Stocks to watch: Public Bank, Supermax, DBE Gurney, Metronic

KUALA LUMPUR: The stock market could come under some selling pressure on Friday, Oct 16 as investors take profit, as displayed by Thursday's performance, despite the positive external news including from Wall Street.

On Wall Street, the Dow industrials and the S&P 500 climbed on Thursday to 2009 closing highs, buoyed by energy stocks as oil prices jumped, but financials retreated as investors panned results from Goldman Sachs and Citigroup.

The Dow Jones industrial average gained 47.08 points, or 0.47 percent, to close at 10,062.94, a fresh 52-week high. The Standard & Poor's 500 Index rose 4.54 points, or 0.42 percent, to finish at 1,096.56, its highest close for the year. The Nasdaq Composite Index added 1.06 points, or 0.05 percent, to end at 2,173.29.

At Bursa, investors would await news from Media Prima and NSTP, whose trading have been suspended, for an announcement which would likely be on the privatisation of NSTP.

Stocks to watch are PUBLIC BANK BHD [] and Supermax Corp Bhd which delivered a strong set of earnings, while the others are DBE Gurney Resources Bhd, METRONIC GLOBAL BHD [], KENCANA PETROLEUM BHD [], HAP SENG CONSOLIDATED BHD [] and MEMS TECHNOLOGY [] BHD [].

Public Bank Bhd surged to its 52-week high of RM10.70 on Thursday, the highest since May 2008, after its third quarter results ended Sept 30, 2009 (3QFY09) put it on track to meet full-year consensus estimates.

Net profit in 3QFY09 rose 3.68% year-on-year (y-o-y) to RM639.05 million on the back of strong loans and deposit growth and stable asset quality, coming in slightly above analysts’ expectations of a growth of between 2% and 3%.

Supermax’s net profit rose 155% to RM40.15 million in 3Q from RM15.77 million a year earlier, boosted by higher margin gloves. Revenue fell 2.7% to RM237.56 million from RM244.25 million a year earlier.

Poultry-based DBE Gurney Resources Bhd is buying 51% in a rival Visa Jiwa Sdn Bhd for RM30.6 million to be satisfied by 39 million new DBE shares of 50 sen each at par value and RM11. The proposed acquisition is expected to be completed by 1Q, 2010

Metronic expects its maiden China water project, CONSTRUCTION [] of which began on Wednesday, to pave the way for more business opportunities in that country and in the region, said its group managing director, Dr Ng Tek Che.

Hap Seng now owns 50% of Menara Citibank. The company has completed the acquisition of a 50% stake in Inverfin Sdn Bhd, the sole legal and beneficial owner of Menara Citibank. The acquisition was completed with the payment of the balance of the purchase price amounting to RM213.

Bursa Malaysia Securities rejected MEMS's application for a waiver to submit a regularisation plan and upliftment from GN3 classification following its default in payment and the reissue of financial statements.

However, MEMS was given up to March 31, 2010 to submit a regularisation plan to Bursa Securities for approval subject to the condition that MEMS appoint a sponsor and make the relevant announcement by Dec 31, 2009.

Kencana recommended a first and final single-tier dividend of 5% per ordinary share of 10 sen each for the financial year ended July 31.

Written by Loong Tse Min

Friday, 16 October 2009