Tuesday, 24 April 2012

Stocks to Watch Kencana, SapuraCrest, Oriental, KAF, BAT

KUALA LUMPUR (April 23): Malaysian stocks may see further weakness on Tuesday against less-optimistic fundamental and technical indicators. Analysts have a downside-bias perception on the FBM KLCI in anticipation that global economic data and Malaysia's pre-election sentiment could curb gains across the 30-stock benchmark.

Crucial global highlights this week include potential indications of further quantitative easing by US policymakers, and China's monetary policy, results from which will influence the direction of global financial markets.

The spotlight also falls on Europe after the Flash Purchasing Manager's Indexes for Europe indicated a quicker pace of economic decline for the region. These global updates have resulted in a sell-off across Asian stockmarkets.

The FBM KLCI fell 8.05 points to 1,583.8 on Monday.

Stocks to watch on Tuesday include KENCANA PETROLEUM BHD [], SAPURACREST PETROLEUM BHD [], ORIENTAL HOLDINGS BHD [], KAF-Seagroatt & Campbell Bhd, and BRITISH AMERICAN TOBACCO (M) [] Bhd (BAT).

Shares of Kencana and SapuraCrest rose on news that trading of both stocks will be suspended beginning May 2 to facilitate the capital repayment exercises by the oil and gas support service providers. The capital repayment is in conjunction with the merger of both firms under a new-listed entity, SapuraKencana Petroleum Bhd.

Diversified entity Oriental trades ex-dividend on Tuesday. The company — the portfolio of which includes automotive, property and PLANTATION []s — plans to reward shareholders with a single-tier interim dividend of 3% for the financial year ended Dec 31, 2011. The final lodgement day is this Thursday.

KAF's third quarter (3Q) net profit more than doubled from a year earlier, as the stockbroking firm registered higher non-operating gains, which mitigated the impact of lower revenue and higher operating expenses. In a statement to the exchange on Monday, KAF said net profit came to RM8.62 million in the quarter to Feb 29, 2012 versus RM4 million a year earlier. Revenue fell 15% to RM7.18 million from RM8.45 million.

BAT's net profit rose 9% to RM194.51 million in the first quarter ended March 31, 2012 from RM178.56 million a year earlier, helped by higher revenue and lower operating expenses. The company said revenue rose 5% to RM1.04 billion from RM992.15 million. The tobacco firm plans said it plans to reward shareholders with a first interim tax-exempt dividend of 65 sen a share for the current financial year ending Dec 31, 2012.

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