KUALA LUMPUR (May 5): The FBM KLCI could take trend higher next week, as the first quarter earnings reporting season kicks off, and as analysts expect better sequential earnings for companies.
Global stocks swooned and crude oil tumbled on Friday after a weak U.S. jobs report and data that suggested a deeper recession across the euro zone than previously thought dented sentiment, according to Reuters.
Major U.S. and European stock indexes fell more than 1 percent, U.S. crude oil slumped about 4 percent and government debt prices jumped after the Labor Department said American employers reduced hiring more than expected in April, it said.
MIDF Research head of equity Syed Muhammed Kifni said with the earnings reporting season for the first quarter 2012 beginning this week, he expects to see an overall sequential improvement in the bottom line figures.
“Both ours and consensus KLCI earnings growth for this year are estimated at around mid-teens, supported by decent organic earnings growth performance as well as absence of lumpy abnormal losses,” he said.
Syed Muhammmed said that despite recent difficulty of the KLCI to sustain itself above the 1,600 points levels, in our opinion, the recent liquidity-driven rally has not yet ended as the local market undercurrent remains positive.
Furthermore, notwithstanding the feeble dynamics in Europe, risk-on mood is still prevalent on Wall Street as attested by its benchmark index which is stealthily approaching the pre-2008 highs, he said.
“This continuing appetite for risk assets may help the markets in this region to also regain their upward momentum. Hence we believe the KLCI will again attempt to knock against the psychological 1,600 points ceiling in the coming days.
“We reiterate both our year-high as well as year-end 2012 KLCI base case targets of 1,670 points and 1,600 points respectively,” he said.
Among the stocks that could be in focus next week are MAA Group Bhd, PETRA ENERGY BHD [], CREST BUILDER HOLDINGS BHD [], MALAYSIAN AIRLINE SYSTEM BHD [], Air Asia Bhd and DKLS INDUSTRIES BHD [].
MAA Group Bhd is selling its wholly-owned security equipment and services unit for RM7 million, a move which will help the financial services entity focus on its core business.
Petra Energy Bhd declared a final tax-exempt dividend (single-tier) of half a per share for the financial year ended Dec 31, 2011 to be paid on July 13 this year.
The founding family of Crest Builder Holdings Bhd raked in proceeds of RM4.1 million from the sale of five million shares or 4% in the CONSTRUCTION [] firm.
Updates to the exchange show that Yong Tiok Chin who is the daughter of founder and managing director Yong Soon Chow had disposed of the shares at 82 sen each on Thursday.
Shares of Malaysian Airline System Bhd and Air Asia Bhd could continue to be in focus next week after the reversal of their share-swap agreement and the resignation of Tan Sri Tony Fernandes and Datuk Kamarudin Meranun from MAS' board.
DKLS Industries Bhd has inked a heads of agreement with the Selangor State Development Corporation (PKNS) to collaborate in the redevelopment of a 15.9-acre area in Petaling Jaya into a mixed development comprising commercial, retail and residential units.
The company said on Friday that the gross development value of the Proposed Redevelopment was estimated at the range of RM1.5 billion.
Global stocks swooned and crude oil tumbled on Friday after a weak U.S. jobs report and data that suggested a deeper recession across the euro zone than previously thought dented sentiment, according to Reuters.
Major U.S. and European stock indexes fell more than 1 percent, U.S. crude oil slumped about 4 percent and government debt prices jumped after the Labor Department said American employers reduced hiring more than expected in April, it said.
MIDF Research head of equity Syed Muhammed Kifni said with the earnings reporting season for the first quarter 2012 beginning this week, he expects to see an overall sequential improvement in the bottom line figures.
“Both ours and consensus KLCI earnings growth for this year are estimated at around mid-teens, supported by decent organic earnings growth performance as well as absence of lumpy abnormal losses,” he said.
Syed Muhammmed said that despite recent difficulty of the KLCI to sustain itself above the 1,600 points levels, in our opinion, the recent liquidity-driven rally has not yet ended as the local market undercurrent remains positive.
Furthermore, notwithstanding the feeble dynamics in Europe, risk-on mood is still prevalent on Wall Street as attested by its benchmark index which is stealthily approaching the pre-2008 highs, he said.
“This continuing appetite for risk assets may help the markets in this region to also regain their upward momentum. Hence we believe the KLCI will again attempt to knock against the psychological 1,600 points ceiling in the coming days.
“We reiterate both our year-high as well as year-end 2012 KLCI base case targets of 1,670 points and 1,600 points respectively,” he said.
Among the stocks that could be in focus next week are MAA Group Bhd, PETRA ENERGY BHD [], CREST BUILDER HOLDINGS BHD [], MALAYSIAN AIRLINE SYSTEM BHD [], Air Asia Bhd and DKLS INDUSTRIES BHD [].
MAA Group Bhd is selling its wholly-owned security equipment and services unit for RM7 million, a move which will help the financial services entity focus on its core business.
Petra Energy Bhd declared a final tax-exempt dividend (single-tier) of half a per share for the financial year ended Dec 31, 2011 to be paid on July 13 this year.
The founding family of Crest Builder Holdings Bhd raked in proceeds of RM4.1 million from the sale of five million shares or 4% in the CONSTRUCTION [] firm.
Updates to the exchange show that Yong Tiok Chin who is the daughter of founder and managing director Yong Soon Chow had disposed of the shares at 82 sen each on Thursday.
Shares of Malaysian Airline System Bhd and Air Asia Bhd could continue to be in focus next week after the reversal of their share-swap agreement and the resignation of Tan Sri Tony Fernandes and Datuk Kamarudin Meranun from MAS' board.
DKLS Industries Bhd has inked a heads of agreement with the Selangor State Development Corporation (PKNS) to collaborate in the redevelopment of a 15.9-acre area in Petaling Jaya into a mixed development comprising commercial, retail and residential units.
The company said on Friday that the gross development value of the Proposed Redevelopment was estimated at the range of RM1.5 billion.
