Saturday, May 7, 2011

#Stocks to watch:* EONCap, Coastal Contracts, Hap Seng, Fitters, MMHE

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KUALA LUMPUR
: Stocks on Bursa Malaysia could continue to see lacklustre trade in the week ahead, starting Monday, May 9 in the absence of strong fresh positive external news to spur buying interest.

The FBM KLCI had fallen the past week to below the key 1,530 level while volume has been declining due to the lack of strong institutional leads.

However, on the macro economic front, the strong March exports could help underpin sentiment. Exports reached a new high of RM64.06 billion in March 2011, up 7.8% from March 2010 while on a month-on-month basis, exports in March 2011 increased by 23.7%.

On Wall Street, an unexpectedly strong report on U.S. payrolls helped equities bounce back on Friday from four days of losses, tempering worries that stocks could suffer the sharp declines seen this week in commodities.

The Dow Jones industrial average gained 54.64 points, or 0.43 percent, to 12,638.81. The Standard & Poor's 500 added 5.10 points, or 0.38 percent, to 1,340.20. The Nasdaq Composite rose 12.84 points, or 0.46 percent, to 2,827.56.

For the week the Dow lost 1.3 percent, the S&P fell 1.7 percent and the Nasdaq Composite dropped 1.6 percent.

At Bursa, some stocks which could see trading interest include EON CAPITAL BHD [], COASTAL CONTRACTS BHD [], HAP SENG CONSOLIDATED BHD [], FITTERS DIVERSIFIED BHD [] and Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE).

EON Capital will distribute the RM312 million, or 44.9 sen per share, which it will receive as special dividend from its unit EON Bank Bhd to all its entitled shareholders.

The dividend was proposed by EONCap on April 29 and agreed by HONG LEONG BANK BHD [] as a last-minute extra condition to the latter's acquisition of EONCap's assets and liabilities for RM5.06 billion.

Coastal Contracts proposed a corporate exercise involving a bonus issue and free warrants to its shareholders and also to purchase up to 10% of its paid-up capital.

It said on Friday, May 6 said it proposed a one-for-three bonus issue and one free warrant for every eight shares held after the proposed bonus issue.

Hap Seng Consolidated posted a strong set of earnings in the first quarter ended March 31, 2011, with net profit surging 108% to RM82.17 million in the first quarter ended March 31, 2011 from RM39.48 million a year ago.

Revenue rose 28% to RM751.34 million from RM587.18 million while earnings per share doubled to 14.58 sen from 7.01 sen.

Meanwhile, Fitters Diversified Bhd does not expect to be suspended on Tuesday after it submitted its outstanding annual audited financial statements for financial year ended Dec 31,2010 to Bursa Malaysia Securities Bhd on Friday, May 6.

'There will be no suspension of trading in the above company's securities on May 10,' it said.

Fitters Diversified was due to submit the statements to Bursa Securities for public release on or before April 30. However, due to the delay, it had initially faced suspension on May 10.

Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) posted pre-tax profit of RM114.08 million in the four quarter ended March 31, 2011, down 35.7% from RM177.45 million a year ago.

The decrease was mainly due to lower revenue in engineering and CONSTRUCTION [] and marine repair and conversion segments.

However, its net profit was up 11.7% at RM128.64 million compared with RM115.15 million a year ago. There was a tax writeback of RM14.43 million compared with tax paid of RM60.03 million a year ago.

Its revenue fell 41.9% to RM923.29 million from RM1.59 billion a year ago. Earnings per share were 8.0 sen versus 8.6 sen.

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