RHB Invest Reasearch

Friday, December 3, 2010


Top Story

Banks:
Two banks reported better-than-expected numbers while the rest were in line.
Positive trends noted during the quarter were: 1) continued loan growth, which helped take net interest income higher; 2) higher non-interest income qoq; and 3) overheads remained well under control and thus, CIR fell further to 46.6% from 47.2% in 2QCY10.
Maintaining Overweight rating on the sector.



Sector Call


Telecom:
DiGi, TM and in particular, Maxis, saw improvements in EBTIDA margins. Celcom’s EBITDA margin, however, was marginally squeezed by an uptick in sales & marketing expenses due to aggressive subscriber acquisition initiatives.
TM remains the likeliest telco player to pay out special dividends.
Revise our call on the sector to Overweight.


Corporate Highlights


Glomac:
  • Still going strong 2QFY11 net profit of beat our expectation slightly by 7% and consensus by 25%, on an annualised basis.
  • No change to our forecasts and Outperform call


IJM:
A slice of action in RM269m Semantan Pipeline contract
Fair value upgraded to RM6.16m
Recommendation upgraded to Market Perform, from underperform previously.


TM:

Raising the odds of special dividends next year.
Maintain Market Perform at RM3.55.


Technical Highlights


Daily Trading Strategy:
  • Further confirmation needed to secure a technical rebound …
  • The rebound has led the FBM KLCI higher to above the 10-day and 40-day SMAs near 1,494 – 1,497 and the important psychological level of 1,500.
  • This has revived its near-term technical outlook, which could have already turned more bearish should it have not recovered yesterday.
  • The FBM KLCI must still acquire a confirmation candle today, and that the 10-day SMA must recover to above the 40-day SMA to void the previous bearish signal and secure a technical rebound going forward.
  • A slip back to below the 1,500 level and the SMAs will tarnish any positive possibility and turn the index back into the bearish zone again.

Daily Technical Watch: DRB-Hicom
  • A fresh breakout from the RM1.39 resistance level…
  • Immediate support at RM1.39
  • Immediate resistance at RM1.55

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