KUALA LUMPUR (June 2): The FBM KLCI is likely to trend lower from Monday as weak sentiment on the global front would certainly weigh on investor mood t the local equity market.
US stocks plunged last Friday after a troublingly weak jobs report added to fears about a global economic slowdown and sent the Dow into negative territory for the year, according to Reuters.
The world's economic outlook darkened on Friday as reports showed US employment growth slowing sharply, Chinese factory output barely growing and European manufacturing falling deeper into malaise, it said.
Moody’s Investors Services last Thursday downgraded nine Danish banks and specialised lenders, and the three banking and insurance entities that make up the Finnish Pohjola group, as part of a review for downgrade of various European financial institutions initiated on Feb 15.
Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said the FBM KLCI was likely to trend lower on rising funds outflow due to weaker commodities, falling ringgit, the eurozone's fears on troubled Spanish banks and potential Greece exit, absence of China monetary stimulus and disappointing global economic data (negative USA labour market data, a downward revision of US first-quarter growth and weaker than expected Japan industrial production).
Among the stocks that could be in focus at Bursa Malaysia are Petronas Dagangan Bhd (PetDag), Crest Builder Holdings Bhd, Genetec Technology Bhd and plantation-linked counters.
PetDag is acquiring downstream companies from the Petronas Group in the Philippines, Vietnam, Thailand and Malaysia for US$62 million (RM198.31 million) as part of its growth strategy to expand into the region.
In a statement June1, PetDag said it was acquiring Petronas Energy Philippines Inc and Duta Inc in the Philippines, Petronas Vietnam Co Ltd and Thang Long LPG Co Ltd in Vietnam, Petronas International Marketing (Thailand) Co Ltd in Thailand, as well as Petronas Aviation Sdn Bhd in Malaysia.
The Edge weekly in its latest edition reported that Crest Builder was eyeing the big league in the property sector, having scored a deal to developreal estate above the Dang Wanghi Light Rail Transit (LRT) in Jalan Ampang. The newspaper also reported that Genetec, which was affected by the floods in Thailand last year, was on the road to recovery. It cited Genetec managing director Chin Kem Weng as saying that orders were flowing back in, partly due to pent-up demand and the building up of new products.
Plantation-related counters could come under some pressure with the weakening crude palm oil (CPO) prices. CPO futures for the third month delivery fell RM95 per tonne to RM3,006 last Friday.