KUALA LUMPUR (Oct 1): The FBM KLCI could trend higher on the first trading day of the fourth quarter (4Q) on Monday, extending its positive run after ending the third quarter on a high with year-to-date gains of 6.9% as at last Friday.
The local index, however, suffered a little and fell month-on-month in September, registering a monthly loss for the first time in six months, due to investor sentiment being affected by global growth worries as well as being kept on tenterhooks ahead of the tabling of Budget 2013 and the still elusive thirteenth general election date.
In a strategy note last Friday, AmResearch said that on balance, Budget 2013 appeared a tad positive for the market when viewed against earlier somewhat downbeat expectations particularly on property, auto and — by extension — banks.
Among the stocks that could be in focus are MBM Resources Bhd; Ken Holdings Bhd; brewery and tobacco companies; and the oil and gas sector.
MBM Resources has entered into a joint-venture with Japan’s Hino Motors Ltd to establish a manufacturing plant in Malaysia.
It said last Friday that the plant would be located on a 42-acre site in Negeri Sembilan, and will require an initial investment of RM140 million.
“The new plant, with an annual production capacity of approximately 10,000 units, will manufacture the full range of Hino products comprising small, medium and heavy duty trucks; and buses for the Malaysian market,” said MBM Resources.
Ken Holdings will be seeking its shareholder’s nod for its RM1.23 billion development in Johor consisting of residential, commercial, corporate and retail podiums on Oct 15.
The development will be constructed on the land it recently purchased from Malaysia Building Society Bhd (MBSB) that will be fully satisfied with its internally-generated cash.
The oil and gas sector received a shot in the arm with Budget 2013 spelling out initiatives to further position Malaysia as oil and gas hub.
This included an Investment Tax Allowance of 100% for the period of 10 years to qualified companies undertaking refinery activities on petroleum products.
It is worth noting that some US$20 billion (RM61.4 billion) worth of investment in oil and gas projects have been implemented in 2012.
These projects include the Petronas Refinery and Petrochemical Integrated Development (RAPID), oil and gas storage Terminal in Johor, Regasification Plant in Melaka as well as oil and gas terminal in Sipitang, Sabah.
AmResearch said the oil and gas industry appeared to be the major beneficiary of Budget 2013.
“The financial assistance for land acquisition is a positive for Dialog and Benalec although the exact structure of financial support is not yet certain for ventures into the tank terminal businesses.
“We are retaining our end-2012 fair value of 1,690 for the FBM KLCI. “Our fair value is pegged to a slightly higher 2012’s PE multiple of 15.9 times (from 15.5 times) because of the inclusion of Integrated Healthcare Bhd into the market index,” it said.
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