Stocks to watch Tenaga Nasional, Digi, Analabs Resources, GBH (Edge)

The local bourse benchmark index might be in for some correction today, after a candle chart signaled a potential end to a rally that lifted the measure to an 11-month high, according to a report by RHB Research.

The research house added that it was turning cautious on the market's near-term outlook and feared a potential pullback to as low as 1,095.90.

The FBM KLCI closed 14 points or 1.23% higher to 1,148.70 points yesterday, again backed by the strong buying into banks and plantation counters. Top gainers among banking stocks include Public Bank Bhd, which gained 20 sen to close at RM10.30, BCHB Bhd added 10 sen to close at RM10.10 while Malayan Banking Bhd (Maybank) was unchanged at RM6.40

Among plantation players, top gainers on July 22 include IOI Corp Bhd which advanced 10 sen to RM4.94, United Plantations Bhd which climbed 30 sen to RM12.40, Sime Darby Bhd which surged 25 sen to RM7.80 and Kuala Lumpur Kepong Bhd (KLK) which gained 20 sen to RM12.50.

While the government remained decided on the widely expected increments in the electricity tariff, utility giant Tenaga Nasional Bhd bears watching following a tripling of its third quarter (3Q) net profit to RM1.02 billion from RM298.8 million a year ago due to foreign exchange translation gains.     

DiGi.Com Bhd could come under selling pressure, following a 21.4% drop in its second quarter net profit to RM234.47 million from RM298.39 million previously. The dividend proposed for the quarter was also lower at 49 sen per share, compared to 57 sen last year.

Spotlight could also be on Analabs Resources Bhd, following the announcement yesterday that the company had entered into a sales and purchase agreement with Surfaces Holding B V to acquire its entire interest in Coveright Surfaces Malaysia Sdn Bhd for RM40 million.

In the case of Goh Ban Huat Bhd (GBH), the counter is expected to see some buying interest as the proposed take over of the company by its major shareholder, Tan Sri Robert Tan Hua Choon, draws closer, and as the Ministry of International Trade and Industry (Miti) gave its greenlight for the transaction.