Blue chips could see firmer trading interest on Tuesday, July 20, with interest focused on Public Bank which is scheduled to announce its second quarter earnings.
In its first quarter, Public Bank's net profit was RM685.25 million versus RM589.28 million a year ago. Analysts estimate for the full year, earnings should come in at RM2.92 billion, which is higher than the annualized earnings of RM2.74 billion, based on the 1Q earnings.
On Wall Street, US stocks ended higher on Monday, July 19 supported by strong earnings but gains were limited by a drop in U.S. housing data showing cracks in the recovery of the world's largest economy.
The Dow Jones industrial average ended up 56.53 points, or 0.56%, at 10,154.43. The Standard & Poor's 500 Index rose 6.37 points, or 0.60%, at 1,071.25. The Nasdaq Composite Index gained 19.18 points, or 0.88%, at 2,198.23.
Other stocks to watch on Bursa Malaysia include HELP International Corp Bhd, EA Holdings Bhd, MALAYSIAN AIRLINE SYSTEM BHD [], Axiata Group Bhd, Axis REIT Bhd and PA Resources Bhd.
HELP had proposed a three-for-five bonus issue as part of its corporate exercise. Its share price had surged 29 sen to a record high of RM4.05 on Monday, July 19 ahead of the announcement.
The corporate exercise involves the bonus issue of 53.26 million new shares on a three-for-five basis at an entitlement date to be determined later.
EA makes its debut on Tuesday on the ACE Market. Its offer price is 25 sen. The company’s plan is to expand its ICT businesses especially its radio frequency identification applications. Its current customers include Bursa Malaysia and TENAGA NASIONAL BHD [].
MAS selected Pratt & Whitney to supply 34 engines worth RM2.2 billion (US$680 million) for its 17 new Airbus aircraft. The 15 passenger and two freighters will be powered by PW4170 Advantage70 engines.
MAS ordered up to 25 A330-300 and 4 A330-200F worth US$4.5 billion at list price which includes the cost of the engines. The aircraft which will be delivered from 2011 to 2015.
Axiata divested its entire 89% stake in Multinet Pakistan (Private) Ltd to its second largest shareholder, Adnan Asdar Ali, for US$15 million. Adnan owns 11%. The strategy was to focus on mobile communications.
Under the agreement, Adnan will also repay Axiata the shareholders advances provided to Multinet amounting to PKR973.3 million, as part of the agreement. In addition, AA will also obtain the release of all guarantees and financial support provided to Multinet in relation to banking facilities totaling US$65.0 million.
AmResearch said it did not expect the divestment to have material impact on the group’s cash flow or operating profit. Proceeds from the sale of RM86.2 million (cash sales and advances return) or one sen/share would not be sufficient for any dividend, going forward.
“We hold a favourable view of this latest corporate action, for its long-term value. Our BUY call on Axiata is currently more influenced by performance at Celcom, XL and Dialog. We maintain our fair value of RM5.05 on a Sum-of-Part valuation,” he said.
In P.A. RESOURCES BHD [] its rights issue with warrants were oversubscribed by 10.32%. The corporate exercise involved the issuance of renounceable rights issue of up to 66.79 million new shares on a one for two basis with 66.79 million free warrants on the basis of one free warrants for every one rights shares subscribed.
Written by Joseph Chin
The Edge Malaysia
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