After notching gains for the sixth-straight day and pushing the FBM KLCI past the 1,360 level on Friday, July 30, the market may take a breather before attempting to climb further. The cautious sentiment could be due to the lacklustre close on Wall Street on Friday.
Last Friday, the 30-stock FBM KLCI closed at 1,360.92, another new high since February 2008. For July, it chalked up 46.90 points or 3.57%.
Global stocks and the U.S. dollar slid on Friday, July 30 as investors trimmed risk exposure on data showing the U.S. economy slowing a bit more than expected even as other news suggested a slow, steady recovery.
Reuters reported Wall Street closed little changed to wrap up its best month in a year after another week of strong corporate results that offset the impact of lackluster economic data.
The 7% gain in July for the S&P 500 and Dow was on low volume and followed an almost 14% decline through May and June.
The Dow Jones industrial average closed down 1.22 points, or 0.01%, at 10,465.94. The Standard & Poor's 500 Index gained 0.07 point, or 0.01%, at 1,101.60. The Nasdaq Composite Index rose 3.01 points, or 0.13%, to 2,254.70.
Stocks to watch on Monday include Tanjong plc, ZELAN BHD [] and Ngiu Kee Corp (M) Bhd.
Billionaire T. Ananda Krishnan's Usaha Tegas Sdn Bhd, which controls 46.96% of Tanjong plc, has served a take-over on the power-gaming company at RM21.80 per share or for RM4.7 billion. The offer price is RM4.22 or 24% above its pre-suspension price of RM17.58.
Zelan has proposed to dispose of 30 million shares in IJM Corp Bhd, or 2.23% on IJM Corp at an assumed price of RMM5.80 each.
“The proposed disposal would raise gross proceeds of up to RM152.4 million,” Zelan said, as it seeks to obtain the shareholders’ mandate for the disposal.
As at July 15, Zelan’s total borrowings were RM291.98 million. Possible annual savings in interest payment arising from part repayment of about RM50 million of such borrowings (estimated based on the average interests cost of the said borrowings of about 7% per annum) could be about RM3.50 million per annum.
In Ngiu Kee, the company said there was a deviation of 109% between the unaudited net profit for the year ended March 31, 2010 of RM2.48 million and the audited net loss of RM5.93 million. The bigger losses followed an impairment review in accordance with FRS 136, the company said.
Meanwhile HIROTAKO HOLDINGS BHD [] has emerged as a major shareholder in PA Resources Bhd with a 15.99% stake or 30.65 million shares after it subscribed for the shares to rights issue and allotment of excess shares.
The investment in PA Resources could be a bid to enter the aluminium industry at low cost, according to a report by The Edge weekly.
Written by Joseph Chin
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