover of LATEXX PARTNERS BHD [] for RM852.03 million.
Year-to-date, the 30-stock FBM KLCI is up just 1.03 points or 0.07% to end Jan 31 at 1,519.94 while the FBM 100 is up 70.26 points or 0.69% to 10,186.82. However, the broader FBM EMAS recorded a 94.19 points increase or 0.9% to end at 10,469.17.
According to the stock market data, the total market capitalisation increased by RM8.7 billion to RM1,283.98 billion. The peak was on Jan 17 when the market capitalisation rose to RM1,334.34 billion.
Hwang DBS Vickers Research views the ongoing market correction as an intermittent pattern only, which offers opportunities for investors to accumulate on weakness.
'As an under-owned laggard stock market in the region with defensive qualities, the Malaysian bourse could shine through in the Year of the Rabbit,' it said in its strategy report.
The research house reaffirmed its bullish stance on Malaysian equities, projecting the benchmark FBM KLCI to reach 1,730 at the end of 2011. This represents 13% potential upside, it added.
UOB Kay Hian (Malaysia) Holdings Sdn Bhd research director Vincent Khoo said January was a mixed month, which kicked off on a strong note as sentiment was underpinned by the encouraging newsflow on the Economic Transformation Programme (ETP). However, it quickly fizzled out as inflationary concerns on emerging markets took centre stage, he said.
'Nevertheless, the first award of a marginal field concession to a local-foreign consortium in late January provides a crucial lift to the oil and gas sector, and hopefully lifts overall sentiment in the stock market,' Khoo said.
On Monday, KENCANA PETROLEUM BHD [], SAPURACREST PETROLEUM BHD [] and Petrofac Ltd Group announced on Monday, they had secured a Petronas contract for an oil and gas project with an estimated development cost of US$800 million (RM1.96 billion).
The project involved the Berantai oil and gas field, about 150km off Terengganu.
Under the joint operating agreement (JOA) with Petronas, Sapura Energy and Kencana Energy will have 25% interest each while PED will hold a 50% stake.
SapuraCrest and Kencana said that based on the estimated development cost was US$800 million, their subsidiaries' respective contributions to the development was US$200 million each.
Stocks to watch on Wednesday include Latexx, AHMAD ZAKI RESOURCES BHD [], MMC CORPORATION BHD [] and GAMUDA BHD []. Also in focus will be oil and gas companies.
EON CAPITAL BHD [] and HONG LEONG BANK BHD [] could see some interest. The High Court ruled EON Capital Bhd's extraordinary general meeting held on Sept 27 last year as valid despite opposition from Primus (Malaysia) Sdn Bhd.
Fund management company Navis Asia VI Management Company Ltd offered RM852.03 million to acquire all the assets and liabilities of Latexx or RM3.10 per share. The shares were last traded at RM2.80.
In a report issued before the takeover was announced, CIMB Equities Research said this was is a positive surprise as it would set a floor valuation for other companies and stir interest in other small glove makers such as Adventa that are trading at undemanding valuations.
'Pending Latexx's announcement, we retain our EPS forecasts and target price of RM3.85, still based on a CY12 P/E of 10.15 times or a 30% discount to Top Glove's target market P/E of 14.5 times,' it said.
CIMB Research said Latexx remains an Outperform. Potential re-rating catalysts include 1) capacity expansion, 2) new OBM products, 3) better product mix, and 4) a takeover at a premium.
AZRB and Jasa Bakti Sdn Bhd have been awarded a RM125 million contract to undertake a public housing project in Kuala Terengganu.
AZRB received a letter of acceptance from the Housing and Local Government Ministry to build 1,002 flats under the public housing program (PPR-for rental) in Changang Tiga, Kuala Terengganu.
The MMC Corporation Bhd-Gamuda Bhd joint venture has received a letter of award from Syarikat Prasarana Negara Bhd (SPNB) to carry out the Klang Valley mass rapid transit (MRT) project.
MMC said the scope, terms and conditions of the appointment will be subject to the finalised and executed project agreement between the government and SPNB.
The High Court has ruled EON Capital Bhd's extraordinary general meeting held on Sept 27 last year as valid despite opposition from Primus (Malaysia) Sdn Bhd.'' EON Cap said on Monday the judge ruled that the EGM chairman's refusal to put the motion to replace him as chairman was justified.
Fresh developments including the awarding of a marginal oil and gas field concession could lift the sector and sentiment while glove makers could be in focus again following the proposed takeover of LATEXX PARTNERS BHD [] for RM852.03 million.
Year-to-date, the 30-stock FBM KLCI is up just 1.03 points or 0.07% to end Jan 31 at 1,519.94 while the FBM 100 is up 70.26 points or 0.69% to 10,186.82. However, the broader FBM EMAS recorded a 94.19 points increase or 0.9% to end at 10,469.17.
According to the stock market data, the total market capitalisation increased by RM8.7 billion to RM1,283.98 billion. The peak was on Jan 17 when the market capitalisation rose to RM1,334.34 billion.
Hwang DBS Vickers Research views the ongoing market correction as an intermittent pattern only, which offers opportunities for investors to accumulate on weakness.
'As an under-owned laggard stock market in the region with defensive qualities, the Malaysian bourse could shine through in the Year of the Rabbit,' it said in its strategy report.
The research house reaffirmed its bullish stance on Malaysian equities, projecting the benchmark FBM KLCI to reach 1,730 at the end of 2011. This represents 13% potential upside, it added.
UOB Kay Hian (Malaysia) Holdings Sdn Bhd research director Vincent Khoo said January was a mixed month, which kicked off on a strong note as sentiment was underpinned by the encouraging newsflow on the Economic Transformation Programme (ETP). However, it quickly fizzled out as inflationary concerns on emerging markets took centre stage, he said.
'Nevertheless, the first award of a marginal field concession to a local-foreign consortium in late January provides a crucial lift to the oil and gas sector, and hopefully lifts overall sentiment in the stock market,' Khoo said.
On Monday, KENCANA PETROLEUM BHD [], SAPURACREST PETROLEUM BHD [] and Petrofac Ltd Group announced on Monday, they had secured a Petronas contract for an oil and gas project with an estimated development cost of US$800 million (RM1.96 billion).
The project involved the Berantai oil and gas field, about 150km off Terengganu.
Under the joint operating agreement (JOA) with Petronas, Sapura Energy and Kencana Energy will have 25% interest each while PED will hold a 50% stake.
SapuraCrest and Kencana said that based on the estimated development cost was US$800 million, their subsidiaries' respective contributions to the development was US$200 million each.
Stocks to watch on Wednesday include Latexx, AHMAD ZAKI RESOURCES BHD [], MMC CORPORATION BHD [] and GAMUDA BHD []. Also in focus will be oil and gas companies.
EON CAPITAL BHD [] and HONG LEONG BANK BHD [] could see some interest. The High Court ruled EON Capital Bhd's extraordinary general meeting held on Sept 27 last year as valid despite opposition from Primus (Malaysia) Sdn Bhd.
Fund management company Navis Asia VI Management Company Ltd offered RM852.03 million to acquire all the assets and liabilities of Latexx or RM3.10 per share. The shares were last traded at RM2.80.
In a report issued before the takeover was announced, CIMB Equities Research said this was is a positive surprise as it would set a floor valuation for other companies and stir interest in other small glove makers such as Adventa that are trading at undemanding valuations.
'Pending Latexx's announcement, we retain our EPS forecasts and target price of RM3.85, still based on a CY12 P/E of 10.15 times or a 30% discount to Top Glove's target market P/E of 14.5 times,' it said.
CIMB Research said Latexx remains an Outperform. Potential re-rating catalysts include 1) capacity expansion, 2) new OBM products, 3) better product mix, and 4) a takeover at a premium.
AZRB and Jasa Bakti Sdn Bhd have been awarded a RM125 million contract to undertake a public housing project in Kuala Terengganu.
AZRB received a letter of acceptance from the Housing and Local Government Ministry to build 1,002 flats under the public housing program (PPR-for rental) in Changang Tiga, Kuala Terengganu.
The MMC Corporation Bhd-Gamuda Bhd joint venture has received a letter of award from Syarikat Prasarana Negara Bhd (SPNB) to carry out the Klang Valley mass rapid transit (MRT) project.
MMC said the scope, terms and conditions of the appointment will be subject to the finalised and executed project agreement between the government and SPNB.
The High Court has ruled EON Capital Bhd's extraordinary general meeting held on Sept 27 last year as valid despite opposition from Primus (Malaysia) Sdn Bhd.'' EON Cap said on Monday the judge ruled that the EGM chairman's refusal to put the motion to replace him as chairman was justified.
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