RHBInvest Research Highlights 16th November 2010

Tuesday, November 16, 2010

Top Story

  • Stable outlook.
  • We reiterate our Outperform call with fair value of RM5.52.

Macro View

Economic Growth:
  • Slowed down in the 3Q and will likely continue into 1H 2011.
  • We expect real GDP growth to slow down to 5.0% in 2011, from +7.3% estimated for 2010.

Corporate Highlights

  • One more in the bag.
  • Fair value has been raised to RM2.31. Upgrade to Outperform (from market perform previously)

Emas Kiara:
  • Exiting core geosynthetics business.
  • Fair value rationalised to Trading Buy and RM1.26 (from outperform and RM1.52 previously).
  • Cease coverage on the stock.

  • In line with expectations.
  • Fair value estimate is thus reduced to RM7.36 (RM7.76 previously). Maintain Outperform.

Below expectations but larger special dividend makes up for it.
Fair value estimate to RM8.30 (RM8.45 previously). Maintain Market Perform.

Technical Highlights

Daily Trading Strategy:
  • Trading sentiment to remain sluggish.
  • Technically, the closing with a small positive candle signals a chance of a further rebound in the immediate term.
  • In fact, given the poor technical readings overall, it could risk losing the 1,500 psychological level if the sentiment fails to improve significantly.
  • A key support is now seen at the previous breakout point of 1,450.
  • Breaching this level will confirm a major correction phase and potentially press the index towards a lower support at 1,390

Daily Technical Watch: Time Eng
  • Further weakness will force a revisit to the RM0.50 important level.
  • Immediate Support at RM0.50
  • Immediate Resistance at RM0.55


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