Thursday, March 31, 2011

#Stocks to watch:* DBE Gurney, VS Industry, Ireka, Berjaya Corp

KUALA LUMPUR: Stocks on Bursa Malaysia could extend their gains on Thursday, March 31 as the first quarter winds down and the FBM KLCI at its highest since early February, as sentiment could be reinforced by the firmer overnight close on Wall Street.

Credit Suisse Research said Malaysia is expected to surprise on the upside in 2011 but uncertainties still remain over the sustainability of growth beyond 2011.

It said IJM Corp, Air Asia, Axiata and UEMLand were particularly interesting. IJM Corp. is a direct beneficiary of the Economic Transformation Programme (ETP). Air Asia and Axiata have gone beyond Malaysia shores and are riding on the region's strong growth. UEM Land is working on a different approach to take advantage of the strong Singapore-Malaysia ties.

On Wall Street, U.S. stocks rose on Wednesday, March 30 with activity dominated by money managers buying recent winners, including energy and small-caps, as the quarter nears its end.

The Dow Jones industrial average added 71.60 points, or 0.58 percent, to 12,350.61. The Standard & Poor's 500 rose 8.82 points, or 0.67 percent, to 1,328.26. The Nasdaq Composite gained 19.90 points, or 0.72 percent, to 2,776.79.

At Bursa Malaysia, stocks to watch include poultry outfit DBE Gurney Resources Bhd, V. S. Industry Bhd (VSI), Ireka Corp Bhd, Berjaya Corp and Masterskill Education Group Bhd.

DBE Gurney's additional 593.33 million new shares and 200 million warrants will be listed on Thursday. The warrants were issued for free to the subscribers of the renounceable rights issue of 400 million rights shares on the basis of one free detachable warrants for every two rights shares subscribed for.

The maturity date of the warrants is March 22, 2016 and the conversion price is 10 sen. The new shares of 10 sen were issued pursuant to the rights issue with warrants and capitalisation of amounts due to director and creditors settlement.

Meanwhile, The Edge FinancialDaily reports OSK HOLDINGS BHD []'s wholly owned subsidiary OSK Investment Bank Bhd (OSKIB) has emerged as the single largest shareholder of DBE Gurney, with 180.99 million shares or 26.88% of DBE's enlarged issued share capital.

V. S. Industry has set a dividend policy of making out an annual payment of at least 40% of its net profit to shareholders as dividends, and plans to disburse payouts on a quarterly basis. The dividend policy is effective in the current financial year ending July 31, 2011 (FY11).

VSI's net profit in the second quarter ended Jan 31, 2011 surged 134.1% to RM10.1 million from RM4.4 million a year ago, due to higher revenue. The profit came mainly from the higher group sales as a result of the increased sales generated by its Malaysian and Indonesian operations.

Ireka Corp's unit Ireka Engineering & CONSTRUCTION [] Sdn Bhd has received the letter of award from ''Transmission TECHNOLOGY [] Sdn Bhd for the proposed offices and hotel development in Kuala Lumpur for RM232.74 million.

The contract comprises of architectural and M&E works for basements and 13-level podium, a 27-storey office tower and a 37-storey office tower. The contract period for Tower 1 and Tower 2 is 18 months and 20 months respectively.

Berjaya Corp posted net profit of RM32.46 million in the third quarter ended Jan 31, 2011 compared with net loss of RM156.20 million a year ago on higher profit contribution from gaming, stockbroking, direct selling, retail and distribution businesses.

It said on Wednesday, March 3o that revenue rose to RM1.77 billion from RM1.66 billion while earnings per share were 0.74 sen compared with loss per share of 3.75 sen.

'The pre-tax loss of RM50.2 million in the previous year corresponding quarter was mainly due to the non-cash dilution effects amounting to RM150.46 million when the group's interest in BERJAYA LAND BHD [] (BLand) was diluted from 56.44% to 53.25% arising from the conversion of BLand ICULS to BLand shares upon its maturity on Dec 30, 2009,' it said.

For the nine-month period, it recorded net profit of RM244.47 million, a contrast from the net loss of RM64.47 million in the previous corresponding period. It posted pre-tax profit of RM612.64 million compared with RM309.58 million a year ago. .

Masterskill Education Group Bhd has recommended a final single tier dividend of 7.9 sen per 20 sen share for the financial year ended Dec 31, 2010. It said on Wednesday, March 30 the dividends would be payable on June 15. The group had on Oct 13, 2010, completed the distribution of an interim dividend of seven sen per share to the shareholders.

The total of 14.9 sen per share dividend for 2010 will represent a total payout of 60% of its net profit, equivalent to RM61 million.

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