KUALA LUMPUR (Aug 14): The FBM KLCI could be hard pressed to sustain its gains on Tuesday, and will more likely trade sideways as external factors may weigh on investor sentiment.
Regional markets mostly paused on Monday as weak Japanese economic data on Monday tempered investors’ optimism about the European Central Bank’s (ECB) plans to tackle the region’s debt crisis, leaving world stocks slightly lower and the single currency little changed, according to Reuters. Japan said its economy grew 0.3% in April-June from the first quarter, half as much as expected, as Europe’s debt crisis weighed on export demand and consumer spending began to lose momentum, it said.
Among the stocks that could be in focus on Tuesday are United Malayan Land Bhd (UM Land); MSM Malaysia Holdings Bhd (MSM M’sia); Handal Resources Bhd; and Alam Maritim Resources Bhd.
Affin Investment Bank Bhd, acting as independent advisor to minority shareholders of UM Land, has recommended to minority shareholders to accept the offer by Tan Sri Syed Mokhtar Al-Bukhary and a group of investors acting in concert to privatise UM Land at RM2.50 per share. Syed Mokhtar, Datuk Ng Eng Tee and associates reportedly hold a combined 77.52% stake in UM Land. They launched the takeover offer in early July to buy over the rest of the rest of the 22.48% or 67.81 million shares not yet owned by them for a cash consideration of RM2.50 per share. In a statement to Bursa Malaysia Monday, Affin Investment said the offer was “fair and reasonable”.
MSM M’sia’s net profit for the second quarter ended June 30, 2012 fell 31.1% to RM52.81 million from RM76.65 million a year earlier, due mainly to lower gross margin profits as a result of higher cost of raw material. The company said on Monday that its revenue for the quarter dipped 2.98% to RM546.1 million from RM562.87 million due mainly to decreased volume for domestic and export sales despite higher average prices.
Earnings per share was 7.51 sen from 10.87 previously, while net assets per share was RM2.45. On its outlook, MSM M’sia said notwithstanding the volatility of commodity prices it expected to be sustain its performance
Handal Resources’s net profit for the second quarter ended June 30, 2012 fell 40% to RM1.82 million from RM3.04 million due mainly to lower gross profit margin on sales coupled with higher administrative overheads. The company said on Monday its revenue for the quarter rose to RM23.81 million from RM21.95 million. Earnings per share was 1.14 sen compared to 3.38 sen previously, while net assets per share was 64 sen.
On its prospects, Handal Resources said the market condition was expected to be challenging for the current year. However, the company said it was still bullish on the prospect of the Malaysian oil and gas industry, as national oil company Petroliam Nasional Bhd (Petronas) and other oil majors were committed to intensify exploration and production efforts to enhance the country’s reserves, underpinned by stabilising oil prices and the need to retain and increase energy sources. “Furthermore, Petronas’ commitment to re-direct capital expenditure to its home market will also provide spin-off benefits and positive prospects for the group,” it said.
Handal Resources said that while remaining committed to the current core business activities, it would continue to invest in new business activities so as to sustain growth as the demand for the oil and gas support services will remain healthy in the foreseeable future. “Barring unforeseen circumstances, the group’s performance in the current year is expected to improve,” it said.
Alam Maritim’s net profit for the second quarter ended June 30, 2012 jumped to RM16.13 million from RM6.95 million a year earlier due mainly to significant increase in share results of its associates, primarily contributed by vessels owned by Alam-PE group (joint venture entities with CIMB Private Equity). The company said on Monday that its revenue for the quarter surged to RM163.44 million from RM67.91 million in 2011. Earnings per share was 2 sen compared to earnings per share of 0.90 sen previously, while net assets per share was 64 sen.
On its prospects, Alam Maritim said that with the significant capital and operating expenditure budget announced by Petronas and other oil majors, it expects a substantial increase in activities for the domestic oil and gas industry, and that the demand for oil and gas support services in Malaysia will remain healthy in the foreseeable future. Alam Maritim said it was looking forward to another year of growth for the group for the financial year ending Dec 31, 2012 on the back of existing order book for offshore support vessels (OSV) segment and potential expansion into underwater services/offshore installation and construction (OIC) market segment.