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Showing posts from April, 2010

MASTERSKILL IPO Below Fair Value

Masterskill (Offer price: RM3.50; Fair value: RM3.95)

INITIAL PUBLIC OFFERING – Main Market
•  A niche provider of education services, focusing on nursing and allied health sciences.
•  High earnings growth potential with high dividend payout promise.
•  Fair value is set at RM3.95, based on P/E of 12x CY11 EPS, translating to a market cap of RM1.6b.by : HWDBS VickersMalaysia Masterskill IPO

KLCI Technical - Buy RCE Cap, L&G

Immediate Hurdles at 1,340, 1,344 Then 1,347
The local market should bounce back today as fears recede over the situation in Europe’s debt crisis, especially with the overnight strong rebound on Wall Street boosting sentiment.  Immediate support is revised higher to yesterday’s low of 1,332, then next at 1,329.  The index should stay range bound with a slight upward bias, with immediate resistance remaining at 1,340, and higher hurdles at 1,344, the previous two week’s high, and then 1,347, the 7 April pivot high.

BUY RCE Capital and Land & General

Blue chips AMMB, IOI Corp and Public Bank are bargain buys with their share price close to the lower Bollinger band providing support, similarly for lower liners such as MRCB, Tebrau and UEM Land.  Stocks on  focus today are RCE Capital and Land & General which are trading close to their respective lower Bollinger bands of 65sen and 46sen, which should bounce back toward immediate upside targets of 70sen and 55sen in the near-term…

Transmile: Lawsuits to clear company’s name

It was the decision of Transmile Group Bhd’s (TGB) board to sue its former managing director Gan Boon Aun and former CFO Lo Chok Ping, a vital move to clear the company’s reputation, said its managing director Liu Tai Shin. Liu said TGB’s current board decided on the legal suit against the duo without the influence of any shareholders, namely Kuok group which holds 18% equity interest and Pos Malaysia Bhd 15%. He also said that it took a while before the new board could take legal action on Gan and Lo because the company needed time to gather “sufficient evidence” to prove that the duo failed to carry out their duties at TGB. (Financial Daily)

KLCI - Buy MRCB and JAKS On Rebound

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Expect Rebound on Overnight US Strength Stocks fell on Wednesday, dragged down by heavy regional losses on concern credit-rating downgrades of Greece and Portugal will dampen the global economic recovery, but ended off early lows on bargain hunting interest.  The FBM KLCI rose from an early low of 1,324.34 to settle at 1,333.17 to lose 6.55 points or 0.5% for the day, off a high of 1,335.95, on less negative breadth as losers beat gainers 472 to 236 on slower trade of 831.1mn shares worth RM1.12bn.

Immediate Resistance at 1,340, Then 1,344/1,347As we had expected, limited foreign participation cushioned downside and hence the local market fell less than regional peers yesterday, with the 1,320 support never in danger of being challenged at the low point of the day. While the overnight rebound on Wall Street should see buyers coming back to support a rebound today, expect immediate resistance at recent high of 1,340, and higher hurdles at 1,344, the previous two week’s high, and t…

KLCI: Buy On Dip LATEXX and SUPERMAX

Less Adverse Impact, Support at 1,320
The sharp overnight fall on US stock markets, sparked by S&P’s credit ratings downgrade of Greece and Portugal which will deepen the European debt crisis, should spillover to trigger corrections in regional markets and hence locally. 

Nevertheless, the adverse impact on our local market should be less given the limited foreign participation, with 1,320, the 50% Fibonacci Retracement (FR) of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347, acting as immediate support.  Stronger support platform is at 1,309, followed by the 1,300 psychological level. The immediate resistance stays at 1,344, the previous two week’s high, and then 1,347, the 7 April pivot high. 

Buy on Dip Latexx & Supermax
Blue chips are likely to correct lower to the mid or lower Bollinger bands to rebuild support as the market dip in line with external weakness. Meantime, lower liners should also extend correction on slowing buying momentum, wit…

General Corp (GCB) Minority Shareholders Beware: Takeover Bid Start

GCB: Two major shareholders launch takeover bid
Two major shareholders of General Corporation Bhd (GCB) have launched a takeover of the company for about RM505.5m or RM1.70 per share. GCB said it had received a letter from Consistent Record Sdn Bhd (CRSB), a company owned by Tan Sri Low Keng Huat and Datuk Marco Low Peng Kiat, to acquire its entire business and undertakings, including all assets and liabilities. CRSB had stated in the letter than certain family members of the shareholders and the shareholders’ intend to transfer their 32% stake in GCB to the company. (Malaysian Reserve) Read: Power to minority share holders: why so baffled?

Media Prima: Moves to delist NSTP

Media Prima Bhd (MPB), which has completed its takeover exercise of the New Straits Times Press (M) Bhd (NSTP), is proceeding with the delisting of NSTP group. MPB said it had requested NSTP to undertake the proposed delisting exercise. As of 14 Apr 2010, MPB holds an 89.62% stake comprising 194.68m shares of RM1 each in NSTP. MPB said it was prepared to extend a voluntary general offer to acquire all the remaining shares not already owned at RM2.40 per NSTP share, to be satisfied by the issuance of six shares each in MPB at an issue price of RM2 and one new warrant in MPB for free, for every five NSTP shares accepted. (Financial Daily)

KLCI : Buy On Dip DIALOG and KINSTEEL

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Immediate Support at 1,329, Resistance at 1,344 Blue chips should continue to be well-supported due to the positive growth outlook on the domestic and global front, while lower liners remain in consolidation with slight downward bias.  Immediate support for the KLCI remains at 1,329, with 1,320, the 50% Fibonacci Retracement (FR) of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347, acting as better support. Stronger support platform is at 1,309, followed by the 1,300 psychological levels. The immediate resistance stays at 1,344, the previous two week’s high, and then 1,347, the 7 April pivot high. The upside target upon a decisive breakout will be at 1,354, the 76.4%FR of 1,525 to 801.

Buy on Dip Dialog & Kinsteel

Maintain sell on rally call for RHB Capital and Sime Darby at higher upside targets of RM6.20/6.40 and RM8.90/RM9.20 respectively given  the overbought technical condition.  As for lower liners, continue to buy on dip on rubber glove makers Adv…

Theme-play: CEMENT to cost 10% more come May 1

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The price of bagged cement is due to rise by 10% to between RM15.50-RM16.50 per bag from May 1. Each bag weighs 50kg. Steel millers and cement manufacturers in Malaysia face higher production cost as world oil price has been on the rise. Master Builders Association of Malaysia (MBAM) president Ng Kee Leen said, "The cement manufacturers  have wanted to raise prices for the past year." Builders are thinking of buying raw materials like cement from abroad as they are cheaper. Following this, MBAM said pricier steel bars and cement would mean costlier construction projects, be it government funded or jobs procured from property developers. (BT)

Steel Theme Play : Iron and Steel Industry to perform better

The iron and steel industry is expected to perform better this year, with demand going up, boosted by the pick-up in the construction sector.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed said a new investment of RM300mil by a Malaysian company was expected for this industry over the next one to two years.
Approved total investments in the metal industry for 2009 amounted to RM3.96bil, a significant drop from RM26.84bil recorded in the previous year. Exports of metal products for
2009 declined to RM23.36bil from RM30.11bil in 2008.
Iron and steel exports last year amounted to RM8.82bil. Non-ferrous metal exports accounted for RM5.71bil while fabricated metal exports amounted to RM8.83bil.
“However, industry players have expressed concern over potential competition from China. China represents 50% of the world’s iron and steel production,” Mustapa told a press conference after the ministry’s dialogue with associations from the iron and steel industry.
Meanwhile, M…

KLCI : Buy on Dip TEBRAU & UEMLAND

Support at 1,329, Resistance at 1,344
We expect further consolidation today as most investors are likely to stay sidelined ahead of the weekend, but cheap penny third liners are likely to attract retail participation on rotational basis. The immediate support for the index is still at 1,329, with 1,320, the 50% Fibonacci Retracement (FR) of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347, as better support. Stronger support platform is at 1,309, followed by the 1,300 psychological level. Immediate resistance remained at 1,344, last week’s high, and then 1,347, the 7 April pivot high.  The upside target upon a decisive breakout is 1,354, the 76.4%FR of 1,525 to 801.

Buy on Dip Tebrau & UEM Land
Revert to Sell on Rally blue chips RHB Capital and Sime Darby as overbought technical condition and weak buying momentum necessitates a profit-taking correction, while most lower liners extend consolidation.  Stocks in focus today are property and constructio…

Be careful: Goldman Sachs involved with Masterskill IPO!

Masterskill: Raising RM779m from IPO.Masterskill plans to raise as much as RM779m from the IPO. set the indicative price range of its offering of up to 205 million new and existing shares at RM3.00 to RM3.80 each. The IPO will be Malaysia’s largest this year after Malaysian hard disk drive maker JCY International’s RM665.6m offer in February. CIMB and Goldman Sachs are the joint global coordinators and joint bookrunners of the share offer. Listing for the issue is targeted for May 18. (Source: New Straits Times)  Bursa Malaysia Biggest IPO for 2010 is Linked with Jews

KLCI : 3A, JAKS Could Rebound

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Blue chips stayed in consolidation mode Wednesday as regional markets were mixed, but rotational plays on selective lower liners highlighted trading. The FBM KLCI ended down 2.26 points at the day’s low of 1,333.64, off an early high of 1,339.15, dragged down by losses on CIMB, Tenaga and BAT, as gainers edged losers 399 to 288 on better trade totaling 875.5mn shares worth RM1.29bn.

The consolidative mood on blue chips should force the index to stay range bound, but lower liners continue to highlight on selective rotational plays.  Immediate support is retained at 1,329, with 1,320, the 50% Fibonacci Retracement (FR) of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347, as next immediate support. Stronger support platform is at 1,309, followed by the 1,300 psychological level. Immediate resistance is at 1,344, last week’s high, and next 1,347, the 7 April pivot high.  The upside target upon a breakout is 1,354, the 76.4%FR of 1,525 to 801.

Gamuda and Si…

KLSE Steel Theme Play

On Klang Valley LRT Projects : Other clear beneficiaries would be local steel millers such as Ann Joo Resources Bhd and Lion Industries Bhd with a significant portion of steel required for extension works. Price of local steel bars has increased to RM2,200/tonne from RM1,900/tonne in December last year.

EON Capital Bhd : HLB raised to RM7.30/share

To table HLB offer by June
EON Capital (EON Cap) is targeting the end of May or early June to table the latest
offer to its shareholders made by Hong Leong Bank (HLB), group chief executive
officer Michael Lor said yesterday. On April 1, HLB had raised its offer to RM5.06bil
cash, or RM7.30 per share, from the original RM4.92bil, or RM7.10 per share, for the
assets and liabilities of EON Cap, the country’s seventh-largest financial services
group. - StarBiz

PETRONAS: Banks set to bid for it's 2 IPO

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Petronas: Banks set to bid for its IPOs A number of local investment banks are in the midst of preparing proposals to secure the mandate to handle the initial public offerings (IPO) of Malaysia Marine and Heavy  Engineering Sdn Bhd (MMHE) and Petroliam Nasional Bhd’s (Petronas) petrochemicals business, industry sources said. It is understood that among those Petronas issued a request for proposal (RFP) are the investment banking arms of CIMB  and the AmBank group   Sources added that the deadline for submitting the proposals is sometimes next week and that the banks would be assessed on their broad approach to the IPOs. (StarBiz)

FBM KLCI Today Technical Outlook

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Daily Technical Outlook The FBM KLCI closed higher by 9.23 points to 1,335.90. Its resistance areas at 1,336 and  1,347 may cap market gains, whilst the obvious support areas for the FBM KLCI are located at 1,320 and 1,335. Due to the Dow’s overnight rise of 25.01 points, we expect the FBM KLCI to remain steady today.

We believe that the FBM KLCI had a key rebound high on 7 April 2010 at 1,347.61. The MACD and  Stochastic sell indicators together with the bearish divergent signals suggest that the FBM KLCI is risky at this juncture – with little reward and more risk if investors bargain hunt at these lofty levels. Short-term trading or scalping the market would be the best market strategy. Some stocks that we like are:  APM, ENCORP, GCORP, PERISAI, SUNCRN and UNISEM.

FBM KLCI:
Key Points
  Take profit at 1,336 and 1,347
  FBM KLCI had peaked at 1,347.61 (on 7 April) 
  Take profit on any rebound
  Obvious support seen at 1,320 and 1,335 source: Maybank IB

KLCI : Buy On Dip AMMB and RHB Capital

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Bursa Malaysia shares corrected in line with regional markets, which fell steeper led by banking stocks after fraud charges by the SEC against top US investment bank Goldman Sachs fueled concern on more regulations for financial companies.  The FBM KLCI was down 6.1 points to close at 1,326.67, off the opening high of 1,329.73 and low of 1,321.25 as622 losers swarmed 134 gainers on moderate trade of 813mn shares worth RM1.21bn.

Immediate Support at 1,321, Resistance at 1,334While sentiment should stay cautious due to increased external volatility given uncertainty over the wider ramifications of fraud charges against Goldman Sachs, the local market is somewhat cushioned as domestic banks were mostly shielded from the global credit crisis.

As for the KLCI, look for immediate support to cushion downside at 1,321, yesterday’s low matching the 30-day moving average, and 1,320, the 50% Fibonacci Retracement (FR) of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,…

FBM KLCI Today Technical Outlook

Daily Technical Outlook
The FBM KLCI closed lower by 6.10 points to 1,326.67. Its resistance areas at 1,326 and 1,347 will cap market gains, whilst the weaker support areas for the FBM KLCI are located at 1,300 and 1,315. Despite the Dow’s overnight rise of 73.39 points, we expect the FBM KLCI to remain under profit-taking activities. Initial buying (and possible gap-up) activities may fizzle out in the latter part of the day.

We believe that the FBM KLCI had a key rebound high on 7 April 2010 at 1,347.61. The MACD and  Stochastic sell indicators together with the bearish divergent signals suggest that the FBM KLCI is risky at this juncture – with little reward and more risk if investors bargain hunt at these lofty levels. Sell on rebounds and step aside is what we advocate. Otherwise, short-term trading or scalping the market would be the best market strategy.

FBM KLCI: Key Points
  Liquidate at 1,326 and 1,347
  FBMKLCI had peaked at 1,347.61 (on 7 April) 
  Sel…

KLCI Today Expected To Slip Ahead

Negative vibes from external sources will provide an excuse for  investors to take profit on Malaysian equities today. If so, then the benchmark FBM KLCI is expected to slip ahead, possibly on its way towards the first support level of 1,305.

Essentially, regional stock markets could be in the red when trading resumes this morning following last Friday’s tumble on Wall Street. Major U.S. stock bellwethers plunged between 1.1% and 1.6% at the closing bell hit by fraud allegations at Goldman Sachs.

Meanwhile, back home, new developments have emerged with  regard to Hong Leong Bank’s offer to acquire the assets and liabilities of EON Capital, which may translate to added trading interest in related counters today. In particular, Affin has responded by stating that it has not submitted any competing bid to Bank Negara to buy over EON Capital’s banking business. Separately, Primus (an existing substantial shareholder of EON Capital) has issued a statement to say that it has no inten…

AFFIN Denied Revised Proposal For EONCAP

Affin: No revised proposal for EON Capital
Affin Holdings Bhd has denied that it has put in a revised proposal for EON Capital Bhd (EON Cap) to Bank Negara to rival Hong Leong Bank Bhd’s (HLBB) (HLBK MK, Hold, TP:RM8.71) offer to take over EON Cap. It told Bursa Malaysia that the news report was inaccurate as Affin had not submitted any proposal to Bank Negara in relation to the acquisition of any interest in EON Cap. (StarBiz)

EON Capital: We don’t want to sell out

Primus Pacific Partners Ltd yesterday broke its silence by clearly sending a message that it does not intend to sell out on its investment in EON Capital Bhd. Primus stressed that as far back as July 2007, the fund had already indicated a long term commitment to the Malaysian banking industry and its desire to make a valuable contribution to EONCap and its businesses. Primus stated that its investment in EONCap has yielded some strong results. It said the management has successfully transformed the bank that has resulted in a 155% increase in net profits for 2009, a well capitalised balance sheet with strength to grow its core business. (Financial Daily)

KLCI - Sell AFG On Rally, Buy CIMB On Dip

KLCI Building Support Above 1,334
A re-test of the recent high of 1,347 and then a challenge of 1,354 is still plausible as the index continues to consolidate and build support above 1,334, which coincide with the 23.6%FR of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347.  A confirmed breakout above 1,347 will accelerate upside towards 1,354, where a decisive breach above this level will bring it up to the next resistance level at 1,380.  Stronger supports are available at 1,331, last Thursday’s correction low, and then 1,319, which represent the 50% correction of the 1,292 low to 1,347 high.

Sell on Rally AFG, Buy on Dip CIMB
Reiterate Sell on Rally AFG and switch to Buy on Dip CIMB given the high overbought reading on the former with its 14-day RSI already above 80, while the latter has gone through a decent profit-taking correction and hence is ripe to bargain close to RM14.00 or lower.  Meantime,  lower liners such as RCE Capital, 3A Resources and Land …

STEEL Price Surged: MASTEEL

Steel: Malaysian steel millers may raise billet prices. Malaysia Steel Works (KL) Bhd (Masteel) said local steel millers are expected to raise billet prices by between USD70 and USD80 or RM250 to offset rising iron ore and coke costs. "Billet prices have increased by USD90 per tonne to US$640 per tonne for Southeast Asian destinations since mid-March this year," said its CEO and managing director Datuk Seri Tai Hean Leng. "The surge in prices and demand for steel product is expected to expand our margin in coming months," he said.
(Source: Business Times)

AFFIN Submit EON Cap 3rd Bid Proposal

Affin Holdings is believed to have revived its interest in EON Bank Bhd group in a rival bid that betters the one offered by Hong Leong Bank Bhd (HLBB)  (HLBK MK, Hold, TP:RM8.71). Affin which is controlled by Lembaga Angkatan Tentera (LTAT) and its foreign partner Hong Kong’s Bank of East Asia Ltd, had put in a revised proposal for EON Capital Bhd (EON Cap) to Bank Negara Malaysia to rival HLBB’s offer. “This is the third time Affin has submitted a proposal for EON Cap. It is believed that the offer is higher than the HLBB offer and it includes a share equity element,” said a source familiar to the Amatter. (Financial Daily)

Buy On Dips: JAKS, LEADER UNIVERSAL

KLCI to Re-Test 1,347 High and Challenge 1,354
The sustained uptrend on global stock markets, with overnight US stocks leading the rise on better-than-expected results in the early first quarter earnings season and strong retail sales, would offset overbought technical conditions and provide further boost to the local market.  As such, the index should ascend higher to re-test the recent high of 1,347 and then challenge 1,354, which represent the  76.4%FR of the tumble from 1,525 all-time high to the 801 low.  Meantime, expect immediate support from 1,331, which represent last Thursday’s correction low, to hold and prevent further downside risk toward 1,319, which represent the 50% correction of the 12-day rally from 1,292 low of 22 March to he 7 April peak of 1,347.  Stronger support platforms are at 1,309 and the 1,300 psychological levels.

Buy on Dip Jaks Resources and Leader Universal
Maintain Sell on Rally banking stocks Public Bank, AFG and RHB Capital as overbought technical …

IJM Reiterate Buy

IJM Corporation (RM4.86; Buy; Price Target: RM6.00; IJM MK)
New contracts in Sarawak
IJM has received 2 Letters of Acceptance of tender for Murum Access Road, Sarawak (Packages A1 & B2) from the Jabatan Kerja Raya, Sarawak for a total contract value of
RM246.7m.  Package A1 involves earthwork, construction of 3 minor bridges, culverts, drains and pavement works for 20km of road at a contract sum of RM125.2m. Package B2 involves
earthwork, rock excavation, construction of 2 minor bridges, culverts, drains and pavement works for 10.5km of road at a contract sum of RM121.5m. The construction period for both packages is 24 months. These projects are part of the broader RM224bn SCORE development in Sarawak and specifically are the access roads leading to the dam being constructed. The total contract value of RM246.7m accounts for 16% of our RM1.5bn order win forecast for FY11 (below IJM’s target of RM2bn). Assuming conservative margins of 6%, pretax profit generated over the …

MASTERSKILL Listing Next Month

Masterskill (M) Education Group Bhd, Southeast Asia's largest nursing and healthcare college operator, is finally listing on the Main Market of Bursa Malaysia next month, after putting on hold twice its plans to sell shares. According to a company source, the initial public offering (IPO) is expected to raise some RM800 million. In its  draft prospectus on the Securities Commission website, it is stated that the IPO will involve an offer for sale of 164 million existing shares and a public issue of 41 million new shares.
(BTimes)

TURBO MECH Listing on Main Market April 30th

Turbo-Mech Bhd, a regional distributor of rotating equipment for the oil, gas and petrochemical industry, yesterday launched its prospectus for its listing on the Main Market of Bursa Malaysia on April 30. The exercise involves a public issue of 18.068 million new ordinary shares of RM0.50 each at an issue price of RM0.63 per share. "We are a regional supplier of rotating equipment including centrifugal pumps, metering pumps, steam turbines, industrial cooling fans and spare parts," he said at the launch of the prospectus in Kuala Lumpur yesterday. "We plan to open a workshop in Jakarta, Indonesia, a sales office in Balik Papan, East Kalimantan, Pekan Baru, Indonesia, and a fabrication yard in Rayon, Thailand," he said. At present, the company has subsidiaries in Singapore, Indonesia and the Philippines; associated companies in Malaysia, Brunei and Thailand; and a representative office in Vietnam.  (BTimes)

HeiTech Padu Technically Interesting

HeiTech Padu (RM1.12; Trading Buy)

Technically interesting

The counter is poised to trend higher ahead as its upside potentials outweigh the downside risks. On the chart, a target price of RM1.24 is probable riding on technical strength. If there is a breakout from this point, then the stock is expected to be on its way to test the next resistance target of RM1.31. Trading Buy. source: HWDBS Vickers

EPF takeover offer for MRCB lapses

The Employees Provident Fund’s (EPF) conditional takeover offer for Malaysian Resources Corp Bhd (MRCB) at RM1.50 a share lapsed yesterday, and the pension fund will now return all shares acquired from shareholders who accepted the bid as it has no intention to extend the offer.
EPF held 41.95% of MRCB as at 5pm yesterday, the closing date for the offer. This is short of the 50% mark required for the general offer to go through. “On behalf of EPF, we wish to announce that the offer has failed to meet the accepted condition and the offeror (EPF) will not extend the offer period,” the bank said in a statement yesterday.

Those who had accepted EPF’s offer will receive their MRCB shares back within 14 days from yesterday.
MRCB fell two sen yesterday to close at RM1.59 on volume of 6.67 million shares. The stock had shot up to as high as RM1.72 on April 1.
(thestar)

KLSE KLCI : Sell on RHBCap, Tenaga Rally

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The neutralization of daily momentum indicators for KLCI from their overbought positions following last week's profit-taking correction, together with an imminent weekly MACD buy signal should pave the way for further upside in the weeks ahead.  Moreover, persistent strength in global markets due to more signs the global economic recovery will be sustainable given the higher-than-expected retail sales numbers last week in the US and Japan would spillover to the local stock market.

As such, the index should be able to scale higher and re-challenge the recent high of 1,347 and test 1,354, which represent the 76.4%FR of the tumble from 1,525 all-time high to the 801 low.  A decisive breakout above this level will target 1,380 next, and then 1,392, which mirror the 24 July 2007 pivot high. On the downside, immediate support cushion is retained to 1,319, which represent the 50% correction of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347. The next stronger…

PERISAI: CHIEF TO EXIT

Perisai Petroleum: Chief to exit, selling 19% stake
Perisai Petroleum Teknologi Bhd managing director and substantial shareholder Nagendran Nadarajah has agreed to sell his entire 19% stake in the company to Ezra Holdings Ltd. The deal is expected to be completed in the first week of May but at what price the stake was sold was not revealed. Perisai’s main assets now is a derrick lay barge and two marine support vessels after it recently sold off its diving system and acquired two second hand jack up rigs as the company sought to move into the upstream exploration business. (Malaysian Reserve)

KLSE KLCI : Buy on Dip Kinsteel, Sell bank stocks

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Formidable Support Cushion at 1,319 Yesterday’s profit-taking correction on blue chips was long overdue after twelve straight trading days of gains, and should persist until the present overbought technical momentum is fully neutralized.  Note however a sharper dip will quickly neutralize overbought conditions, hence investors can look forward to re-enter the market on a further sharp fall.  Look at 1,319, representing the 50% correction of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347, to provide a formidable immediate support cushion.  The next stronger support platform is at 1,309.  Immediate resistance is reset to 1,347, with 1,354 and 1,380 acting as stronger upside hurdles.

Buy on Dip Kinsteel; Sell on Rally Jaks Resources
Switch to Sell on Rally banking stocks Public Bank and RHB Capital as increasingly overbought technical momentum calls for a profit-taking correction.  Maintain Sell MRCB and UEM Land ahead of likely further weakness in the short-…

KLSE KLCI FRIDAY MARKET PREVIEW

Today's Market Preview
It will probably be a test of resilience on the Malaysian bourse today. Essentially, sentiment could be hurt by renewed concerns on sovereign default risk in Greece, which caused an overnight slump on Wall Street (as key U.S. bellwethers fell 0.2%-0.7%).

While profit-takers may be tempted to cut their exposures after seeing an uninterrupted rise for 12 consecutive days, bargain hunters are likely to step in on market weakness. On the chart, the immediate support line for the benchmark FBM KLCI is currently seen at 1,340.
I
n terms of individual company news, there should be a bit more interest on: (a) Dayang, which has just been awarded a RM400m 5-year contract to provide maintenance services for  Sarawak Shell; and (b) Sunway City, after announcing that it would be injecting property assets into a REIT that would eventually be listed on the local stock exchange. Meanwhile, we will get an update on the Malaysian economy when the Index of Indust…

KLSE : SWITCH SELL ON RALLY: AFG, AMMB, SIME DARBY, TENAGA,TM - TA

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The first black candle  (on Wednesday) registered on the KLCI chart after twelve straight trading sessions imply waning upside momentum and higher likelihood for profit-taking correction to follow.  With market conditions becoming increasingly overbought, we expect a more significant profit-taking resistance near 1,354, which represent a key Fibonacci retracement hurdle.  Immediate support is retained at Monday’s low of 1,339, with subsequent supports at 1,329 and 1,319, representing the previous two days’ lows.

Switch to Sell on Rally blue chips AFG, AMMB, Sime Darby, Tenaga and TM as they become increasingly overbought, hence a profit-taking correction ahead is very likely.  On the other hand, any further weakness on Genting Bhd shares towards the January low of RM6.20 is good buying opportunity for technical rebound upside to RM6.80.  Adjust call on Supermax to
Take Profit as further rally will increase overbought technical conditions and trigger profit-taking correction.

ANOTHER STOCK DISAPPEAR INTO THIN AIR:TENGGARA DELISTED FROM BURSA MALAYSIA ON 19TH APRIL 2010

There it goes, another Bursa malaysia stock disappearing into thin air. Why it get listed in the first place? The Board of Directors of TOB wishes to announce that Bursa Malaysia Securities Berhad ("Bursa Securities") had issued a letter dated 7 April 2010 (“Letter”) in respect of de-listing procedures commenced against TOB in view that the agreement in respect of the Company’s proposed restructuring scheme with the EP Group of Companies had lapsed and as such the Company has failed to implement its regularization plan. The securities of the Company will be removed from the Official List of Bursa Securities on Monday, 19 April 2010 unless an appeal is made to Bursa Securities within 5 market days from the date of the Letter, which is by 14 April 2010 ("Appeal Timeframe").

The Board of Directors of TOB also wishes to announce the following:-
1) Any appeal submitted after the Appeal Timeframe will not be considered by Bursa Securities;
2) In the event the …

KLSE STEEL STOCKS THEME PLAY? STEEL ON THE RISE

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Domestic long and flat steel products will see substantial price increase at least for the next three months following an imminent shift in the annual iron ore contracts to quarterly pricing by the world’s top three iron ore mining companies.
The cost of iron ore – the major raw material for steel making – to Asian steelmakers could now rise 80% to 100%, or US$110 to US$120 per tonne, under the new pricing mechanism, said industry players.This compared with US$60 per tonne, the settled iron ore price for 2009/2010 annual contracts.
Vale SA of Brazil, BHP Billiton and Rio Tinto Group have considerable bargaining clout, controlling two-thirds of the US$88bil global seaborne iron ore trade.
AmResearch, in its latest steel report, said regional export prices of semi-finished and finished steel products were already on an uptrend after the Chinese New Year break.
Some Malaysian steel millers have also resumed their export orders for billets to Asean region at US$450 per tonne last December. B…

KLCI : BUY DIALOG AND SCOMI GROUP -TA

Immediate Support at 1,339
The index should continue climbing higher before meeting more significant profit-taking resistance near 1,354, as market condition becomes more overbought.  Higher upside targets upon a breakout are at 1,380, and next at 1,392, matching the 24 July 2007 pivot high.  Immediate support is retained at Monday’s low of 1,339, with subsequent supports at 1,329 and 1,319, representing the previous two days’ lows.

BUY Dialog & Scomi Group
RHB Capital just brokeout from consolidation and could climb further toward RM6.20/6.40 on positive sentiment, but downgrade to SELL Supermax, MRCB and UEM Land given overbought conditions and hook downs on momentum indicators which suggest further near-term weakness.  Meantime, bullish breakouts on oil & gas stocks such asDialog and Scomi Group should accelerate further gain towards the respective immediate upside targets of RM1.20/1.30 and 55sen. source: TA securities

DIS TECHNOLOGY BHD HIT BY RM131.3 M FRAUD

DIS Technology Holdings Bhd, which has been hit by RM131.3mn fraud, has defaulted on its banking facilities amounting to RM21 mn due and owing as of yesterday. The creditors were Malayan Banking Bhd, RHB Bank Bhd, Alliance Bank Bhd, Public Bank Bhd, Malaysian Debt Ventures Bhd and Al Rajhi Banking & Investment Corp Bhd. (The Edge)

EON CAP SEEKING SHAREHOLDER APPROVAL

EON Cap will soon call for a general meeting to seek shareholders approval on the revised RM5.06 bn all-cash buyout proposal from Hong Leong Bank Bhd (HLBB), says Eon Bank Group Chief Executive, Michael Lor. He also said the decision would be made anytime from now, as the board of directors and in particular the independent director, is satisfied that the strategic option had been considered to preserve and enhance the value of EON Cap. (Bernama)

EPF DISPOSED ASTRO AT RM4.27

Astro All Asia Networks Plc announced Tuesday that its a major shareholder, the  Employees Provident Fund Board, has disposed 350,000 Astro shares through AmanahRaya Investment Asset Management Sdn Bhd at a price of RM4.27 per share Monday. (Bernama)

KLSE: BUY ON DIPS BANKING STOCKS - AFG, PUBLIC BANK

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The local stock market extended gains for a tenth straight trading day on Monday, propped up by banking stocks as exports increased for a third month and the ringgit appreciated to the highest level since July 2008.  The FBM KLCI was up 5.81 points to settle at 1,341.75, after gapping up and oscillating within a narrow range bordering low of 1,339.3 and high of 1,342.2, as gainers led losers 403 to 322 on robust volume totaling 1.05bn shares worth RM1.31bn.

The blue-chip barometer just closed above the upper Bollinger band yesterday, which read 1,340, signaling a bullish breakout which should boost upside momentum toward 1,354, before more significant profit-taking interest emerge.  A strong breakout above this level will extend gains to target 1,380 next, and then 1,392, matching the 24 July 2007 pivot high.  While technical indicators are flashing initial overbought readings, trend indicators stayed bullish to indicate further upside ahead.  Immediate support is upgraded to yest…

PNB ACQUIRED MORE PETRA PERDANA

Permodalan Nasional Bhd (PNB) has acquired an additional 7.03mn shares
representing a 2.4% stake in Petra Perdana Bhd, upping its direct interest in
the offshore marine services provider  to 8.21% or 24.44mn share. The latest
acquisition makes PNB the second largest shareholder in the company after
Lembaga Tabung Haji which holds a 10.16% stake. (Financial Daily)

KLCI THIS WEEK: SELL ON RALLY: CIMB, SUPERMAX, MRCB, UEMLAND

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Daily and weekly momentum indicators for the KLCI are flashing initial overbought signals following last week's rise, but strengthening trend indicators should offset the overbought technical condition and support further gains in the immediate term.  As such, investors can expect further upside this week, with daily trading volume sustaining above the one billion shares mark to strengthen bullish momentum. Improving sentiment on global markets due to strengthening economic numbers will also support upside momentum this week.

As for the KLCI, last Friday's bullish breakout above the 1,334 peak of 11 March will fuel upside toward the next upside target of 1,354, which represent the 76.4%FR of the tumble from 1,525 all-time high to the 801 low.  Looking ahead, a decisive breakout above this level will target 1,380 next, and then 1,392, which mirror the 24 July 2007 pivot high.

On the downside, immediate support cushion is revised upwards to 1,319, with 1,308 and 1,300 act…

KLSE TO EASE THIS WEEK : OSK RESEARCH

The local stock market is expected to ease during the early part of this week, before regaining its momentum in the second half."I think the market will pull back slightly this week. It has gained quite a fair bit recently. We expect some profit-taking," said OSK Research Sdn Bhd head Chris Eng.

The benchmark FTSE Bursa Malaysia KLCI rose 1.5 per cent, or 20.8 points, last week, to end the week at 1335.94. The closing on Friday also marked the index's 10th consecutive days of gain.

Analysts said the gain last week was partly driven by growing investors confidence, after the unveiling of the first stage of the New Economic Model by Prime Minister Datuk Seri Najib Razak.

The gain may also be driven by foreign funds that flowed in to take advantage of the US dollar-carry and yen-carry trades, said analysts.
While profit-taking may happen during the first few days of the week, analysts expect the market to recover.

There will be several growth drivers for the m…

SELL ON RALLY: CIMB, SUPERMAX, MRCB & UEM LAND

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Breakout Above 1,334 to Target 1,354 Next
The return of quality buying by investors and strong rebound in the region and the overnight US and European markets bodes well for longer-term bulls, which would be able to absorb profit-taking from short-term bears and promote a sustained uptrend going forward.  Looking at the KLCI, a successful breakout above the recent 11 March high of 1,334 will accelerate upside momentum toward 1,354, which represent the 76.4%FR of the collapse from 1,525 all-time high to the  801 trough.  The next upside target is at 1,380, while immediate support is revised upwards to 1,319, yesterday’s low, with 1,308 and 1,300 acting as stronger support platforms.

Sell on Rally CIMB, Supermax, MRCB & UEM Land
Given the bullish reversal and breakout rallies yesterday on some blue chips and lower liners due to sustained rotational plays despite the slower buying momentum, further near-term upside can be expected for these stocks.  Nonetheless, we would switch re…

REVISE TO BUY ON ADVENTA, IRCB, LATEXX , SUPERMAX

Immediate Support at 1,313, Better Supports at 1,308/1,300
A weak close on the FBM KLCI today will trigger a sell signal on the daily slow stochastics indicator in the overbought zone, hence confirming the “sell-on-fact” mentality will ring true again. Immediate support upon a correction is at 1,313, Monday’s low, with 1,308 and 1,300 as stronger supports.  Immediate resistance remains at 1,325, with the 1,334 peak acting as a more significant hurdle.

Revise to Buy on Dip Adventa, IRCB, Latexx & Supermax
Blue chips are likely to congest with slight near-term downward bias, similarly for most lower liners as buying momentum slows on negative market breadth. Nonetheless, bright spots exist for short-term traders as rotational plays remain robust. Meanwhile, revise to Buy on Dip rubber glove makers such as Adventa, IRCB, Latexx and Supeemax following the recent profit-taking retracement for technical rebound upside.
source: TA Securities

POS MALAYSIA FOR SALE

Khazanah Nasional has received some indications of interest regarding the potential buyers of Pos Malaysia. Tan Sri Azman Mokhtar, managing director of Khazanah said that they are able to commit three to six months to select the bidders and hoped that it would be completed by the end of the year. He mentioned further that the divestment of its 32.2% stake in Pos Malaysia would be undertaken in two stages. Reports also indicated that Tune Money and DRB-Hicom are among the potential bidders.
source: Financial Daily

REVISE TO SELL ON AMMB, SIME DARBY, TENAGA AND TM

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Failure of the index to overcome the immediate resistance level of 1,325, combined with an overbought daily stochastics reading, suggests profit-taking correction is likely to follow.  Immediate support on this correction is at 1,313, Monday’s low, with 1,308 and 1,300 as stronger supports.  Hence, blue chips are likely to fall into profit-taking consolidation, while most lower liners are also expected to ease back into hibernation.  However, trading momentum could shift today to construction and property related stocks to highlight rotational interest.Revise to SELL AMMB, Sime Darby, Tenaga & TM
Revise call to SELL AMMB, Sime Darby, Tenaga and TM ahead of likely profit- taking correction from their upper Bollinger bands.  On the other hand, the breakout from consolidation on share prices of Gamuda and MRCB yesterday indicate good further upside potential in the medium-term.  For Gamuda, a sustained breakout above the 200-day moving average (RM2.95) will improve upside bias toward…

NO CIMB + MAYBANK MERGING

CIMB Group expects the corporate deal pipeline to remain positive after a strong start to the year, said CEO Datuk Seri Nazir Razak. Nazir also ruled out speculation of a merger between CIMB and Maybank, saying that there will be a lot of duplications and he doesn’t see any advantages. The group is also in talks to sell a stake in a unit set up to manage bad debt to three potential investors, Nazir said. The bank expects to sign its first agreement this year, Nazir said. He added that Malaysian banks can cope with a further interest rate increase of 25 to 50 basis points. (Bloomberg)

PETRONAS WILL LIST TWO UNITS THIS YEAR

Petroliam Nasional Bhd will list two units this year, Prime Minister Datuk Seri Najib Razak said. Petronas, already has three listed units on Kuala Lumpur’s stock exchange, including MISC Bhd, the world’s biggest owner of liquefied natural gas tankers. Najib said two additional subsidiaries with “good track records” would be listed this year, without naming them. (Bloomberg)