Stocks to Watch — Press Metal, Mesiniaga, Multi Sports

TheEdge Tue, Nov 05, 2019 11:28am - 4 years View Original


KUALA LUMPUR (Nov 5): Press Metal Bhd, a component stock of the FBM KLCI, is expected to be on the watch as the aluminium products manufacturer has been made to contribute more to Sarawak's state coffers.

The Sarawak state government announced yesterday that it will introduce a 1% state sales tax on aluminium products effective January 2020.

Press Metal's aluminium smelter in Sarawak, which takes advantage of the cheap energy generated from Bakun Dam, is subject to the new levy.

AmBank Research anticipates the new tax will cost Press Metal RM64 million in the financial year ending Dec 31, 2020 (FY20) and RM89 million in FY21. It also forecasted that Press Metal's profit margin will shrink by 6%-8% in the two years.

The company's share price is currently under some selling pressure, down 12 sen or 2.5%. However, trading volume is not large, only 453,300 shares changed hands so far at 10.45am, indicating that there is no panic selling at the moment.

Over at Mesiniaga Bhd, the sentiment is quite a contrast; its shareholders are expected to be grinning cheerfully as its share price continues to head north today.

The mild buying interest pushes Mesiniaga share price to RM1.32 this morning, up seven sen or 5.6%. The news on it bagging another contract in a week helps to fuel the upward trend.

Mesiniaga yesterday announced it secured a RM16.05 million contract from the Employees Provident Fund (EPF) for the supply of computer hardware, software, maintenance and IT related services

This is the second contract it was awarded in the span of a week, following the RM261.26 million job it accepted from the Finance Ministry to build new infrastructure for the Accountant General's Department of Malaysia. This is also the third contract it has secured this year, according to Bursa filings.

China-based sports shoemaker Multi Sports Holdings Ltd remains on top of the trading volume list for the second consecutive day. This is another penny stock that is on the verge of being suspended from trading this week, besides Sumatec Resources Bhd, and yet shares are actively traded.

There are already 62.59 million shares changing hands in the first two trading hours. The trading volume is more than its share capital of 606 million shares. The stock is trading at 1.5 sen, up 0.5 sen.

Two weeks ago, Bursa Malaysia rejected Multi Sports' application to delay the issuance of the China-based shoe manufacturer's 2019 annual report from Oct 31, 2019 to Dec 31, 2019.

Consequently, the company is at risk of having its share trade suspended next month, or subsequently delisted, should the company fail to submit its 2019 annual report by Oct 31.

In the event the company fails to submit the annual report 2019 within five market days after the expiry of the relevant time frame, which is Nov 7, 2019, the suspension of trading on the company's ordinary shares will be effected by Bursa on the next market day which is at 9.00am on Nov 8, 2019 after the expiry of five market days from the relevant time frame, in addition to any enforcement action that Bursa may take, said the regulator.

Multi Sports has yet to file the annual report as of now.

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