Stocks To Watch - Perwaja, Eti Tech, REDtone, Top Glove, property and plantation stocks

KUALA LUMPUR (Oct 30): Based on corporate announcements and news flow today, the stocks that may generate some interest tomorrow could include Perwaja, Eti Tech, REDtone, Top Glove, property and plantation stocks.

Perwaja Holdings Bhd (PHB) announced that its wholly owned subsidiary, Perwaja Steel Sdn Bhd (PSSB), has obtained a High Court order to restrain all actions against it for 90 days while it negotiates for a debt restructuring scheme.

The order stops “further proceedings and any actions or proceedings brought by any party including its Scheme Creditors for a period of 90 days effective from Oct 29, 2013”, said PHB in a filing with Bursa Malaysia.

“The order is to facilitate PSSB to convene a meeting with its creditors pursuant to Section 176(1) of the Act for the purpose of considering, and if thought fit, to approve with or without any alteration or modification, a proposed scheme of arrangement and compromise for PSSB,” said Perwaja.

It said full details of the proposed scheme of arrangement will be issued to the scheme creditors in due course.

Last month, Perwaja Holdings announced that the government’s Corporate Debt Restructuring Committee (CDRC) had agreed to render help in its negotiations with creditors for a debt restructuring programme.

The restructuring would be required to help in the turnaround of the company, it added.

Kinsteel Bhd, which is the financially-distressed parent company of Perwaja Steel, also announced last month that the CDRC has agreed to help it in its debt restructuring plan.

Eti Tech Corporation Bhd said the Shah Alam High Court has issued a restraining order which prohibits Eti Tech Corp Bhd's (Etitech) lenders from taking legal action against the firm.

Etitech, a battery specialist, said the 90-day restraining order starts from October 14 this year.

"The restraining order will allow Etitech to focus on formalising the proposed schemes of arrangements unhindered without having to divert its attention and resources to defending and dealing with any proceedings and/or actions from the lenders and/or creditors.

Etitech said its business is "experiencing a significant slowdown due to delay in realisation of projects.”

The company said it is restructuring itself to strengthen its financials.

REDtone International Bhd saw its earnings for the first quarter ended August 31, 2013 (1QFY14) increase by 107.5% due to a significantly higher contribution from its data and broadband business.

Net profit for the quarter stood at RM4.15 million from RM2 million from the previous corresponding quarter, said the company in a press statement.

Revenue for the quarter was also up 17.7% at RM36.11 million from RM30.67 million, driven by strong growth in its data segment.

“The continued earnings uptrend in its latest quarter underscores REDtone’s success in turning its business around via repositioning itself in the data and broadband space,” said Redtone.

In the statement, REDtone CEO Lau Bik Soon said the company has come a long way since 2009 when it embarked on a plan to return to profitability and to rebuild its business by focusing on the data segment and leveraging on its core competency.

“As a result of this, REDtone turned in a great year in FY’13 with a record net profit, and now a strong set of results for our latest quarter.”

Top Glove Corporation Bhd said its patented invention has increased production output efficiency by double and added value to the glove manufacturing process.

The glove manufacturer said its wholly owned unit Top Glove Sdn Bhd had been granted with a patent title ‘Former Carrying Assembly’ on Dec 31 last year by the Registrar of Patents, Malaysia.

Top Glove said ‘Former Carrying Assembly’ is the design of the holder of the hand-moulds, which is attached to a conveyor system for the dipping of gloves.

Property stocks may get excited after Knight Frank, a global property consultancy, said cooling measures introduced in Budget 2014 last week will not bring down prices of residential properties in the country.

Speaking to the media today, Knight Frank Malaysia managing director Sarkunan Subramaniam said the measures such as a higher 30% real property gain tax (RPGT) will not see house prices coming down.

“Residential property prices in Malaysia will maintain. We will have lesser transactions but we do not see prices coming down,” said Sarkunan.

“It may slow down the appreciation of house prices but it will not bring down prices.”

Sarkunan said the cooling measures would stave off speculators but will not deter genuine investors and second homebuyers from buying. Its effectiveness will only be seen over time, he added.

Plantation companies may stir as Malaysian palm oil futures continued to rise today, hitting their highest level in eight months, supported by technical trading and expectations that current wet weather may hit oil palm production in the coming months.

By market close, the benchmark January contract on the Bursa Malaysia Derivatives Exchange ended up 1.8 percent at 2,543 ringgit ($810) per tonne.

Both Malaysia and Indonesia, which account for about 90 percent of the world's palm oil production, are now entering their monsoon weather season.

Technicals showed Malaysian palm oil has a good chance of rising towards 2,630 ringgit, once it had broken above a resistance at 2,544 ringgit per tonne, said Reuters market analyst Wang Tao.

Concurrently, U.S. soyoil contract for December rose 1.3 percent in early trades. The most-active May soybean oil contract on the Dalian Commodities Exchange rose 2 percent, Reuters reported.



Written by Ho Wah Foon of theedgemalaysia.com