Friday, February 25, 2011

#Stocks to watch:* Sime, AirAsia, Tanjung Offshore, L&G

KUALA LUMPUR: After the battering on Thursday, Feb 24 following the growing revolt in oil producer Libya which sent oil prices surging, investors are expected to remain cautious on concerns of more selling pressure on Friday.

The FBM KLCI closed below the crucial 1,500 level while selling pressure picked up pace in the late afternoon with banks and PLANTATION []s among the major losers. With crude palm oil prices on the decline, plantation stocks are off their recent highs while worries about a weakening economic outlook saw banks being sold. However, oil and gas stocks are expected to continue to see strong interest with US light crude oil above US$100 and Brent around US$120.

On Wall Street, bruised but not bowed, bulls staged a rebound on Thursday, Feb 24 and helped stocks stabilize in a volatile session suggesting investors aren't ready to give up on the market's rally.

The S&P 500 recovered off early lows triggered by deepening concerns that higher oil could stifle economic activity. Stocks hit their worst levels when Brent crude neared $120 a barrel on Libya's turmoil.

The Dow Jones industrial average .DJI fell 37.28 points, or 0.31 percent, to 12,068.50. The Standard & Poor's 500 Index .SPX slipped 1.30 points, or 0.10 percent, to 1,306.10. The Nasdaq Composite Index .IXIC rose 14.91 points, or 0.55 percent, to 2,737.90.

Stocks to watch include SIME DARBY BHD [], AIRASIA BHD [], TANJUNG OFFSHORE BHD [], Land & General Bhd, CARLSBERG BREWERY MALAYSIA BHD [] and Nestle (Malaysia) Bhd.

Sime Darby Bhd's earnings surged 104.8% to RM877.06 million in the second quarter ended Dec 31, 2010 from RM428.19 million a year ago, boosted by most of its divisions while for the year ahead.

Sime said its revenue rose 21.9% to RM10.28 billion from RM8.43 billion and planned to boost its property division by launching property projects with gross development value of RM1.6 billion.

The Edge FinancialDaily reports Sime's former executive vice-president of ''its energy and utilities (E&U) division Datuk Mohamad Shukri Baharom is seeking to strike out a multi-million ringgit suit brought against him by his former employers.

AirAsia Bhd, which posted a record profit for the financial year ended Dec 31, 2010 is not looking at imposing fuel surcharge despite surging crude oil prices.

For the financial year ended Dec 31, 2010, its net profit jumped 110% to RM1.066 billion from RM506.26 million in FY09. Revenue rose 25% to
RM3.992 billion from RM3.178 billion.

In the fourth quarter ended Dec 31, 2010, its earnings surged 835% to RM316.55 million from RM33.87 million a year ago while it was upbeat about its operations based on the current forward booking trend.

'The underlying passenger demand in the first and second quarters for the Malaysian, Thai and Indonesian operations remains positive,' the low-cost carrier said.

Tanjung Offshore Bhd received contract extensions from Petronas Carigali Sdn Bhd to provide offshore support vessels (OSVs) for total charter contract of RM33.5 million.

The contract extensions for the three units of OSVs were for a period of one year, effective March 2011 (one OSV) and July 2011 (two OSVs) respectively.

Land & General Bhd recorded a net profit of RM7.39 million for its third quarter ended Dec 31, 2010 (3Q 2010), up from the RM5.38 million posted a year ago.

It generated a revenue of RM14.08 million for 3Q 2010, compared to RM9.74 million posted a year ago.

Carlsberg Brewery Malaysia Bhd's net profit rose 51.8% to RM30.49 million in the fourth quarter ended Dec 31, 2010 from RM20.09 million a year ago, driven by higher export and contract manufacturing sales.

Its revenue rose to RM326.06 million from RM300.40 million in 2009. Earnings per share were 9.97 sen while net asset per share was RM1.93. It announced a final gross dividend of 7.5 sen per and special gross dividend of 43 sen share.

For the financial year ended Dec 31, 2010 Carlsberg's net profit surged to RM133.24 million from RM76.14 million in 2009, on the back of revenue RM1.37 billion in FY10 from RM1.05 billion in FY09.

Nestle (Malaysia) Bhd's net profit fell 54.5% to RM39.26 million in the fourth quarter ended Dec 31, 2010 from RM86.22 million a year ago, as its profit margin was squeezed mainly by higher investments in brand building, overhead expenses and increase in
commodity costs.

Its revenue for the quarter rose to RM963.89 million from RM950.63 million. Earnings per share were 16.74 sen while net assets per share was RM2.62.

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