Stocks to watch Dijaya, Ivory, Kimlun, KPJ, oil and gas-related counters

KUALA LUMPUR (Nov 12): The FBM KLCI is expected to trend moderately higher on Monday, Nov 14 in line with the positive close at Wall Street last Friday.

Also, the statement by Prime Minister Datuk Seri Najib Tun Razak on Nov 11 that the general election would not be held this year put an end to weeks of speculation, and created what some analysts have described as offering some clarity to a nervy local market.

US stocks rose on Friday, ending higher for the week after the Italian Senate's approval of economic reforms gave investors some relief from worries about the euro zone's debt crisis.

The Dow Jones industrial average was up 2.19% to 12,153.68; the Standard & Poor's 500 Index rose 1.95% to 1,263.85, while the Nasdaq Composite Index added 2.04% to 2,678.75.

Affin Investment Bank Bhd head of retail research Dr Mohd Nazri Khan said Najib’s statement was to be taken as positive for the market, as it provides for more clarity and less volatility.

“Sometimes election can heighten market fluctuation as was seen in the run-up to the Sarawak state election in April this year,” he said.

Meanwhile, MIDF Research head Zulkifli Hamzah said the market was expected to remain edgy next week, on developments in Europe, especially pertaining to the Italian government’s bond auction on Monday.

Volatility had spiked up recently and the consensus was that global equity markets remain vulnerable to sharp selloff, he said.

He said Malaysia’s 3Q11 GDP growth, which was slated to be unveiled on Nov 18 was not expected to be a game-changing announcement.

“Our house view is that growth may hit 5% year-on-year, which would be keeping pace with regional economies,” he said.

Zulkifli said the local equity market was currently in a period of uneasy equilibrium, but added that foreign investors appear to be keeping faith in the Malaysian market and had been gradually accumulating since early October.

“There were net buyers again this week. Yet, local investors are circumspect of the fact that remains a large overhang of foreign liquidity in the system that can decide to eject overnight,” he said.

Among the stocks that could be in focus on Monday are DIJAYA CORPORATION BHD [], Ivory PROPERTIES [] Group Bhd, Kimlun Corporation Bhd, KPJ HEALTHCARE BHD [] and oil and gas-related counters.

Dijaya and Ivory inked a joint venture agreement to develop mixed residential and commercial properties in Penang with a gross development value of RM10 billion.

The two companies said the development will be completed over the next eight years and would comprise of residential, shopping mall, hotel, office suites, office towers, retail spaces and an open mall with a boulevard.

CONSTRUCTION [] of the first phase is scheduled to begin next year, they said last Friday.

Kimlun secured a contract worth RM68 million to build a service apartment in Iskandar Malaysia in Johor.

It said last week that its wholly-owned subsidiary Kimlun Sdn Bhd had accepted the letter of award for the contract from Grand Action Sdn Bhd.

KPJ is buying four plots of land in the district of Klang, Selangor for RM23.76 million cash as part of its plans to build a specialist hospital.

KPJ on Friday said the four plots of land were situated within a mixed development undertaken by Sazean known as “Sazean Business Park”, and that Sazean would make an application to convert the category of the lands it was buying from agricultural to building/commercial.

Meanwhile, Petroliam Nasional Bhd and Shell Malaysia last week inked heads of agreement (HOA) for new enhanced oil recovery projects offshore Sabah and Sarawak, a development which may boost the oil and gas support services-related counters.