KUALA LUMPUR (March 16) : Global economic growth concerns may continue to weigh on Malaysian stocks on Friday as the local bourse sees less trading participation due to the on-going school holidays.
Analysts said a higher trading volume is crucial to sustain gains in the 30-stock FBM KLCI, against the backdrop of weaker economic sentiments in China which had pushed Asian bourses into the red.
“Higher volume is vital for more sustainable gains (in the KLCI),” Hong Leong Investment Bank Research wrote in a note.
According to Hong Leong Research, unless the FBM KLCI closes above the 1,580 and 1,585 levels and registers average daily trading volume of between 1.8 billion and 1.9 billion shares in the next few days, the research firm is reiterating its cautious view on the market.
On Thursday, the KLCI closed higher in late buying on Thursday, underpinned by gains in CIMB and Maybank amid volatile trading.
The KLCI rose 3.67 points or 0.2% to finish at 1,579.38. Turnover was 1.36 billion shares worth RM1.73 billion while the broader market was cautious, with 296 gainers versus 443 decliners while 367 stocks were unchanged.
Among the stocks to watch are ZELAN BHD [], SELANGOR DREDGING BHD [], Kinsteel Bhd, logistics firms Freight Management Holdings Bhd and CENTURY LOGISTICS HOLDINGS BHD [], besides Top Glove Corp Bhd, Taliworks Corp Bhd and Eversendai Corp Bhd.
Zelan’s 95%-owned Terminal Bersepadu Gombak Sdn Bhd (Tegas) has secured a 25 year and three months concession from the government for the Gombak Integrated Transport Terminal.
Tegas would undertake the RM307.37 million project on a build-lease-manage-operate-transfer basis via the public private partnership.
Selangor Dredging plans to launch a housing project with an estimated gross development value of RM150 million in Gombak.
It is buying three pieces of leasehold land measuring nearly 36,000 sq metres from Superior Dignity Sdn. Bhd for RM34.50 million.
Kinsteel is streamlining its downstream business operations, especially its 51% owned Perfect Channel Sdn Bhd, which has been affected by weak steel prices and rising material costs.
Kinsteel said on Thursday that Perfect Channel’s core activities were manufacturing and trading of steel beams, bars, wire rods and other steel products.
RHB Research Institute upgraded its recommendations for Freight Management and Century Logistics to Outoperform from Market Perform, and raised the fair values for both stocks. This is in anticipation that both logistics firms will benefit from a recovery in global trade.
Freight Management is deemed fairly valued at RM1.05 compared to the 92 sen estimated previously while Century Logistics has a potential reach RM2.09 compared to the previous target price of RM1.78, according to RHB Research.
Shares of both logistics firms closed unchanged on Thursday. Freight Management finished at 89.5sen while Century Logistics settled at RM1.78
Top Glove’s net profit in the second quarter ended Feb 29, 2012 (2QFY12) more than doubled (110%) to RM53.46 million from RM25.41 million a year earlier, as higher sales, and cheaper raw materials boosted the rubber glove manufacturer’s bottom line, the company told the exchange. Top Glove shares rose 12 sen to RM4.92.
Taliworks set up a joint venture with L.G.B. Engineering Sdn Bhd to construct water treatment facilities in Selangor. Taliworks closed 1.5 sen lower at 93.5 sen.
Eversendai executive chairman and managing director, Datuk A.K. Nathan expects the company to register an annual turnover of RM2 billion within the next five years. The company posted revenue of RM1.03 billion in financial year ended Dec 31, 2011. Eversendai shares declined one sen to RM1.67.
