KUALA LUMPUR (Nov 5): Penny stocks, which dominated trading on Bursa Malaysia on Monday, are expected to continue dominating trade on the local bourse as sentiment stayed cautious ahead of major political developments in the world's top two largest economies later this week.
The US Presidential Election is scheduled for Tuesday (Wednesday here), while China's once-in-a-decade leadership change is about to take place with the Chinese Communist Party's National Congress slated to kick-off on Thursday.
In Kuala Lumpur, the bellwether FBM KLCI shed 2.09 points to 1,654.04 points on Monday. The broader FBM EMAS Index fell 9.37 points to end at 11,282.29 points. Traders had expected this following the declines seen on Wall Street over the weekend.
That said, several stocks may see some trading interest due to corporate developments and news-flow ahead of the third quarter earnings reporting season this month.
Among other things, SapuraKencana Petroleum Bhd, whose shares were suspended on Monday and resumes trading Tuesday, will be reacting to news of its proposed purchase of Seadrill Ltd's tender rig business for an indicative enterprise value of US$2.9 billion in cash and shares. The move that raises its exposure to the higher margin drilling segment, could see Seadrill's stake in SapuraKencana rising from 6.4% to 13%, subject to due-diligence. SapuraKencana closed flat at RM2.71 last Friday.
Separately, Gamuda Bhd could also continue to see trading interest. Group managing director Datuk Lin Yun Ling bought 7.46 million shares on Nov 5 at RM3.50 apiece off-market, a Nov 5 filing showed. This raised his direct holdings to 67.6 million shares or 3.25%. The Edge Financial Daily on Monday reported that Lin's share purchases signalled willingness to continue on in the company after the expiring of his five-year contract in June 2013. Gamuda added 9 sen or 2.51% to close at RM3.67 on Monday.
Penny stock Tiger Synergy Bhd could again be in the spotlight. After topping the most active list on Monday, Tiger announced the emergence of Hayat Maya Sdn Bhd as a new substantial shareholder with 5.26% stake. The unknown company paid 45.3 sen apiece or just over two times book value for the stock last Friday.
Tiger added half a sen or 1.08% to close at 47 sen on Monday after trading between 43.5 sen and 54.5 sen apiece. Some 88.67 million shares or 29% its share base changed hands on Monday, despite Bursa Malaysia Securities asking investors to exercise caution when trading the company's shares Monday morning. Tiger-WA, meanwhile, shed 4.5 sen or 15% to 25.5 sen.
Over at the property sector, developer Plenitude Bhd's executive chairman Elsie Chua told reporters on Monday (Nov 11) that the group plans to launch residential properties worth some RM313 million in gross development value (GDV) next year. He is also "cautiously optimistic" on prospects, banking on potential growth from its landbank and healthy balance sheet with some RM355 cash and zero borrowings. Plenitude closed unchanged at RM1.90 on Monday on thin trade.
Meanwhile, Mac Ngan Boon, managing director of Muhibbah Engineering (M) Bhd, one of the largest contractors of the stalled Asia Petroleum Hub project, on Monday told theedgemalaysia.com that the company is wants to work with bankers to salvage the project and would not have to make an additional RM245 million provision if a restructuring scheme can be worked out. Muhibbah shed 1 sen or 1.08% to close at 91.5 sen on Monday.
Nitrile glove-maker Hartalega Holdings Bhd is expected to release second quarter earnings on Tuesday. Hartalega shed 4 sen or 0.83% to close at RM4.80 on Monday.