Stocks to watch: Ramunia, BCorp, Bintai Kinden, AFG

Sunday, July 10, 2011

KUALA LUMPUR: Stocks on Bursa Malaysia may see some mild selling pressure on Monday, July 11 following the cautious close Wall Street after a weak jobs report dashed hopes the US economy was emerging from a soft patch.

Hence, investors may have to hold back their hopes that the FBM KLCI can cross the psychological important 1,600 level this week.

Late fund buying on selected stocks pushed the index to a fresh historic close of 1,594.74. But the broader market displayed some caution due to the Bersih 2.0 rally on Saturday.

However, OSK Research director Chris Eng said the Malaysian market will easily recover in half of week despite initial concerns about the Bersih rally.

“The remainder of July should be positive,” he said, adding sentiment would be underpinned by the economic reforms and the strategic reform initiatives,” he said.

On Wall Street, the sell-off was broad and halted an eight-day streak for the Nasdaq, though stocks ended off their lows. U.S. employers added only 18,000 workers in June, short of even the lowest forecast, jolting buyers who had rushed into the market after some encouraging labour-market figures earlier in the week.

The S&P 500 components are expected to show earnings growth of an average of 7.3 percent in the second quarter, but estimates have been lowered in the last 30 days.

The Dow Jones industrial average slipped 62.29 points, or 0.49%, to 12,657.20 at the close. The Standard & Poor's 500 Index shed 9.42 points, or 0.70%, to 1,343.80. The Nasdaq Composite Index dropped 12.85 points, or 0.45%, to 2,859.81.

At Bursa Malaysia, stocks to watch include RAMUNIA HOLDINGS BHD [], BERJAYA CORPORATION BHD [], Bintai Kinden Corp Bhd and ALLIANCE FINANCIAL GROUP BHD [].

Ramunia is buying a floating, storage and offloading (FSO) vessel for US$82.5 million (RM248.37 million) cash. The acquisition would be financed by bank borrowings of RM201.3 million and the remainder via internally generated funds

Berjaya Corporation aborted the proposals including a special dividend after it decided to go ahead and privatise its Hong Kong-listed Cosway Corp Ltd (CCL), after listing it about two years ago.

The corporate exercise then had included the issuance restricted non-renounceable offer for sale by CCL of HK$491.56 million loan stocks to BCorp shareholders.

Bintai Kinden and Biz Investment Pte. Ltd have proposed a takeover of Lereno Bio-Chem Ltd, which is listed on the Singapore Exchange’s Catalist Board in a deal valued at RM214.84 million.

Bintai Kinden and Biz Investment would sell their 100% stake in Bintai Kindenko Pte Ltd (BKPL), representing 8.5 million shares, for RM214.84 million to be satisfied by the allotment and issuance of new securities in Lereno.

Bintai Kinden would dispose of its 69.82% stake for RM150,000 and Biz Investment of its 30.18% for RM64.84 million.

AFG shares fell last Friday as investors were disappointed that no deal had yet firmed up about Temasek Holdings Pte Ltd and Langkah Bahagia Sdn Bhd disposing of their combined 30% stake in AFG.

Market talk was that Temasek might want to dispose of its stake in AFG after selling its stakes in two of China’s biggest banks.


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