KUALA LUMPUR:  Blue chips on Bursa Malaysia managed to hold on to most of their gains on May 12, despite intermittent profit taking.

However, the breadth of the market has shown some weakness over the past two days as decliners are leading advancing counters, mainly due to selling on lower liners and penny stocks which are without fresh corporate news. Volume had reduced from recent highs.

The KLCI closed 2.48 points lower at 1,023.02 on May 12. At the current level, the KLCI is trading at a price-to-earnings of 14.65 times.

Plantation stocks will continue to attract trading interest due to the firm crude palm oil prices and the onset of the dry season could impact productivity, which in turn could push prices higher. CPO futures for third month delivery rose RM65 to RM2,725 per tonne, the highest since Aug 22 last year.

The rise in crude oil price would also attract trading interest again in oil and gas-related and also support services. Oil rose to a six-month high of US$59.68 on Nymex last night on speculation an economic recovery would reduce the stockpile of fuel.

Investors would also look at overseas markets for some leads on the bottoming out of their economies.

But at Bursa Malaysia, most of the earnings have yet to be reported while Bank Negara will announce the first quarter GDP data no later than May 27.

Stocks to watch would include Scomi Engineering which secured a massive project to build the monorail project in Bangalore, South India. Scomi Engineering has teamed up with another Indian company for the project. For more read The Edge FinancialDaily.

Sime Darby should attract interest after announcing its RM40 million investment in its oil palm genome project and it is expected to invest another RM100 million over the next two to three years.

It expects the new “super tree” would double the yield per hectare. It expected to replant all its oil palm estates with the new trees within 30 years.

With corporate earnings underway, stocks to watch include EON Capital, KLCC Property  and UOA Real Estate Investment Trust (REIT).

EON Capital posted net profit of RM79.56 million in the first quarter ended March 31 from RM76.32 million a year ago.

As for KLCCP, it posted RM362.5 million net profit in the fourth quarter ended March 31 from RM264.7 million a year ago. It had proposes 5.5 sen dividend tax exempt.

UOA Real Estate Investment Trust (REIT) saw its net profit jump 35% to RM7.5 million in the 1Q versus a year earlier, on the back of a 21.91% rise in revenue to RM11.46 million as gross rental improved.

Supermax expects overall sales to jump by at least 3% to 5% this year as demand for hygiene-control items increases following the H1N1 flu outbreak.