Malaysia Market Watch 2nd August 2012

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KUALA LUMPUR – The FBM KLCI could trade range bound on Thursday, as lack of fresh catalysts could keep investors on tenterhooks and somewhat risk averse.

European share prices and the single currency held their ground on Wednesday as markets waited to see if the European Central Bank (ECB) and the US Federal Reserve will respond to fresh evidence of slowing global economic growth, according to Reuters.

Investors are most focused on the ECB’s Thursday meeting to see how it plans to make good on promises by president Mario Draghi to preserve the euro. Few investors expect fresh monetary stimulus from the Fed at the end of its two-day meeting later on Wednesday, it said.

Among the stocks that could be in focus are Amcorp Properties Bhd (Amprop); Mudajaya Group Bhd; George Kent (M) Bhd; Bintai Kinden Corporation Bhd; Patimas Computers Bhd; and Halex Holdings Bhd.

Amprop, via its a wholly-owned subsidiary Old Burlington Ltd (OBL), is to acquire a stake in a freehold and income-producing property in central London. OBL has entered a joint venture (JV) with NL (Pollen) Ltd and HPL (Mayfair) Pte Ltd to purchase the property on 29-30 Old Burlington Street, London W1 at a consideration of £85 million (RM414.8 million).

According to a filing with Bursa Malaysia on Tuesday, OBL is to have a 25% shareholding in the JV entity, Ten Acre (Mayfair) Ltd, while NL Pollen and HPL Mayfair holds 10% and 65% respectively. Ten Acre intends to assess the property’s potential for residential re-development. “A further £5 million will be payable on receipt of satisfactory planning permission to convert to residential use,” read the statement.

Mudajaya unit Mudajaya Corp Bhd has been awarded a contract worth RM30 million to undertake a project to construct the entrance and exit road from the North South Highway to a building site at Kampung Sungai Serai in Rawang, Selangor. In a filing Wednesday, Mudajaya said its unit had been awarded the contract by TPPT Sdn Bhd, a company established by Bank Negara Malaysia, to undertake and complete the project.

Mudajaya said the project was expected to be completed within 104 weeks from Thursday. It said the project was expected to contribute positively to its earnings or the current and future financial years.

The Ampang Line Extension Project (LEP) has been awarded by Syarikat Prasarana Negara Bhd (Prasarana) to a joint venture (JV) consortium of George Kent (M) Bhd and its partner Lion Pacific Sdn Bhd is worth RM955.84 million. In a filing Wednesday, George Kent said the consortium was further awarded the supply of Train Borne Equipment together with works in respect of which Prasarana has Options which it can exercise together for a total of RM128.62 million.

The contract entails the engineering, procurement, construction, testing and commissioning of the Signalling System, Communication, Trackwork and third Rail, Electrification of the Rail System and other associated works for the Ampang LRT Line to be extended by another 17.7km, connecting the current Sri Petaling station to Putra Heights, the company said.

Bintai Kinden’s Singapore-incorporated sub-subsidiary Bintai Kindenko Indonesia Holdings Pte Ltd (BKIH) has entered into a joint venture (JV) agreement with PT ACSET Indonusa, PT VS Lighting Control and PT Pandu Usaha Selaras to to develop and sell a common range of services and solutions in Indonesia.

In a filing Wednesday, Bintai Kinden said the parties had agreed to form a JV company — to be known as PT Bintai Kindenko Engineering Indonesia — as a special purpose vehicle to carry out the activities in the field of mechanical and electrical engineering works, consultancy and construction works in Indonesia.

Patimas Computers’s share price took a dive of 55% on Wednesday. The counter shed 5.5 sen per share within a day from its previous closing at 10 sen per share on Jul 30. At the end of the trading day, the company saw some 103.6 million shares sold while some 191.9 million shares were bought in the open market.

The stock price which has been fairly stable for the past three months experienced heavy trading and a sudden surge upwards between July 26 and 30. Share price climbed 25%, from 8 sen apiece on July 26 to 10 sen apiece on July 30. The counter was suspended following concerns raised by the external auditors on “unresolved significant accounting and audit findings/queries” in the accounts.

Halex, whose shares rose by 5.84% to close at 81.5 per on Wednesday, has proposed to issue bonus shares of 20,000 new ordinary shares of RM0.50 each to shareholders on the basis of one bonus share for every four Halex shares held. The date for the bonus issue is to be decided later.

The company, in a statement to Bursa Malaysia, said the application was submitted to the stock exchange on Wednesday. In the same announcement, Halex also proposed a share buy-back arrangement whereby the company could purchase up to 10% of its issued and paid up share capital.

-By Surin Murugiah of theedgemalaysia.com