Wednesday, 9 May 2012

Stocks to Watch CIMB, Kencana, Hartalega, Grand-Flo

KUALA LUMPUR (May 8): A slew of corporate announcements, including CIMB Group Holdings Bhd's planned acquisition of 60% of Bank of Commerce (BoC) in the Philippines, could help pique investors' appetite at Bursa Malaysia on Wednesday.

Elsewhere, investor sentiment remains on tenterhooks as the weekend results of elections in Europe have raised the specter of the troubles faced by the beleaguered eurozone.

Investors sold European shares and the euro on Tuesday, unnerved by the political stalemate in Greece and the threat of a Franco-German split over policies to tackle the region's debt crisis, according to Reuters.

Among the stocks that could be in focus are CIMB Group Holdings Bhd, KENCANA PETROLEUM BHD [], HARTALEGA HOLDINGS BHD [] and GRAND-FLO SOLUTION BHD [].

CIMB Group Holdings has entered into conditional share purchase agreements (SPA) with San Miguel PROPERTIES [] Inc, San Miguel Corporation Retirement Plan and various minority shareholders for the proposed acquisition of 60% of Bank of Commerce (BoC) in the Philippines. In a statement on Tuesday, CIMB said the acquisition was for the equivalent of RM881 million cash.

Kencana's unit Kencana HL Sdn Bhd has been awarded a RM460 million engineering, procurement, CONSTRUCTION [] and commissioning (EPCC) contract from Murphy Sarawak Oil Co Ltd. In a statement on Bursa Malaysia on Tuesday, it said that Kencana HL had received a letter of award from Murphy for the fabrication of offshore topsides.

Hartalega declared a third interim dividend of six sen per share single tier for the financial year ended March 31, 2012, to be paid on June 13. Its net profit for the fourth quarter ended March 31, 2012 fell 4.55% to RM50.01 million from RM52.39 million a year earlier, despite a 24.77% increase in revenue to RM240.22 million.

The company said on Tuesday that the significant increase in revenue was in line with the continuous expansion in production capacity and increase in demand. However, its bottom line was impacted by the increase in raw material prices of nitrile latex, fuel costs and more competitive sales pricing for the current quarter compared with the corresponding quarter of the preceding year, it said.

Grand-Flo's net profit for the first quarter ended March 31, 2012 rose 5.91% to RM2.22 million from RM2.09 million a year earlier, due mainly to strong tracking solutions sales abroad. It said on Tuesday that its revenue jumped 19.6% to RM20.37 million from RM17.03 million. Meanwhile, earnings per share were 1.39 sen compared to 1.44 sen a year ago.

Grand-Flo proposed a final dividend of 1.2 sen per share, comprising a gross dividend of 0.037 sen per share and a tax exempted dividend of 1.163 sen per share for foteh financial year ended Dec 31, 2011. Grand-Flo said that in line its results, it proposed to set a dividend policy to distribute a minimum 20% of its net profit as annual dividends to shareholders effective from the financial year ended Dec 31 2011, subject to shareholders' approval.

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