KUALA LUMPUR: Defensive stocks and companies involved in the Economic Transformation Programme (ETP) should be on investors’ radar screen following Europe’s continuous inability to resolve the debt crisis.
Last Friday, the FBM KLCI snapped its three straight days of losses, surging 15.14 points or 1.04% to 1,477.51 on late buying of selected stocks.
News reports highlighting the eurozone’s repeated failure to tackle its debt crisis are catapulting the bloc towards recession, raising the spectre of dangerous spillovers to the rest of the world economy.
UOB Kay Hian Malaysia Research head Vincent Khoo said there were earlier concerns abut the contagion effect from Greece but he believed this could be under control.
“On the other hand, a recession in Europe is inevitable but this has not been fully reflected in the equities market as yet,” he said.
As for Malaysia, he said the research house has a two-pronged approach for investors. The first is to focus on defensive stocks and the second on ETP companies.
Khoo said market sentiment was also boosted by prospects of the general election.
“UEM Land will benefit from the Iskandar development projects, MRCB (Malaysian Resources Corp Bhd) from the development of the Rubber Research Institute land (RRI land in Sungai Buloh) while Gamuda Bhd would benefit from the Mass Rapid Transit project,” he said.
Other defensive counters investors could focus on are telecommunications, numbers forecast operators and consumer stocks.
Merger and acquisition activities in the near future could spice up the market, with great anticipation in the financial and gaming sectors.
Other stocks with recent corporate news are Melati Ehsan Holdings Bhd, Fraser & Neave Holdings Bhd, Malaysia Smelting Corp Bhd and Nestle (M) Bhd.
Melati Ehsan unit Pembinaan Kery Sdn Bhd has accepted two contracts from the Housing and Local Government for two housing projects worth RM298 million in Kuala Lumpur.
Fraser & Neave posted a net profit of RM66.21 million in the fourth quarter ended Sept 30, 2011, down 85.7% from the RM462.31 million a year ago where there was a gain of RM382.03 million after selling its glass container business.
It proposed a final single tier dividend of 47 sen per share together with a special single tier dividend of 15 sen.
Malaysia Smelting posted a net profit of RM41.81 million in the third quarter ended Sept 30, 2011 against a net loss of RM37.05 million a year ago where there was an impairment provision for goodwill of RM73.63 million.
Nestle posted a net profit of RM110 million in the third quarter ended Sept 30, 2011, marginally lower from the RM113.18 million a year ago as profit margins were affected by higher prices of key raw materials.
Its operating profit was RM143.16 million, up 3.8% from RM137.83 million. Revenue rose 18.2% to RM1.17 billion from RM991.07 million, boosted by strong domestic and export sales.
This article appeared in The Edge Financial Daily, November 8, 2011.
Last Friday, the FBM KLCI snapped its three straight days of losses, surging 15.14 points or 1.04% to 1,477.51 on late buying of selected stocks.
News reports highlighting the eurozone’s repeated failure to tackle its debt crisis are catapulting the bloc towards recession, raising the spectre of dangerous spillovers to the rest of the world economy.
UOB Kay Hian Malaysia Research head Vincent Khoo said there were earlier concerns abut the contagion effect from Greece but he believed this could be under control.
“On the other hand, a recession in Europe is inevitable but this has not been fully reflected in the equities market as yet,” he said.
As for Malaysia, he said the research house has a two-pronged approach for investors. The first is to focus on defensive stocks and the second on ETP companies.
Khoo said market sentiment was also boosted by prospects of the general election.
“UEM Land will benefit from the Iskandar development projects, MRCB (Malaysian Resources Corp Bhd) from the development of the Rubber Research Institute land (RRI land in Sungai Buloh) while Gamuda Bhd would benefit from the Mass Rapid Transit project,” he said.
Other defensive counters investors could focus on are telecommunications, numbers forecast operators and consumer stocks.
Merger and acquisition activities in the near future could spice up the market, with great anticipation in the financial and gaming sectors.
Other stocks with recent corporate news are Melati Ehsan Holdings Bhd, Fraser & Neave Holdings Bhd, Malaysia Smelting Corp Bhd and Nestle (M) Bhd.
Melati Ehsan unit Pembinaan Kery Sdn Bhd has accepted two contracts from the Housing and Local Government for two housing projects worth RM298 million in Kuala Lumpur.
Fraser & Neave posted a net profit of RM66.21 million in the fourth quarter ended Sept 30, 2011, down 85.7% from the RM462.31 million a year ago where there was a gain of RM382.03 million after selling its glass container business.
It proposed a final single tier dividend of 47 sen per share together with a special single tier dividend of 15 sen.
Malaysia Smelting posted a net profit of RM41.81 million in the third quarter ended Sept 30, 2011 against a net loss of RM37.05 million a year ago where there was an impairment provision for goodwill of RM73.63 million.
Nestle posted a net profit of RM110 million in the third quarter ended Sept 30, 2011, marginally lower from the RM113.18 million a year ago as profit margins were affected by higher prices of key raw materials.
Its operating profit was RM143.16 million, up 3.8% from RM137.83 million. Revenue rose 18.2% to RM1.17 billion from RM991.07 million, boosted by strong domestic and export sales.
This article appeared in The Edge Financial Daily, November 8, 2011.
