Update - Stocks to watch: mTouche, Mulpha, PLUS, Lafarge

Written by Joseph Chin
Monday, 15 February 2010 16:13

KUALA LUMPUR: Trading volume is expected to stay relatively low when the market reopens on Wednesday, Feb 17 due to concerns about slowing growth as China continues to tighten liquidity and concerns about Greece's debt woes.

The meeting of euro zone finance ministers failed to instil confidence that Greece's debt problems will be resolved quickly, according to Reuters.

Euro zone states have urged Greece to announce more deficit-control steps by mid-March if needed, but said nothing new of last week's pledge to defend the country if debt market pressures spin out of control.

At talks among finance ministers, Greece asked the euro zone to bear with its fiscal plans as announced, and warned that last week's offer of support by EU leaders may not be enough to stem a debt market squeeze on governments in the region.

Investors can also expect the bulk of the corporate results for the October to December period to be released over the next six trading days until Feb 25. So far, the results have improved from a year ago, with improvements seen in PLANTATION []s and banking stocks.

At Bursa Malaysia, stocks to watch include MTOUCHE TECHNOLOGY [] BHD [], MULPHA INTERNATIONAL BHD [], PLUS EXPRESSWAYS BHD [] and LAFARGE MALAYAN CEMENT BHD [].

mTouche announced more losses in the fourth quarter ended Dec 31, 2009. It made losses of RM66.62 million as it was impacted by impairments for investments totalling RM45.2 million. It closed at 20 sen last Friday.

Its fourth quarter revenue was RM10.33 million. In the previous corresponding quarter, net loss was RM34.19 million and revenue at RM10.52 million. Loss per share was 52.13 sen in 4Q09 versus 25.8 sen in 4Q08.

Bank Negara Malaysia (BNM) has rejected Mulpha International Bhd's application to hold talks with a substantial shareholder of EON Capital to acquire a stake.

"Mulpha is in an ongoing dialogue with BNM on this matter," said the company.

In PLUS, the Employees Provident Fund disposed of 22.98 million shares from Jan 22 to Feb 3, according to filings to Bursa Malaysia.

It sold 13.71 million shares in late January and 9.27 million shares on Feb 2 and 3, reducing its total stake to 12.83% or 641.58 million shares.

Meanwhile, RAM Ratings has assigned respective long- and short-term ratings of AA2 and P1 to Lafarge's proposed RM350 million Islamic Securities Programme (2010/2017); the long-term rating has a stable outlook.

The ratings are based on Lafarge's position as Malaysia's largest integrated cement manufacturer, with access to international markets and a favourable corporate lineage as part of the larger international Lafarge Group - affording Lafarge access to its parent's international distribution networks and global expertise.

As at end-September 2009, its debt level had been reduced to RM396 million, translating into a gearing ratio of 0.12 times while its cash pile was RM394 million. The liberalisation of cement prices in 2008 has also allowed Lafarge better flexibility in its pricing mechanism.

RAM expects Lafarge to benefit from a recovery in demand, supported by fiscal spending for the CONSTRUCTION [] sector and the anticipated pick-up in the property-development industry this year.