RHBInvest Research

Friday, November 5, 2010

Top Story

Building Materials

Steel Sub-sector: Ann Joo vs. Southern Steel.
Still premature to turn bullish on the steel sub-sector.

Macro View

  • Exports slowed down markedly in Sep.
  • We expect the country’s exports to slow down in 2011, after a strong rebound in 2010.

BNM Measures
  • Bank Negara Malaysia announced tightening measure on property financing.
  • Move is to ensure a stable and sustainable property market.

Sector Call

  • The overhanging issue is now over.
  • Maintain Overweight on the sector.
  • We continue to like SP Setia (OP, FV = RM5.94) and IJM Land (OP, FV = RM3.50).

  • BNM implements LTV cap of 70%
  • Overweight stance on the sector maintained.

Corporate Highlights

  • Suspension + unusual interim dividend.
  • Maintain Outperform call and fair value of RM3.30
  • The rising raw material price predicament.
  • Fair value is RM3.10. We downgrade our call to Market Perform.

  • Guiding for a weaker 4QFY12/10.
  • Fair value is RM2.31. Maintain Outperform.

Mah Sing
  • 2 land banking deals cost RM166.5m
  • Fair value is RM2.40. Maintain Outperform.

QL Resources
  • Private placement, share split, and free warrants issue.
  • Fair value is RM6.46. Maintain Outperform.

Technical Highlights

Daily Trading Strategy
  • Trading is expected to be volatile today.
  • Compounded with a drastic move by the Bank Negara late yesterday to curb speculative purchase on property sector.
  • Ahead of the shortened week due to the Deepavali holiday on Friday, the trading sentiment in local bourse is expected to stay cautious.
  • Technically, if the index manages to remove Monday’s high of 1,511.24, the index will gear towards the historical peak at 1,524.69.

Daily Technical Watch: Mulpha
  • Turn bullish only if it sustains at above RM0.52 in the near term.
  • Immediate Support at RM0.52
  • Immediate Resistance at RM0.62


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