Stocks to watch: MRCB, Telekom, Putrajaya Perdana, Tanjong

KUALA LUMPUR: Regional markets are expected to see more downside on Friday, Nov 20 following the weaker overnight closing on Wall Street while at Bursa Malaysia, the factors to watch out are the release of the third quarter GDP data and the inclusion of Maxis Bhd into the 30-stock FBM KLCI.

US stocks slid as another batch of economic data pointed to the fragility of the recovery and a brokerage's dim view on the semiconductor sector hit TECHNOLOGY [] shares, according to Reuters.

The benchmark S&P 500 suffered its worst one-day percentage fall in three weeks as investors feared that weakness in housing and labor markets would persist, making current stock valuation seem unjustified.

The Dow Jones industrial average shed 93.87 points, or 0.90 percent, to end at 10,332.44. The Standard & Poor's 500 Index slid 14.90 points, or 1.34 percent, to 1,094.90. The Nasdaq Composite Index dropped 36.32 points, or 1.66 percent, to 2,156.82.

On the home front, Bank Negara is scheduled to release its 3Q GDP data after market close. Economists expect the country's economy to have bottomed out, though 3Q would see a contraction on-year, but at a smaller pace.

However, the statement from the central bank about the outlook for the economy should be of more importance.

Maxis Bhd, which traded as expected on its return to Bursa Malaysia Securities yesterday, intends to fervently defend, if not beat, the old Maxis's record highs on all fronts and is prepared to gear up to deliver good dividend yields, its top officials said.

Maxis will be included in the 30-stock FBM KLCI, replacing MALAYSIAN AIRLINE SYSTEM BHD [].

MALAYSIAN RESOURCES CORP [] Bhd (MRCB) has priced its share rights issue with an entitlement basis of one-for-two at RM1.12 per share. It said the right issue would raise gross proceeds of about RM540.7 million and RM508.3 million under the maximum and minimum scenarios, respectively.

Telekom Malaysia is scheduled to release its results on Friday. OSK Investment Research is maintaining its neutral call on TM with a target price of RM2.88.

It expected the telco's margin to come under pressure from higher high speed broadband operating expenditure and increased advertising and promotion as as TM slugged it out to defend its fixed broadband business and to drive uptake of its voice service.

"TM’s core earnings are likely to come in lower year-on-year in 3Q09 due to weaker EBITDA margin and lower interest income but higher quarter-on-quarter with the normalisation of the high effective tax in 2Q09.

"We suspect TM conceded its dominant share of fixed broadband addition in 3Q09 to a nimble and more aggressive Packet One (P1)," it said.

Putrajaya Perdana's 3Q net profit jumped 110% to RM12.2 million for its third quarter ended September 30, 2009 (3Q2009). Its revenue however fell 16% to RM199.9 million.

For its nine months period, its net profit increased 71% to RM26.96 million compared to the previous corresponding period. Meanwhile, its revenue increased 15% to RM679.8 million for the same period

Tanjong plc has appointed ASTRO ALL ASIA NETWORKS PLC []'s former chief operating officer Goh Seow Eng as the chief executive officer of its entertainment division, responsible for both its wholly-owned subsidiaries Pan Malaysian Pools Sdn Bhd (PMP) and TGV Cinemas Sdn Bhd (TGV).

It is interesting to note that analysts had earlier said if Tanjong's power and gaming operations were split, this could create greater value. The power business, if spun off, would attract Syariah compliant funds.

GAMUDA BHD []'s 40%-owned Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) has filed a suit against PUNCAK NIAGA HOLDINGS BHD []'s 70% subsidiary Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) with a claim of RM196 million owing, excluding interests, in relation to the supply of treated water to the latter.