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Sunday, August 21, 2011

Stocks to watch: Maybank, MMHE, Tenaga, TSH (Edge)

Regional markets including Bursa Malaysia will continue to see downside pressure in the week ahead, starting Monday, Aug 22, tracking losses on European and US markets.

The FBM KLCI closed down 1.29% on Friday, or 19.32 points to 1,483.98, weighed by losses including at Genting and CIMB.

For the month, the KLCI is down 78 points while RM132.76 billion has been erased from the market capitalisation. A major concern is that another week of selldown could trigger margin calls on assets pledged with equities.

On Wall Street, stocks fell for the fourth week of losses amid mounting fears of another U.S. recession while Europe's financial system faces destabilisation, Reuters reported.

The Dow Jones industrial average fell 172.93 points, or 1.57%, to end at 10,817.65. The Standard & Poor's 500 Index dropped 17.12 points, or 1.50%, to 1,123.53. The Nasdaq Composite Index slid 38.59 points, or 1.62%, to close at 2,341.84.

For the week, the Dow ended down 4%, the S&P 500 dropped 4.7% and the Nasdaq lost 6.6%.

Stocks to watch on Monday include MALAYAN BANKING BHD [] (Maybank), Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE), TENAGA NASIONAL BHD [] and TSH RESOURCES BHD [].

Other counters which could see trading interest are PLUS Expressway Bhd, UMW HOLDINGS BHD [] and TAN CHONG MOTOR HOLDINGS BHD [].

Maybank will announce its fourth quarter results and expectations are that it could announce attractive dividends, as reflected that its share price was holding much steadier over the week compared with other heavyweights over the past week.

MMHE has secured two contracts worth RM952 million from MISC BHD [] for topsides fabrication, marine repair and conversion of two energy vessels.

Tenaga may continue to see more selling pressure after falling to a new 52-week low of RM5.55 on Friday. Hefty fuel costs which could reach an additional RM400 million a month would continue to weigh on the power giant while analysts had also downgraded the stock.

TSH posted a record pre-tax profit of RM51.63 million, which was 192% above the RM17.69 million a year ago in the second quarter, boosted by its PLANTATION []s business, especially from its Indonesian operations.

Its net profit increased by 217% to RM35.96 million from RM11.32 million a year ago. Its revenue rose 59% to RM329.95 million from RM207.47 million. Earnings per share were 8.77 sen compared with 2.77 a year ago.

PLUS, which is being taken private, reported second quarter earnings rose 28.7% to RM383.49 million from RM297.86 million a year ago, boosted by an increase in toll collection by RM41.10 million.

UMW earnings fell 38% to RM131.18 million from RM211.69 million a year ago, due mainly to lower contributions from its automotive and manufacturing & engineering segments. Revenue dipped 3.6% to RM3.16 billion from RM3.28 billion. Earnings per share were 11.26 sen while net asset per share was RM3.66.

The Edge weekly reported that production at Tan Chong Motor Holdings' assembly plant in Segambut is being ramped up to meet the rising volume of brands owned by its sister companies. Thus, the group has decided to defer its property development plan for the tract on which the assembly plant is located.

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