Friday 29 Mar 2024
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KUALA LUMPUR: The run-up in commodities especially plantations and oil would help underpin the market sentiment on May 20 despite the weaker earnings report card so far, but the overnight decline on Wall Street could restrain risk appetite for equities.

The world's top policymakers have also been upbeat about the global economy in months and adding that it was stabilising, and it could start growing again as soon as late this year.

World Bank President Robert Zoellick, European Central Bank Vice-President Lucas Papademos and Australia's central bank governor Glenn Stevens reportedly said the global downturn was abating and growth could resume this year or next.

Sentiment was upbeat at Bursa Malaysia on May 19 after the technical correction the previous day, buoyed by the commodities rally.

Oil crossed the US$60 per barrel on concerns on tighter supply and hopes of a global economic recovery.

Crude palm oil futures for third-month delivery rise RM60 to RM2,630 on speculation of a contraction in the supply of soybeans.

Stocks to watch would include RHB Capital, Axiata Group, PPB, plantations, oil and gas-related counters and also steel manufacturers.

RHB Capital posted net profit of RM228.64 million compared with RM222.42 million a year ago, due to higher net interest income.

In the 4Q ended Dec 31, its pre-tax profit RM315.0 million, was up 20% from RM262.0 million in 4Q. The higher profit was mainly due to lower other operating expenses by RM59.6 million, lower allowance for losses on loans and financing by RM36.0 million.

Axiata Group posted net profit of RM63.89 million in 1Q, down 88.9% from the RM402.69 million a year ago. The lower earnings were due to the forex loss of RM216.2 million in 1Q compared with RM42.4 million foreign exchange gains a year ago.

PPB Group’s 1Q net profit fell 29% to RM271.83 million from RM383.1 million a year ago due to higher raw material costs incurred by the sugar refining and flour and milling divisions. Bulk of the profit or RM255 million came from its associate Wilmar International.

Harbour-Link Group has secured a RM10.95 million contract from Overseas Manufacturing (Johor) Sdn Bhd to build eight fuel oil storage tanks at Langsat Terminal (One) & Langsat CTF at the Port of Tanjung Langsat in Johor.

Steel counters including Kinsteel, Perwaja, Lion Corp, Ann Joo Resources and Southern Steel could see extended interest as investors pin their hopes of a recovery in steel prices as the second stimulus package gets underway and a global economic recovery.

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