KUALA LUMPUR (Oct 30): The FBM KLCI could well extend its gains for a sixth day running, although gains could be limited given that the US markets are closed for the day, and thereby curbing investor activity at most global markets that act as indicators.
Although European shares advanced in early trade, volumes were expected to remain thin, however, with the effects of a massive storm hitting the eastern United States set to keep Wall Street closed for a second day, it said.
Asian shares rose modestly on Tuesday but momentum was curbed by a giant, powerful storm that will keep US markets shut, while the dollar slid to an intraday low against the yen after the Bank of Japan unveiled further easing steps, according to Reuters.
Among the stocks that could be in focus on Wednesday on Bursa Malaysia are TENAGA NASIONAL BHD [] (TNB); DKSH Holdings (Malaysia) Bhd; Cycle & Carriage Bintang Bhd (CCB); GLOBETRONICS TECHNOLOGY [] BHD []; and counters related to oil and gas (O&G).
TNB is scheduled to announce its financial results for the fourth quarter (4Q) ended Aug 31, 2012 on Wednesday.
Maybank Investment Bank Bhd Research has maintained its Buy rating on the Tenaga and said the utility company's results would be better relative to the third quarter thanks to higher natural gas supply and lower coal costs.
"We remain bullish on Tenaga as the first shipment of LNG is on track for delivery soon, which will put an end to the gas supply issue permanently.
"Maintain 'Buy' with an unchanged target price of RM7.70 based on FY8/13 PER of 13x, in line with its historical average," the research house said in a note Oct 30.
DKSH has inked a deal to support The Coffee Bean & Tea Leaf's (CB&TL) market expansion into Malaysia's mass retail market from Nov 1.
In a statement Tuesday, DKSH said the agreement would see it provide market expansion services to CB&TL, which currently operated close to 50 café outlets in Malaysia.
The company said it would provide sales and distribution services for CB&TL's newly-launched products, such as ready coffee, fresh leaf tea and its range of ready-to-drink tea, sparkling tea and coffee.
Besides sales and distribution, DKSH will also support CB&TL with trade marketing, merchandising and logistics services.
CCB's net profit for the third quarter ended Sept 30, 2012 fell to RM3.91 million from RM5.93 million a year earlier, due mainly to lower vehicle sales.
The company said on Tuesday that its revenue for the quarter decreased to RM162.22 million from RM188.21 million a year earlier.
Earnings per share was 3.88 sen compared to 5.89 sen previously, while net assets per share was RM1.94.
For the nine months ended Sept 30, CCB said its net profit fell to RM16.87 million from RM20.29 million on the back of revenue RM497.63 million versus RM519 million.
CCB said that intense competition continued in the premium car segment during the third quarter with competing brands fighting for market share, adding that this resulted in reduced margins for the group.
Cautious consumer sentiment and intense competition in the premium car segment, with new models and competitive prices being offered by other brands, led to continued margin erosion, it said.
"The group's sales of Mercedes-Benz passenger cars were down 7% year-on-year. Excluding the Penang dealership which was acquired in May 2011, unit sales would have been 14% lower year-on-year," it said.
On its prospects, CCB said that with the competitive environment unlikely to show any improvement in the near term, the remainder of the year was expected to be challenging.
Globetronics's net profit for the third quarter ended Sept 30, 2012 surged 84% to RM14.21 million from RM7.73 million a year earlier, due mainly to higher volume loadings from most of the group's customers, better product mix and economy of scale coupled with gain on disposal of land and factory building in Jitra.
The company said on Tuesday that its revenue for the quarter increased to RM78.34 million from RM70.72 million in 2011.
For the nine months ended Sept 30, Globetronics posted net profit RM30.12 million compared to RM21.67 million, on the back of revenue RM204.68 million versus RM207.08 million a year earlier.
Globetronics said that moving forward, it would continue to focus on escalating up the value chain and riding on the R&D initiatives in new products' design and development.
Oil and gas-related companies could see some activity after Petroliam Nasional Bhd (Petronas) and Sweden-based petroleum firm Lundin Oil found additional oilfields off Malaysia's Pahang state, a discovery that could potentially boost production up to 20,000 barrels of crude oil a day.
CIMB Research maintained its overweight rating on the sector and said while the discovery was not substantial but every drop counted as the national oil company pursues sector-wide opportunities to reverse Malaysia's production decline.
"We continue to have positive expectations for the oil & gas sector and maintain our overweight call.
"Petronas's 5-year RM300 billion capex should keep the excitement level high in a sector that is a major revenue earner. Our top picks are SapuraKencana for big caps and Perisai for small caps," it said.
Written by Surin Murugiah of theedgemalaysia.com
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