OSK Research: Bumi Armada’s consolidation over, to trade higher

KUALA LUMPUR (March 8): OSK Retail Research said for Bumi Armada, the RM4.20 proved to be a hard level to break as three previous attempts since its IPO failed to crack this level convincingly.

“Nonetheless, there was an upward bias since September 2011 and the tough resistance level was finally broken yesterday. Thus, we can now expect the stock to trade higher,” it said on Thursday.

OSK Research said Bumi Armada’s two-month sideways consolidation is likely over after the stock closed above the resistance level of RM4.20 on Wednesday.



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Pantech buys UK-based Nautic Steel for RM45m

KUALA LUMPUR (March 8): PANTECH GROUP HOLDINGS BHD [], a pipes, fittings and flow controls solutions provider, has acquired the entire stake in UK-based Nautic Steels (Holdings) Ltd for GBP9.5 million or RM45.46 million.

In a statement to Bursa Malaysia on Thursday, Pantech said the acquisition will help the company expand its geographical presence and product range.

“The consideration will be satisfied through a combination of funds raised. This includes RM9.75 million from rights issues of ICULS (Irredeemable Convertible Unsecured Loan Stock), RM25 million from a term loan provided by a licensed bank in Malaysia and the balance consideration will be paid by internally generated funds, Pantech said.

Trading of Shares in Pantech has been suspended from 9am and will resume at 10am on Thursday in conjunction with the announcement of the exercise. The stock was last traded at 52.5 sen.

Barring any unforeseen circumstances, Pantech believes the acquisition is in line with the Group’s strategies to grow its core businesses. The company said the inclusion of Nautic into Pantech’s stable will help the acquirer expand its foothold as a major pipes, fittings and flow controls solutions providers.



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HDBSVR downgrades BIMB to Hold, TP remains at RM2.20

KUALA LUMPUR (March 8): Hwang DBS Vickers Research has downgraded BIMB HOLDINGS BHD [] to a Hold but maintains the target price at RM2.20.

It said on Thursday the RM2.20 was based on the Gordon Growth Model, assuming 12% ROE, 4% growth, 10.3% cost of equity.

“Share price has gained 15% YTD. Bank Islam assuming BIMB’s listing status could be positive as this would allow investors to have direct exposure to Bank Islam,” it said.

HDBSVR said currently, only 51% of Bank Islam’s earnings are consolidated into BIMB.

“There are talks that Bank Islam is seeking to buy an Indonesian bank, which could allow it to penetrate new markets. There are no details yet, but pricing and the resulting synergies would be crucial,” HDBSVR said.



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CIMB Research has technical buy on N2N Connect at 48 sen

KUALA LUMPUR (March 8): CIMB Equities Research has a technical buy on N2N Connect at 48 sen at which it is trading at a price-to-book value of 3.8 times.

It said on Thursday that N2N Connect broke out of its wedge pattern yesterday.

“We see this as a prelude to more upside ahead. If prices can continue to hold on above the resistance-turned-support trend line, there is a good chance that the candles may charge towards 50 sen and 55 sen next,” it said.

CIMB Research said the odds are favouring the bulls at the moment. MACD signal line is still rising while RSI is above the 50pts mark.

“Aggressive traders may start to nibble now. However, always place a stop at below the 43 sen to 41 sen levels,” it said.



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CIMB Research has technical sell on Hock Seng Lee at RM1.70

KUALA LUMPUR (March 8): CIMB Research has technical sell on Hock Seng Lee at RM1.70 at which it is trading at a price-to-book value of 2.3 times.

It said on Thursday that as long as prices stay below its previous high of RM1.75, there is a possibility that Hock Seng Lee might be forming a double top pattern.

“Hence, we advocate investors to adopt a sell into strength strategy here. Near term gains are likely capped at RM1.70-RM1.75.

CIMB Research said the technical landscape is deteriorating, suggesting that buying momentum is losing pace. MACD histogram bars have slipped into the negative territory while RSI has also hooked downward.

“There is a minor support at RM1.66. Once this level is violated, we expect the candles to tumble towards the neckline support (now at RM1.57). The following support levels are RM1.49 and RM1.35. Prices need to surpass the RM1.80 level to negate this bearish view,” it said.



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CIMB Research has technical sell on Cypark at RM1.84

KUALA LUMPUR (March 8): CIMB Equities Research has a technical sell on Cypark Resources at RM1.84 at which it is trading at a price-to-book value of 2.5 times.

It said on Thursday the countertrend rebound may have exhausted. Prices reached the 38.2% Fibonacci Retracement level and the bears have since weighed on the bulls.

“The triangle breakdown on Tuesday indicates that there is still room to the downside. Once the 200-day SMA (RM1.80) gives way, expect prices to fall towards RM1.70 and RM1.63,” it said.

CIMB Research said the MACD has staged a dead cross, pushing its histogram bars into the negative territory. RSI too is below the 50pts mark.

“Unload on strength looks like a good option here, especially near the RM1.90-RM1.98 resistance. Only a rise above RM2.00 would prompt us to review our call,” it said.



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HDBSVR expects market sentiment to perk up

KUALA LUMPUR (March 8): HwangDBS Vickers Research expects the key regional markets including Bursa Malaysia to perk up on Thursday following the firmer overnight close on Wall Street.

On Wall Street, stocks closed higher on Wednesday following better employment data in the U.S. and news that Greece’s debt-exchange deal with private bond holders is gathering pace. The key indices on Wall Street jumped between 0.6% and 0.9%.

“The positive vibes from Wall Street is expected to lift sentiment in Asia today after the broad sell-off yesterday. Back home, the key FBM KLCI could stage a technical rebound following a decline of 15.1-point or 1.0% since Tuesday. On the chart, the benchmark index may attempt to cross above the support-turned-resistance level of 1,580 ahead,” it said.

HDBSVR said that hoping to ride on a market recovery are beaten down shares like Sime Darby.

Together with other PLANTATION [] companies, they should benefit from a firm CPO price outlook, as forecasted by industry experts at the Palm & Lauric Oils Conference that ended yesterday.

Separately, OSK Property may attract interest after acquiring two pieces of land in Shah Alam for RM45 million while MALAYSIA SMELTING CORPORATION [] could be hit by news that Indonesia want to limit foreign ownership of mines in the country.



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Stocks to watch: Padini, Silver Bird, Pelikan, WinSun

KUALA LUMPUR (March 8): Malaysian stocks could be in for further profit taking on Thursday as the European debt crisis continues to take centre stage in global financial markets .

Key regional markets fell on Wednesday as investors were kept vigilant on the status of Greece’s debt relief scheme. The FBM KLCI fell 0.95% or 15.08 points to finish at 1574.83 points, the biggest one-day decline this year. However, year-to-date, it is up 3%. FBM KLCI futures closed seven points down to 1575.5.

Private holders of Greek government bonds have until Thursday night to voluntarily swap their bonds for new ones. The bond swap is vital to help Greece to obtain bailout funds, without which the country may default on its debt obligations this month. A default could have a negative impact on global financial markets.

Weakness across major importing countries in Europe, and China has already been reflected in Malaysia’s latest trade numbers.

Malaysia’s January exports grew at slower year-on-year pace of 0.4 % as shipments of electrical and electronic and commodity-based products to China and Europe declined. This compares to December 2011’s export growth of 6.1%.

Stocks on watch on Thursday are PADINI HOLDINGS BHD [], SILVER BIRD GROUP BHD [], Pelikan International Corporation Bhd and WINSUN TECHNOLOGIES BHD []. Other stocks which could see trading interest are SYARIKAT TAKAFUL MALAYSIA BHD [] and Brahim’s Holdings Bhd.

AmResearch Sdn Bhd initiated coverage on Padini, an apparel maker with a Buy call and target price of RM1.80. Padini shares closed unchanged at RM1.48 on Wednesday. The stock had earlier traded to a fresh intraday high of RM1.49.

The research house said Padini’s market capitalisation, which is approaching RM1billion, will improve the stock’s visibility among institutional funds. Despite its strong share price performance, Padini’s valuation is undemanding in anticipation of the firm’s earnings growth, according to the research firm.

Bread manufacturer Silver Bird was the third most actively traded stock on Wednesday on speculation that Fraser & Neave Holdings Bhd chief executive officer Datuk Tan Ang Meng may be roped in to lead Silver Bird.

This follows news of alleged financial irregularities at the bread manufacturer. However,Tan has denied the speculation. Silver Bird shares rose 4.5 sen to finish at 23 sen.

Pelikan plans to reward its shareholders with one treasury share for evey 50 existing shares held for FY ended Dec 31, 2011. The board also recommended a final cash dividend of one sen per share single tier dividend.

Industrial automation systems entity Winsun Technologies Bhd secured a letter of intent from Ningbo Shanghao which has indicated its intention to buy from Winsun 60,000 tonnes of iron ore a month for a duration of two (2) years. Winsun shares closed 0.5 sen higher at 17 sen.

Brahim’s whose shares closed 8% higher at RM1.23, announced that it had fixed the issue price for its 17.9 million new placement shares at RM1.10. This translates into gross proceeds of close to RM20 million should all the new securities placed out.

Syarikat Takaful Malaysia Bhd could also draw interest after its managing director Datuk Hassan Kamil indicated the Islamic insurer’s plans to further grow earnings in key market Indonesia for the long term. The stock rose seven sen or 3.3% to close at RM2.18.



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