Stocks to watch: Kencana, Mudajaya, Hong Leong Bank, JAKS

KUALA LUMPUR: Sentiment for equities should show an improvement on Thursday, Nov 12 following the firmer close on Wall Street and positive corporate earnings from local corporations.

On Wall Street, the Standard & Poor's 500 index closed at a fresh 13-month high, bouyed by an upbeat forecast from a top homebuilder and data from China, raising hopes of a stronger global economy.

A Reuters report said the Dow also closed at a 13-month high, up for the 6th day as investors' sentiment was reinforced by comments from top Federal Reserve officials suggesting low interest rates will stay for some time.

The Dow Jones industrial average was up 44.29 points, or 0.43%, at 10,291.26. The Standard & Poor's 500 Index was up 5.50 points, or 0.50%, at 1,098.51. The Nasdaq Composite Index was up 15.82 points, or 0.74%, at 2,166.90.

At Bursa Malaysia, the 30-stock FBM KLCI snapped a six-day winning streak on Wednesday after rising more than 32 points on mild profit taking during the period. However, the gains could be limited again as investors may lock in their profits.

Stocks to watch today are KENCANA PETROLEUM BHD [], MUDAJAYA GROUP BHD [],HONG LEONG BANK BHD [] and JAKS Resources Bhd.

Kencana proposed a renounceable rights issue of up to 369.07 million shares and a three-for-10 bonus issue and the provision of financial assistance for its 25%-owned Mermaid Kencana Rig 1 Pte Ltd (MKR1) in Singapore.

Mudajaya's net profit in the third quarter ended Sept 30 jumped more than two-fold to RM35.32 million on the back of a 78% increase in revenue to RM200.10 million. Basic earnings per share improved to 9.48 sen from 2.17 sen a year earlier.

Hong Leong Bank posted a 3% decline in net profit to RM234.21 million, although its profit for the quarter was the best it had reported in the 2009 calendar year. HLG CAPITAL BHD [] recorded a 78.1% surge in net profit to RM5.36 million.

HONG LEONG FINANCIAL GROUP BHD [] (HLFG) declared an interim dividend of nine sen less tax for the first quarter (1Q) ended Sept 30, 2009, as it posted a 7.02% year-on-year increase in net profit to RM157.6 million. Revenue dipped 1.42% to RM562.59 million but earnings per share rose to 15.2 sen from 14.2 sen.

JAKS plans to raise up to RM48.2 million from placing out 48.22 million shares at an indicative RM1 per placement share with up to one detachable warrant each. The money would be used for working capital, business expansion, settlement of bank borrowings and/or other investments.

Xingquan International Sports Holdings Ltd posted a 4.8% rise in net profit to RM23.6 million for its first quarter (1Q) ended Sept 30 from RM22.5 million in the same period a year earlier.

GREEN PACKET BHD [] will subscribe for 419,500 Class A Islamic Irredeemable Convertible Preference Shares (Class A ICPS) in subsidiary Packet One Networks (Malaysia) Sdn Bhd (Packet One) for RM110 million.

Green Packet said the preference share subscription would enable the company to invest in Packet One’s rollout of its worldwide interoperability for microwave access (WiMAX) network that would provide commercial wireless access services across the country.

The proceeds from the Class A ICPS subscription would provide Packet One working capital to ensure the successful rollout of its WiMAX services locally.

Packet One was awarded a 2.3 GHz spectrum (on the WiMAX wireless network) by the Malaysian Communications and Multimedia Commission in March 2007.