OSK Research sees more upside for Genting Malaysia share price

KUALA LUMPUR (Feb 2): OSK Retail Research is still eyeing the RM4.26 and RM4.60 levels as the upside targets for Genting Malaysia.

In its previous analysis on Nov 8, 2011, it advised traders to accumulate Genting Malaysia’s shares during the consolidation phase in the RM2.96–RM3.93 range and wait for a possible re-test of the RM4.60 historic high in the future.

“After nearly two months, the RM3.93 level was finally violated with very strong volume on Tuesday.

“The stock is now expected to continue extending its upward move within the uptrend channel. We are still eyeing the RM4.26 and RM4.60 levels as the upside targets,” OSK Research said.



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KLCI starts February on firmer note, crosses 1,540-level

KUALA LUMPUR (Feb 2): The FBM KLCI started February on a firmer note and crossed the 1,540-level in early trade on Thursday, in line with gains at regional markets.

At 9.05am, the FBM KLCI jumped 19.23 points to 1,540.52, lifted by gains at blue chips.

Gainers beat losers by 281 to 39, while 146 counters traded unchanged. Volume was 127.31 million shares valued at RM79.69 million.

Among the early gainers were Petronas Gas, BAT, DiGi, MAHB, United PLANTATION []s, IJM Corp, KLK, Public Bank, Sime Darby and HLFG.

Meanwhile, Asian shares and the euro gained on Thursday as global manufacturing data soothed fears about global economies deteriorating on the back of the ongoing euro zone debt crisis, while falling European debt yields also improved sentiment, according to Reuters.



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RHB Research upgrades Hiap Teck Ventures to market perform, FV 64c

KUALA LUMPUR (Feb 2): RHB Research Institute has upgraded Hiap Teck Ventures to market perform.

It said on Thursday that it was rationalising its valuation method in order to better reflect the recent cash call and investment in the blast furnace project that is not likely to contribute to Hiap Teck’s earnings within the next one to two years.

“Indicative fair value is adjusted to 64 sen (from 70 sen) based on 0.5 times book value of RM1.28 (post-rights issue). Upgrade to Market Perform,” it said.

RHB Research said it believes Hiap Teck’s manufacturing division will continue to be weak due to lacklustre domestic demand in the absence of significant water-related projects. This is evidenced by its low capacity utilisation rate of 50%.

“Demand for steel slabs produced by Eastern Steel is not likely to be an issue as there is a ready buyer. We estimate that Phase 1 of the blast furnace project could contribute roughly RM35-46m to Hiap Teck’s FY07/14 net profit,” it said.

The research house said that captive raw material from securing iron ore mining concession will transform Hiap Teck into an integrated steel producer, although actual award of the mining concession could take some time.

“Our FY07/12-14 net profit forecasts are raised by 12%-28%, having reflected interest savings arising from the private placement and rights proceeds,” it said.



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CIMB Research has technical sell on SKP Resources at 42 sen

KUALA LUMPUR (Feb 2): CIMB Equities Research has a technical sell on SKP Resources at 42 sen at at which it is trading at a price-to-book value of 1.6 times.

It said on Thursday that the uptrend from its January's low may be coming to an end. The black candle formed on the previous trading day confirmed the reversal signal. If this is indeed the beginning of a downtrend, the candles must not rise above its recent high of 43.5 sen.

“Indicators are showing signs of exhaustion. MACD histogram bars are starting to lose strength while RSI has also hooked downward. These easing trends do not bode well for the stock.

“Unload on strength looks like a good option here, especially near the 43.5 sen high. The next downleg is going to drag prices towards 39 sen and 36.5 sen. Put a buy stop at 44 sen, just in case,” CIMB Research said.



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CIMB Research has technical sell on Versatile Creative at 53 sen

KUALA LUMPUR (Feb 2): CIMB Equities Research has a technical sell on Versatile Creative at 53 sen at which it is trading at a price-to-book value of 1.2 times.

It said on Thursday that Versatile Creative violated its wedge support few days ago and it believes this is a prelude to more downside ahead.

“If we are right, the candles should fall towards 50 sen and 46.5 sen soon. Selling pressure will intensify when the 30-day SMA is breached,” it said.

CIMB Research said the bearish divergence on the MACD indicator shows that buying momentum is losing steam. RSI has also fallen below the overbought territory.

“Traders should do well selling into strength as near term gains are likely capped at 54 sen to 55.5 sen. Put a buy stop at 58 sen, just in case,” it said.



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CIMB Research has technical sell on Bumi Armada at RM3.95

KUALA LUMPUR (Feb 2): CIMB Equities Research has a technical sell on Bumi Armada at RM3.95 at which it is trading at a FY13 price-to-earnings of 15.2 times and price-to-book value of 1.2 times.

It said on Thursday that Bumi Armada violated its medium term downtrend channel recently and selling pressure has been slowly creeping up.

“If the candles still could not climb back above its key moving averages at RM4.04-RM4.08, we expect prices to de-rate towards RM3.72 and RM3.59,” it said.

CIMB Research said the MACD signal line has slipped into the negative territory while RSI is below the 50pts mark. The weak technical reading suggests that the bears have the upper hand here.

“Any rebound towards RM4.04-RM4.08 is an opportunity to sell into strength. Only a rise above RM4.15 would prompt us to review our bearish stance,” it said.



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HDBSVR sees Malaysian market rebounding on Thursday

KUALA LUMPUR (Feb 2): Hwang DBS Vickers Research said most Asian indices registering positive gains on Wednesday, the FBM KLCI should be raring to go after a one-day break, with the immediate resistance of 1,530 within its sight.

It said on Thursday that major US stock indices rose between 0.7% and 0.9% overnight due to positive outlook from manufacturing data released in the US, UK, China and Germany.

“We believe investors would be keenly following news on Greece’s expected completion of a debt writedown with private investors and an accord on a US$171bn eurozone bailout by the end of this week,” it added.

As for stocks on Bursa Malaysia, HDBSVR said on counters that should attract interest include:

(a) Tebrau Teguh, which was appointed to develop 413 acres of land in Pengerang, Johor, despite an offer of only 76 sen for a 33% stake which would trigger a mandatory takeover offer;

(b) IJM and AZRB, after confirming that they had officially received the letters of acceptance from MRT Corp; and

(c) Southern Steel, after reporting a net loss of RM5 million in the Oct-Dec quarter, which was below consensus expectations.



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Stocks to watch: Tebrau Teguh, MIG, Southern Steel, IJM, AZRB

KUALA LUMPUR (Feb 1): TEBRAU TEGUH BHD [] will be the stock to watch when the Malaysia market resumes trading after a one-day break for the Federal Territory holidays on Wednesday.

Other stocks which could also see trading interest are MELEWAR INDUSTRIAL GROUP BHD [] (MIG), SOUTHERN STEEL BHD [], IJM CORPORATION BHD [] and AHMAD ZAKI RESOURCES BHD [] (AZRB) following the latest corporate developments.

In a surprising turn of events, Tebrau Teguh is being taken over by Iskandar Waterfront Holdings Sdn Bhd (IWH), which is offering 76 sen per share – or just one sen above the pre-suspension price of 75 sen. Its net asset per share was 75 sen as at Sept 30, 2011 while it had RM44.52 million in cash and bank balances.

IWH is buying a 33.15% stake in Tebrau Teguh Bhd, comprising of 22 million shares, from Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ). The proposed acquisition would trigger a mandatory take-over offer by IWH for the remaining shares.

While the one sen premium is insignificant, the upside for the low-key Tebrau Teguh is that it has been appointed to develop 413 acres of land in Pengerang, Kota Tinggi, Johor.

The Johor government has appointed Tebrau Teguh to develop the site for a comprehensive mixed development project. The land, belonging to the state government, is within the Johor oil & gas Industry hub.

Meanwhile, MIG has proposed a corporate exercise involving a share capital reduction and a renounceable rights issue of up to 150.348 million new shares.

The rights issue, at an indicative price of 40 sen per rights share, the rights share would enable it to raise between RM21.97 million and RM60.14 million.

Southern Steel Bhd swung into the red with losses of RM5.52 million in the second quarter ended Dec 31, 2011 due to lower margins and foreign exchange translation losses. Its revenue and loss before tax were RM928.84 million and RM6.40 million respectively as compared with the preceding quarter’s revenue and profit before taxation of RM734.0 million and RM17.3 million.

IJM and AZRB, whose shares had rallied after the announcement by Mass Rapid Transit Corporation Sdn Bhd for the Sungai Buloh-Kajang phase, confirmed on Tuesday they had officially received the letters of acceptance.

IJM’s phase is for package V5 of the Mass Rapid Transit costing RM974.78 million while AZRB’s contract includes the completion of viaduct guideway and other works from Plaza Phoenix to Bandar Tun Hussein Onn station valued at RM764.91 million.



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