Stocks to watch Monday : FBM KLCI, UEM Land, GBH, Media Prima

The changeover of the KLCI to the FBM KLCI should be the focus of attention on July 6 as retail investors have to get used to the 30 big cap stocks instead of the usual 100 stocks. As for fund managers and institutional investors, there is not much change as attention would be on the FBM KLCI and also the remaining 70 stocks. However, the fundamentals of the companies are more important for any stock investors.
Investors should also be aware the FBM KLCI could see more volatility because of the larger weighting for the big cap stocks. The FBM KLCI will assume the closing of the KLCI on July 3 when the changeover takes effect on July 6.
On the economic front, the May exports were worse than expected due to the slump in the US economy and decline in the electrical and electronics (E&E) industry. May exports fell 29.7% to RM42.95 billion from a year ago but were 4.5% higher from April.
Data which investors should look at are the industrial production index, which measures the manufacturing activity and output, due this coming week.
Economists are expecting the second quarter to have entered into a recession and a recovery is only expected in the fourth quarter. Meanwhile, the US-based Semiconductor Industry Association reported global sales of semiconductors rose to US$16.5 billion in May, an increase of 5.4% from April when sales were US$15.6 billion, providing some cautious optimism to the industry. But when compared with a year ago, worldwide sales of chips in May fell 23.2% from US$21.5 billion a year ago.

UEM Land should be in focus after it posted its best gains in one week and the latest corporate announcement was that the company and Telekom Malaysia have extended their partnership to develop and provide telecommunications services in Nusajaya, Iskandar Malaysia by another year until July 2, 2010.

Investors would also want to know the reasons for Sime Darby’s unit and Ramunia Holdings Bhd decision to extend the signing of the definitive sale and purchase agreement from July 3 to Aug 3.

Sime said on July 3 the extension was made at the request of Sime Darby Engineering Sdn Bhd (SDE).

Under the agreement, SDE would acquire the business and undertaking, including the assets and liabilities of Ramunia for a total provisional purchase consideration of RM232.0 million.

Goh Ban Huat should also attract attention following the latest development in Tan Sri Robert Tan’s move to launch a takeover of the ceramics products manufacturer. Tan already has triggered the 33%.

In Media Prima, US fund Harris Associates LP bought another 5.02 million shares on June 26 and 30, in addition to the 13.51 million Media Prima shares from June 22 to 25. This sees the US fund having 101.44 million shares or 11.88%.

In Compugates, Datuk Goh Tian Chuan has ceased to be a substantial shareholder after the disposal of 28.78 million shares on July 3 in an off-market deal.
In Kurnia Setia, the board of directors has accepted Kreatif Selaras’ takeover offer at RM2.70 per share and RM1.20 per warrant.