Stocks to watch: SP Setia, Dialog, BHIC, Dataprep

KUALA LUMPUR: Markets would continue to be cautious in the week ahead, starting Monday, Aug 15, after the volatile week which saw RM42.18 billion erased from the local market.

The FBM KLCI is down 40.78 points or 2.67% from 1,524.43 on Aug 5 to close at 1,483.67 on Friday, Aug 12. However, the FBM 100 sustained greater losses, declining 304.17 points or 2.96% from 10,267.75 to 9,963.58.

Selling pressure on Bursa Malaysia eased on Friday but buying was still cautious due to external worries from the US and Europe. Analysts said investors were not ready to go on bargain hunting for battered stocks, but there was some evidence of local fund support for the 30-stock KLCI.

On Wall Street, the Dow Jones Industrial Average had on Friday closed 125.71 points, or 1.13% higher, to 11,269.02. The Standard & Poor's 500 Index added 6.17 points, or 0.53%, to 1,178.81. The Nasdaq Composite Index rose 15.30 points, or 0.61%, to 2,507.98.

According to Reuters, it was the first two-day rally on the broader S&P 500 since July 21-22. For the week, the Dow fell 1.5% and the Nasdaq lost 1%. The S&P 500 fell on 11 of the past 15 days, dropping 12.4% in three weeks.

At Bursa Malaysia, stocks to watch include SP SETIA BHD [], DIALOG GROUP BHD [], BOUSTEAD HEAVY INDUSTRIES CORP []oration Bhd (BHIC), DATAPREP HOLDINGS BHD [] and Sarawak Cable Bhd.

SP Setia Bhd plans to undertake a mixed residential township development project in Ulu Langat with an estimated gross development value of RM3.5 billion.

It said the project would be carried out on 1,010.5 acres of freehold land which it is purchasing from Ban Guan Hin Realty Sdn Bhd for RM330.13 million or RM7.50 per square foot.

Dialog Group Bhd’s earnings rose 45.2% to RM44.87 million in the fourth quarter ended June 30 from RM30.89 million a year ago, boosted by its engineering and CONSTRUCTION [] and also plant maintenance services.

Revenue increased by 37.8% to RM374.88million from RM271.95 million. Earnings per share were 2.28 sen compared with 1.56 sen. It proposed a final single tier dividend of 18% or 1.8 sen per 10 sen share.

For the FY ended June 30, its earnings rose 24.2% to RM152.29 million from RM118.29 million while revenue increased by 6% to RM1.208 billion from RM1.139 billion. Its cash pile increased to RM274.32 million as at June 30 fromRM258.07 million a year ago.

BHIC’s net profit for the second quarter ended June 30, 2011 fell to RM1.39 million from RM15.8 million earlier due to escalation in costs to complete its current projects.

Its revenue for the quarter rose to RM120.76 million from RM104.47 million. Earnings per share were 0.56 sen while net assets per share was RM1.71.

For the six months ended June 30, BHIC’s net profit fell to RM11.47 million from RM31.47 million, on the back of revenue RM237.45 million.

The Edge weekly highlights Dataprep which is reinventing its business model. Newly-appointed CEO Ahmad Rizan Ibrahim fully expects the company to be back in the black this year, premised on its healthy order book of over RM100 million in projects from government-linked entities and the fact that it has paid off most of its debts and has some RM31 million in cash

The weekly also reported that electricity jobs are expected to boost Sarawak Cable Bhd.

The power cable maker's shares could be worth watching, considering its improving earnings prospects with the Sarawak government spending more on infrastructure projects, including electricity transmission.