Gold prices to increase further

Poh Kong expects gold prices to increase further

PETALING JAYA: Poh Kong Holdings Bhd anticipates further uptrend in the price of gold, given strong demand for the commodity.

Gold price hit a record high of above US$910 an ounce on Monday.

Executive director Siow Der Ming said the previous record price was during the 1980s – at US$850 an ounce.

“Many analysts have predicted the price will hit US$1,000 per ounce soon but we believe it will average about US$850, depending on the state of the US economy,” he said after the company AGM and EGM yesterday.

»We believe there will be more people buying gold (wafers) for investment« SIOW DER MING

Siow also said the weakening US dollar could help boost the demand for the precious metal.

Many investors are expected to switch to gold to hedge against inflation and the depreciating dollar.

“We believe there will be more people buying gold (wafers) for investment,” he said.

Backed by favourable external factors and the company’s expansion plans, Siow said Poh Kong expected to record a 10% increase in sales for its financial year ending July 31 (FY08).

The company reported lower net profit of RM18mil on sales of RM414.2mil for FY07 compared with RM26mil and RM372.1mil respectively for FY06.

It announced yesterday a final dividend of 6 sen per ordinary share, less income tax of 26% for FY07.

For the first quarter ended Oct 31, it made a net profit of RM8.8mil compared with RM7.9mil for the previous corresponding period.

On expansion plans, Siow said the jewellery retail chain would open two new stores by year-end – one each in Klang and Penang. Each store would cost about RM3mil, he said.

Poh Kong currently has 91 outlets nationwide.

“We aim to venture into Vietnam, Indonesia, Singapore and Thailand over the next two years to capture the high-end market,” he said.

The company recently signed an exclusive distribution and marketing agreement with German pearl trading company Schoeffel GmbH to distribute and market Schoeffel pearl jewellery in the region.

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