HDBSVR sees upside for UEM Land, TP RM2.30

KUALA LUMPUR (Jan 6): Hwang DBS Vickers Research (HDBSVR) sees the successful talks between the governments of Malaysia and Singapore as a strong boost to the prospects of Iskandar Malaysia.

The research house said on Friday that Iskandar Malaysia is expected to reach its tipping point in 2012 following the completion of key catalyst developments and infrastructure improvements.

The industrial cooperation work group may serve as a springboard for more investments from Singapore into Iskandar Malaysia which has received RM77.8 billion worth of committed investments as at Dec 2011.

HDBSVR said UEM Land will be the largest beneficiary of improving Malaysia-Singapore ties given that it is the largest landowner in Iskandar Malaysia with 11,000 acres in Nusajaya.

UEM Land is also the project manager for the M+S Pte Ltd developments (S$11bn) in Singapore. Assuming project management fee of 3% of GDV and a 50% share, it could boost UEM Land’s RNAV by an additional 1.3% or 5 sen/share.

“Maintain Hold call for UEM Land with RM2.30 TP, based on 40% discount to RNAV of RM3.82,” it said.



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Muted gains on KLCI in early trade

KUALA LUMPUR (Jan 6): The FBM KLCI edged up marginally on Friday, reflecting cautious investor sentiment as key regional markets mostly retreated after European markets sank overnight.

At 9.05am, the FBM KLCI was up 0.24 point to 1,514.67.

Gainers led losers by 101 to 50, while 112 counters traded unchanged. Volume was 53 million shares valued at RM29.18 million.

Among the advancing stocks were Can-One, United PLANTATION []s, Petronas Gas, BAT, Petronas Dagangan, HLFG, Muda, Kian Joo and Tasco.



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RHB Research maintains underweight on banks, but Public Bank top sector pick

KUALA LUMPUR (Jan 6): RHB Research Institute is maintaining its Underweight stance on the banking sector amid prospects of weaker economic conditions ahead.

As for individual recommendations, the research house pointed out Public Bank remains an outperform with a fair value of RM14 as its top sector pick.

RHB Research said among the three main factors that underpin its bearish sector view were that historically, the sector has not performed well during an economic downturn as banks are often viewed as a proxy to the economy.

“For 2012, we project aggregate sector net profit growth to slow to 4.5%, from 10.6% for 2011 but we do not discount further downside risks to our forecasts,” it said.

RHB Research said from a valuations perspective, it finds Malaysian banks less attractive versus regional peers and historical levels.

“We believe the risk of a global double-dip recession has eased somewhat and consequently, have raised our target prices by up to 16%,” the research house said.



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CIMB Research has technical buy on Unisem at RM1.09

KUALA LUMPUR (Jan 6): CIMB Equities Research has a technical buy on Unisem at RM1.09 at which it is trading at a FY13 price-to-earnings of 8.4 times and price-to-book value of 0.7 times.

It said on Friday Unisem is still trapped in a downtrend channel but we think a short term bottom may have formed. The recent sideways consolidation suggests that a base is formed near the RM1.00 level.

“As long as prices stay above the RM1.00 level, we advocate traders to accumulate on weakness. The next upswing is likely to push prices towards RM1.14 and RM1.21. The 200-day SMA is also a magnet for prices,” it said.

CIMB Research said the MACD signal line is rising towards the zero level while RSI is also above the 50pts mark.

However, the research house said the key risk to this investment is that the stock could prolong its sideways consolidation.



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CIMB Research has technical sell on WCT at RM2.18

KUALA LUMPUR (Jan 6): CIMB Equities Research has a technical sell on WCT BHD [] at RM2.18 at which it is trading at a FY13 price-to-earnings of 8.1 times and price-to-book value of 1.2 times.It said on Friday that despite numerous attempts, WCT failed to push above its triangle resistance.

“It seems that the downward slopping resistance line is a level of significance and this would likely keep the bulls at bay in the near term,” it said.

CIMB Research said the technical landscape is deteriorating. MACD signal line is losing pace fast while RSI has also hooked downward.

“Our strategy here is to unload on strength, preferably near the RM2.28-2.31 resistances. Prices need to swing past above to negate our bearish stance. On the downside, a break below RM2.06 would likely drag prices towards RM1.95 and RM1.85,” the research house said.



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CIMB Research has technical buy on BDRB at RM2.28

KUALA LUMPUR (Jan 6): CIMB Equities Research has a technical buy on BANDAR RAYA DEVELOPMENTS BHD [] (BDRB) at RM2.28, at which it is trading at a price-to-book value of 0.6 times.

It said on Friday BDRB broke out of its consolidation triangle pattern on Thursday.

“We think the stock is ripe for a stronger rebound. If we are right, the next upleg is going to lift prices towards RM2.45 and RM2.54 next,” it said.

CIMB Research said the MACD signal line has finally returned to the black while RSI is still rising adding, the bulls will likely take lead from here.

“Aggressive traders may start to nibble now. However, always place a stop at below RM2.20 to cap exposure,” said the research house.



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HDBSVR: KLCI to trade sideways around 1,515

KUALA LUMPUR (Jan 6): Hwang DBS Vickers Research (HDBSVR) said the benchmark FBM KLCI will probably bounce back and forth around the immediate resistance level of 1,515 on Friday, possibly moving with a marginal downward bias on the chart.

It said the sideways market performance is anticipated in view of a dearth of fresh market leads. Overnight, major U.S. equity indices ended between flat and 0.8% higher amid better economic data.

HDBSVR said Malaysian stocks that could be of interest to investors include:

(a) KIAN JOO CAN FACTORY BHD [], which has announced that its managing director has stepped down following the end of his contract term;

(b) Can-One, after saying that it is not aware of any possible reason for the sharp run-up in its share price (which went limit-up on Thursday). Can-One has previously announced a plan to buy a 32.9% controlling stake in Kian Joo Can Factory and is in the midst of a legal process to go ahead with the proposed acquisition; and

(c) BHIC, which has clarified that there is no indication of any privatisation deal for the company.



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Stocks to watch: SapuraCrest, Can-One, XDL, Maxbiz, JCY

KUALA LUMPUR (Jan 6): The local stock market could see some intermittent profit taking activities on Friday as investors lock in their gains ahead of the weekend.

European shares were lower early Thursday afternoon, led by bank stocks on concerns about their financial health and as sovereign yields rose across the region after a French debt auction.

The FTSEurofirst 300 index of top European shares was down 0.8 percent at 1,012.78 points, with Italy's FTSE MIB index down 3.2 percent and France's CAC-40 down 1.1 percent.

The uncertain external developments could see investors taking a more cautious stance despite the firmer close of the broader market on Thursday.

Concerns would for stocks which had run-up in the absence of positive corporate developments like Can-One, Box-Pak and BOUSTEAD HEAVY INDUSTRIES CORP [] (BHIC).

The FBM KLCI surged 10.21 points to close at 1,514.43, with KL Kepong surging RM1.76 to RM25.26. Turnover was 1.67 billion shares valued at RM1.46 billion. Advancers beat decliners 467 to 325 while 324 stocks were unchanged.

Can-One, whose share price surged 31 sen to close at RM1.37 with 6.95 million shares done, replied to a Bursa Malaysia Securities query that there were no factors for the unusual market activity.

Box-Pak could see profit taking, after rising 26 sen to RM2.52, despite earlier announcements that there was no plan to privatise it.

BHIC, which gained 26 sen to RM4.11, could also see a retracement in the share price after it clarified that it had not received any indication or direction from its shareholders about any major acquisition of shares in the company which might include potential privatisation.

However, on a positive note, SAPURACREST PETROLEUM BHD [] had secured two contracts worth combined US$227 million (RM712.78 million) to build two units pipelay cum heavylift offshore CONSTRUCTION [] vessels.

Its unit TL Offshore Sdn Bhd had finalised the contracts with Cosco (Nantong) Shipyard Co. Ltd. SapuraCrest said both parties had agreed that the contract be effective from Sept 10, 2011.

In XiDeLang Holdings Ltd (XDL), the company said Navis Capital has approached the former’s major shareholder Hong Peng International Holdings Ltd to acquire its stake.

The British Virgin Islands’ registered Hong Peng owns 240 million XDL shares or 60% as at Nov 11, 2009.

MAXBIZ CORPORATION BHD [] said the contract value of the letter of intent (LOI) of RM510 million from Fibre-N Sdn Bhd was based on the infrastructure works of RM5,100 per connection.

Maxbiz said the LOI was for the fibre-to-the-home and fibre-to-the-office (FTTX) infrastructure works for 100,000 connections to high- rise residential and office buildings in Klang Valley, Penang and Johor Bahru.

LION CORPORATION BHD [] has received Bursa Malaysia Securities Bhd’s approval to list up to 950 million new shares to settle the overdue amount owed by its 79% owned Megasteel Sdn Bhd.

JCY International Bhd might extend its gains from Thursday after the company’s recent statement it was likely to record a surge in earnings for the quarter ended Dec 31, 2011.

CIMB Research had stated said JCY’s profit guidance for the December quarter was even better than its already-above-consensus estimate.

It expected JCY’s positive earnings momentum to continue for at least the next two to three quarters and should catalyse a rerating of the stock.

“The favourable impact of a higher ASP, better product mix and stronger US$ prompts us to revise our above-industry forecasts again for FY12-14. “This raises our target price to RM1.54, still based on 6x CY13 P/E. Maintain Trading Buy,” it said.



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