Penny stocks, warrants to remain in the spotlight

Most of the volume on Bursa Malaysia will likely come from penny stocks as retailers gear up for a (pre-Chinese New Year) rally, says a dealer

THE FBM KLCI will likely continue to be listless this week amid a lack of strong leads to pull it out of its sluggishness , but penny stocks and warrants are expected to remain in the spotlight, ahead of the upcoming Chinese new year.

"Most of the volume will likely come from penny stocks as retailers gear up for a (pre-Chinese New Year) rally," said a dealer with a local brokerage firm.

Among such counters that were active last week include Nextnation Communication, Xidelang Holdings and Hibiscus warrants.

The FBM KLCI underwent a choppy week of trading in the first week of 2012, ending the week in the red, down about 1.1 per cent or 16.6 points to 1,514.13.

The 30-stock index is likely to find support at 1,500 points and resistance at 1,540 in the near term, the dealer said. The market may see more profit-taking today after the US markets ended lower last Friday, with the Dow Jones Industrial Average down 0.45 per cent to 12,359.92.

"Do take profit on rallies if the index components inch up in a small way," said Maybank Investment Bank Research's head of retail research Lee Cheng Hooi.

Europe's ongoing debt crisis continues to have a bearing on the market, and today, investors will be following a meeting between two of its key leaders - French President Nicolas Sarkozy and German Chancellor Angela Merkel in Berlin, ahead of an European Union leaders summit at the month's end.

On the local front, investors will also be watching for the verdict of former deputy prime minister and now opposition leader Datuk Seri Anwar Ibrahim's sodomy trial at the Kuala Lumpur High Court today, which has dragged since 2008.

The outcome will have a bearing on his political future, even as a general election in the country is seen looming.

Stocks like Proton Holdings and QSR could be in the spotlight this week as more news on buyout offers emerge.

A business weekly reported over the weekend that there could be more suitors for Proton, with Tan Sri Arumugam Apavoo Packiri and Gerald Lopez of Genii Capital potentially putting in a joint bid for Khazanah Nasional Bhd's 42.7 per cent stake in the national carmaker.

Last week, Proton said its chairman Datuk Mohd Nadzmi Mohd Salleh had made a bid in his personal capacity for that same stake.

In the US, corporate earnings are expected to take centre stage, with big companies like banking group JPMorgan Chase and aluminium company Alcoa set to unveil their fourth quarter earnings.

In Europe, the European Central Bank will have a monetary policy meeting on Thursday, where it is widely expected to keep interest rates steady.

from btimes.com.my