KUALA LUMPUR: A positive US labour market report and improved corporate earnings could be the catalysts for the key Asian markets including Bursa Malaysia on Monday, April 5.
Reuters reported US non-farm payrolls report showed the economy added 162,000 jobs in March, the fastest pace of growth in three years.
Analysts said the biggest increase in employment in three years is the strongest indication the deepest U.S. recession since the 1930s has ended.
At Bursa Malaysia, blue chips which are expected to continue their upwards trend would be banking stocks including CIMB, plantations as crude palm oil prices extend their gains and also oil and gas (O&G) related companies as light crude oil holds steady about the US$80 mark.
The stronger ringgit would also provide an impetus for foreign funds to buy blue chips as rising prices and a stronger ringgit would provide more upside.
Reports showed the ringgit gained for a third day on Friday while February exports climbed 18% on-year, but at a slower pace compared with January, where exports rose 37%, the most in more than 11 years.
The ringgit advanced 1.7% this week to 3.2490 to the US dollar and reached 3.2437, the highest since July 2008. The reports said the ringgit may strengthen by about 4.8 percent to 3.10 by year-end.
Stocks to watch on Monday include the call warrants over Ann Joo Resources Bhd, (ANNJOO-CW), Berjaya Corp Bhd (BJCORP-CW), Wah Seong Corp Bhd (WASEONG-CW) and Genting Singapore plc (GENS-CW) which are issued by AmInvestment Bank Bhd.
The investment banks said the CWs focus on thematic plays and on stocks well supported by AmResearch calls. These new call warrants are targeted for short term traders who want a leveraged bet on the underlying stocks. All four have an issue price of 15-16 sen and a nine-month tenure.
AmInvestment said Genting Singapore operates Resorts World Singapore and is also the largest casino operator in the UK. The market has been bearish on Genting Singapore recently: its current share price of about 90 Singapore cents is significantly off its January high of S$1.32. There are four Genting Singapore CWs listed on Bursa with exercise prices greater than S$1.
These warrants were issued when the share price was stronger and are now out-of-the-money. In contrast, AmInvestment Bank's Genting Singapore CWs has an exercise price of 90 cents and will enable investors to profit from share upside from these lower levels.
Meanwhile, EON Capital Bhd’s board of directors will table to its shareholders Hong Leong Bank Bhd’s proposal to acquire the former's assets and liabilities for RM5.06 billion cash or RM7.30 per share while also describing the offer as "credible".
EONCap had written to Hong Leong Bank to confirm that it agrees to implement the processes outlined in the offer.
The firm CPO prices, which are expected to rise in the medium-term, are expected to continue to generate interest in plantations including Kuala Lumpur Kepong, IOI Corp and PPB Group Bhd, which has exposure via Singapore-listed Wilmar.
Smaller plantations may also benefit if CPO prices continue to show an upward trend.
Most O&G counters have been lagging behind the banks and plantation stocks in the recent run-up and with the crude oil firmly above the US$80 per barrel, this could spark more interest in the O&G players. Stocks to watch include Kenanca Petroleum, Dialog Group, Wah Seong Corp Bhd.