KUALA LUMPUR: Blue chips closed at 941.38, highest since October last year, as investors were positive about the new Cabinet line-up while sentiment was also reinforced by the recovery in the US and Asian markets. For the week, the KLCI rose 34.37 points and the market capitalization rose RM31.6 billion to end the week at RM716.43 billion, the highest in six months also. The firm crude palm oil (CPO) futures also boosted plantation stocks. Analysts said the new Cabinet line-up resulted in changes to the Energy, Water and Communications portfolio as well as Works, Agriculture, Domestic and International Trade and Finance Ministries. However, they said the changes may cause some concern especially with regards to the water, power and telecom sectors. But overall, they believed the new administration would likely have a “renewed” sense of urgency to push forward, and in particular relook at underperforming government-linked companies. Stocks to watch this week include Esso Malaysia, Axiata, Malayan Banking Bhd-OR, Tenaga Nasional Bank and Public Bank Bhd. Esso Malaysia has proposed final gross dividend of 12 sen per share to be paid on June 22, 2009. The entitlement to Axiata’s renounceable rights issue of about 4.69 billion new shares at RM1.12 per rights shares will start trading on April 15 and cease quotation on April 22. As for Maybank-OR, the entitlement to the rights, will cease trading on April 14. Maybank’s corporate exercise involved the renounceable rights issue of 2.12 billion new rights shares at an issue price of RM2.74. Tenaga’s second quarter results are expected to be released on April 15. Analysts said excluding forex losses of about RM140 million, they expect 2Q core net profit to stay relatively flat quarter-on-quarter (1QFY09: RM494 million; 2QFY08: RM772 million), which would bring 1H core net profit up to around 43%-45% and 45%-47% of its and consensus FY09 net profit estimates respectively. CIMB Equities Research expects Public Bank to release its earnings for the first quarter ended March 31 early this week. It estimated the bank would report net profit of RM570 million to RM580 million for the quarter, on par with the level a year ago if there was an exclusion of 1Q08’s one-off goodwill payment of RM200 million. “Although annualised 1Q09 net profit is likely to be 2%-7% short of our full-year forecast and market consensus, we would consider it to be in line because earnings in the remaining quarters will be supported by the continuous downward repricing of fixed deposit (FD) rates and expansion of its loan base,” it added.
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