KUALA LUMPUR (July 4): The FBM KLCI could take a breather on Thursday after it reached its all-time high on Wednesday, as investors are likely to take a wait-and-see approach on how European banks deal with the debt crisis in the troubled eurozone.
Also, with the US markets closed Wednesday for the Independence Day holiday, there would be little guide from the world's largest economy. The FBM KLCI closed 6.01 points higher at 1,613.75 on Wednesday. The index earlier rose to its intraday high of 1,614.79.
Meanwhile, European shares retreated from two-month highs on Wednesday after three days of gains made on hopes of more monetary stimulus from central banks and progress made in dealing with the eurozone debt crisis, according to Reuters. Activity was expected to be subdued with US markets closed for the Independence Day holiday, and ahead of meetings of European Central Bank and Bank of England policy makers on Thursday, it said.
Among the stocks that could be in focus on Thursday are MBM RESOURCES BHD [], CONSTRUCTION []-related counters and TRICUBES BHD [].
MBM Resources could extend its gains on Thursday after AmResearch Sdn Bhd on Tuesday reaffirmed its high conviction Buy on the stock and raised its fair value to RM4.30 from RM3.60 previously. "Our sum-of-parts valuation now pegs Perodua at 12x FY12F earnings (vs 10x previously) to reflect its strong earnings traction, underpinned by a strong TIV rebound in the recently-announced May numbers," said the research house. MBM Resources jumped 61 sen to RM3.80 on Wednesday.
Construction-related counters may be in focus after CIMB Research in a note Wednesday said contractors were becoming more upbeat about job award prospects. "This ties in with our view that transport infrastructure-driven projects will get the momentum going for even larger jobs from 2H12 onwards. This should lay the foundation for more active newsflow beyond MRT. Likely pre-election driven newsflow continues to anchor our Trading Buy call," it said.
The research house said the sector was not an Overweight given the overhang from Malaysia's general election. "WCT and Mudajaya are now our top picks as contract flows are likely to pick up, backed by better job visibility. They replace IJM Corp and Gamuda, which still stand to benefit from large-scale contracts," it said.
Meanwhile, Tricubes Bhd said Bursa Malaysia Securities Bhd had rejected its regularisation plan of after the company failed to demonstrate its ability to increase and sustain revenue and profit growth of its existing principal activities. At 3.31pm, Tricubes tumbled seven sen to three sen, with 20.9 million shares done. It closed at three sen.
In a filing on Wednesday, Tricubes said its existing principal activities were its Identity Authentication Solutions (IAS) and the Enterprise Mobile Solutions (EMS) business segments. It said Bursa Malaysia Securities' concerns included the maturing, growth slowdown and competitive environment of the lAS industry; and the ability of the group to generate and sustain revenue growth of its EMS business segment in-view of the group's limited access to non-government and non-banking sectors as well as the reliance on the Malaysian market.
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