Trading ideas: SKP Resources, Oldtown, Sime, MAHB

Foreign funds have continued to be net buyers on Bursa Malaysia on Monday at RM167.64mil.

KUALA LUMPUR: SKP Resources, Oldtown, Sime Darby and MAHB could see trading interest on Monday after their corporate announcements.

JF Apex Research said that global markets were under pressure last Friday due to geopolitical issues as US stocks ended mixed after an attempted military coup in Turkey. Earlier, European equities declined following a terror attack in Nice, France.

At Bursa Malaysia, the FBM KLCI jumped 13.62 points to 1,668.40. 

“Following the bearish sentiment in global markets, investors could take profit from last week's surge and trade below the resistance of 1,670,” it said.

Stock market data showed foreign funds continued to be net buyers on Bursa Malaysia at RM249.03mil while retail investors and local institutions were net sellers at -RM35.66mil and -RM213.37mil.
 

JF Apex Research said SKP Resources clinched a four-year contract worth RM500mil per annum — or RM2bil in total — from its major customer Dyson Ltd to manufacture an electronic consumer product. 

However, the group said this would replace its five-year RM400mil per annum contract that was awarded by Dyson in May last year, for manufacturing cordless vacuum cleaners to "optimise limited labour resources following the government's move to freeze the hiring of foreign workers".

Oldtown is expanding its "Oldtown White Coffee" restaurant empire footprint into Jiangsu province in China, with the first outlet to be opened in Wuxi City in October this year.

“We are positive on the expanding mode undertaken by Oldtown Bhd's China-arm which entered into a territorial licence agreement (TLA) with China's G&L to give its rights to operate and to sub-license the rights to operate the Oldtown White Coffee restaurant business in Jiangsu, China by opening the new outlet in this coming October,” said JF Apex Research.

Meanwhile, CIMB Equities Research said political events unfolding in Turkey right now, on top of recent terrorist attacks, will likely dissuade international travellers from visiting Turkey.

It cut MAHB group’s FY16-18 core EPS forecasts by 19%-35%, by assuming that its Turkey airport ISG’s international pax traffic will decline 3% in FY16, from 9% growth previously. 

“We remain Add on MAHB, with a reduced DCF-based target of RM7.25, with the key catalyst being a likely increase in klia2’s passenger service charges,” it said.

CIMB Research also said Sime confirmed that its Ulu Remis palm oil mill was suspended by the Department of Enivronment of Johor for 60 days due to an overflow of treated Palm Oil Mill Effluent (POME). 

“The group’s checks show no evidence that its POME led to the contamination of Sg Johor. This news is negative but we do not expect this to significantly impact earnings. We maintain our Hold rating and sum-of-parts based target price of RM7.56,” it said.