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Malaysia stock market and companies daily report (September 01, 2010)

Contributed by Shares Investment

By Shares Investment

Bank Negara Likely To Maintain Key Rate

Bank Negara Malaysia is likely to keep borrowing costs unchanged when its monetary policy committee meets tomorrow for the second last time for this year. The market highly anticipates that the committee will pause increasing the overnight policy rate (OPR) which ultimately determines interest rates. In a recent survey, only 12% of the 17 research houses felt that there was a 55% to 60% probability that the central bank would increase the OPR by another 25 basis points to reach 3.0%. TA Research economist Patricia Oh does not expect Bank Negara to make any changes through year-end. “The three consecutive OPR hikes through to July this year had in fact been favourable towards boosting the overall local sentiments and thus lifting domestic growth to date,” she said. “As a result of the stabilisation from the low-base effect of last year, economic growth may persist but at a modest growth pace going forward into the third and fourth quarters,” she added.

AmResearch Maintains Buy On PLUS Expressways

AmResearch maintains its Buy call on PLUS Expressways (PLUS) with fair value raised from RM4.33 a share to RM4.72 a share after the earnings upgrade following strong traffic numbers. The research house said on 1 Sep-10 that it raised its forecast for 2010 traffic growth projections from 5% to 5.5%, which is slightly higher than PLUS management’s guidance. “Proposed 4th lane expansion program would likely provide an added kicker to its traffic levels over the long-term. We continue to like PLUS for its sturdy cash flows and strong management team – backed by attractive yields of 5%- 6% over FY10F-12,” it said. AmResearch added more upside could come from potentially value accretive investments abroad – particularly in India as well as Indonesia.

KNM Proposes To Consolidate Shares

The group is proposing to consolidate every four of its shares of 25 sen each into 1 ordinary share of RM1 each. The company has also proposed to amend its memorandum and articles of association to effect the share consolidation exercise. As at 30 Aug-10, the issued and paid-up share capital of KNM is about RM1b, comprising 4.004b shares. Upon completion of the proposed share consolidation, the issued and paid-up share capital of KNM would be rounded down to about RM1.0b, comprising about 1.0b consolidated shares. KNM said following the exercise, KNM shall benefit from easier management of a smaller number of shares, where the consolidated shares shall bear the same value of the existing KNM securities but at no expense to neither KNM nor its investors.

This article is contributed by Shares Investment. Visit Sharesinv.com for the latest Singapore, Malaysia and China stock market news and reports.