CIMB Research has technical sell on Mah Sing at RM1.88

KUALA LUMPUR (Dec 5): CIMB Equities Research has a technical sell on Mah Sing Group at RM1.88 at which it is trading at a FY13 price-to-earnings of 5.4 times and price-to-book value of 1.5 times.

The research house said on Monday the rebound from its August’s low hit a snag near the 61.8% FR level at RM2.15.

“We believe this is a level of significance and traders should continue to use any rebound to unload on strength. There is also a cluster of resistances at RM1.92-RM1.97,” it said.

CIMB Research said the technical landscape remains lethargic, which does not bode well for the stock. MACD signal line is about to fall into the negative territory while RSI has also hooked downward.

The research house said traders with lower risk appetite may wait for prices to fall below RM1.84 before joining the seller’s camp. The following support levels are RM1.74 and RM1.64.



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CIMB Research has technical buy on Proton at RM3.61

KUALA LUMPUR (Dec 5): CIMB Equities Research has a technical buy on Proton Holdings at RM3.61 at which it is trading at a FY13 price-to-earnings of 16.4 times and price-to-book value of 0.4 times.

The research house said on Monday Proton broke out of its triangle resistance on Friday.

“The rally also lifted prices above its 200-day SMA. Looking at the chart, we think this uptrend still has legs. The next upswing is likely to push prices towards RM3.86 and RM4.00 next,” it said.

CIMB Research said the technical landscape remains compelling. MACD is hovering in the positive territory while RSI is also above the 50pts mark.

“Risk takers may take some position here. However, always put a stop at between RM3.36-RM3.23 in case this is a bull’s trap,” it said.



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Bullish sentiment on Bursa set to continue

KUALA LUMPUR: Stocks are expected to continue to trade higher this week, with the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBMKLCI) trying to break the psychological 1,500 mark for the first time in more than three months.

The overall improving sentiments are mainly driven by a coordinated move by major central banks to ease Europe's debt crisis, the greater clarity provided by European policy makers on plans to stabilise the debt situation, as well as encouraging economic data from the US.

Meanwhile, closer at home, speculation of DRB-HICOM Bhd's possible acquisition of major stakes in Proton Holdings Bhd, possible mergers between ECM Libra Financial Group and K&N Kenanga Holdings, as well as Petronas' plans to build its third natural gas terminal in Lumut, will keep investors excited for the week.

"Investors' confidence has significantly improved over the past few trading days, and is expected to stay strong over the near term. This may be the beginning of a year-end rally," said a head of research from a local brokerage.

Analysts expect the immediate resistance level for the benchmark index at about 1,500 level, while the near-term support level is around the 1,470 level.

The FBM KLCI ended four consecutive weeks of losses with a 4.01 per cent gain last week at 1,489.02. It was also the index's highest weekly gain since July 2009.

Last week, the entire market capitalisation of the stock market rose by some RM30 billion to RM1.27 trillion, from RM1.24 trillion the week before.

The gains were partly driven by improving sentiments among foreign fund managers, who boughtalmost RM3 billion and sold RM1.76 billion worth of stocks, resul-ting in a net buying of more than RM1.17 billion.

Last week, the US Federal Reserve and five other central banks lowered the cost of dollar funding to ease Europe's debt crisis, while China reduced the amount of cash that banks must set aside as reserves for the first time since 2008. The reserve ratios will decline by 50 basis points starting today.

Meanwhile, data revealed that payroll gains in the US improved last month, and jobless rate was down to 8.6 per cent, its lowest level since March 2009.

This week, stocks that will be in investors' radar, among others, include Proton and DRB-HICOM on speculation of possible corpo-rate exercise; Glomac Bhd on its 50 per cent jump in second quarter net profit; as well as Tan Chong Motor Holdings Bhd, which a weekly publication reported that its Vietnam venture may reach break-even earlier than expected.



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Digistar hopes to join digital TV ‘revolution'

Kuala Lumpur: The migration from analogue to digital television transmission has everyone excited over who will be given the coveted government contract, estimated to be worth RM2 billion.


ACE market-listed Digistar Corp Bhd is one of those companies that are looking to be involved in the project once the government announced the contract.

Digistar director Tan Sri Zaman Khan expressed hope that the government would give preference to local and homegrown companies with the experience, expertise and know-how.

“The government needs to do more to nurture local companies to become world-class companies. For example, TATA Group of India, which started off as a truck company, has expanded to become the country’s top IT company with the support of the Indian government,” he said in an interview with Business Times, recently.

Currently, the market talk is that tycoon Tan Sri Syed Mokhtar Albukhary, through his privately held entity Puncak Semangat Sdn Bhd, had been promised the job by the government.

It is also learnt that Puncak Semangat had gone on a recruitment drive to hire engineers by teaming up with local universities to train talent.

Digistar managing director Datuk Lee Wah Chong said the company was preparing for the conversion project, in the event that it was able to land a part of the contract.

“We very much would like to supply for that job and we are talking with several companies. It would also help Digistar’s future earnings if it was involved in the project.”

Lee said the company was also in the midst of starting a subsidiary in Singapore early next year to bid for similar jobs in the region.

"All TV stations will have to switch to the digital system by 2015 as no equipment for the analogue system will be produced any more," he added.

Digistar is involved in, among others, the design, supply, installation and integration of IT infrastructure; teleconferencing; interactive media management systems; radio and television news automation; telecommunications systems; and other related electronic systems.

Lee also spoke on the problem of brain drain in Malaysia, saying it was slowing eating into the productivity of local companies, including Digistar.

"The government should provide more support to small- and medium-sized enterprises (SMEs). The growth of SMEs will help reduce and reverse the brain drain.

"In Japan and Taiwan for example, local SMEs get more projects and contracts compared with foreign companies," he said.



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HDBSVR cautious on outlook, advises sell into strength

KUALA LUMPUR (Dec 5): Hwang DBS Vickers Research have advised investors to sell into strength as it is still early whether the worst is already over.

In its market outlook on Monday, it said after witnessing a surprisingly powerful technical rebound last week, investors could be tempted to turn bullish now.

“But it is premature to think that the worst is already over when the state of the global economy is still fragile.

“Consequently, investors should sell into strength, as the bears may return sooner or later to block our stock market progress. On the chart, we stick to our stance that the FBM KLCI will face stiff resistance at the 1,500 and 1,515 levels,” it said.



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M&As must drive Proton's exports, says chairman

PETALING JAYA (Dec 3): Any form of merger or acquisition involving the national automaker, PROTON HOLDINGS BHD [], should steer its glory internationally, says chairman Datuk Seri Mohd Nadzmi Mohd Salleh.

He neither confirmed or denied any takeover rumour but said as a national automotive company any move to bring in new shareholders or privatise the entity should only be for the future success of Proton.

"As to who will be the shareholders, it is not up to me or the management to decide but it is up to the government. Proton can never remain the national car manufacturer forever given the present situation.

"Proton is now in the midst of transforming its business module where we are looking to push exports. Proton cannot be what it is locally, it has to transform itself to become a global player internationally," he told Bernama on the sidelines of the Proton's Family Day celebration here on Saturday.

Mohd Nadzmi said it was for this reason that the company's management and board were pushing ahead for Proton to be bigger than what it is today.

"Push for more export activities is the key because for a car industry, volume is very critical. In Malaysia, the domestic market is very small and very saturated.

"The current management team has a very huge task in making sure the national car project is not only focusing on the domestic market but we want to be a big global player.

"I think whatever we have to do now...even if we have to bring in new shareholders or the company needs to be privatised, it should not lose sight of that objective," Mohd Nadzmi said when commenting on Proton's sharp price increase of 15.4 per cent or 51 sen to RM3.61 on Friday, making it the day's third biggest gainer.

Analysts highlighted that the hike was a clear indication that talks of an impending takeover or sale of a stake in Proton, was imminent.

Conglomerates DRB-HICOM, Naza Group and SIME DARBY BHD [] were among the big companies involved in the automotive company's merger and acquisition exercise, with a stake sale to DRB-HICOM expected to be the closest.

Asked on potential suitors, Mohd Nadzmi said: "The interest has always been there. Many parties have expressed their interest and I think the government is very cautious in this kind of things as they would balance and analyse all possible factors before making a decision.

Mohd Nadzmi also said Proton was positive it cannot perform in the global arena as good as it did domestically without undergoing a shift in business modules. - Bernama



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Stocks to watch: Glomac, Mah Sing, Tan Chong, Fibon

KUALA LUMPUR (Dec 3): The FBM KLCI may trend higher and again test the psychologically important 1,500 level in the week ahead, starting Monday, Dec 5 on more global liquidity and economic optimism.

On Friday, Dec 2, the FBM KLCI closed in positive territory as some key regional markets reversed their earlier losses, but gains at the local market remained muted as investor sentiment stayed cautious.

Week-on-week, the KLCI was up 57.45 points to end at 1,489 with the market capitalisation up RM39.59 billion to RM1,269.59 billion.

Affin Investment Bank head of retail research Dr Nazri Khan said the sentiment could be propped by the coordinated move by central banks including China and Brazil to ease monetary policies.

Another positive factor is the rising expectation of an aggressive cut in the ECB interest rate and stronger EU deal to resolve the debt crisis.

“However, despite the gains spotted worldwide, we recommended caution since the liquidity move is yet to address the core problems that Europe faces which is to provide a long-term sustainable funding solution to the troubled European banking community,” he said.

Dr Nazri expected the broad market to trend higher slowly as they digest more clarity on the EU plan to deal the problems (possibly disclosed in the upcoming Dec 9, EU summit).

“These may includes details on how to enforce budget balancing for troubled countries, how to implement tough austerity measures especially for Portugal, Italy, Ireland, Greece and Spain, how to leverage the rescue funds and how to strengthen the ECB to backstop future crisis,” he pointed out.

Among the stocks which could see trading interest are GLOMAC BHD [], MAH SING GROUP BHD [], TAN CHONG MOTOR HOLDINGS BHD [] and Fibon Bhd.

Glomac's net profit for the second quarter ended Oct 31, 2011 rose 50pct to RM23.78 million from RM15.88 million a year ago, underpinned by on-going projects particularly Glomac Damansara, Glomac Cyberjaya, Saujana Rawang and Bandar Saujana Utama.

Its revenue for the quarter however declined 4.3pct to RM134.83 million from RM140.89 million, due to completion of two projects namely Glomac Tower and Glomac Galleria.

Mah Sing's proposed joint development of 4.08 acres of prime land along Jalan Tun Razak-Jalan Pahang faced a setback after the conditions were not met.

However, Mah Sing said it would explore options to move ahead on this. The project is a niche development – M Sentral -- with an estimated gross development value of RM900 million and it is part of the RM9-billion 58 acre riverside urban regeneration project.

The Edge weekly reports that Tan Chong Motor Holdings Bhd, which invested nearly US$45 million in Nissan Vietnam Co Ltd since acquiring a controlling stake in the company last year, is optimistic that it will reach break-even earlier than anticipated.

Meanwhile, Fibon – a chemical compounds producer -- is poised to enter a new phase of growth with the upcoming launch of its new switchboard Fibon LogiCube.

Anther company which could see trading interest are sports shoe sole manufacturer Xingquan International Sports Holdings Ltd. Its chief executive officer Wu Qingquan is confident that it can maintain its double digit growth in revenue for the financial year ending June 2012, said. The compound annual growth rate from 2006 to 2011 was 39%.

Last Friday, MMC CORPORATION BHD []'s Tanjung Bin Energy Sdn Bhd has sealed a power purchase agreement with TENAGA NASIONAL BHD [] to supply electricity over 25 years. However, the price of electricity which Tanjung Bin would sell to Tenaga was not disclosed in the statement to Bursa Malaysia.



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Proton group MD sees higher sales next yr

PETALING JAYA (Dec 3): PROTON HOLDINGS BHD [] is confident of achieving better sales volume next year as the car maker has put several initiatives in place to boost sales, says group managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir.

He said it has been Proton's tradition lately to introduce a new car variant or model annually, and next year, would be no exception.

"We are preparing to launch a new car in 2012 and one of the important activities for Proton next year would be to push hard on exports.

"Domestically, the sales volume is growing, year-on-year, but, for next year, it would be dependent upon prevailing market conditions then," he told Bernama at Proton's annual Family Day here on Saturday.

Syed Zainal said next year was expected to be a challenging year economically, but for the automotive industry, the introduction of new varient models would help improve Proton's overall performance.

For the first six months, Proton Holdings' car sales increased to 74,519 units versus 65,918 units sold in the same period in 2010.

Syed Zainal said like any other segment of the economy, the automotive market was and would remain very competitive.

"Thus, we have to double our efforts and this family day is one way to gather our workforce, raise their spirits, morale and encourage them to steer Proton to greater heights and success," he said. - Bernama



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