Wednesday, 21 April 2010

Stocks to watch: Tenaga, Bursa, MAS, Gamuda

Stocks to watch: Tenaga, Bursa, MAS, Gamuda

Written by Melody Song and Isabelle Francis
Wednesday, 21 April 2010 07:38

KUALA LUMPUR: Blue chips are expected to extend their gains on Wednesday, April 21, spurred by the firmer overnight close on Wall Street while fresh corporate earnings from power giant Tenaga Nasional and Bursa Malaysia should generate trading interest.

On Wall Street, US stocks rose on Tuesday, April 20 as oil prices lifted energy shares and investors were upbeat about the overall profits recovery, even as some high-profile results fell short of lofty expectations, according to Reuters.

The Dow Jones industrial average added 25.01 points, or 0.23 percent, to 11,117.06. The Standard & Poor's 500 Index rose 9.65 points, or 0.81 percent, to 1,207.17. The Nasdaq Composite Index gained 20.20 points, or 0.81 percent, to 2,500.31.

Stocks to watch are Tenaga Nasional, BURSA MALAYSIA BHD [], MALAYSIAN AIRLINE SYSTEM BHD [], HONG LEONG BANK BHD [], EON CAPITAL BHD [], AFFIN HOLDINGS BHD [], GAMUDA BHD [] and related water stocks.

Tenaga Nasional said it would not be sourcing power from the Bakun Hydroelectric dam in Sarawak and has mapped out alternative plans to meet the increasing power demand in the peninsula.

In its second quarter ended Feb 28, it posted net profit of RM1 billion, up 48% from RM674.6 million a year ago, underpinned by higher revenue as electricity demand rose, a more stable generation cost and foreign exchange translation gain of RM144.4 million.

Revenue was RM7.389 billion, up 7% or RM482.5 million against RM6.906 billion a year ago. Earnings per share were 23.05 sen versus 15.56 sen. It declared dividend of six sen per share.

Bursa Malaysia may rise after it posted an 81% increase in net profit to RM28.05 million for 1Q10 due to improved investor confidence that resulted in stronger performance in the securities market. Revenue rose 37.3% increase to RM88.11 million for the period.

Malaysia Airline System will also be in focus following an announcement yesterday that from April 15 to 20, 2010, it had cancelled 46 of its Europe-bound flights due to the spread of the volcanic ash cloud from Iceland.

Its flight cancellation involved an average some 14,000 passengers. International airlines are estimated to have lost US$250 million a day due to the closure of airspace, with the International Air Transport Association (IATA) describing the impact of the volcano eruption being bigger than the Sept 11, 2001 terrorist attacks in the US.

Hong Leong Bank Bhd (HLBB) and EON Capital Bhd (EONCap) have received approval from Bank Negara Malaysia (BNM) for the former to undertake a due diligence on the latter, sources said.

Meanwhile, Affin Holdings Bhd has again tried to tone down market speculation that it was interested in acquiring EON Capital and would be ready to make a better offer to outbid rival Hong Leong Bank.

Gamuda Bhd revised its bid to buy the entire Selangor water assets and operations via its 40% associate Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash).

Under the revised offer, Splash will not own, but lease water assets from Pengurusan Aset Air Bhd. Its earlier offer of RM10.75 billion remains unchanged.

The CONSTRUCTION [] cum utilities stock is expected to see some movement after closing unchanged at RM2.95 yesterday.

PUNCAK NIAGA HOLDINGS BHD [], which owns 70% of the state water distribution arm, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), ended one sen higher at RM2.63. KUMPULAN PERANGSANG SELANGOR [] Bhd, which owns 30% in Splash, was up four sen at RM1.46.

RAMUNIA HOLDINGS BHD [], which has just completed the sale of its fabrication yard to SIME DARBY BHD [] for RM515 million, will focus on marine engineering as its core business, said its chairman Datuk Azizan Abdul Rahman.

Another stock to watch is Axis Real Estate Investment Trust (Axis REIT), which recorded a 36.9% increase in net profit for 1Q10 versus 1Q09 to RM14.27 million.

However, net profit was 50.40% lower in the quarter from 4Q09, due to capital expenditure incurred for the refurbishment of Quattro West (formerly Nestle House), which it expects to come on stream in 3Q10.

The trust also announced its proposed acquisition of a warehouse and office building at Tanjung Pelepas Port in Johor for RM30 million.

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