Bursa Malaysia Stock Market: October 2010

Stocks to watch: MMHE, Freight Management, MAHB, L&G

Sunday, October 31, 2010

Stocks to watch include MMHE, whose share price had exceeded nearly all analysts' expectations, Freight Management, Malaysia Airports Holdings Bhd (MAHB) and Land & General Bhd.

Freight Management is focusing its expansion plans across Asean to diversify its earnings base so that it is not exposed to risks in one country segment alone, according to The Edge Weekly.

MAHB posted net profit of RM61.82 million for the third quarter ended Sept 30, 2010, down 25.9% from the RM83.43 million a year ago due to a higher share of losses in an associate company.MAHB said revenue rose 18.2% to RM446.28 million from RM377.36 million. Earnings per share were 5.62 sen versus 7.59 sen.

L&G share price is trading at fresh highs as the company is now cash rich and almost debt free following a debt restructuring, capital reduction exercise and redemption of its final tranche of secured paper, according to The Edge Weekly.

Theedgemalaysia

Assessment on Annjoo

Saturday, October 30, 2010

Annjoo weekly chart

Assessment on my stock holding; Annjoo

I am still holding Annjoo counter. The last session Annjoo was trading at RM2.99. The longterm downtrend already broken last week. Annjoo daily chart showing that the trend turning down.

My first target to dispose Annjoo at RM3.3o succeed during trading time on last Monday (partially). Next target will be at RM3.80. I am still holding 5500 units to be disposed. Maybe need some time to achieve at the price level. 3/4 months??? Anyway, this November Annjoo will announce their latest financial. If the fundamental has changed, than I need to reevaluate back this share counter.

Happy investing!!!

RHBInvest Research

Sector Call

Rubber Gloves:

Kossan remains our top pick

In this report, we make a comparison between two glove manufacturers, Kossan and Hartalega, where nitrile gloves makes up a higher proportion of their product mix.
We maintain our Underperform call on Top Glove (FV=RM5.40) and Market Perform call on Adventa (FV=RM2.47).
We reiterate our Market Perform call on Hartalega (FV=RM5.64).

Corporate Highlights

MAHB:

3QFY12/10 results to meet our expectations, secures Build-Operate-Transfer for Male Air.
Our fair value has been raised from RM6.81 to RM7.70.

TNB:

4QFY10 dampened by depreciation and repair & maintenance costs .
Our indicative fair value lowered to RM9.40 (from RM10.30). Recommendation downgraded to Market Perform.

Technical Highlights

Daily Trading Strategy:

Chart wise, the deterioration on the overall technical readings of late due to the increase profit-taking activities did not augur well for the FBM KLCI.
A fall to below the 10-day SMA will turn the short-term sentiment negative, while a rebound from the SMA will indicate a possible technical rebound on the index.
Hence, we continue to expect rangebound trading today, for we do not foresee investors to opt for a heavy position ahead of the next week.

Daily Technical Watch: Kencana

Could see follow-through selling pressure if it loses the 10-day SMA.
Immediate Support at RM1.72
Immediate Resistance at RM1.90

Will Hiaptek Break the Longterm Downtrend Line?

Friday, October 29, 2010

Hiaptek share price false breakout on the 16th April 2010. See the chart below. The triangle pattern will be met again. Whether go down or will be up. We will see.... Currently Hiaptek was trading at RM1.29.

Hiaptek weekly chart

Views & News, Maybank IB (2010-10-29)

RESULTS REVIEW

Tenaga RM8.87: Sell
It's going to get even more challenging Shariah-compliant
RM2.5b FY10 net profit ex-forex (+22% YtD) below consensus. 4Q net profit plunged 23% QoQ to RM414m on seasonally high "other costs" and rising coal prices. The final dividend was raised to 20 sen/share, but
the 3% gross full-year yield is still not particularly compelling. We tweak our EPS forecasts on post-result housekeeping and still expect FY11 net profit contraction on higher coal prices.

Nestle (Malaysia) RM43.60: Buy
It's marvellous what Milo can do! Shariah-compliant

Tried and tested recipe. Nestle's 10% share price gain since our upgrade on 30 August was nearly double the main Index's gain during the same period. 9M10 results outperformed. We tentatively raise our earnings a further 6-8% for 2010-12 and DCF-based TP by 3% to RM45 (from RM43.86) as we await its analysts' briefing later today for further details. Buy as we foresee further upside to its earnings and TP.

COMPANY UPDATE

Loh & Loh Corporation RM4.80: Accept offer
Ceasing coverage Shariah-compliant

Stock to be delisted. The mandatory take-over offer by PetroSaudi International and ultimately, Sheikh Tarek Essam Ahmad Obaid for Loh & Loh shares at RM4.85 a piece, has received 96.82% acceptances. The offerer does not intend to maintain the listing status of Loh & Loh. The stock will accordingly be suspended from trading on 8 Nov 2010.

Technicals

The FBM KLCI rose slightly higher by 0.33 points yesterday to end at 1,499.44. Its resistance areas at 1,504 and 1,512 may cap market gains, whilst its support areas are located at 1,483 and 1,499. Due to the mixed tone in the USA last night, we may see the FBM KLCI in a muted mode today - with later blue chip and mid-cap nibbling that may curtail some initial profit-taking activities.

Trading idea for today is a SHORT TERM BUY call on KFC.

Other Local News

MAHB: In Maldives JV. Malaysia Airports Holdings Bhd signed a 23:77 joint-venture agreement with GMR Infrastructure Ltd, to expand and operate the Male International Airport in Maldives. The joint-venture firm will have a paid-up capital of USD30m (RM93m) and based on the construction cost of USD373m (RM1.16b), MAHB's portion of the cost is USD86m (RM267m). (Source: Business Times)

Sunrise: Launching four projects next year. Property developer Sunrise Bhd plans to launch four projects with a total gross development value (GDV) of RM3.2b next year. The immediate project would be the Solaris Tower (GDV: RM480m) launching this year or early next year. Next would be the second phase of Vancouver, Canada project- the Quintet expected to launch in February or March 2011. Following that, Sunrise will unveil its MK20 (GDV: RM1b), with a build-and-sell mixed development project in Mont' Kiara by mid of next year and a premium landed development in Kajang, next to the Mines Resort (GDV: RM500m) by year-end. (Source: The Star)

Plenitude: To launch seven projects in FY11. Property developer Plenitude Bhd plans to launch seven projects in the financial year ending June 30, 2011, which could generate a total gross development value of about RM400m. These projects comprising mix development with a combination of residential and commercial properties are located in Johor, Penang, Sungai Petani and Selangor. (Source: The Star)

Southern Acids: To unlock value of land in Kota Kemuning. Southern Acids (M) Sdn Bhd (SAB) is set to unlock its holding of 644.5 acres of land bordering Kota Kemuning, Shah Alam, although its board of directors are still exploring the options. The land is known as Thangamallay Estate, which is the home to SAB's palm oil plantation. The value of the plot of land is estimated to worth RM20 per sq ft, amounting to RM561m, which is more than SAB’s current market capitalization of RM376.57m. (Source: The Edge Financial Daily)

Property: Mortgage cap decision soon. The media is reporting that the central bank would meet with banks next week to discuss plans for a mortgage cap whereby loans would be limited to a portion of the property value. "The expectation is a cap of about 70-80%. We think a directive will be issued to cap," said two sources with knowledge of the meeting. (Source: Business Times)

REIT: i-REIT from GCC may list next year. Bursa Malaysia Bhd expects an Islamic real estate investment trust (i-REIT) from the Gulf Cooperation Council (GCC) to be listed on the exchange next year, adding to its three existing i-REITS. It did not identify the issuer, but market speculation is that that it may be Qatar-listed property group Ezdan. (Source: Business Times)

Uchitec - Short and Medium Downtrend Line Broken

Uchitec - Short and Medium Downtrend Line Broken

Uchitec the small-cap stock that is electronic company. It has paid consistently good dividends over the years and is expected to pay dividend yields of 8% in FY2010 and FY2011.

Views & News, Maybank IB (2010-10-28)

Thursday, October 28, 2010

COMPANY UPDATE

Malaysia Airports Holdings RM5.86: Buy

Field Trip to Sabiha Gökçen

Leveraging on the East-West powerhouse. We visited MAHB's 20% investment in Turkey, Sabiha Gökçen Airport (SGA), and returned optimistic on its potential to become the premier low-cost carrier (LCC) hub of Istanbul and possibly Central Asia, leveraging on its unique location, tourist appeal and a population that has just begun to embrace air travel in a big way. We maintain our earnings forecasts as there is no P&L impact before 2014, but raise our TP to RM7.12. Maintain Buy.

RESULTS REVIEW

Amanah Raya REIT RM0.92: Buy

Boosted by new assets

An attractive yield play. AAREIT's 9M10 RM31.3m realised net profit (+38% YoY) was as we expected, but above consensus. We continue to like AAREIT for its attractive 8.9% 2011 yield (vs. 8.1% industry), earnings visibility and sustainability supported by long lease agreements with step-up features. We maintain our forecasts (+6% 3-year DPU CAGR) and RM1.19/sh DCF-derived TP.

Technicals

The FBM KLCI closed slightly higher by 2.17 points yesterday to end at 1,499.11 led by the finance and consumer sectors. Its resistance areas at 1,504 and 1,512 may cap market gains, whilst the support areas for the FBM KLCI are located at 1,483 and 1,499.
Trading idea for today is a SHORT TERM BUY call on CIHLDG.

Other Local News

Dialog: Exciting times ahead for Dialog. Dialog Group is gearing up for the independent deepwater petroleum terminal project at Pengerang, Johor which will turn into a regional oil storage and trading hub by 2017. The latest boost for the project was the Johor government’s decision to approve the site – 500 acres of reclaimed land – for a 60-year lease. The approval will enable Dialog, and its partners, Johor government and Vopak, world’s largest independent tank terminal operator, to own and develop an independent deepwater petroleum terminal with jetty and other marine facilities with water depth of up to 26m, capable of handling very large crude carriers. The combined investment in the terminal would be RM5b over a seven year period. (Source: The Edge Financial Daily)

SunCity: Mulls over new projects for REIT, JV for RM4.3b project in China. Sunway City Bhd (SunCity) is mulling over office and retail projects to be nurtured into yield-accretive assets which can later be injected into the Sunway real estate investment trust (REIT). The first project is The Pinnacle in Bandar Sunway, a 25-storey corporate office block with net lettable area of 560,000 sq ft that was scheduled for completion by 2013. Next would be the development of a parcel of land beside Sunway Pyramid Shopping Mall. Currently referred to as SP3, this would be a retail and service apartment development with vehicular and pedestrian links to the mall. Separately, Sunway City (S’pore) Pte Ltd (SCS), a wholly owned subsidiary of Sunway City Bhd (SunCity), has entered into a joint venture to develop a project with an estimated gross development value of RM4.3b in Sino-Singapore Tianjin Eco-City, China. (Source: The Star)

MK Land: Clinches RM4b project in Bangalore. MK Land Holdings Bhd sealed an agreement with Embassy Group of India to develop a RM4b "affordable homes" project in North Bangalore, India. The development will be carried out by MK Embassy Land Sdn Bhd, which is a joint venture between MK Land (47.5%), Star Dreams Pte Ltd (47.5%) – a subsidiary of Embassy Group, and MKN Embassy Development Sdn Bhd (5%) – a subsidiary of the Emkay Group. The development will be on land measuring approximately 185 acres in North Bangalore and will comprise 14,400 residential units with some two million sq ft of commercial space. (Source: The Edge Financial Daily)

Mutiara Goodyear: Plans RM1.6b projects. Property developer Mutiara Goodyear Development Bhd targets to launch several high-end property projects with a total gross development value (GDV) of about RM1.6b in the next 12 months. The property projects that would be launched were the Nadayu Melawati high-end property development comprising luxury bungalows, semi-detached homes, super links and commercial units (GDV: RM850m) that is slated for completion by 2012. Other projects to be launched next year are the Nadayu 92 Kajang (GDV: RM250m), Nadayu 28 Sunway (GDV: RM300m) and Nadayu Penang (GDV: RM450m). (Source: The Star)

RHBInvest Research Highlights 28th October 2010

Top Story

Property:

Picking among the best – SPSB vs. IJMLD.
Maintain Outperform call for both SPSB and IJMLD with a target price of RM5.94 and RM3.50

Sector Call

Building Materials:

Cement sub-sector: Lafarge vs. YTL Cement.
Lafarge: Fair Value is 7.42. Underperform.
YTL Cement: Fair Value is 5.59. Outperform.
Maintain Neutral stance on the cement sub-sector.

Corporate Highlights

KFC:

Ayamas – Spreading its wings; Another RPT with JCorp.
Target price is RM3.85, revise our recommendation to Trading Buy from outperforms.

Technical Highlights

Daily Trading Strategy:

Pending clearance from the eventful week ahead.
Profit-taking activities are expected to continue ahead of the next week’s US FOMC meeting and the two by-elections in Galas and Batu Sapi respectively.
Nevertheless, the 10-day SMA near 1,491 should cap its near-term downside, while the 40-day SMA at 1,467 and critical support at 1,450
For the index to resume its positive trend, it will need to recapture the 1,500 psychological hurdle and yesterday’s high of 1,504.37
Meanwhile, we expect the market to trade rangebound pending more clearance from the eventful week ahead.

Daily Technical Watch: Cepatwawasan

Heading lower to cover a technical gap near RM1.19-1.22 soon.
Immediate Support at RM1.29
Immediate Resistance at RM1.44

Views & News, Maybank IB (2010-10-27)

Wednesday, October 27, 2010

COMPANY UPDATE

Hock Seng Lee RM1.82: Buy

Momentum building up Shariah-compliant
Raising target price. Recent news flow involving Sarawak, namely Mubadala's USD7b investment pledge and a good share of the 2011 National Budget allocation, are indications of rising construction job flows. We retain our RM600m 2010 job win target for HSL, but lift our 2011 target to RM720m (+20%). We also raise 2011 net profit forecast by 11% and 2012 by 9%. Our new target price, based on a higher 14x 2011 earnings multiple (previously 13x) is RM2.30 (+21%). Buy.

RESULTS REVIEW

Digi.Com RM24.66: Hold

3Q10: Dividends intact Shariah-compliant
Results in line. 3Q10 net profit of RM289.3m (+3.9% QoQ, +18.5% YoY) brings 9M10 net profit to RM846m (+12.2% YoY), 77% of our full-year forecast and consensus. A third DPS of 50sen (RM1.20 YTD) was declared, and Digi remains on track to pay out more than 100% of its earnings in 2010. While payouts could decline in 2011, we still expect Digi to be the highest yielding among the Malaysian telcos.

Technicals

The FBM KLCI was higher by 5.50 points yesterday to close at 1,496.94 on further positive investor sentiment, led by plantation plays. Its resistance areas at 1,503 and 1,510 may cap market gains, whilst the support areas for the FBM KLCI are located at 1,480 and 1,496.
Trading idea for today is a SHORT TERM BUY call on RSAWIT.

Other Local News

CIMB: CIMB Islamic signs largest-ever term facility with MNC. CIMB Islamic Bank formalized the largest ?ever term financing facility to date when the bank signed a 12 year USD100m facility based on the syariah concept Bai' Al 'Innah with Hewlett-Packet (HP) Multimedia Sdn Bhd. The facility would be used to finance the first phase of HP?s 32-acre Next Generation Data Center (NGDC) in Cyberjaya, which formed part of the company?s 28.3ha integrated campus. (Source: The Star)

Maybank: Anfaal upbeat on prospects in S. Arabia. Maybank Investment Bank Bhd's affiliate company Saudi-based Anfaal Capital is eyeing the sukuk, corporate finance and advisory, fund management and real estate investment markets in Saudi Arabia to build its business. Anfaal chairman Khaled M. Al Aboodi said they have in the pipeline four good opportunities which they are in negotiations and hope will materialize soon. These could result in Anfaal having 3b riyals (RM2.5b) in funds under management. In addition to Maybank Investment Bank's 18% stake, Anfaal's other major shareholders include Islamic Corp for the Development of the Private Sector (ICD) with 37% and Alnmo Real Estate Co, an entity which is controlled by Saudi?s prominent Bin Mahfouz family, with 18%. (Source: The Star)

Banking: One mega Islamic bank this year, first Islamic bank in the Maldives. Bank Negara will announce one mega Islamic bank by this year under its plan to issue up to two mega Islamic banking licences. The universal mega Islamic bank licence requires a minimum paid up capital of USD1b (RM3.09b). Bank Negara plans to allow foreigners to hold 100% stake in the lender or form a joint venture with local partners. Separately, The Islamic Banking and Finance Institute Malaysia (IBFIM) has joined forces with Maldives Islamic bank to set up the first Islamic Bank in Maldives, which aims to be operational next January. The bank hoped to capture up to 25% of its local market share within 3 years. (Source: The Star, The Edge Financial Daily)

Utilities: Talks on Bakun may wrap up mid-2011, ministry addressing nuclear power option. Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui expects negotiations between the Finance Ministry and the Sarawak government on the sale of the Bakun hydropower project to conclude by mid-2011. Chin also reiterated that the Cabinet had approved the setting up of a nuclear power plant and the Economic Council had approved the ministry to go-ahead and start identifying suitable sites. However, he declined to talk about cost and location of the plant. (Source: The Edge Financial Daily)

YTL Comms: To unveil its own mobile phones. YTL Communications Sdn Bhd (YTL Comms), which is gearing up for the launch of its 4G mobile Internet services next month, is expected to unveil its own mobile phones soon. "We are working on our own Android platform phones and its likely to be introduced in 3 months," said executive director Datuk Yeoh Seok Hong. Market talk has it that YTL Comms was working on a number of WIMAX devices and had outsourced the production of its mobile phones to a smartphone manufacturer. (Source: The Star)

RHBInvest Research Highlights 27th October 2010

Top Story

Digi:

Early bumper dividend.
Maintain Outperform call with fair value of RM26.35.

Technical Highlights

Daily Trading Strategy:

Our positive bias view stays.
Index will march higher to above the 1,500 psychological level and the recent high of 1,503.82 soon, if the robust buying interests continue in the near term.
Upon removal of 1,503.82, the bulls will lift the market higher and aim the index towards the all-time high at 1,524.69.
Given the strong demand on the plantation counters on the back of the rallying CPO futures of late, and the renewed buying interests on the banking counters.
The local benchmark index is likely to uphold its recovery mode today.
Immediate support is near the 10-day SMA of 1,491.

Daily Technical Watch: AMMB

Poised to confirm a breakout pattern from RM5.94 congestion area.
Immediate Support at RM5.94
Immediate Resistance at RM6.50

Stocks in Steel Sector

Pmetal daily chart - stock in uptrend mode

Annjoo daily chart - downtrend line broken

Perwaja daily chart - stock in uptrend mode

CSCSteel daily chart - stock in uptrend mode

Lionind daily chart - stock in uptrend mode

RHBInvest Research Highlights 26th October 2010

Tuesday, October 26, 2010

Top Story

Government Measures:

A long and bumpy road.
Market is driven by news flow, and this will continue to provide support for certain key stocks.

Corporate Highlights

Glomac:

Buying back 18 units of Suria Stonor.
Maintain Outperform rating, with a fair value of RM2.09.

Perwaja:

Constructing a concentration and pelletising plant in Kemaman.
Indicative fair value is RM1.37. Maintain Outperform.

Technical Highlights

Daily Trading Strategy:

Trading sentiment turning more upbeat.
FBM KLCI managed to sustain at above the supportive 10-day SMA in the recent sessions.
Given the robust trading volume and the active rotational interests recently.
Trading sentiment is poised to turn even more positive in the near term.
Lower liners and the selective sectors like construction, plantation, brokerages and property-related counters are expected to lead trading action.

Daily Technical Watch: Sino Hua-An

Next target is to cover a tiny technical gap at RM0.435
Immediate Support at RM0.31
Immediate Resistance at RM0.435

Views & News, Maybank IB (2010-10-26)

Company Update

Lingkaran Trans Kota Holdings RM3.49: Buy

LITRAK's plus-es Shariah-compliant

Up target price. We reiterate our Buy call on LITRAK with a raised RM4.00 DCF-based target price (+5%) after rolling over our valuation period. We expect rising investors' interest on LITRAK for its dividend yield potential (>5% net), providing further upside to its share price (+25% YTD). The asset-liability route for the take-over of PLUS' concessions may be applied to LITRAK's but not immediate, we think. The proposed Kinrara-Damansara link is not an immediate threat.

Glomac RM1.62: Buy

Invests in Suria Stonor condominium Shariah-compliant

Buys investment assets. Glomac's re-purchase of Suria Stonor condominiums from two bulk purchasers is a surprise to us. Despite attractive pricing, we are neutral on the deal given huge new and existing condominium supply around the KLCC area. No change to our forecasts and RM1.84 TP (25% discount to RM2.45/sh). Glomac trades at single digit PERs for over 20% growth in 2011-12. Maintain Buy.

Petronas Gas RM11.26: Buy

Gladstone to meet Malaysia's LNG needs

PETRONAS' regas plant will be ready by end-2012, but LNG import from Glastone LNG will only start from 2014, according to Santos. We are not concerned by this supply mismatch as we foresee PETRONAS using the entire 2013 to test and fine-tune the regas plant's integration with the PGU pipeline network system. Maintain Buy on Petronas Gas (PGas) with a DCF-derived RM12.80 target price.

Technicals

The FBM KLCI was higher by just 0.80 points yesterday to close at 1,491.44 on some positive investor sentiment. Its resistance areas at 1,493 and 1,508 may cap market gains, whilst the support areas for the FBM KLCI are located at 1,476 and 1,491.

AirAsia: AirAsia X to gain from ministry programme. The Ministry of Transport's (MOT) plan to develop a transparent and liberalised air rights allocation framework could finally see AirAsia X getting the much sought after rights to fly to Seoul and Sydney. Under the Economic Transformation Programme road-map, MOT has been tasked to facilitate the formulation of an air rights allocation framework to further develop the tourism and airline industries. The framework will enable local airlines to plan and launch additional flights to priority cities in a more efficient manner after additional air rights have been negotiated. (Source: Business Times)

Perwaja: To spend RM400m on pelletisation plant in Kemaman. In a bid to venture into upstream activities, Perwaja Holdings Bhd, a subsidiary of Kinsteel Bhd, is investing RM400m in an iron ore concentration and pelletisation plant in Kemaman, Terengganu, to meet its own raw materials demands. In order to gain access to the state's iron ore mines, Perwaja has invited the Terengganu state government to take an equity state in the venture. The new plant is expected to supply 80% to 90% of its internal demands and achieve a minimum production cost savings of 15%. (Source: The Edge Financial Daily)

Public Bank: Cambodian unit sets up securities business. Public Bank Bhd unit Cambodian Public Bank plc (CampuBank) has established a wholly-owned subsidiary, CampuBank Securities plc, in Cambodia. CampuBank Securities had obtained a securities company license from the Securities and Exchange Commission of Cambodia, which would enable it to carry out securities underwriting business, securities dealing business, securities brokerage business and investment advisory business in Cambodia. The issued and paid up capital of CampuBank Securities was equivalent to about RM31.1m. (Source: The Star)

SP Setia: To launch four residential projects. SP Setia Bhd plans to launch 4 new residential projects with an estimated gross sales value of RM546m in Penang beginning this December and next year. The projects comprised the RM175m Setia Greens, RM60.5m Brook Residences, RM170m Setia V Residences, and RM139m Pearl Villas in the Setia Pearl Island scheme. SP Setia property's (North) GM S.Rajoo said Penang would continue to play an important revenue generating role in the group?s property development business. (Source: The Star)

Broadband: Two more companies offer 4G broadband. Two companies have started offering the 4G wireless broadband service on a trial basis, with eventual speed hitting 100Mbps (mega bytes per second) by the first quarter of next year. He declined to name the two companies but mentioned that they are among the nine companies that are offering the new 4G long term evolution (LTE) technology. These companies are currently undertaking trials to test the latest wireless broadband network. (Source: Business Times)

Weekly Equity Information Flyer - 25 October 2010

Pmetal

Press Metal Berhad , the leading aluminium extruder in South East Asia with a 40,000 metric tonnes per annum of aluminium extrusion capacity offering customers a quick turnaround services.

Buy Price: RM1.67
Target Price: Rm2.10

HSPlant

Hap Seng Plantations Holdings Berhad , the efficient pure plantation player with activities located mainly in Lahad Datu.

Buy Price: RM2.69
Target Price: Rm3.00

AirAsia Berhad , the pioneer of low cost flights in Asia and was also the first airline in the region to implement fully ticketless travel.

Buy Price: RM2.58
Target Price: Rm3.30

RHBInvest Research Highlights 25th October 2010

Top Story

QL:

Expansions to start contributing from FY12 onwards.
Fair value is RM5.50. Maintain Outperform.

Corporate Highlights

Wah Seong:

Gladstone/Curtis LNG projects gets environmental green light
Market Perform while our fair value is raised to RM2.21

Hunza Properties:

Headline net profit skewed by EIs.
Fair value is RM1.58. Maintain our Market Perform call.

Technical Highlights

Daily Trading Strategy:

Short-term outlook remains optimistic.
FBM KLCI may risk more profit-taking activities in the immediate term.
Investors should view this as an opportunity to collect value stocks for further positive push ahead.
FBM KLCI is expected to retest the 1,500 psychological level and the recent high of 1,503.82 soon.
Beyond that, sentiment will turn even more bullish and it will lift the index towards the all-time high of 1,524.69 next.

Daily Technical Watch: TSH Resources

Uptrend is likely to be maintained going forward.
Immediate Support at RM2.17
Immediate Resistance at RM2.58

Weekly Trading Idea: LBS Bina

Removing the recent high will spell more rallies ahead.
Strategy: Bargain Buy for a breakout of RM0.64 soon.
Immediate Resistance at RM0.64
Immediate Support at RM0.52
Exit: Cut loss if it falls below the 10-day SMA near RM0.57

Kencana - Top Picks in O&G Sector

Sunday, October 24, 2010

Kencana weekly chart

Kencana one of the stock top picks in oil and gas company. The uptrend on the weekly chart showed very strong and some of the research house target the stock price at more than RM2.

Tenaga Still on Uptrend

Tenaga daily chart

Tenaga Nasional, the biggest utility power company in Malaysia is one of the most liquid share in Bursa Malaysia stock market.The share currently trade at RM8.85 which closed on the last Friday. Most of the research house downgrade back the share price to RM9. from RM10 recently. due to lower earning expectations.

My observation:

Longterm - Tenaga (TNB) stock price still on uptrend.
Short term - the downtrend line already broken on last week.

I still believe that there is still room for Tenaga to hike. Happy reading...

RHBInvest Research Highlights 22nd October 2010

Saturday, October 23, 2010

Top Story

Telecom:

Sizing up the pure mobile domestic players – Maxis vs. DiGi.
No change to our Neutral stance on the sector.
Maintain Outperform on Maxis (FV=RM5.75)
Maintain Outperform on DiGi (FV=RM26.35)
TM (Market Perform, FV=RM3.55)
Axiata is still a Market Perform (FV=RM4.75)

Corporate Highlights

MAHB:

Sabiha Gokcen for long term prospects.
We have raised our fair value to RM6.81 (from RM5.96). Maintain Outperform.

Fajarbaru:

Lands RM36.5m Pasir Mas Halal Park infrastructure job.
Fair value is RM1.37. Maintain Outperform.

Technical Highlights

Daily Trading Strategy:

Fresh opportunity to retest 1,500
A sustainable trading above the 10-day SMA means a return to positive trading sentiment in the short term.
For now, the 10-day SMA becomes its immediate support level on the chart, followed by the tiny technical gap near 1,472.32 - 1,476.05.
Robust trading volume and healthy rotational plays are expected to cap profit-taking pressure in the near term, in our view.
Opportunity to retest the 1,500 psychological level and the recent high of 1,503.82, before gearing up to challenge the historical high at 1,524.69

Views & News, Maybank IB (2010-10-22)

Friday, October 22, 2010

Other Local News

KL Kepong: To expand Indonesian landbank. Kuala Lumpur Kepong Bhd (KLK) is expanding its oil palm landbank in Indonesia by another 7,177ha. Its unit KL-Kepong Plantation Holdings Sdn Bhd is buying 95% of PT. Bumi Makmur Sejahtera Jaya (PT BMS) from Tjong Hasan Agus Salim and Tjhang Ardy Fadrinata. Since KLK has engaged a high conservation value study on the land and is carrying out legal and financial due diligence, the deal is likely to materialize in the first quarter of 2012. (Source: Business Times)

SP Setia: Plans 40 corporate office buildings in Setia City. SP Setia Bhd plans to set up about 40 corporate office buildings in its 96ha integrated green commercial hub, Setia City that is worth RM5b in gross development value when completed in 10 to 15 years. The company has secured Top Glove Corp Bhd and Khind Holdings Bhd to set up their corporate headquarters in the hub, which will comprise office towers, hotels, service apartments and a retail mall. ?We are now in talks with a few local companies to set up their corporate office towers here and are not discounting the possibilities to talk to multinational companies in the future,? SP Setia president and CEO Tan Sri Liew Kee Sin said. (Source: The Star)

KFC: Eyes 17 outlets in India. KFC Holdings (M) Bhd, which is fast expanding its operations in India, expects to have 17 outlets in the subcontinent by the end of next year. The fast-food outlet operator now has three outlets in India ? one in Pune and two in Mumbai. The 17 outlets would include five in Mumbai that KFC Holdings would acquire from master franchise holder Yum! Brands Inc. They would also include two outlets in Pune that would be acquired from another Indian franchise holder, Kernel Food Pte Ltd. They would open four more outlets of its? own by year-end. Of the four, two would be in Mumbai, one in Pune and one in Aurangabad. (Source: The Star)

KFC, Kulim: Privatisation of KFCH ?very very remote? possibility. Kulim Bhd MD and KFC Holdings bhd (KFCH) deputy chairman Ahamad Mohamad said the privatization of KFC was not on the cards for now. But he pointed out that Kulim was always keen on holding a larger stake in the cash rich fast food chain operator. Ahamad said, ?We feel that having a direct stake (KFCH) circumvents having to go through two channels ? QSR and KFCH. It is more effective in that sense and of course, QSR at that time was not in a position to buy so Kulim was in a better position to buy so we bought?. On why Kulim had reduced its stake in QSR, Ahamad said Kulim bought ?more than enough? shares in QSR. (Source: The Edge Financial Daily)

Maybank: Opens ninth branch in Cambodia. Malayan Banking Bhd (Maybank) has opened its ninth branch in Cambodia to expand customer reach and tap the growing economic potential in that country. ?We have been on an aggressive expansion trail in Cambodia with eight branches opened in the last two years and are targeting to open two more branches by end of 2011,? said Maybank head of global wholesale banking Abdul Farid Alias. Located in Sihanoukville, the latest branch was the third provincial Maybank branch outside Phnom Penh City, after branches in Siem Reap and Battambang. (Source: The Star)

Lion Forest: Sells Silverstone to Toyo Tire for RM462m. Lion Forest Industries Bhd, owned by Lion Group, is selling its local tyre manufacturer Silverstone Bhd for RM462m to Japan?s Toyo Tire & Rubber Co Ltd, as Lion Forest looks to realise and unlock the value in Silverstone and make a gain of RM140m from the sale. Sources close to the deal said Lion Group is selling its tyre unit to raise cash to fund other core businesses such as steel and retail. The gain of RM140m will be reflected in Lion Forest?s financial year ending June 30, 2011, which translates to an increase in earnings per share of 60 sen per share. The disposal will also improve the group?s gearing from 0.05 times to 0.03 times. (Source: The Star)

Outside Malaysia

U.S: Leading index rises in September for a third month, signaling the recovery will extend into 2011. The New York-based Conference Board's index of leading economic indicators climbed 0.3% MoM. (Source: Bloomberg)

U.S: Philadelphia-area manufacturing expanded in October to 1 from minus 0.7 a month earlier. Readings greater than zero suggest expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware. (Source: Bloomberg)

U.S: Initial jobless claims fell 23,000 to 452,000 in the week ended Oct. 15. The total number of people receiving unemployment insurance fell, while those getting extended payments rose. (Source: Bloomberg)

E.U: Services and manufacturing industries expanded at the weakest pace in a year in October . A composite index based on a survey of euro-area purchasing managers in both industries fell to 53.4 from 54.1 in September, London-based Markit Economics said. A reading above 50 indicates expansion. (Source: Bloomberg)

E.U: Consumer confidence remained unchanged in October . An index of consumer sentiment in the 16-nation euro area held at minus 11, the same as in September. (Source: Bloomberg)

U.K: Retail sales unexpectedly dropped in September for a second month as consumers bracing for the government's budget squeeze curbed spending on items from clothing to gasoline. Sales fell 0.2% MoM from August, when they declined 0.7% MoM. On the year, sales rose 0.5% YoY, the least since January. (Source: Bloomberg)

Tenaga RM8.85: Sell - Maybank Invest

COMPANY UPDATE

Consensus set to be disappointed Shariah-compliant

Tenaga's 4Q result to be released Thurs, Oct 28. We think the full-year net profit ex-forex items will be 10-20% below consensus, which is not fully factoring in the usual 4Q spike in other costs and rising coal prices. The proposed subsidy rationalisation and feed-in tariffs bode poorly for reinstatement of the tariff formula. We see Tenaga being pushed back in the queue again, leaving it exposed to coal price fluctuations. Sell.

I love MPCORP by Maybank Invest

MPCORP

Support at RM0.42 & RM0.485
Resistance at RM0.54 & RM0.66
Target at RM0.56 & higher
Stoploss at 0.41
Broke previous resistance at RM0.475
Historical PE 2x

Air Asia, Fajarbaru Stock to Watch

Fajarbaru weekly chart - downtrend line broken

On Bursa Malaysia, the stocks that could be in focus include Fajarbaru Builder Group Bhd, OSK HOLDINGS BHD, AIRASIA BHD, MALAYSIA BUILDING SOCIETY BHD (MBSB).

Fajarbaru landed a contract worth RM36.47 million from the East Coast Economic Region Development Council (ECERDC) for the CONSTRUCTION of the first phase of the Pasir Mas Halal Park in Kelantan. Yesterday, Fajarbaru said its unit Fajarbaru Builder Sdn Bhd had received the letter of acceptance from the ECERDC on Oct 19. It said the construction period was 15 months commencing from the date of possession on Nov 1 this year.

Air Asia weekly chart - with strong uptrend

AirAsia extended the term of its cooperation agreement with Tune Talk Sdn Bhd (TTSB) up to July 27, 2011 to generate extra revenue and further boost the low-cost carrier's branding.

Under the terms of the agreement, AirAsia would continue selling any unsold TTSB SIM cards; allow TTSB to continue redeeming unused e-gift vouchers; continue utilising the various advertising platforms; and continue AirAsia's entitlement to be remunerated with a 5% sale commission on total top-up sales.

TTSB is 23.42% owned by Tune Ventures Sdn Bhd, in which both Datuk Seri Tony Fernandes and Datuk Kamarudin bin Meranun are substantial shareholders. The low-cost carrier has also been in focus lately after several analysts raised their target price and earnings estimates on it. Analyst raised their target price for the low-cost carrier following the release of its preliminary 3Q operating statistics on Tuesday, which saw revenue passengers kilometre (RPK) increasing 26.6% from a year earlier.

MBSB’s net profit for the nine months ended Sept 30, 2010 surged to RM133.21 million from RM66.91 million a year earlier, due mainly to higher loan and financing income, especially from the expansion of personal financing and higher other operating income from personal financing activities. These were partly set off by higher operating expenses and higher loan loss impairment, it said in a filing to Bursa Malaysia on Thursday, Oct 21.

MBSB chief executive officer Datuk Ahmad Zaini Othman said the company’s sustainability of its profit for the current quarter was due to the right strategies adopted.

OSK Holdings’ indirect wholly owned subsidiary OSK Indochina Securities Ltd (OSKIL) has been issued the licence for Securities Firm by Securities and Exchange Commission of Cambodia (SECC). The licence permits OSKISL to undertake securities underwriting business, securities dealing business, securities brokerage business and investment advisory business in Cambodia.

source: theedgemalaysia

RHBInvest Research Highlights 21st October 2010

Top Story

Media:

9M10 print and tv adex up by 18.2% yoy
Our Top pick is Media Prima (FV=RM2.75)
We maintain Outperform call on Media Chinese (FV=RM1.21)
Trading Buy call on Star (FV=RM4.34).
Maintain Overweight for the sector.

Macro View

Economy:

Leading index bounced back in Aug
Pointing to resilient economic activities ahead.

Sector Call

Rubber Gloves:

Still cautious on near-term outlook.
Maintain Underperform call on Top Glove (FV=RM5.40)
Market Perform call on Adventa (FV=RM2.47).
As for Hartalega (FV=RM5.64), we downgrade our call to Market Perform.
No change to our Neutral call on the sector.

Corporate Highlights

Puncak Niaga:

Eyeing Hogenakkal water project in India .
Fair value is RM3.01. Maintain Market Perform.

WCT:

Secures RM1.36bn building job in Qatar and RM128m hospital project in Sabah .Fair value is raised to RM2.56 from RM2.30. Maintain Underperform.

Axis REIT:

Quattro West started to contribute.
Maintain Outperform call on Axis REIT with fair value of RM2.67.

BAT:

Impact of less than 20’s ban cushioned by relaunch of Peter Stuyvesant.
Fair value is thus raised to RM42.92 (from RM42.90 previously). Underperform.

Technical Highlights

Daily Trading Strategy:

Recapturing the 10-day sma will renew upbeat sentiment.
Further recovery to above the 10-day SMA today will attract further follow-through buying support in the near term.
And once the recent high of 1,503.82 can be cleared, the short-term technical scenario will return to positive.
On the downside, the solid medium-term support at 1,450 level and the 40-day SMA of 1,458 are expected to keep sellers at bay.

Daily Technical Watch: Alliance Financial Group

Medium- to long-term uptrend remains largely intact.
Immediate Support at RM3.10
Immediate Resistance at RM3.30

Views & News, Maybank IB (2010-10-21)

WCT RM3.11: Buy

Lands RM1.5b contracts Shariah-compliant

A much anticipated wait. Two newly secured jobs have lifted job wins for 2010-YTD to almost RM2.2b, and outstanding order book to RM4.3b, we estimate. The RM1.36b job in Qatar , one of the two wins, has been much anticipated. We retain our earnings forecasts for now, having imputed RM2b job wins for 2010. We remain positive on WCT benefiting further from major domestic infrastructure / construction spend. The stock remains our top pick in the construction sector.

Axis REIT RM2.18: Buy

Targets RM1.5b asset size by 2011 Shariah-compliant

Still a Buy. Axis REIT's (AXRB) 9M10 results were within expectations. Total asset size will increase to c.RM1.3b (+50% YoY) after 6 asset injections and revaluation gains. AXRB targets to hit a RM1.5b asset size by end-2011, which could enhance its earnings by 11%. We are raising our earnings forecasts by 6-32% to factor in the new assets worth RM260m. DCF-based TP is raised to RM2.60/sh.

The FBM KLCI was lower marginally by 1.87 points yesterday. Its resistance areas at 1,490 and 1,503 will cap market gains, whilst the support areas for the FBM KLCI are located at 1,469 and 1,486.

Local News

Construction: Contractors for LRT project to be shortlisted next month. Contractors shortlisted for the first phase of the RM7b light rail transit (LRT) extension will be announced by early next month said an industry source. The first phase of the extension or package A for both Kelana Jaya and Ampang Lines involved 9.2km and 7.39km of construction length respective. Syarikat Prasarana Negara Bhd held a pre-bid briefing with the pre-qualified contractors for package A on June 22. The contractors were requested to submit their tenders in August. It is understood the briefing was attended by 15 construction companies that included Sunway Construction Sdn Bhd, IJM Construction Sdn Bhd, Muhibbah Engineering Sdn Bhd, Gamuda Bhd, Bina Puri Holdings Bhd, Loh & Loh Corp Bhd and MRCB Engineering Sdn Bhd. (Source: The Star)

YTL Corp: Proposes gas-saving power technology. Power-giant YTL Corp Bhd hopes to submit a proposal to the Malaysian government to use a new technology which will save up to 20% of the gas used to generate power. MD Tan Sri Francis Yeoh said the use of the co-generation combined cycle technology at power plants would save government millions of ringgit spent on gas. "We have tried and tested this technology at our plant in Singapore and are more than willing to share this knowledge with Malaysia as well." "This 20% savings can translate to about RM400m in savings annually". (Source: The Star)

Property: PNB defends Warisan Merdeka project. Permodalan Nasional Bhd's (PNB) RM5b plan to redevelop the tract of land near Stadium Merdeka, which includes a 100-storey office block, is a move to diversify the investment group's asset portfolio, said its group CEO Tan Sri Hamad Kama Piah. He said PNB expects an annual return of 8% to 10% from the project, which he stressed was a well-thought investment decision. He also reiterated that PNB could finance the mega project solely from its profits. "We are not taking the government?s money (for the project)," he said. The new tower will cost RM2.5b to RM3b and is expected to be completed by 2015. (Source: The Edge Financial Daily)

Berjaya Corp: Granted vehicle manufacturing plant license. Berjaya Corp Bhd (BCorp) has been granted a manufacturing plant license by the International Trade and Industry Ministry (Miti) for the assembly of commercial vehicles, hybrid cars, electric cars and luxury passenger vehicles in Malaysia . The 100-acre plant would be based at Bukit Tagar, Selangor, the company told Bursa Malaysia yesterday. BCorp chairman and CEO Tan Sri Vincent Tan said in a statement that the manufacturing licence would provide the company with the opportunity to assemble commercial and passenger vehicles locally, giving it more flexibility and control in terms of quality and pricing of its vehicles. (Source: The Star)

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