Stocks to watch: Hock Heng, Gamuda, Kencana, MPHB, water-related counters

KUALA LUMPUR: The market is expected to be lacklustre on Friday, March 26 with some profit taking expected ahead of the weekend and after Wall Street closed flat on renewed debt fears in Europe and the US.

The Dow Jones industrial average closed up 5.06 points, or 0.05 percent, to 10,841.21, while the S&P 500 index fell 1.99 points, or 0.17 percent, to 1,165.73. The Nasdaq Composite Index dipped 1.35 points, or 0.06 percent, to 2,397.41.

A Reuters report said the euro sank to a 10-month low on Thursday and benchmark 10-year U.S. Treasury yields hit a nine-month high, stung by renewed debt fears in Europe and in the United States.

However, recent positive corporate news on the home front could underpin market sentiment, especially after the rally on water-related counters in Selangor.

The stocks rallied after GAMUDA BHD [] made a RM10.75 billion bid to buy the entire Selangor water assets and operations via its 40% associate Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash).

Other stocks which will continue to see interest will be PUNCAK NIAGA HOLDINGS BHD [], KUMPULAN PERANGSANG SELANGOR [] Bhd (KPS)and JAKS Resources Bhd.

Inter-Pacific Research has a fair value of 52 sen for Hock Heng Stone Industries Bhd which is scheduled to be listed on Friday. It said the lower FV from the IPO price of 55 sen was based on earnings per share (EPS) of seven sen and price-to-earnings of 7.4 times using FY10 earnings.

Loh & Loh Corp Bhd’s joint venture with Sinohydro Corp Ltd via its unit Loh & Loh CONSTRUCTION []s Sdn Bhd has accepted the terms of a letter of intent (LOI) from TENAGA NASIONAL BHD [] for the Hulu Terengganu hydroelectric project worth RM828.33 million.

MULTI-PURPOSE HOLDINGS BHD [] (MPHB) surged to its highest in more than two years on expectations of stronger first quarter earnings, bolstered by the jackpot game.

KENCANA PETROLEUM BHD [] reported an 18.53% year-on-year (y-o-y) increase in net profit to RM32.30 million in the second quarter ended Jan 31, 2010 (2QFY10) on better margins due to improved cost management.

Gamuda Bhd recorded a 38.67% growth in net profit to RM68.03 million in the second quarter ended Jan 31, 2010 (2QFY10) compared with a year earlier due to higher contributions from its business divisions.

SAPURA INDUSTRIAL BHD [] recorded an almost 18-fold year-on-year growth in net profit to RM4.99 million in the fourth quarter ended Jan 31, 2010, as revenue rose 23.5% year-on-year to RM76.46 million.

MALAYAN BANKING BHD [] proposed a recurrent and optional dividend reinvestment plan which allows shareholders to reinvest their dividend into new Maybank shares of RM1 each, in a move it said would maximise shareholders’ value while enlarging its share capital base, strengthen its capital position and add liquidity to its shares.

Stocks of TALAM CORPORATION BHD [] and related party KUMPULAN EUROPLUS BHD [] (KEuro) are also in focus following the release of their full-year results for the year ended Jan 31, 2010.

Talam posted a 88% decline in net profit for FY10 to RM7.09 million from RM59.11 million while its revenue for the year fell to RM250.98million from RM301.28 million.

Meanwhile, KEuro, which is 25%-owned by IJM CORPORATION BHD [] who also has a 26.73% stake in Talam posted a full-year net loss of RM33.08 million from a net profit of RM11.24 million a year earlier.

Scientex Bhd posted a 134% increase in net profit in its 2Q10 results announcement due to better performance in its manufacturing and property divisions.

Multi-Code Electronics Industries (M) Bhd reported a 240.43% year-on-year surge in net profit in the second quarter ended Jan 31, 2010 (2QFY10), on lower costs incurred during the quarter. It said revenue grew 32.37% to RM24.74 million from a year earlier, due to stronger demand for its products from its main customers.

Furniture-maker LCL CORPORATION BHD [] was issued a demand notice from EON Bank Bhd for a RM41.14 million loan. A filing to Bursa Securities showed it owed a total of RM210.53 million to several other financial institutions.

Yen Global Bhd, formerly known as SEQUOIA HOLDINGS BHD [], saw a net loss of RM1.84 million for the second quarter ended Jan 31, 2010 from a net profit of RM406,000 a year earlier. Its revenue was also 24.4% lower for the quarter.