Friday, October 14, 2011

#Stocks to watch:* Jerneh Asia, TM, timber stocks, HDD

KUALA LUMPUR: After three straight days of gains on Bursa Malaysia, investors may set to take profit on Friday, Oct 14, taking their cue from the softer overnight closing on Wall Street.

The Dow and S&P 500 slipped on Thursday after JPMorgan's earnings and China's soft trade data revived worries about the impact of slower growth on profits, Reuters reported.

The declines put an end to three straight days of gains that capped off a 12 percent increase in the S&P 500 since hitting a low on Oct. 4. The Nasdaq stayed in positive territory, helped by semiconductor shares, Reuters said.

The Dow Jones industrial average fell 40.72 points, or 0.35 percent, to end at 11,478.13. The Standard & Poor's 500 Index shed 3.59 points, or 0.30 percent, to 1,203.66. But the Nasdaq Composite Index gained 15.51 points, or 0.60 percent, to close at 2,620.24.

At Bursa Malaysia on Thursday, the FBM KLCI extended its gains and closed higher for the third day running on Thursday, while key regional markets eased off a little, as concerns from Europe's debt crisis as well as weaker Chinese trade data weighed on investor sentiment.

While the KLCI jumped 1.15% or 16.37 points to 1,444.87 with a stronger broader market, volume also surged to the highest in recent months with trading hitting 1.51 billion shares valued at RM1.96 billion.

Stocks to watch on Friday include cash-rich JERNEH ASIA BHD [], Telekom Malaysia and, timber stocks Jaya Tiasa and TA ANN HOLDINGS BHD [], and hard disk drive companies.

The Edge FinancialDaily reported on Friday that Jerneh Asia's proposal to buy a Sabah-based developer is said to be out the window as definitive terms could not be agreed upon despite extensive discussions, a source said, opening up the possibility of a capital repayment to shareholders, if necessary approvals are granted.

Foreigners held about 17% of Telekom Malaysia's shares, an increase from less than 10% previously. The increase in the foreign shareholdings reflected the investors' confidence in TM's business and also the good take-up rate for its UniFi internet services.

TM's move to work with Green Packet was expected to increase its revenue also.

Meanwhile, GREEN PACKET BHD []'s wireless broadband arm, Packet One Networks (M) Sdn Bhd (P1), will begin offering fibreoptic cable-powered high speed broadband (HSBB) and possibly IPTV services by 1Q12, having sealed a 10-year wholesale agreement with TELEKOM MALAYSIA BHD [] (TM).

Jaya Tiasa and Ta Ann rose in line with the firmer recovery on Bursa Malaysia and underpinned by expected demand from Japan. Investors will be watching if these stocks can extend their gains amid some profit taking expected on Friday.

Hard-disk drive component manufacturers' Thai operation continued to be affected by the floods in Thailand.

Among the latest was MQ TECHNOLOGY [] BHD []'s unit in Thailand has temporarily suspended the operations since Wednesday, Oct 12 due to the severe flooding.

The company said the floods had affected the operations of its unit MPT Solution Co., Ltd in Pathumthani. The unit makes plate moulds, tooling, jig and fixtures for data storage and semiconductors.

Global HDD leader Seagate Technology plc expects hard drive supply to be affected in the current quarter following a disruption in the supply chain due to the severe floods in Thailand.

The hard disk drive manufacturer said it expected certain components in the supply chain will be constrained.

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