Stocks to watch: OilCorp, L&G, Pelikan, Mamee

Written by Tony Goh
Thursday, 22 October 2009 07:45

KUALA LUMPUR: Investors will have to brace for more downside pressure on Thursday, Oct 21 after Wall Street fell overnight following a late sell-off in financial shares, making it the second straight day of losses.

The Dow Jones industrial average dropped 92.12 points, or 0.92 percent, to end at 9,949.36. The Standard & Poor's 500 Index lost 9.66 points, or 0.89 percent, to 1,081.40. The Nasdaq Composite Index shed 12.74 points, or 0.59 percent, to 2,150.73, according to Reuters.

However, the latest batch of corporate exercises could attract interest in the companies including Pelikan International Corp Bhd and HUNZA PROPERTIES [] BHD [] which are proposing to undertake rights issue while MAMEE-DOUBLE DECKER (M) BHD [] has received the regulator's approval for its rights issue.

Other stocks to watch include OILCORP BHD [], LAND & GENERAL BHD [] (L&G), Atis Corp Bhd and PLANTATION []s.

Plantation stocks would see continued trading interest, albeit some profit taking continuing from Wednesday when most of them fell. IOI Corp Bhd fell four sen to RM5.50, IJM PLANTATIONS BHD [] two sen to RM2.70, KUALA LUMPUR KEPONG BHD [] down six sen to RM14.94 while SIME DARBY BHD [] was unchanged at RM8.79.

OilCorp Bhd's subsidiary has terminated its contract, believed to be valued at RM36 million, with Carigali Hess Operating Company Sdn Bhd involving a brownfield retrofit project. The termination was over a dispute of non-payment.

L&G plans to acquire more land in the Klang Valley for more commercial and residential projects, riding on the optimism of rising demand for mixed development properties. Its 8trium @ Sri Damansara, a mixed commercial initiative, costing RM160 million, is being built on a 1.1ha piece of freehold land. Completion date is 2012.

Pelikan plans to raise RM188.74 million from a proposed renounceable rights issue. This will be on the basis of one rights share for every two existing ordinary shares held. The rights issue of up to 171.58 million new shares of RM1 each will be at an issue price of RM1.10 each.

Hunza is undertaking a rights issue to raise RM43 million by issuing around 45.2 million new shares.

Mamee-Double Decker (M) Bhd has received the Bursa Malaysia Securities Bhd's approval for its proposed bonus issue of 65.16 million new shares on a four-for-five basis.

Atis is buying 21.38 million MUTIARA GOODYEAR DEVELOPMENT [] Bhd shares or 9.26%, for a cash consideration of RM20.74 million from Laman Arif Sdn Bhd and Lim Beng Guan. This will Atis's stake to 30.28%.

The acquisition would push up Atis's net asset per share to RM1.60 from RM1.45, but would also increase its net borrowings to RM74.65 million from RM34.5 million and net gearing level to 0.29 times from 0.15 times based on its consolidated financial results as of March 31, 2009.

MILUX CORPORATION BHD [], which is undertaking a proposed placement of 4.237 million shares , has fixed the issue price of RM1.11. The issue price was a discount of about 9.76% to the five-day volume weighted average market price of Milux's shares up to and including Oct 20 of RM1.23.