KUALA LUMPUR (Oct 16): The FBM KLCI could trade range bound on Wednesday given the edgy local investor sentiment that saw the local index reverse its gains in a day to close lower, lagging its regional peers.
Despite improving sentiment at most global markets, the local index was adversely impacted by weaker crude palm oil (CPO)futures that saw losses at index-linked PLANTATION [] stocks, a trend that could continue.
It could be made worse with the gloomier expert outlook, after Godrej's Dorab Mistry said the Malaysian three-month CPO futures should fall to RM2,200 in four to six weeks.
Asian shares rose on Tuesday after rallies in US stocks and positive US data cheered investor mood, with hopes for some progress in the euro zone debt crisis also helping to underpin sentiment, according to Reuters.
Meanwhile, European shares and the euro led a fresh push by risk assets on Tuesday, with investors buoyed by the latest batch of US data and earnings and hopeful a meeting of European leaders later in the week can advance plans to tackle Spain and Greece's debts, it said
Among the stocks that could be in focus at the local market are DRB-HICOM BHD [], TIME DOTCOM BHD [], GLOMAC BHD [], Top Glove Corp Bhd and plantation-related counters.
DRB-Hicom chief operating officer Datuk Seri Che Khalib said Proton could bring down the whole DRB-Hicom group if the national car maker's problems are not fixed.
"If we do not solve the Proton problem, it's not just Proton that will go down, but the whole DRB group," he said at the MICPA-Bursa Malaysia Business Forum on Tuesday.
Che Khalib, who was one of the speakers at the forum, said DRB-Hicom was currently working on solutions for its "problem child" Proton.
"Yes, we are coming up with solutions for Proton. We plan to announce to the market next month what we have planned for Proton," he said.
Time dotCom has entered into a 10-year agreement with Setia Haruman Technonoly Sdn Bhd (SHTech) in a deal that would extend Time’s high-speed broadband service and Main Market-bound Astro Malaysia Holdings Bhd’s broadband TV offering to Cyberjaya.
In a statement to Bursa Malaysia on Tuesday, Time said its unit TT dotCom Sdn Bhd (TTdC) will collaborate with SHTech to introduce 100% fibre-to-home and fibre-to-office services to an estimated 3,300 homes and 1,400 offices in Cyberjaya over the next decade.
Time expects the collaboration to “contribute positively” to its earnings for the current “financial year ending Dec 31, 2012 and beyond”.
The collaboration to jointly deliver Internet pay-tv (IPTV), broadband and voice telephony services will be extended to new buildings in Cyberjaya in the future, Time said.
Glomac is actively looking to acquire new land in greater Kuala Lumpur and has the balance sheet to do so, its group managing director and CEO Datuk FD Iskandar said, letting on the possibility of a deal happening soon.
"I'll be surprised if we don't announce any new acquisitions before year-end. We should be able to," Iskandar told reporters after the company's annual general meeting (AGM) on Tuesday.
Top Glove is open to acquisitions and has earmarked some RM200 million for capital expenditure (capex) for the current financial year to expand both its glove-making and planned upstream activities, its top executive said.
"We are careful with our investments," chairman Tan Sri Lim Wee Chai told analysts and reporters at a briefing on Tuesday, after saying the funds was to finance potential acquisition of rivals, capacity expansion, as well as the development of the company's rubber plantations.
Top Glove, which recently paid RM24.1 million for a smaller glove-maker GMP Medicare Sdn Bhd, will finance its capex with internal funds, Lim said.
Top Glove had set aside RM140.5 million for capex in the previous financial year ended Aug 30, 2012.
Plantation-related stocks could remain under pressure given the weakness of CPO futures that has stayed below the RM3,000 per tonne level for some time, with anxiety building that record stockpile levels in Malaysia could drive the prices lower, while the assessment by Dorab Mistry could drive plantation share prices southward.
Written by Surin Murugiah of theedgemalaysia.com
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