KLCI pauses in line with regional markets

KUALA LUMPUR (March 12): The FBM KLCI slipped at mid-morning on Monday in line with the cautious sentiment at most regional markets.

Asian shares fell on Monday as investors paused to assess the effect of strong U.S. jobs data, which scaled back expectations for more easing ahead of this week's Federal Reserve meeting, while concerns over China's slowdown also weighed on sentiment, according to Reuters.

The FBM KLCI shed 0.90 of a point to 1,578.10 at 10am, weighed by losses at select blue chips.

Gainers led losers by 219 to 165, while 221 counters traded unchanged. Volume was 310.96 million shares valued at RM194.03 million.

At the regional markets, Japan’s Nikkei 225 was up 0.25% to 9,955.00, Hong Kong’s Hang Seng Index edged up 0.01% to 21,087.90, the Shanghai Composite Index added 0.09% to 2,437.29, , and Singapore’s Straits Times Index added 0.15% to 2,967.70, while South Korea’s Kospi fell 0.40% to 2,010.20, Taiwan’s Taiex was down 0.07% to 8,010.31.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Monday said The FBM KLCI lost 4.78 points and closed at 1,579.00 last Friday.

The weaker support areas for the FBM KLCI are in the 1,530 to 1,572 zone, he said.

“The next resistance levels of 1,579 and 1,597 may see heavy liquidation activities,” he said.

On Bursa Malaysia, decliners at mid-morning included Sunchirin that fell eight sen to RM1.40, Petronas Chemicals down sevens sen to RM6.77. Media Prima, KLK and Kulim lost six sen each to RM2.65, RM23.34 and RM4.20 respectively, whiel Bursa and Public Bankl fell four sen each to RM7.38 and RM13.70,

Naim Indah Corp was the most actively traded counter with 83.4 million shares done. The stock added six sen to 70.5 sen.

Other actives included HLS Corp, HWGB,Key West, and Hubline.

Gainers included Petrol One that rose 30 sen to RM1.15, Ekovest up 21 sen to RM2.78. Nice 15.5 sen to 51 sen, Tecnic 15 sen to RM3.85, Lafarge Malayan Cement and Bonia 12 sen each to RM7.37 and RM2.64, P.I.E 11 sen to RM4.75, UMW 10 aen to RM7.30 and NWP eight sen to 24 sen.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

HDBSVR upgrades Padini’s earnings, TP RM1.75

KUALA LUMPUR (March 12): Hwang DBS Vickers Research has upgraded the earnings for Padini and raised the target price to RM1.75.

It said on Monday that Padini’s store expansion plan for FY12 is more aggressive than it expected.

“As such, we raised our FY12-14F earnings by 6-9%. We also increased same store sales growth assumptions after a strong 1H12 result,” it said.

HDBSVR said Padini is a liquid and cheap proxy to rising affluence (civil servants pay raised recently by 7%-13%) and a resilient Malaysian economy, and hence, deserves premium valuation.

“As such, we raised our target PE to 12x from 10x CY12F EPS, which lifted TP to RM1.75. The company should be able to pay higher dividends (expect 6 sen DPS for FY12F, implying 4.2% dividend yield),” it said.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

RHB Research maintains Outperform on Sunway, FV RM3.15

KUALA LUMPUR (March 12): RHB Research Institute is maintaining its Outperform on Sunway Bhd with a fair value of RM3.15.

It said the 691-acre Sunway Iskandar project with a GDV of RM12 billion will transform the profile of the company’s property development business.

RHB Research said on Monday the development could also benefit the precast division, and Sunway REIT is given the ROFR on the future developments of Sunway Iskandar.

“News flow on the MRT jobs is likely to pick up in 1H2012. Even if it loses out, we believe it will still be able to secure external jobs, and downside is mitigated with the recurring flow of internal jobs,” it said.

RHB Research said the recurring income from the 37%-owned Sunway REIT will see a bumper growth in 2014 upon the completion of AEI works at Sunway Putra Place.

“Stripping out the valuations of Sunway REIT, Sunway is currently trading at only 7.0 times to 8.0 times. Considering the decent landbank profile, the implied market value of its landbank is only at about RM14 psf. We reiterate our Outperform rating with an unchanged fair value of RM3.15,” it said.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

CIMB Research has technical buy on MEGB at RM1.06

KUALA LUMPUR (March 12): CIMB Equities Research has a technical buy on Masterskill Education Group at RM1.06 at which it is trading at a FY13 price-to-earnings of 9.6 times and price-to-book value of 0.8 times.

It said on Monday that MEGB, after it had violated the triangle support, the share price fell to a low of 97 sen before bouncing to current levels.

“We think that the 97 sen low would likely be its near term support. Hence, risk takers may consider taking some position here,” it said.

CIMB Research said the MACD histogram bars are falling at a slower pace, suggesting that buying momentum is slowly picking up. RSI has also recovered from the oversold territory.

“The immediate target to beat is RM1.16. Once this level is taken out, the bulls will likely charge towards RM1.24 and RM1.38,” it said.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

CIMB Research has technical buy on MMHE at RM5.42

KUALA LUMPUR (March 12): CIMB Research has technical buy on Malaysia Marine and Heavy Engineering at RM5.42 at which it is trading at a FY13 price-to-earnings of 20.8 times and price-to-book value of 3.5 times.

It said on Monday the stock is penetrating the wedge resistance. If it succeeds, there is a good chance that prices may re-rate towards RM5.65 and RM5.78. Momentum should pick up once the candles swing past the 50-day SMA.

“The bullish divergence on the MACD indicator shows that selling pressure has tapered off. This, together with the rising RSI signal line, shows that the bulls are slowly making a comeback.

“As long as prices stay above the RM5.28 level, any pullback is an opportunity to accumulate,” CIMB Research said.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

CIMB Research has technical buy on Tenaga at RM6.39

KUALA LUMPUR (March 12): CIMB Equities Research has a technical buy on Tenaga Nasional at RM6.39 at which it is trading at a FY13 price-to-earnings of 14.2 times and price-to-book value of 1.2 times.

It said on Monday Tenaga Nasional broke out of its triangle pattern on Friday.

“If the candles continue to hold on above the support-turned-resistance trend line, we expect the next upswing to lift prices towards RM6.78 and possibly even RM7.21. Currently, the stock is supported by all its key moving averages,” it said.

CIMB Research said the indicators are showing signs of improvement. MACD signal line is trading in the positive territory while RSI has also hooked upward.

“Aggressive traders may start to accumulate now while others should wait for a push above RM6.40 before going long. Put a stop at below RM6.13,” it said.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

CIMB Research expects KLCI to be firm, upward bias

KUALA LUMPUR (March 12): CIMB Equities Research expects the FBM KLCI to be firm with an upward bias this week.

“The recently concluded major results season in Feb turned out to be less negative than we feared, which could signal a bottoming of the severe EPS cuts of the past few results seasons,” it said on Monday.

CIMB Research said that also, in line with its strategy of selling into strength ahead of a pre-election rally, it expects market conditions in the period ahead of the 13th general elections to be positive.

“Consensus view is for elections to be held in the May/June period during the school holidays. Pump priming, award of contracts and positive newsflow should be strong in this period, which is positive for equities,” it said.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Stocks to watch: HWGB, SKP, MSC, Gefung

KUALA LUMPUR (March 10): After a bumpy ride over the past week, which saw the FBM KLCI retracing the most in 2012, the market could receive a boost from firmer external developments, especially from the US markets.

Affin Investment Bank head of retail research, Dr Nazri Khan expected the KLCI to advance, underpinned by local projects newsflow, stronger US jobs data and rising optimism that Greece would avoid a disorderly default.

“Despite the last three days broad sell-off (Tuesday-Thursday), we generally view the distribution as a healthy correction to neutralise the overbought market condition (five months of KLCI uptrend with 12.5% gains since October 2011),” he said.

Nazri said based on his technical analysis, since the KLCI is holding above the 20, 50 and 200-day moving average is an indication the longer-term trend is still positive with KLCI aiming for 1,600 level as the ultimate near term target.

On Wall Street, for the week ahead, Reuters reported that US stocks may still sell off in the near term, but it's not likely to be a drastic decline.

Reuters said much of the optimism has come from signs of further improvement in the US economy. Friday's stronger-than-expected jobs report - the most widely watched U.S. economic indicator - gave the stock market more wind in its sails.

The S&P 500 ended the week with a gain of 0.1%, even though on Tuesday, it marked its weakest day so far in 2012 on concerns about a default by Greece on its country's debt.

Investors had also brushed aside Friday's news of a technical default by the country was mostly brushed aside by investors.

Reuters reported that while concerns about Greece aren't going away, the worst-case scenario has been averted, and the payroll report is another reason for investors to be confident.

As for Malaysia, among the stocks to watch on Monday are HO WAH GENTING BHD [] [] (HWGB), SKP RESOURCES BHD [], Malaysia Smelting Corp Bhd (MSC), GEFUNG HOLDINGS BHD [] and DIJAYA CORPORATION BHD [].

HWGB, whose shares had seen very active trade, said it is not in talks to sell its tin mining business for US$75 million (RM227 million) to Yunnan Tin Group.

HWGB said it was not negotiating with Yunnan Tin’s subsidiary Sino-Platinum Metals Co. Ltd to dispose of the business at this point in time.

A news report said Yunnan Tin had plans to buy HWGB’s tin mining business for US$75 million.

Meanwhile, The Edge weekly reported that the emergence of Dyson, the British innovative designer of electrical appliances, as a major new customer has launched a strong stream of earnings for SKP Resources.

MSC will rope in Optima Synergy Resources Ltd as a joint venture partner to undertake tin mining operations in Indonesia.

MSC signed a strategic alliance agreement with Optima Synergy, which is owned by Indonesian shareholders.

The deal will allow Optima Synergy to acquire up to 23% of MSC’s unit Bemban Corp Ltd for US$1.38 million, according to MSC. Bemban in turn has a 75% stake in PT Koba Tin which has secured a mining contract from the Indonesian government.

Gefung will not go ahead with the proposed joint venture for a mixed development project on 50.74 acres of land in east of Jakarta.

Gefung said the company and PT Greenworld Development “could not reach an agreement on the terms and conditions for the proposed project, the parties have mutually agreed to terminate the MoU with immediate effect”.

The Edge weekly reported that judging from the present share price movement, investors seem cautious about Dijaya’s proposal to acquire 73 PROPERTIES [] from major shareholder Tan Sri Danny Tan and family for an indicative consideration of RM948.7 million, mostly via the issuance of loan stocks.

BOUSTEAD HOLDINGS BHD [] sees its profit breaching the RM1 billion level within the next two years.

Deputy chairman/group managing director Tan Sri Lodin Wok Kamaruddin was quoted saying by Bernama that 2011 was a record year for the group.

“My personal target is that we’ll breach the RM1 billion profit level within the next two years. It could be this year or next year,” he said.

Lodin said Boustead would remain focused on PLANTATION []s, financial services, property, manufacturing and trading, pharmaceuticals and heavy industries.

In FY Dec 31, 2011, Boustead posted a pre-tax profit of RM831 million, up 14.43% from the RM726.2 million in FY10.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.