KUALA LUMPUR (Dec 26): The FBM KLCI could extend its gains for a third day running on Thursday, supported by window dressing activities in line with the improving sentiment at regional markets.
The FBN KLCI on Wednesday clawed back from negative territory to close higher, as some analysts had earlier predicted.
Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan in a note Dec 26 said he believes the local equity market would zoom higher from a number of positively received events with the global equities holding onto strong December gains despite being overbought.
He said that despite the FBM KLCI being overbought (56 points within the last three weeks), it was best to view any overbought weakness as a short term correction, not a medium term top, and to assume the stock market would keep climbing the external wall of worry.
"Barring any close below 1,630, we view any weakness as an opportunity to reenter cheaper as the monthly, weekly and daily uptrendline remains sound and intact. Given ample liquidity and rising foreign net equity flow, we are not surprised to see FBM KLCI aiming higher for 1,680 level. Any close above 1,680 will lead FBM KLCI to a good bull rally towards an-all-time-high of 1,720-1,750 in the early part of next year," he said.
Among the stocks that could be in focus on Thursday are tycoon Tan Sri Syed Mokhtar Al-Bukhary-owned Tradewinds (M) Bhd, Tradewinds Plantations Bhd and Padiberas Nasional Bhd (Bernas), which have each been made an offer to be taken private by the tycoon’s other vehicles. The other stocks that could be in focus are XOX Bhd; Naim Holdings Bhd; and Gabungan AQRS Bhd.
Tradewinds was the top gainer on Bursa Malaysia on Wednesday, jumping RM1.16 to RM8.91 on Syed Mokhtar's privatisation offer of RM9.30 per each of its shares he did not already own. Meanwhile, Tradewinds Plantation was among the top losers, as investors did not find the offer price for the stock as very attractive.
XOX, a mobile virtual network operator, is currently finalising the terms for a possible fund-raising exercise for its working capital requirements.
In a reply to Bursa Malaysia over an unusual market activity (UMA) query, XOX said its board had held a preliminary discussion with certain potential parties on the proposed debt settlement of which details had not been finalised and had yet to be approved by the board.
In its bid to quash the negative outlook on its RM500 million Islamic medium term notes by RAM Rating Services Sdn Bhd, Naim said the group's "good financial performance" in 2012 is expected to continue into next year due to more construction contracts and property launches.
In a response emailed to the media, Naim's senior director of corporate services Ricky Kho said the group is enjoying strong results from its property development division, as well as improving margins on its construction side.
"As at 3Q 2012, our group's PBT (profit before tax) stood at RM90.3 million, which was one of the highest in our history and an increase of 76.9% over the same period in 2011. We are on track to exceed our targeted profits this year," he said.
Gabungan AQRS's unit Gabungan Strategik Sdn Bhd secured a constuction contract in Shah Alam worth RM36.49 million from Soon Chai Architect issued on behalf of Peridot Development Sdn Bhd.