Blue chips are expected to extend their gains this week, as investor sentiment is underpinned by the firmer performance on Wall Street and global markets.
Fewer-than-expected European banks failed the stress tests, with only seven failing (of which five are in Spain) compared with market expectations of 10.
The estimated capital shortfall would be €3.5 billion (US$4.5 billion or RM14.44 billion) instead of 10 bank failures and projected shortfalls of €100 billion.
On Wall Street, the Dow Jones Industrial Average climbed 102.32 points, or 1%, to end at 10,424.62 — just about four points below its end-2009 close.
The broader Standard & Poor’s 500 Index rose 0.82% to 1,102.66 — or about 13 points below its year-end 2009 close. The Nasdaq Composite Index gained 1.05% to close at 2,269.47.
At Bursa Malaysia, stocks to watch include Sarawak-based counters, telco players Telekom Malaysia Bhd and Maxis Bhd, MISC Bhd, Tanjung Offshore Bhd, M3nergy Bhd, Mudajaya Group Bhd and Tanjong plc.
Sarawak stocks have been outperforming the FBM KLCI amid rumours the state election could be held sooner rather than later and buoyed by potential projects under the Sarawak Corridor of Renewable Energy.
Among the telecommunication players, indications are that the next battleground in the country will be in Internet Protocol Television (IPTV), with Telekom Malaysia and Maxis going head-to-head.
MISC’s proposed listing of its unit Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) will involve offering 25% or 408 million shares of the enlarged paid-up capital of 1.6 billion shares.
MISC said the listing vehicle would be MSE Holdings Bhd (MHB), which holds 100% of MMHE. The listing exercise will see MHB declaring a cash dividend payout of RM300 million to MISC via dividend income received from MMHE. MISC has cash of RM7.85 billion in the fourth quarter ended March 31, 2010.
It also said the listing exercise would involve the sub-division of MHB’s existing paid-up of RM16.22 million, comprising of 16.22 million RM1 shares, into 32.44 million 50-sen shares.
Ekuiti Nasional Bhd (Ekuinas), which is investing RM73.4 million in Tanjung Offshore Bhd, hopes to see the latter’s revenue double in the mid- to long-term. Ekuinas’ investment horizon as a strategic investor is between three and five years.
The board of directors of M3nergy has concurred with its financial adviser HwangDBS Investment Bank Bhd (HDBS) that the conditional takeover offer from Adamus Avenue Sdn Bhd is not fair and not compelling.
M3nergy said the offer did not seem to reflect the underlying value of the company as well as the prospects.
Mudajaya could see trading interest on news report the Securities Commission (SC) is “looking into the affairs” of the company following a complaint.
The SC was reported to be looking into Mudajaya’s affairs, which was part of its continuing vigilance and proactive surveillance of the corporate developments of listed companies.
Meanwhile, Malaysian financial firms eyeing investment banking operations in Cambodia could be in for a longer wait as the processing of stockholding licences has been put on hold.
Written by Joseph Chin
This article appeared in The Edge Financial Daily, July 26, 2010.
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