Tuesday, November 29, 2011

Stocks to watch 20111129: MCIL, Sime, MRCB, IJM, Kulim

KUALA LUMPUR (Nov 27): The market sentiment is expected to stay cautious when it reopens for trading on Tuesday, Nov 29 as external factors arising from the eurozone will continue to weigh.

According to Reuters, France and Germany are planning a quick new pact on budget discipline that might persuade the European Central Bank to ramp up its government bond purchases.

The news report, quoting Germany’s Welt am Sonntag newspaper on Sunday, said the French and German leaders were prepared to back a deal with other euro countries that might induce the ECB to intervene more forcefully to calm the euro debt crisis.

If all goes, well this would be positive for the markets and hopefully shore up Malaysia's market sentiment.

At Bursa Malaysia, the market is down for November, extending several months of decline due to the eurozone and US crisis.

Stock market data showed the FBM KLCI is down 4% or 60.34 points from 1,491.89 on Oct 31 after it closed at 1,431.55 on Nov 25. Market capitalisation was reduced by RM38 billion to RM1.230 trilllion from RM1.268 trillion.

Among the stocks to watch are SIME DARBY BHD [], MALAYSIAN RESOURCES CORP []oration Bhd (MRCB), IJM CORPORATION BHD [], KULIM (M) BHD [] following the recent corporate announcements.

Meanwhile, The Edge weekly reports that MEDIA CHINESE INTERNATIONAL LT []d (MCIL), a newspaper publisher with the most Chinese titles in the world, has jumped onto the non-print media bandwagon and is scouting around for opportunities in TV and radio.

Last Friday, Sime Darby reported its net profit for the first quarter ended Sept 30, 2011 jumped 63.9% to RM1.07 billion from RM654.74 million a year ago, boosted by stronger results of the PLANTATION []s and industrial divisions.

Its revenue for the quarter rose 27.5pct to RM11.06 billion from RM8.67 billion in 2010.

MRCB’s net profit for the third quarter ended Sept 30, 2011 jumped 191pct to RM10.72 million from RM3.68 million a year ago, due mainly to higher contribution from its revenue recognition of ongoing and encouraging strata office sales of property development projects at Kuala Lumpur Sentral.

IJM Corp’s second quarter earnings fell 35% to RM74.77 from RM115.13 million a year ago as it was impacted by unrealised foreign exchange translation losses on US dollar loans.

Kulim’s earnings slumped 39.9% to RM171.07 million in the third quarter ended Sept 30 from RM284.65 million a year ago following the disposal of oleochemicals group that recorded a profit of RM156 million last year. Kulim declared a single tier interim dividend of 20%.

For the nine-month period, its net profit increased 23% to RM444.46 million from RM361.21 million while revenue rose at a slightly stronger pace of 29.2% to RM5.240 billion from RM4.056 billion.

Kulim’s related companies, KFC Holdings (Malaysia) Bhd and QSR BRANDS BHD [] also recorded a decline in earnings due to higher commodity prices.

KFCH reported a 12.2% decline in its third quarter earnings to RM33.52 million from RM38.20 million a year ago as it was affected by the higher food, commodity and energy costs.

QSR’s earnings fell 10.5% to RM22.22 million in the third quarter ended Sept 30 from RM25.33 million a year ago, as its margins were affected by inflationary pressures including commodity costs. Revenue increased 10% to RM821.49 million from RM746.49 million while earnings per share were 8.13 sen versus 9.22 sen.

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