Stocks to watch: Public Bank, Bursa, Astro, Proton, WCT

FROM THE EDGE

KUALA LUMPUR: Two big capitalised companies are due to announce their second quarter results on July 20 – Public Bank and Bursa Malaysia – which could see investors’ attention focused on the companies.

Strong earnings from the companies would underpin market sentiment, especially from Public Bank which analysts expect it to outperform its peers despite the weaker economic climate
RHB Research has maintained its outperform call and fair value of RM11.50 on Public Bank as it believes investors would switch their focus to the bank’s earnings prospects. “With investors’ focus switching to 2010 earnings prospects, we believe its (Public Bank) 1H09 share price underperformance should reverse with upward bias in 2H09.

“Concerns (capital, dividend payout and maintaining high return on equity) that have weighed down on its 1H09 share price performance have been overplayed and are likely to be the catalyst for share price performance in 2H09,” it said in a recent report.

The strong trading volume in the second quarter and the rally should also underpin Bursa Malaysia’s earnings.

Maybank Investment Bank expects Bursa Malaysia’s second quarter ended June 30, 2009 net profit to double that of 1Q09 on strong trading activities, although it maintains its sell recommendation on the company’s stock as “valuations are still ahead”.
“With between 50% and 60% of operating revenue derived from trading activities, we expect Bursa’s 2Q09 net profit to exceed RM30 million, from RM15.5 million in 1Q09,” the research house said.

Astro All Asia Networks’ AGM on July 20 would see shareholders raising questions whether the satellite TV operator is hiving off its 20% owned Indian associate Sun Direct TV.
The Edge weekly in its July 20-26 edition reports the company could return some cash to shareholders. This could see continued interest in Astro, whose share had run up last week.

The weekly also reported Proton Holdings managing director Datuk Syed Zainal Abidin Syed Mohamad Tahir as saying the national carmaker has hired a professional advisory company to help it improve the business in its sports car subsidiary Lotus.

In WCT Bhd, the company secured four contracts worth RM766.48 million from Medini Iskandar Malaysia Sdn Bhd to undertake infrastructure works in Medini Iskandar Malaysia, Johor.

The works comprise of earthwork, drainage, roads, infrastructure works, sewerage pumping station, electricity sub-stations and 33KV main distribution sub-stations.

The EGM of SLK Holdings is expected to attract interest on news reports of a shareholder feud. Shareholders of the highway concessionaire have to put to vote a plan to buy an oil and gas services company.

The report said SILK majority shareholder and executive chairman Datuk Muhammad Azlan Hashim has differing views from substantial shareholder Cerah Sama Sdn Bhd.