Wednesday, December 28, 2011

#Stocks to watch:* Plantations, Alam Maritim, TPC, JCY

KUALA LUMPUR (Dec 29): Blue chips on Bursa Malaysia are likely to hang on to their gains on Thursday, albeit adverse external news from the US or the eurozone, but volume is expected to be thin.

On Wednesday, the FBM KLCI reversed its earlier losses and closed above the important 1,500-level for the second day, spurred by some late buying into select blue chips and PLANTATION []-related counters. The FBM KLCI rose 3.20 points to 1,504.11.

The KLCI bucked regional markets where Hong Kong's Hang Seng Index fell 0.59% to 18,518.67, Japan's Nikkei 225 lost 0.20% to 8,423.62, South Korea's Kospi fell 0.92% to 1,825.12, Taiwan's Taiex was down 0.40% to 7,056.67 and Singapore's Straits Times Index shed 0.28% to 2,666.25.

At Bursa Malaysia, local funds could be still involved in late window dressing. The KLCI futures closed 0.5 of a point higher at 1,504.50, reflecting the firmer sentiment.

Plantations could be in focus, after the third-month CPO futures rose RM24 to RM3,186 per tonne on concerns that rains in the main growing areas of Malaysia could affect harvests.

Other stocks in focus could be ALAM MARITIM RESOURCES BHD [], TPC PLUS BHD [], hard disk drive manufacturer JCY International Bhd and PROTON HOLDINGS BHD [].

Alam Maritim (M) Sdn Bhd had recently received a letter of award from Sarawak Shell Bhd for the modules offshore transportation and installation contract valued at RM29.80 million.

The nine-month contract started the current fourth quarter and the expected date of completion was May 2012. ''The contract is not renewable.

HUAT LAI RESOURCES BHD [] has made a conditional take-over offer for the remaining 66.29% stake in TPC Plus Bhd at 30 sen a share. The take-over offer would involve the remaining 52.032 million shares at the cost of RM15.61 million.

JYC share price close at near a 13-month high of RM1.05 as it was not affected by the recent severe Thai floods and due to strong demand.

OSK Research had on Dec 23 upgraded the TECHNOLOGY [] sector a Neutral as the worst impact from the Thai floods should be over while restoration of production in Thailand was going on at full steam.

The research house had said it came to understand that Western Digital and Seagate had used this opportunity to push for higher prices of their HDD products (50%-100%) whilst cutting down warranty periods

'As for JCY, we are raising our earnings forecast by more than 100% as their equipment was unscathed. Valuation switched from 0.9 times PBV to 8 times FY12 PER. Call upgraded to Trading Buy with FV of RM1.30. We understand that there are rumours of a strong price push over the next one month,' it said.

National car maker Proton could continue to see trading interest on the strong positive newsflow that the party keen to buy Khazanah Nasional's 42.7% equity stake would be subjected to a general offer.

Khazanah managing director Tan Sri Azman Mokhtar said in written replies to The Edge weekly that they have been receiving offers for various forms of collaboration, including acquiring its controlling stake in Proton but have not arrived at any decision to sell to any particular offeror.

Meanwhile, the Employees Provident Fund (EPF) Board continued to reduce its shareholding in YTL POWER INTERNATIONAL BHD [], with the latest disposal of 1.44 million shares on Dec 22.

The EPF sold the shares on Dec 22 and reduced its shareholding to 703.38 million or 9.68%. On Dec 1, it disposed of 831,600 shares and reduced its shareholding then to 714.60 million shares or 9.83%.

According to the filings, from Dec 1 to Dec 22, the EPF had disposed of 12.05 million shares.

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