Wednesday , 1 October 2014

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KUALA LUMPUR – The FBM KLCI could struggle to eke out gains on Wednesday, as the local market appears to still look to external factors for direction.

European shares ended a three-day rally and oil fell on Tuesday as investors feared the recent gains built on anticipation of new stimulus measures from central banks in the United States and Europe had been overdone, according to Reuters.

Speculation had centred on hopes the European Central Bank (ECB) would announce a resumption of its bond buying programme at a meeting on Thursday to force down rising Spanish and Italian borrowing costs, despite German opposition to the move, it said.

Markets had also pinned hopes on the Federal Reserve, which begins a two-day rate setting meeting later, succumbing to renewed pressure to boost slowing growth, though many economists do not expect further easing measures until September, said Reuters.

On Bursa Malaysia, among the stocks that could be in focus on Wednesday are IHH Healthcare Bhd, AirAsia Bhd, Biosis Group Bhd, George Kent (M) Bhd and Gabungan AQRS Bhd.

IHH Healthcare, which has had a favourable run since its listing last week, may extend its gains after its inclusion into the FTSE FBM KLCI list on Wednesday. The stock will replace MMC Corporation Bhd.

The Indonesian government may cancel the acquisition of local airline Batavia Air by Malaysian low cost carrier AirAsia and its Indonesian partner PT Fersindo Nusaperkasa, if the transaction breached the ownership limit imposed on foreign companies in national airlines, according to a report by theJakarta Post.

The Jakarta Post on July 29 had reported that the Transportation Ministry air transportation director-general Herry Bhakti Gumay said AirAsia and its partner had yet to report their acquisition to the ministry.

AirAsia and Fersindo, which owns a 51% stake in Indonesia AirAsia (IAA), signed an agreement last Thursday to buy Metro Batavia, the owner of Batavia Air, for US$80 million (RM251.56 million).

“We will give Batavia, AirAsia Bhd and Fersindo Nusaperkasa one month to report their plan to us. We will cancel the acquisition process if Indonesia is not the majority shareholder,” the Jakarta Postquoted Herry as saying.

The Ampang Line Extension Project (LEP) has been awarded to a joint venture (JV) consortium of George Kent (M) Bhd and its partner Lion Pacific Sdn Bhd, according to Syarikat Prasarana Negara Bhd (Prasarana). In a statement on Tuesday, Prasarana said the JV was 100% locally-owned companies and well supported by reputable local and international multi-disciplinary technical partners, with proven track records in their respective field of systems implementation expertise.

“Additionally, some of the key sub-systems proposed also have synergy with Prasarana’s current operations, thus and in the long run, Prasarana will benefit from reduced operating expenditures as well as cross-competency gains that will increase service efficiencies,” it said.

Bursa Malaysia Securities has queried Biosis over the unusual market activity (UMA) in the trading of the company’s shares. It said on Tuesday that the query was regarding the sharp rise in the price and high volume of the shares recently.

Gabungan AQRS reversed its losses to close higher on its debut on to Bursa Malaysia Securities on Tuesday. At 5pm, it rose four sen to RM1.22 with 37.48 million shares done. Gabungan AQRS made a public issue of 62 million new ordinary shares of 25 sen par value and an offer for sale of 30 million ordinary shares of 25 sen par value at a price of RM1.18 per share. -By Surin Murugiah | The Edge Malaysia

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