Stocks to watch: PPB, Sime Darby, Lityan, Time

KUALA LUMPUR: Key Asian markets, including Bursa Malaysia, should extend gains on Thursday, Nov 5 after US stocks closed slightly higher and supported by an upbeat outlook from the World Bank for developing economies especially China.

Overnight, the US Federal Reserve reported the U.S. economy had "continued to pick up" since its last meeting in September, but it expressed concern the economy's recovery was likely to be muted.

The Dow Jones industrial average gained 30.23 points, or 0.31 percent, to end at 9,802.14, after rising as much as 156.13 points, or 1.6 percent, in the hour after the FOMC statement to touch a session high at 9,928.04.

The Standard & Poor's 500 Index edged up 1.09 points, or 0.10 percent, to finish at 1,046.50. But the Nasdaq Composite Index slipped 1.80 points, or 0.09 percent, to close at 2,055.52.

At Bursa Malaysia, stocks to watch will be PPB Group, Sime Darby, Lityan and Time Engineering and also the banks.

OSK Research has maintained an overweight on the banking sector following most domestic banks' and selected foreign banks' move to revise upwards their mortgage rates.

PPB, which posted its biggest one-day gains since July, should see some trading interest as the sharp gains were in the last 10 minutes of trade on Wednesday.

A head of institutional dealing at a local stockbroking house expressed concern over the artificial support, even though the stock has strong fundamentals, due to the push in the share price in late trading. For more, see today's The Edge  FinancialDaily.

Sime Darby should see trading interest as China's President Hu Jintao visit to Malaysia next week as the market is abuzz the Malaysian government may finally seal a deal to sell 10% of the PLANTATION []s-property group to a Chinese group.

Lityan continues to surge despite the unusual market activity, creating concerns about heavy speculative activity which is pushing the share price way above its fundamentals. Retail investors should brace for profit taking.

Time Engineering should see positive trading activity after the regulator agreed to uplift the company from the Practice Note 17 status. The shares rose in very active trade on Wednesday.

OSK Research has maintained an overweight on the banking sector following most domestic banks' and selected foreign banks' move to revise upwards their mortgage rates on Tuesday.

Among telcos, Norwegian Telenor ASA says it is confident its 49%-owned DIGI.COM BHD [] and its rivals -- Maxis Bhd and Celcom (M) Bhd -- can fend off competition from new 3G and WiMAX licensees.