KUALA LUMPUR: The market is expected to continue its consolidation phase, in line with the cautious US and European markets as recent developments cast a pall of gloom over global recovery hopes.
However, there is still a lot of liquidity in the market and fund managers see the market as still liquidity-driven. The spate of fresh corporate news could also underpin sentiment in the counters including Kurnia Setia, SapuraCrest, steel stocks and Premium Nutrients.
In the US, consumer prices edged up in May on higher gasoline prices, but fell over the past 12 months by the most since 1950, in a sign that inflation was no threat for now as the country fights a brutal recession.
The Labor Department said its Consumer Price Index edged up 0.1% month on month, after being flat in April, below market expectations for a 0.3% increase.
In Malaysia, the Consumer Price Index for May rose 2.4% year-on-year mainly due to higher food prices, exceeding economists' consensus of 2.2%.
Crude palm oil futures closed RM25 lower at RM2,375 while light crude oil eased below the US$70 level, slipping 97 cents to US$69.50 on slower economic growth.
At Bursa Malaysia, Kurnia Setia's major shareholders, which are taking the plantations company private, had revised upwards the offer price. The offer price was increased to RM2.70 per share and RM1.20 per warrant, from RM2.40 and 90 sen under the earlier offer.
The revised offer was a 14.2% increase for Kurnia Setia's entire business and undertaking, including its assets and liabilities. It would cost Kurnia Setia's major shareholders about RM308.47 million to acquire the company based on its June 5 shareholdings, compared to RM270 million previously.
UEM Land announced that Dubai's Damac Properties withdrew from its proposed RM396.44 million land deal. UEM Land said Damac had stated it was not agreeable to further extension of the extended approval period.
SapuraCrest Petroleum's net profit for the first quarter ended April 30, 2009 rose 26% to RM25.66 million from RM20.35 million a year ago attributable mainly to its drilling division. Group revenue increased to RM716.18 million from RM684.44 million a year ago.
Meanwhile, there is much cheer for the steel makers after the government announced several measures to further liberalise the iron and steel industry. This included the reduction in import duty and relaxation in the import requirements of both products into the country.
The import duty on long and flat steel products would be reduced gradually to 10% from Aug 1, 2009 and 5% from Jan 1, 2010 and for subsequent years.
In Premium Nutrients, the major shareholder, Koperasi Kebangsaan Permodalan Tanah Bhd (KKPT), has extended a mandatory take-over offer to acquire the remaining shares it does not own in the oil and fat products-related manufacturer.
KKPT is offering to buy the shares it does not own for 25 sen each to be settled in cash. This is at an 11.1% above the closing price of 22.5 sen.
Axiata Group CEO Datuk Seri Jamaludin Ibrahim expects the mobile phone operator to post foreign exchange (forex) gains in April and May, after its first-quarter (1Q) results were hit by forex losses.
Axiata proposed capital raising for its Indonesian unit, PT Excelcomindo Pratama Tk, was on track to be completed this year and could involve a rights issue.
Trading in Prime Utilities will be suspended from June 22 after it failed to submit a regularisation plan to the Securities Commission by the June 15 deadline.
Alliance Financial Group issued an amended report to its financial results ended March 31, 2009. It said the contracts not hedged and exposed to market risk at March 31 should be RM12.85 million and not RM239.44 million as stated earlier.