KUALA LUMPUR: Proton and DRB-Hicom are the stocks to watch on April 21 after the surge in share price and expected corporate developments involving their car distribution.
The stocks, especially Proton, could see sustained increase as the government states its intention that the national car market seek out a strategic partner. Of course, the initial success of its MPV, Exora, launched last week will help generate interest in Proton.
Despite that the KLCI had notched its eighth straight day of gains, volume could falter as it is T+3 after the heavy volume of shares traded on April 16, where nearly two billion units were transacted, says Jupiter Research head Pong Teng Siew.
Of course, external factors including Wall Street's performance would dictate how the local bourse would perform. US stocks slid more than 3% on April 20 after weak results from Bank of America reignited concerns over the state of the banking industry and the economy,
Axiata-OR, which started trading on April 15, could see heavy transaction volumes as its last trading day is on April 21. The entitlement to the rights and also the mother share had been actively traded.
Plantations would also see strong interest, albeit some profit taking, as crude palm oil futures rose RM11 to RM2,446. Some foreign research houses had reduced their rating for IOI Corp and KL Kepong as their deemed the CPO rally as unsustainable.
In another corporate development, BIMB Holdings Bhd, the parent of Bank Islam Malaysia, entered into a conditional share subscription agreement with Lembaga Tabung Haji (LTH) to formalise the understanding between the two with respect to BIMB’s restricted issue of new shares to LTH.
Meanwhile, Selangor water stocks could again see interest after Menteri Besar Tan Sri Abdul Khalid Ibrahim said the Selangor government hopes to discuss the restructuring of the water industry with the Energy, Green Technology and Water Ministry this week.
CIMB Equities Research said it was maintaining a Trading Buy call on the water sector due to the importance of speedy progress for the water transfer project, which is another key catalyst for the sector apart from the restructuring and/or acquisition plans in Selangor.
“We maintain our Trading Buy on Puncak Niaga (RM3.40 target price based on a 30% discount to discounted cashflow value), backed by a hypothetical fair acquisition price of RM3.29 which is its book value.
“IJM Corp remains a potential winner for the water transfer tunnel project while Gamuda could return the proceeds from the sale of Splash to shareholders in the form of dividends. We have a Trading Buy recommendation on both stocks,” it said.