Harvest Court securities continue to slide

KUALA LUMPUR (Nov 17): HARVEST COURT INDUSTRIES BHD [] shares and warrants continued to fall sharply on Thursday, Nov 17 after Bursa Malaysia Securities had imposed trading sanctions on Monday.

At 9.15am, Harvest fell 44 sen to RM1.05 with 489,500 shares done.

The warrants fell 38 sen to 89 sen with 93,000 units done.

Under the trading curbs, buyers have to pay upfront for the shares or warrants, hence effectively curbing speculative buying.

The trading sanctions were the sternest warning to speculators who had chased up the stock in recent weeks despite that the regulator also issued unusual market activity queries to other penny stocks.

Bursa Securities had then said its decision to designate the securities of Harvest and the warrants due to excessive speculation were in the interest of ensuring a fair and orderly market.



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HDBSVR maintains Hold on AMMB, target price RM6.70

KUALA LUMPUR (Nov 17): Hwang DBS Vickers Research (HDBSVR) is retaining its Hold rating and RM6.70 target price for AMMB HOLDINGS BHD [] based on 15.5% returns on equity, 6% growth and 11.5% cost of equity.

It said on Thursday that AMMB’s 1HFY12 profit was 51%/53% of its/consensus’ estimates. Non-interest income was the main earnings driver, led by markets (treasury) segment as the bank lightened its fixed income portfolio to take advantage of the lower yield environment.

“These are expected to inch down in 2HFY12. NIM improved because loans grew ahead of deposits.

“We understand competition for deposits remains intense, and there could be further NIM pressure ahead. AMMB said that its balance sheet is still biased towards a rate hike,” it said.

HDBSVR said the variable rate loans are now 53% of total loans vs 47% a year ago.

“We trimmed loan and deposit growth to 8% each from 12% and 10%, respectively, so loan-to-deposit ratio remains at about 90%. 6MFY12 loan growth was only 2% while deposits growth was flat, but this could build up in 2HFY12 led by the corporate & investment banking business,” it said.

HDBSVR said its earnings estimates are little changed after this adjustment.



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Amway advances in early trade on firm 3Q earnings

KUALA LUMPUR (Nov 17): Amway (Malaysia) Holding Bhd shares advanced in early trade on Thursday, Nov 17 after its net profit rose 19.8% to RM25.77 million in the third quarter ended Sept 30, 2011 from RM21.51 million a year ago as it benefited from higher sales and improved gross margins due to the favourable foreign exchange impact.

At 9.10am, Amway rose 31 sen to RM9.35 with 12,900 shares traded.

Its revenue rose at a slower pace of 5.4% to RM211.52 million from RM191.50 million while earnings per share were 15.68 sen compared with 13.08 sen.

Amway declared a third interim single tier dividend of 9.0 sen net per share and special interim single tier dividend of 30.0 sen net per share for the financial year ending Dec 31, 2011.



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MIDF Research maintains Positive on oil & gas sector

KUALA LUMPUR (Nov 17): MIDF Research has maintained its Positive rating on the oil and gas sector, and saud that sustained order book, intact earnings outlook, healthy new contracts replenishment and positive news flow were the key supports for its view on the sector.

In a note Thursday, Nov 17, MIDF Research said it believed that Petronas’ capex plans of RM60 billion annually (as compared with RM30 billion-RM40 billion previously) would eventually translate into bigger contract size, and this may support valuation.

“We are also encouraged by the recently proposed US$12 billion EOR projects in Sabah and Sarawak by Petronas and Shell, expecting more contracts to be awarded going forward,” it said.



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HDBSVR sees KLCI falling below 1,475

KUALA LUMPUR (Nov 17): Hwang DBS Vickers Research (HDBSVR) said the benchmark FBM KLCI is expected to drop below its immediate support level of 1,475, possibly falling towards the next support line of 1,445 ahead.

It said on Thursday that sentiment would be impacted after the overnight fall on Wall Street. Major U.S. equity indices plunged between 1.6% and 1.7% at the closing bell partly on fears that American banks could be hit by the spreading eurozone sovereign debt crisis.

“Consequently, Asian equities will likely suffer from the spillover effects today,” it said.

HDBSVR said against the weak market backdrop, the share price and warrant price of Harvest Court should tumble further on Thursday after hitting limit down on Wednesday.

“And it remains to be seen whether the selling momentum will affect other penny stocks still sitting on huge gains such as DPS Resources, Federal Furniture and Tricubes.

“Meanwhile, Tanjung Offshore shares may come under pressures too following the release of a set of poor financial results last evening,” it said.



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CIMB Research downgrades Imaspro to Sell, TP 78 sen

KUALA LUMPUR (Nov 17): CIMB Equities Research has downgraded agrochemical and pesticide manufacturer Imaspro to a sell after its first quarter (1QFY6/12) earnings were below expectations.

It said on Thursday the net profit of RM1.1m was below expectations, being only 11% of its full-year forecast.

“We had overestimated its cost pass-through ability and been too optimistic about the demand growth,” it said.

CIMB Research said on the dividend front, however, the company did not disappoint, declaring a single-tier first and final dividend of 3.5 sen.

“Factoring slower growth and weaker margins, we slash our FY12-14 EPS numbers by 10-24%. Our target price is chopped from RM1.13 to RM0.78, still pegged to a 40% discount to our target market P/E, revised from 14.5x CY12 to 12.6x CY13.

“We also downgrade the stock from Buy to SELL. Potential de-rating catalysts include 1) this results miss, 2) stiff competition and 3) higher raw material prices which erode profit margins. Poor share liquidity is another negative,” it said.



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CIMB Research has technical buy on Kumpulan Europlus

KUALA LUMPUR (Nov 17): CIMB Equities Research has a technical buy on Kumpulan Europlus at RM1.07 at which it trading at a price-to-book value of 5.5 times.

It said on Thursday Kumpulan Europlus broke out of its triangle resistance on Wednesday.

“Looking at the chart, we think this upswing still has legs. If prices can continue to hold on above its 30-day SMA (now at RM1.03), there is a good chance that prices may edge closer towards RM1.14 and RM1.20,” it said.

CIMB Research said the technical landscape is improving. MACD is poised for a positive crossover while RSI has also hooked upward.

“Traders may start to nibble now but always put a stop at below the RM1.01 level. A break below its 50-day SMA would put a stop to this uptrend,” it said.



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CIMB Research has technical buy on Asia Media at 28.5c

KUALA LUMPUR (Nov 17): CIMB Equities Research has a technical buy on Asia Media Group Bhd at 28.5 sen at which it trading at a price-to-book value of 1.1 times.

It said on Thursday Asia Media broke out of its triangle pattern on Wednesday.

“We think there is still room to the upside. If we are right, the candles should swing past yesterday’s high of 31 sen again soon. The following resistance levels are 33 sen and 35 sen,” it said.

CIMB Research said the MACD signal line is hovering in the positive territory while RSI is also rising. The positive readings reinforce its short term bullish stance on the stock.

“Risk takers may start to nibble now while others should wait for a push above 29.5 sen before going long. Put a stop at below 27 sen,” it said.

Asia Media Group is a digital out-of-home Transit TV company. The company is a media provider, offering infotainment and targeted advertising through the use of digital electronic displays installed in various outdoor premises.

Asia media has LCD screens installed in buses travelling in the market centric hubs of Klang Valley and Johor Bahru.



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