Friday, 20 April 2012

Stocks to Watch Bursa, China Stationery, UMW, CMMT, Naim

KUALA LUMPUR (April 19): Economic and political factors, besides weakening technical indicators, could dictate the direction of Malaysian stocks on Friday, as investors evaluate the impact of global economic data against domestic pre-election sentiment.

Analysts said the on-going European debt crisis and slower growth in China, apart from the anticipation of Malaysia's coming general election, could lead to persistent selling pressure in the FBM KLCI.

The FBM KLCI of 30 stocks erased earlier gains to finish in the red at 1,596.62, down 2.24 points on Thursday.

Stocks to watch on Friday are BURSA MALAYSIA BHD [], China Stationery Ltd, UMW HOLDINGS BHD [], Capitamalls Malaysia Trust (CMMT) and Naim Holdings Bhd.

Bursa posted flat profit growth in the first quarter (1Q), as the stock exchange operator's lower operating expenses mitigated the impact of less revenue during the period. Bursa said its net profit rose 0.7% to RM40.77 million in the quarter ended March 31, 2012 from RM40.49 million a year earlier, while revenue fell 4.8% to RM110.52 million from RM116.11 million.

Regulators have queried China Stationery on the unusual trading patterns of the company's shares. The company said it was not aware of any factors contributing to the rise in the price and volume of the stock. China Stationery also said it had no plans to declare an interim dividend nor undertake a dual listing in Hong Kong.

AmResearch Sdn Bhd had raised its earnings forecast for UMW, an automotive and oil and gas support services entity, by up to 25% for financial years ending Dec 31, 2012 to 2014. AmResearch also revised upwards its target price for the stock by 31% to RM8.90 from RM6.80, and upgraded the shares to a "buy" from "hold".

CMMT's 1Q net profit rose 10% from a year earlier, as the retail-based Real Estate Investment Trust (REIT) registered higher revenue, following the inclusion of the East Coast Mall in Kuantan to the group's portfolio. CMMT said net profit came to RM34.44 million against RM31.44 million previously, while revenue was up 36% to RM71.4 million from RM52.68 million.

Real estate developer and builder Naim is diversifying into the healthcare business via a collaboration with KPJ HEALTHCARE BHD []. Both Naim and KPJ will set up a joint venture company on 30% and 70% basis respectively to construct and operate a hospital in Miri, Sarawak.

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