Stocks to watch: Melati Ehsan, TSH, KPJ, MK Land

KUALA LUMPUR: Market sentiment is likely to cautious in the week ahead, starting Monday, May 23 following the weaker closing on Wall Street and worries about the contagion effect from Europe’s debt crisis.

In the latest development, credit ratings agency Standard & Poors cut its outlook for Italy to "negative" from "stable", citing weak outlook for growth and reduced prospects for slashing its debt mountain.

The downward revision, which raises the risk of a downgrade of Italy's sovereign rating, may heighten fears that contagion from Greece's and other European countries' debt crisis could be spreading to the euro zone's third-largest economy.

On Wall Street, US stocks fell on Friday, May 20 on euro-zone debt worries that could spill over into next week's trading with a bearish note, while retailers lost ground after a weak profit outlook from Gap.

The Dow Jones industrial average was down 93.28 points, or 0.74%, to end at 12,512.04. The Standard & Poor's 500 Index was down 10.33 points, or 0.77%, at 1,333.27. The Nasdaq Composite Index was down 19.99 points, or 0.71%, to close at 2,803.32.

For the week, the Dow was down 0.7%, the S&P 500 was down 0.3% and the Nasdaq was down 0.9%.

At Bursa Malaysia, stocks to watch include MELATI EHSAN HOLDINGS BHD [], TSH RESOURCES BHD [], KPJ HEALTHCARE BHD [], MK LAND HOLDINGS BHD [], CAN-ONE BHD [] and Kiaqn Joo Can Factory Bhd.

Melati Ehsan was awarded a RM148.63 million project from the Public Works Department to build a road stretching from Gua Musang in Kelantanf to Kampung Relong in Pahang.

Melati’s unit Pembinaan Kery Sdn Bhd accepted a letter of award from the PWD for the road CONSTRUCTION [] project which starts on June 15 this year until Dec 10, 2013.

TSH Resources has allocated RM100 million or more per year as PLANTATION [] development capital expenditure (capex) for new planting of oil palm trees, the bulk of which will in Kalimantan, Indonesia.

Bulk of the RM100 million capex would be for new planting in Kalimantan where it has about 58,000 ha of land which is still unplanted. The Indonesian operations, with the trees maturing by next year, would underpin TSH’s fresh fruit bunches output, productivity and revenue.

KPJ Healthcare reported a set of unimpressive earnings at RM27.51 million in the first quarter ended March 31, 2011 (1QFY2011) compared with RM27.24 million a year ago.

Revenue rose 16.4% to RM437.75 million from RM376.04 million a year ago while earnings per share were 5.09 sen compared with 5.19 sen. It declared 2.4 sen dividend per share.

However, KPJ expected the group’s performance would continue to improve in line with increasing demand, hospital capacity and activities.

MK Land Holdings Bhd’s net profit rose more than two-fold to RM7.22 million in the third quarter ended March 31 versus RM2.02 million a year ago, underpinned by its strong property performance. Revenue rose to RM165.15 million from RM94.74 million. Net asset per share was 87 sen.

Can-One Bhd has taken court action KIAN JOO CAN FACTORY BHD [] over the latter’s proposed one-for-two bonus issue and the proposed renounceable rights issue of 166.56 million 2five-year warrants 2011/2016 on the basis of one warrant for every four KJCF shares held after the proposed bonus.

Can-One claimed the proposals breached the rights of Can-One under the shares sales agreement dated March 13, 2009 and in breach of the Order of the Court of Appeal dated Aug 25, 2010 and the order of the Federal Court dated Feb 21, 2011.

The Edge weekly reports that crane manufacturer Handal Resources has been on an expansion trail since it was listed two years ago, and the strategy has borne fruit.

Meanwhile, hardware and building materials trading Chuan Huat said the group's recent strategic investment in Amalgamated Steel Industrial Steel Bhd is seen as an attempt to get its foot in the door of the steel pipe manufacturer.