Stocks to watch: IJM, Mitrajaya, K.Euro, Sunway, Sime Darby

Sunday, April 3, 2011

KUALA LUMPUR: CONSTRUCTION stocks would be in focus in the week ahead, starting Monday, April 4 as the government rolls out more projects under the Economic Transformation Programme (ETP).

Prime Minister Datuk Seri Najib Razak has given the assurance that the government will announce a slew of new major and exciting projects in the next few months, providing traction in implementing effectively the ETP.

Meanwhile, analysts expect external newsflow to impact investors’ sentiment in the second quarter,

“Nevertheless, beyond the short-term volatility, we believe there is still room for the market to move higher in the 2H as investors’ worries are somewhat exaggerated and the global economic recovery will unlikely be derailed,” said RHB Research Institute.

It said the external headwinds that dragged down global equities will likely dissipate and transform into potential catalysts for the market to come back in the second half.

“These include: 1) Worst of the Japanese disaster over with reconstruction plans being put in place; 2) Political upheavals in the Middle-east and North Africa subside and oil price normalises; 3) Receding threat of accelerated inflation for Emerging Asia as weather conditions improve and food prices ease; and 4) Domestically, implementation of ETP gaining speed with cheers from general election news flow from time to time,” RHB Research Institute said.

Meanwhile, interest in biogas is expected to pick up with power giant TENAGA NASIONAL BHD signing an MoU on Monday with Sime Darby PLANTATION [] and Mitsui & Co., Ltd to study the potential of using biogas to generate power at Sime Darby’s oil palm estates.

The study, which will see a collaboration of facilities, skills-set and knowledge based on each company’s area of expertise, intends to take Sime Darby Plantation’s sustainability efforts to new heights.

Other stocks to watch would be IJM Corp, Mitrajaya Holdings, Kumpulan Europlus and Sunway Holdings following fresh corporate news.

IJM Corp Bhd’s unit New Pantai Expressway Sdn Bhd (NPE) has received the go-ahead from the Public Private Partnership Unit of the Prime Minister’s Department for the proposed New Pantai elevated highway extension to Ampang-Kuala Lumpur.

Mitrajaya’s unit has accepted the RM90.78 million contract for the extension project of the Ampang light rail transit (LRT) line in Kinrara.

Kumpulan Europlus said its 64.2% owned West Coast Expressway Sdn Bhd has received a letter from the Public Private Partnership Unit approving in-principle the proposed construction of West Coast Expressway (Taiping-Banting).

The project is to be privatised on a build-operate-transfer basis and the negotiation is expected to be completed within six months from the date of the letter.

Sunway Holdings has accepted a RM22.56 million contract from Singapore-based Sim Lian Group Ltd’s subsidiary to undertake the substructure of three blocks along Jalan Tun Razak here.

Its unit Sunway Geotechnics (M) Sdn Bhd accepted the letter of award for the contract from Sim Lian’s subsidiary Perumahan SLG Central Sdn Bhd for the piling of three blocks of commercial building.

SAM Engineering & Equipment (M) Bhd (formerly LKT INDUSTRIAL BHD) is acquiring the assets and manufacturing business of engine casing, a division of Singapore Aerospace Manufacturing Pte Ltd for RM135 million in cash and loan stocks. The acquisition was part of its long-term strategy to grow the business and diversify the customer base beyond the current backend business.

The proposed acquisition would interest investors after its major shareholder Singapore Precision Engineering Ltd (SPE) intends to retain the listing status of SAM Engineering and it would undertake a proposed rectification plan about its shareholding.


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