Stocks to watch: KNM, GBH, Favelle Favco, Mamee

KUALA LUMPUR: Investors will again have to brace for a volatile week ahead starting Nov 30 as investment sentiment is expected to be impacted by the worries about a possible default from a Dubai state-owned conglomerate.

On Wall Street, stocks fell as investors sold financial and commodity-linked sectors which were most sensitive to economic uncertainty.

The Dow Jones industrial average dropped 1.48% to end at 10,309.92. The Standard & Poor's 500 Index fell 1.72% to 1,091.49. The Nasdaq Composite Index lost 1.73% to 2,138.44.

At Bursa Malaysia, the last batch of the corporate results for the quarter ended Sept 30 will be released on Monday

Last Thursday, the 30-stock FBM KLCI lost 0.39 point to close at 1,270.61 as investors took profit ahead of the long weekend. Market breadth was weaker, as losers beat gainers 401 to 267 gainers.

Stocks to watch on Monday include KNM Group, Goh Ban Huat, Favelle Favco and Mamee-Double Decker.

KNM's third quarter net profit fell 69.1% to RM31.92 million from RM103.42 million a year ago, while revenue declined 38.6% to RM458.35 million from RM746.2 million.as revenue shrank amid a slower global economic landscape.

It attributed the weaker performance due to the global economic slowdown and the full effect of intangible asset amortisation after acquiring Borsig.

KNM also said the memorandum of agreement with Sofinter SpA to set out the commercial terms for its boiler business joint venture had lapsed as mutually agreed by the parties.

In Goh Ban Huat, it sank deeper into the red with net loss of RM11.26 million against RM335,000 a year ago due to one time stock write off of RM1.2 million, stocks provision of RM4.3 million and higher administration expenses.

Favelle Favco's net profit jumped to RM7.168m versus RM2.311m a year ago. The improvement in net
profit was mainly contributed by improvement in margin from sales of cranes.

As at Nov 20, its outstanding order book is RM495 million of which 58% is from oil and gas cranes for the offshore oil and gas exploration and production activities. The rest are from the shipyard, CONSTRUCTION [] and wind turbine industry.

Favelle Favco, which had cash of RM95.7 million, said it would  continue to execute and deliver its existing order book secured in hand. However, it cautioned the outlook appeared challenging although it expected to maintain market share from its diversified customer base.

Mamee-Double Decker reported its net profit rose nearly 86% to RM12.1 million from a year ago, underpinned by improved consumer spending and also favourable sales mix. Revenue rose only 2.84% to RM113.86 million.

As for Guinness Anchor, its net profit fell 43.5% to RM26.75 million from RM47.32 million a year ago due to lower demand for its malt liquor beverages during the difficult economic conditions. Revenue fell 17.7% to RM300.97 million from RM365.8 million.

Written by Joseph Chin