KUALA LUMPUR: Plantations will continue to attract investors’ interest on May 6 with the crude palm oil futures above RM2,500 despite the slight pullback due to the halt in the rally of light crude oil. CPO third month futures fell RM71 to RM2,570 per tonne while oil slipped to US$54.
As for the equities market, profit taking may pick up as investors lock in gains but the market sentiment is expected to remain firm with stronger participation from the institutional and retail investors.
Analysts said as the KL Composite Index geared up for further gains, short-term volatility might increase as it heads closer to the immediate resistance level of 1,050. Higher resistance level is only seen near the 1,150 level.
They cautioned short-term investors to be cautious if the daily volume shrinks to below 1.0 billion shares and that the KLCI dips to below the 980 support level.
Capital Dynamics states the current stock market rally seems sustainable as the global economy is heading towards a V-shape recovery.
Group managing director Tan Teng Boo has said the current rally was not a short-lived bear market rally and it would be sustained by the spending of cash-rich institutions and fund managers.
Stocks to watch include Axiata Group, Kencana Petroleum, Country Heights Holdings (CHHB), EON Capital, Astral Asia.
Axiata Group’s offer of 4.69 billion rights shares to its existing shareholders recorded 99.3 % subscription rate.
On Feb 26, Axiata announced plans to raise RM5.25 billion via a fully renounceable rights issue with the primary objective of reducing its overall debt levels. The right shares will trade on May 11.
Kencana’s unit Kencana HL Sdn Bhd has secured a contract from Murphy Sarawak Oil Co. Ltd to fabricate offshore platform facilities off Bintulu, Sarawak. The total contract value is about RM64 million.
CHHB is seeking bondholders nod to transfer properties valued at RM16.23 million in lieu of payment of interest.
CHHB had sought to defer interest payment for the RM150 million 3% to 8% redeemable secured bonds 1996/2009. It has secured borrowings totaling RM311.78 million and unsecured borrowing of RM35.93 million as at Dec 31, 2008.
EON Capital’s unit – EON Bank - and Koperasi MCIS, Atalantik and other minority shareholders of MCIS Zurich Insurance have ceased negotiations over the proposed acquisition of up to 40% of MCIS Zurich Insurance.
Astral Asia posted net loss of RM182,000 in the first quarter ended March 31,2009 compared with a net profit of RM1.87 million a year ago. Revenue fell to RM9.14 million from RM16.62 million. Revenue from plantations fell 37% to RM5.6 million.
The lower revenue was due to lower crude palm oil prices which had decreased by 43.2% to RM1,938 per tonne from RM3,412 a year ago.
The SC had given SAAG until July 9 to undertake its proposed renounceable rights issue of up to 813.22 million new 10 sen shares which would be used to repay its bank borrowings.
As for Gefung Holdings, the SC rejected its second application for an extension to complete its private placement. The application was for another six months to implement the private placement of up to 15.48 million new RM1 shares or 10% of its paid-up.