MPI hits high of RM3.05 after upgrade on positive outlook for semicon

KUALA LUMPUR (Jan 19): Shares of MALAYSIAN PACIFIC INDUSTRIES [] Bhd (MPI) rose to a high of RM3.05 on Thursday on some nibbling, as sentiment was underpinned by a more positive outlook for the semiconductor sector.

At 3.14pm, MPI was up 23 sen to RM3.02.

The FBM KLCI fell 2.01 points to 1,515.37. Turnover was 1.30 billion shares valued at RM943.17 million. There were 310 gainers, 372 losers and 304 stocks unchanged.

RHB Research Institute has upgraded Unisem and MPI to market perform from underperform following the upbeat outlook from major players about the semiconductor industry.

It raised the fair value (FV) for Unisem to RM1.22, MPI’s FV to RM2.79 while Notion VTec’s FV was raised to RM1.69 (underperform outlook unchanged).

RHB Research said US based IC design company Linear TECHNOLOGY [] gave an upbeat outlook for the industry.

This would be the third positive guidance after Broadcom and ChipMOS, and indicates a more positive tone for the industry after a parade of negative guidance last month.

“We have already factored in a weak 1Q12 for local packaging players, as there is still lack of order visibility, but we believe the industry may be on track for some recovery in 2Q12, and stronger recovery in 2H12.

“We believe the demand weakness for chips has already been priced in. Thus, we are raising our benchmark forward target P/BV from 0.6 times to 0.8 times for the semiconductor players. We upgrade Unisem and MPI to Market Perform (from underperform),” said RHB Research.



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OSK Research: Unico-Desa near 4-yr resistance level

KUALA LUMPUR (Nov 25): OSK Research said Unico-Desa PLANTATION []s Bhd continued to outperform the benchmark FBM KLCI since the price has started resuming its firm upward run in early 2010.

It said on Friday the share price is now within touching distance of the four-year resistance level and a good break above that level should see it accelerating even higher, leaving many laggards in its trail.

OSK Research said Unico can be considered a laggard within the plantation sector. “Despite trending higher from the series of higher lows since early 2009, its share price has yet to break above the 2008 high of RM1.20.

This is in contrast to the majority of plantation stocks, especially the smaller capitalised plantation stocks, which have broken into new levels,” it said.

OSK Research said this may change after the stock continued to show strength since rebounding off the August low.

In fact, the market sell-off in August-September did little to dampen its outperformance. The low in August was just a tad below the February low, while the September low was higher than the August low, which is opposite to the benchmark FBM KLCI’s trend.

The stock also hardly budged during the selling of the past two weeks. Its relative strength line also confirms the price strength. It is inching higher since 2010 and is now at the highest level since the 2009 low.

OSK Research said the September low of RM2.76 is above the March low of RM2.65. However, the positive technical picture will only be affirmed by a weekly close above the all-time high weekly close of RM1.20.

That will see a violation of the 4-year old resistance level, and a strong move is always expected on breakout from a long-term resistance level. A price of RM1.80 is not impossible, but a conservative projection could see it testing RM1.60, a measured move based on the 2009-2011 rally.

Minor resistance is expected at RM1.40, a projection based on the 2010 rally. Strong support is clearly at the 2011 low of above RM0.97, which also exhibits the most oversold weekly RSI level since early 2009, and a close below that level can be employed as a stop.

Thus, positions can be initiated at the current level or if possible, on pullback towards the support level. A close below RM0.97 will invalidate the trade, and the price may trade at best sideways, between the wide range of RM0.60 and RM1.20.



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