Stocks to watch Sime Darby, MAS, MMC, Puncak Niaga, Genting

Bellwether indices in the region closed mostly higher yesterday. The Shanghai Composite Index rebounded by 2% after slumping the day before on fears of a government clampdown on bank lending.

However, at home, the FBM KLCI was trading mostly sideways. The index was in the red for the better part of the day but losses were limited. The benchmark index ended the day just one point lower at 1,271.

The stocks to watch today are SIME DARBY BHD [], MALAYSIAN AIRLINE SYSTEM BHD [] (MAS), MMC CORPORATION BHD [], PUNCAK NIAGA HOLDINGS BHD [] and GENTING BHD [].

Sime Darby’s net profit for the first quarter ended Sept 30, 2009 (1QFY10) fell 21% to RM684.64 million from RM866.98 million, underpinned by lower average crude palm oil (CPO) price.

Revenue was 11.13% lower at RM7.74 billion compared with RM8.705 billion a year earlier.

However, moving forward Sime Darby’s earnings is expected to improve as CPO prices are already on the uptrend. Yesterday, CPO closed RM4 higher at RM2,482 per tonne from RM2,478 on Tuesday. Sime Darby closed three sen higher at RM8.98 yesterday.

MAS shares might extend its losses today after announcing a net loss of RM299.6 million for its third quarter ended Sept 30, 2009 versus RM38.1 million profit in the same period last year. The counter closed six sen lower at RM3.10 yesterday.

Despite early signs of improvement in passenger and cargo traffic, the national carrier said the outlook for the fourth quarter continues to be challenging as yields remained under pressure.

MMC Corporation Bhd’s shares are also expected to see some movement today after the company terminated the memorandum of understanding with Dubai World to jointly develop areas in south Johor.

The plan was for MMC and Dubai World to develop a maritime centre masterplan that would comprise oil terminal activities, drydocks, a shipyard, including conventional cargo handling facilities. MMC closed at RM2.50 yesterday.

Water concessionaire Puncak Niaga Holdings Bhd might come under close watch today after the Selangor state government said it would not pay compensation to Puncak's subsidiary Syarikat Bekalan Air Selangor Sdn Bhd (Syabas).

The state government said Puncak should not have included the compensation into its recently-announced quarterly and nine-month results and called for the concessionaire to rectify the matter and be "responsible" towards its shareholders.

Investors should also monitor other Selangor water-players, namely KUMPULAN PERANGSANG SELANGOR [] Bhd (KPS) as the Pengurusan Aset Air Bhd’s (PAAB) due diligence on all four state water companies nears completion. The due diligence is expected to conclude by next week.

Puncak closed three sen higher at RM3.24 while KPS gained five sen to end at RM1.48 yesterday.

Genting Bhd may draw investors’ interest today after reporting a sterling third quarter ended Sept 30, 2009 net profit of RM371 million against a loss of RM40 million a year ago.

The gaming giant said in a statement that while the global economy continues to show signs of recovery, it remains cautiously optimistic of its prospects. Genting closed three sen lower at RM7.08 yesterday.