Stocks to watch: Infra stocks, Mamee, autos, MAA

KUALA LUMPUR: Stocks could ride on the positive local news flow from the two-day Invest Malaysia conference starting Tuesday, April 12 while focus could also be on selected Sarawak-linked stocks in the run-up to the April 16 elections.

Analysts expect the government might offer a progress report and reaffirm its commitment to achieve the long-term goals under the Economic Transformation Programme.

They are expecting the government to announce more high-impact projects to generate economic activity. The sectors identified as key growth engines include oil & gas and services and among their favourites are KNM and Dayang Enterprise.

Meanwhile, JP Morgan Asia Pacific Equity Research said Malaysia was under-owned and an oil price play. It said Malaysia was the only economy that is a net beneficiary of higher oil prices, as a net exporter of oil and oil seeds.

“In our view, the market should remain resilient as it is under-owned, with average allocations of emerging markets portfolio managers well below a MSCI neutral weight of 2.9%. We like the broader ETP theme which is gradually gaining traction, whose success will have a bearing on the upcoming general election, in our view,” it said.

Other analysts are expecting an update on the Greater Kuala Lumpur / Klang Valley catalyst, one of 12 National Key Economic Areas (NKEAs) under the ETP.

They said specifically, a progress report and timetable for the massive MRT project may be revealed. They CONSTRUCTION [] proxies are Gamuda and MMC while YTL Land is a MRT-related property play.

Shares of MAMEE-DOUBLE DECKER (M) BHD are expected to surge when they resume trading on Monday. Its major shareholders – who collectively hold 79.1% -- have proposed a selective capital repayment (SCR) of RM4.39 a share to the remaining shareholders under a corporate exercise to take it private.

At RM4.39, this was a premium of 79 sen or 21.94% above the last traded price of RM3.60 on Wednesday, April 6.

Perusahaan Otomobil Kedua Sdn Bhd (Perodua) retained its top position in car sales in the first quarter ended March 31, 2011 (1Q2011) with 45,700 units and a market share of 29% -- underpinned by robust sales of the popular Myvi.

However, Perodua managing director Datuk Aminar Rashid Salleh said that “moving forward, the 2Q and 3Q will be challenging, as our operations are impacted by the earthquake and tsunami which hit Japan on March 11, 2011”.

The Edge weekly reports that while the full impact of the disaster on Malaysian auto assemblers is yet to be seen, it has amplified sector risks. Auto delivery could be affected from 3Q if component supply problems continue for a prolonged period.

Stocks related to the Melewar group could see extended trading activities through MAA Holdings has pulled back slightly after the recent week-long price surge.

Last Friday, April 8 shares of Melewar Industrial Group and MYCRON STEEL BHD surged to multi-year highs in active trade, riding on the recent price jump in MAA HOLDINGS BHD [].

Melewar rose 22.5 sen to RM1.13 with 35.5 million shares done, and Mycron was up 15 sen to 81 sen. MAA fell four sen to RM1.34 with 84.1 million shares traded.

MAA Holdings is the parent company of the MAA group of companies and is controlled by the Melewar Group. Khyra Legacy Bhd owns 38.86% of Melewar Industrial and 34.75% of MAA Holdings and 55.57% of Mycron.

MAA Holdings shares have surged from last Friday, April 1’s close of RM1.03 despite a denial earlier this week over the sale of a 70% stake in Malaysian Assurance Alliance Bhd (MAAB) to Zurich Insurance Co. Ltd for an estimated RM1.2 billion.

On Wednesday, MAA denied the sale but said discussions were still ongoing.