Analysts: Good time to pick up quality shares

  • Business
  • Thursday, 29 Jan 2004

By izwan idris

THE recent decline in the price of poultry-related stocks is an opportunity for investors to accumulate quality shares at lower prices, analysts said. 

“Should share prices continue to plunge, we reckon this would be an opportunity to buy on weakness,’’ MIDF Sisma Securities said in a research note yesterday. 

In recent days, poultry-based stocks like Leong Hup Holdings Bhd, LTKM Bhd, CAB Cakaran Corp Bhd, and Comsa Farms Bhd have seen their prices falling by as much as 12%, largely due to concerns over the fast-spreading bird flu virus. 

The deadly Avian Influenza has been detected in 10 countries around the region. Malaysia has so far remained free of the virus. 

Said Pacific Mutual Fund senior investment manager Geoffrey Ng: “I will take this opportunity to effectively build up our position on stocks that have been bashed down badly. 

“We are adopting an opportunist strategy. That's what we did during the SARS outbreak and it has proven to be a success.'' 

He noted that certain investors, particularly foreign funds, were using the spread of the bird flu virus as an excuse to take profit as share prices in the region had gone up substantially. 

Besides fears over the bird flu virus, the local market was also due for consolidation after posting recent gains, TA Securities research head C.K. Ngu opined. “I don't think it (the bird flu) is a serious concern at this point of time,'' he added. 

Meanwhile, MIDF Sisma expects the affected stocks to rebound once the fears subside, as was the case with travel stocks during the SARS epidemic last year. 

Despite its positive outlook, MIDF Sisma cautioned that there could be further price depreciation. 

“Indeed, prices of poultry stocks would continue to come under pressure from continuous negative news flow on this front,’’ it said. 

The bird flu scare also weighed on the main index yesterday, which ended lower for the second straight day. 

Genting Bhd – whose gaming operations have a sizeable regional clientele – shed 30 sen to close at RM16.90, while national carrier Malaysia Airlines was down 14 sen at RM4.38. 

 Stock Watch On LTKM Stock Watch On LHH Stock Watch On CAB Stock Watch On COMSA

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