Stocks to watch: Gamuda, Boustead, GDex, TDM

KUALA LUMPUR (Dec 17): Regional markets including Bursa Malaysia are expected to see cautious trade in the week ahead, starting Dec 19 with volume continuing to thin during the holiday season while investors’ sentiment is expected to be dampened by the eurozone debt crisis.

On Wall Street, a rally in stocks fizzled, leaving major indexes with modest gains on Friday, as Wall Street was torn between hope that U.S. economic data signals better times ahead and fear Europe's debt crisis will engulf world economies, Reuters reported.

The Dow Jones industrial average fell 2.42 points, or 0.02%, at 11,866.39. The Standard & Poor's 500 Index was up 3.91 points, or 0.32%, at 1,219.66. The Nasdaq Composite Index was up 14.32 points, or 0.56%, at 2,555.33.

Meanwhile, credit rating agency Fitch told euro zone countries it believed a comprehensive solution to their debt crisis was beyond reach, putting six euro zone economies including Italy on watch for potential downgrades in the near future,

At Bursa Malaysia, stocks to watch include GAMUDA BHD [], BOUSTEAD HOLDINGS BHD [], GD EXPRESS CARRIER BHD [] (GDex), TDM BHD [] and Top Glove Corp Bhd.

Gamuda is upbeat about the outlook for its prospects for the remaining financial year after its earnings climbed 49.5% to RM132.32 million in the first quarter ended Oct 31, 2011, from RM88.53 million a year ago due to higher contributions from all divisions.

The infrastructure-based company expected a stronger performance this year supported by its ongoing CONSTRUCTION [] projects, continued strong property sales and steady earnings from the water and expressway divisions.

Boustead’s subsidiary Boustead Naval Shipyard Sdn. Bhd has received the letter of award from the Ministry of Defence (Mindef) to supply six patrol vessels with a contract ceiling of RM9 billion.

The Edge weekly reported in its latest issue that GDex is bolstering its position to fight competition. The local express delivery provider is drawing up strategic plans on multiple fronts to deal with the increasing competition and gloomy economic outlook for 2012.

The Edge also reported that the rehabilitation of estates is paying off for TDM. It has been an exceptional year for the PLANTATION [] company as its net profit for the first nine months of FY2011 already exceeds that of any full year in the past.

Top Glove’s earnings fell 12.81% to RM31.43 million in the first quarter ended Nov 30, 2011 from the RM6.05 million a year ago impacted by higher raw material prices and the oversupply in the industry

However, the world’s largest glove maker performed better when compared with the preceding quarter in terms of revenue and earnings. It revenue rose 2.4% to RM554.84 million from RM541.84 million in the preceding quarter, while net profit increased 21.5% to RM32.46 million from RM26.82 million.

Commenting on the results, CIMB Equities Research said Top Glove’s 20.5% on -quarter rise in net profit, though strong, was expected.

“It came primarily from cost deflation as demand remained weak and industry overcapacity is still an issue. At 23.2% of our forecast and 20.2% of consensus, 1Q results were broadly in line as we expect stronger quarters ahead. We maintain our Underperform rating and target price, still based on 13.05 times price-to-earnings,” it said.