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Wednesday, February 23, 2011

Stocks to watch: Genting Plantations, SunCity, Parkson, MMC (Edge)

Key regional markets are expected to see volatile trade with downside pressure on Wednesday, Feb 23 following the spreading unrest in oil exporter Libya.

Wall Street suffered its worst day since August on Tuesday as investors dumped stocks on turmoil in Libya, in what could be the start of a long-anticipated pullback after a lengthy rally.

Reuters reported rising volatility and heavy volume added heft to the possibility of a larger pullback. The CBOE Volatility Index, Wall Street's so-called fear gauge, surged 26.6 percent to end at 20.80, its highest one-day jump since May 20, 2010.

The Dow Jones industrial average lost 178.46 points, or 1.44 percent, to end at 12,212.79. The Standard & Poor's 500 Index fell 27.57 points, or 2.05 percent, to 1,315.44. The Nasdaq Composite Index dropped 77.53 points, or 2.74 percent, to 2,756.42.

After the closing bell, Hewlett-Packard Co slumped 10 percent to $43.42 in extended trade after the Palo Alto, California-based company trimmed its 2011 revenue projections on falling consumer demand for its personal computers.

At Bursa Malaysia, Aberdeen Asset Management head of equities Abdul Jalil Rasheed, however, said that the only reaction so far to the turmoil in Middle East had been the increase in oil prices, and that it had had no direct impact on the stock market.

“Corrections in market are not a bad thing. It shows that the markets are functioning properly. A consistently rising market is not sustainable. We see falling markets as an opportunity to accumulate good quality stocks,” he said.

He said Aberdeen's outlook on the local investment scene was positive, adding there was a sense of urgency now to get things done and the government machinery seemed to be moving faster, which were all positive signs.

“However big catalysts for the market will be the successful economic tranformation programmes, the essential one being the roll out of MRT.

“We don't take a view on sectors or macroeconomic themes, but will remain invested in well managed companies with valuations that make sense,” he said.

Stocks to watch on Wednesday include Genting PLANTATION []s Bhd, SUNWAY CITY BHD [], PARKSON HOLDINGS BHD [] and MMC Corp Bhd.

Companies announcing their results on Wednesday include GENTING BHD [], MEDIA PRIMA BHD [], PLUS EXPRESSWAYS BHD [] and IJM CORPORATION BHD [].

Genting Plantations, benefiting from the surge in crude palm oil (CPO) prices, reported its fourth quarter earnings rose 31.1% to RM102.76 million from RM78.35 million a year ago.

Revenue increased by 23.3% to RM296.70 million in the quarter ended Dec 31, 2010 from RM240.56 million while earnings per share were 13.54 sen compared with 10.34 sen. Genting Plantations declared a special dividend of three sen per share and proposed a final dividend of 5.5 sen per share.

Meanwhile, Genting Singapore plc posted net profit from continuing operations of S$91.65 million compared with net loss of S$101.69 million a year ago. For FY10, its net profit was S$657.20 million compared with a net loss of S$282.24 million.

At the discontinued operations level, Genting Singapore posted net loss of S$150.32 million after suffering net losses of S$241.97 million. For FY10, it was net profit of S$37.76 million versus net loss of S$277.56 million in FY09.

Net loss attributable to equity holders of Genting Singapore were S$150.32 million versus net loss of S$101.67 million a year ago. For FY10, net profit was S$37.76 million versus net loss of S$277.56 million in FY09.

Sunway City posted fourth quarter earnings of RM106.82 million on the back of RM341.31 million in revenue. For FY10, net profit was RM539.86 million while revenue was RM1.11 billion.

Parkson Holdings Bhd, which reported RM93.8 million in earnings in the second quarter, plans to accelerate its expansion plan in the countries which operates and targets to add on average 20% new operating area to its portfolio.

The 2Q earnings in the quarter ended Dec 31, 2010 was a 16.8% increase from RM80.31 million a year ago, driven by year end festivities and the holiday season.

Parkson, which operates in Malaysia, China and Vietnam, said revenue rose 6.7% to RM756.38 million from RM709.32 million a year ago. Earnings per share were 8.67 sen while net assets per share was RM1.89.

MMC Corp Bhd’s earnings dipped 3.6% to RM104.60 million from RM108.60 million a year ago. It said on Tuesday, revenue rose 2.5% to RM2.254 billion from RM2.198 billion. Earnings per shares were 3.44 sen compared with 3.57 sen.

For the financial year ended Dec 31, 2010, it recorded a 47.6% increase to RM344.94 million from RM233.61 million while its full year revenue showed a 4.9% improvement at RM8.863 billion versus RM8.444 billion a year ago.

PETRONAS GAS BHD []’s (PetGas) net profit increased 50.4% to RM400.74 million for the third quarter ended Dec 31, 2010 from RM266.47 million a year ago driven by higher gas processing and gas transportation revenue.

Revenue rose 10% to RM892.69 million from RM810.89 million. Earnings per share were 20.25 sen while net assets per share was RM4.14.

For the nine months ended Dec 31, PetGas’s net profit rose 58.2% to RM1.17 billion from RM739.5 million a year ago while its revenue increased by 8.67% to RM2.63 billion from RM2.42 billion.

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