Technical | Fundamental Analysis Discussion Stocks Listed In Bursa

Thursday, April 1, 2010

KLCI May Fall, Oversea, Berjaya, General Corp

DJ MARKET TALK: KLCI May Fall, Led By Property Stks; 1313 Support

0044 GMT [Dow Jones] KLCI may fall, tracking declines in U.S. stocks overnight, while profit-taking expected following 7-session winning streak; "The index has tried but failed over the the past three days to crack the 1325 barrier. With the weaker U.S. performance, investors will probably want to take some money off the table," dealer says; adds profit-taking likely to be on property stocks like UEM Land (5148.KU), which were among the biggest gainers this week. TA Research pegs immediate support at Monday's low of 1313, with resistance at 1325. KLCI +0.1% at 1320.57 yesterday

DJ MARKET TALK: General Corp May Rise On 4Q Turnaround
0039 GMT [Dow Jones] Property and construction firm General Corp (3166.KU) may rise to test recent high of MYR1.42, says dealer with local brokerage; this after company posts 4Q profit of MYR25.4 million vs loss of MYR10.2 million a year earlier; takes FY10 (ended Jan. 31)'s net profit to MYR85.4 million vs MYR14.9 million in FY09. Company attributes improved earnings to construction projects such as Hard Rock Hotel at Sentosa, Meritus Mandarin Hotel at Orchard Road, commencement of new project at Serangoon Central Mall in Singapore; expects to focus on cost cutting strategies and operational efficiency to sustain earnings. "The earnings are better than expected and will give a boost to the stock price," says dealer; adds higher final dividend of 3 sen/share vs 2 sen/share a year earlier likely to support interest. Stock closed down 2.9% at MYR1.34.

DJ MARKET TALK: Berjaya Corp May Fall On 3Q Loss Of MYR155.1m

0034 GMT [Dow Jones] Berjaya Corp (3395.KU) may fall to MYR1.63 (Tuesday's intraday low) vs yesterday's close at MYR1.75 (+1.7%) says dealer; this after conglomerate posts fiscal 3Q (to January 31) loss of MYR155.1 million vs net profit of MYR17.9 million year ago; 9-month loss of MYR61.4 million vs net profit of MYR61.5 million previously. Company says poor results mainly due to one-off loss arising from dilution of interest in subsidiary companies. Also, weaker operational profits due to seasonal factors (timing of Lunar New Year in Feb this year vs January in 2009) affecting gaming sector, weaker earnings from hotels, resorts. Dealer says although most of the 3Q loss arising from non-cash items, some investors will likely sell stock on news; still, says losses may be contained as "there's a silver lining with property, hotels and direct selling businesses likely to show better results going forward."

DJ MARKET TALK: Oversea May Rise 10-20% On ACE Market Debut

0009 GMT [Dow Jones] NEW LISTING: Oversea Enterprise (0153.KU) may rise 10-20% vs IPO price of MYR0.23 on debut on Bursa's ACE Market, says dealer with local brokerage. "The restaurant operator's public tranche of 12 million IPO shares was oversubscribed by 10.3 times, suggesting that there is interest in the stock," says dealer. But OSK Research's analyst Law Mei Chi says Oversea's offer price of MYR0.23, which values the company at 7.8X FY10 EPS, is fair given that its earnings are relatively less vs peers which are trading in the range of 9-11X P/E. Oversea has a well established presence with over 30 years of culinary expertise; has consistent track record with revenue registering a stable growth at a 3-year CAGR of 3.4%, while pretax profit up 20.1% over the same period, largely driven by better cost management via centralized procurement over the years. Projects company to post net profit of MYR7.2 million in FY10, MYR8.7 million in FY11.

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