Key markets are expected to open on a cautious note on Thursday, Sept 23, tracking the weaker overnight close on Wall Street.
US stocks slipped on Wednesday, Sept 22 ending the Dow's five-day winning streak, following Adobe's discouraging revenue outlook and investors' disappointment over Microsoft's new dividend.
Investors also weighed the impact of the Federal Reserve's statement on Tuesday, which indicated the central bank was edging closer to pumping hundreds of billions of new dollars into the sluggish economy.
The Dow Jones industrial average dipped 21.72 points, or 0.20%, to 10,739.31. The Standard & Poor's 500 Index slipped 5.50 points, or 0.48%, to 1,134.28. The Nasdaq Composite Index lost 14.80 points, or 0.63%, to 2,334.55.
However, market sentiment at Bursa Malaysia could be shored up by infrastructure stocks like Gamuda on expectations that it could take the lead in the mass rapid transit project in Kuala Lumpur.
Morgan Stanley Research had in a recent report upgraded the Malaysian market to Overweight from Equal-weight. Also upgraded were China, Russia, Korea, Brazil, Malaysia and Czech Republic.
Countries which were Underweight were South Africa, Turkey, Thailand, Colombia, Chile, Peru, Philippines and Hungary.
“In terms of key ranking changes in the factors tracked by the model, we highlight significant improvements in the earnings growth and revisions breadth scores for the three markets we are upgrading today (Sept 20). Malaysia now ranks #3 on breadth and #4 on earnings growth,” it said.
Stocks to watch include SIME DARBY BHD [], AIRASIA BHD [], RGB International Bhd (formerly Dreamgate Corp Bhd), Masterskill Education Group Bhd, ZELAN BHD [] and TIME DOTCOM BHD [].
Companies which reported their financial results on Wednesday were SAPURA INDUSTRIAL BHD [], TA Global Bhd and MUTIARA GOODYEAR DEVELOPMENT [] Bhd.
Sime Darby Bhd said there would not be additional provisions required to be made for the four key projects in the energy & utilities (E&U) division, which has suffered heavy losses.
The group had made the necessary provisions in the financial statements for the year ended June 30, 2010 based on the progress, cost incurred, cost estimated to completion and the technical consultants’ report.
AirAsia is maintaining its no fuel surcharge policy despite reports that other airlines are increasing previously imposed charges. Instead, it has chosen to tackle fuel price hike with aggressive marketing and the strengthening of its ancillary business instead of relying on fuel surcharge to offset rising fuel cost.
RAM Rating Services Bhd has placed the A1/P1 ratings of RGB’s RM200 million Commercial Papers/Medium-Term Notes Programme (2007/2014) (CP/MTN) on Rating Watch, with a negative outlook.
The outlook on RGB International’s long-term rating had earlier been revised from stable to negative in June 2010, premised on concerns that the Group’s financial profile may not improve according to RAM Ratings’ expectations.
Shares of Masterskill Education Group slumped to close at its lowest since its listing, closing at RM3.19 on Wednesday. At Wednesday’s closing price of RM3.19, it is down 8.85% from its retail offer price of RM3.50 when it was listed on May 18.
At RM3.19, this is a decline of 25.8% from its historic high of RM4.30 in intra-day trade on July 29.
Zelan reported that the Employees Provident Fund Board had disposed of six million shares from Sept 6 to 15, reducing its stake to 10.4% or 58.6 million shares.
Khazanah Nasional Bhd saw its indirect stake in Time dotCom reduced to 1.389 billion shares or 54.78% after TIME ENGINEERING BHD [] disposed of 4.6 million shares on Sept 15 and 16.
By Joseph Chin
The Edge Malaysia
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