20051028 Market Roundup JetFM

Market in holiday mood
 
Next week, Bursa Malaysia will close on November 1st for the Hindu festival Deepavali and then on November 3rd and 4th for the Muslim festival Hari Raya Aidil Fitri. Today at 5 pm, the Kuala Lumpur Composite Index (KLCI) improved 1.33 points to 905.79. Volume expanded to 277.18 mln shares valued at RM645.94 mln. Losers outpaced gainers 314 to 290, while 334 counters were unchanged and 483 untraded. The Emas Index added 0.21 points to 205.83, while the Second Board fell 0.07 points to 83.17. Share prices ended the day slightly higher in sluggish trade as most investors stayed on the sidelines ahead of the long holidays. The 115-point fall on the Dow Jones Industrial Average also weighed on sentiment. Among blue chips, Tenaga at RM10.10 and Malayan Banking at RM11.50 were both 10 sen higher, while Telekom at RM9.75 was 5 sen lower.
 
The Employees Provident Fund (EPF) has recorded an income of RM3 bln from its investments for the 3rd quarter of the year, a decrease of 4.2% from RM3.2 bln recorded in the 2nd quarter. EPF in a statement here Friday said its investment income from Malaysian government securities, loans and bonds, money market instruments and property registered higher increases while equities yielded lower returns as compared to the last quarter. However, the accumulated investment income for the 9-month period up to September 2005 increased by 17% to RM9.1 bln compared with RM7.8 bln in the corresponding period of last year. Despite the increase, EPF said members were cautioned not to expect significant changes in the dividend rate for 2005 as the final quarter results have not been incorporated. It will cost more to pay out 1% dividend compared to the previous year following an increase in membership, it said.
 
MNC Wireless, which offers mobile technology consultancy services, was up 10.5 sen at 38.5 sen on possible buying by institutional funds interested in entering the telecommunications sector. The counter was the most active with 11.49 mln shares done.
 
Transmile Group was lower after the company announced that it is planning a private placement of up to 22.19 mln shares, which is seen as earnings dilutive. Transmile fell 10 sen to RM10.70.
 
Bumiputra Commerce Holdings was lower on selling pressure from some institutional funds, which could have also been precipitated by speculation that the company is unlikely to be able to merge with Southern Bank. Bumiputra Commerce was down 10 sen at RM5.50. Commerce Asset-Holding will be traded and quoted under its new name, Bumiputra-Commerce Holdings, with effect from November 2. It added that the stock short name and stock number remain unchanged.
 
Among highlights for the day, Southern Bank at RM3.90 (+10 sen); Golden Hope Plantations at RM4.14 (-2 sen); Texchem Resources at RM1.17 (+7 sen); Genting at RM20.50 (-10 sen); DiGi.Com at RM6.95 (+5 sen); Malaysian AE Models at 85 sen (+1 sen); Bursa Malaysia at RM4.46 (+6 sen); Media Prima at RM1.57 (+3 sen); CIMB at RM6.10 (-10 sen); Sarawak Oil Palms at RM1.22 (-1 sen); AMMB Holdings at RM2.37 (+2 sen); AirAsia at RM1.61 (-2 sen).
 
Japanese stocks fell on Friday, hit by profit taking after 3 days of rises and by some disappointing quarterly earnings. The Nikkei 225-Average was down 0.53% to 13,346.54. Some traders were also nervous about disappointing industrial production figures, although the latest round of employment numbers showed a continuing improvement. The insurance sector plunged 4.4% as speculation of takeovers to exploit companies' excess capital subsided. Nevertheless, insurers have still put in an extremely strong performance this year, boosted by growing confidence about Japan's economic recovery and their exposure to rising Japanese stock prices. All regional indices were bearish except for Philippines' PCOMP at 1,960.22 (+0.97%); Hong Kong's Hang Seng at 14,215.83 (-1.15%); Singapore's STI at 2,192.41 (-0.43%); South Korea's KOSPI at 1,140.72 (-2.20%); Taiwan's TWSE at 5,632.97 (-0.50%); Thailand's SET at 680.95 (-0.63%);Indonesia's JCI at 1,058.256 (-0.51%).
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20051028 Technical Outlook JetFM

Stock portfolio liquidation forced CI to close lower. A consecutive 2 up closes managed to roll in some buying interest in the stock market, CI subsequently rose to reach an intraday high of 909.14 before settled at 904.46 as "Funds" saw a higher CI as another good opportunity for them to continue liquidating their stock portfolio at a better gain. For Friday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 908.0 & 911.5; 1st and 2nd support levels will be 902.0 & 899.6.
 
Chart wise: Strong hands not seen in the trade. CI traded to an intraday high of 909.14; but the stock index could not sustain its momentum on the high side as stock portfolio liquidation continued to pour in to take advantage of higher stock prices. CI may have seemed to have stabilized with 2 up closes in a row at 904-level, the negative impact from the sharp fall on 19/10/2005 and a string of 9 down closes still linger strongly in "Funds" mind, these "Funds" were believed to have made a "decision" to sell into the market as CI goes higher, they no longer willing to take the risk of just watching CI going higher without selling to realize some profit. That's the reason why CI encountered some resistance each time it tried to go higher. In other words, "Funds" could have probably changed their market view from bullish to bearish; thus, by selling into rallies, they could recoup some cash now to buy stock at cheaper price later when CI falls below 900-level. An analysis of the market action revealed that strong hands have been selling since late September 2005, they were not seen in the market to buy recently when CI fell nearly to 900-level, the buying interest we saw were the weak hands. Furthermore, the most recent 3-day bars did not present a solid ground for the market to stage a strong rally. A study of CI behavior yesterday showed that selling pressure was greater than buying power. CI was therefore expected to trade lower than 903.19.
 
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. MACD readings fell to -4.52 (27/10/2005) from -4.09 (26/10/2005) with signal line readings also dropped to -2.47 (27/10/2005) from -1.88 (26/10/2005), an indication of a downtrend market. On Directional Movement Index, -DMI continued to stay above the +DMI. On the reading scales, -DMI was down to 29 from 36 on 26/10/2005 and +DMI was up to 8 from 4 on 26/10/2006. ADX fell lower from 74 (26/10/2005) to 71 (27/10/2005), an indication of weaken trending situation compared to 26/10/2005. As for Stochastics, %K line continued to stay below the %D line in the oversold zone. %K line was seen continue to curve up slightly to get closer to %D linee, a sign of bottom out. %K fell to 9.22 from 10.11 (26/10/2005) with %D also fell from 13.7 (26/10/2005) to 11.4 (26/10/2005). Traders must therefore start to exercise some caution for a possible correction.
 
Our stock recommendation for today is:
Tronoh Mines (Trading Buy) at RM3.20 with a stop loss at RM3.10

20051027 Market Roundup JetFM

Digi.Com the most active with only 9.63 mln shares done
 
At 5 pm, the Kuala Lumpur Composite Index (KLCI) lost 0.75 points to 904.46. Volume expanded to 293.93 mln shares valued at RM734.23 mln. Losers outpaced gainers 341 to 293, while 324 counters were unchanged and 463 untraded. The Emas Index dropped 0.14 points to 205.62, while the Second Board fell 0.19 points to 83.24. Share prices ended flat after listless trading, with the market lacking in stimulating news and with most investors reluctant to take any heavy positions ahead of a long holiday next week. Among blue chips, Malayan Banking at RM11.40 was lower by 10 sen and Telekom shed 10 sen to RM9.80. Tenaga at RM10.00 was 20 sen lower extending its losses from yesterday after the company posted below-expectation results for the year to August. The stock also came under selling pressure from foreign funds that are reducing their exposure to Malaysian stocks. Digi.Com at RM6.90 jumped 70 sen with 9.63 mln shares done was the most active counter today.
 
Talks on a possible merger between CIMB and Southern Bank have only involved major Southern Bank shareholders Selangor Sultan Sharafuddin Idris Shah and Syed Mohd Yusof Syed Nasir, said Nazir Razak, chief executive of Malaysia's CIMB, Thursday. His remarks follow a statement from Southern Bank late Monday that suggested Chief Executive and substantial shareholder Tan Teong Hean opposes any merger and wants Southern Bank to stay independent. CIMB at RM6.20 was unchanged, while Southern Bank at RM3.80 lost 2 sen.
 
Killinghall was sharply higher on speculation that the company may be a takeover target for Bumiputera Commerce. They said interest in the stock is also supported by a perception that Killinghall is a cheaper means of entry into Southern Bank. Killinghall was up 24 sen at RM3.28.
 
Sunway City, or SunCity, plans to float a real estate investment trust that includes a shopping mall, hotels, office blocks and a university campus in 2007, senior managing director Wong Choon Kee said. He declined to say how much the REIT will be worth, but expects its size and yield to be attractive enough for foreign and local investors. SunCity at RM1.45 fell 5 sen.
 
AirAsia was higher extending its gains from yesterday after the company announced that the finance ministry has approved its investment allowance incentive application. The approval will enable it to offer low fares, which in turn will potentially enhance earnings. AirAsia was unchanged at RM1.63.
 
IOI Corp was higher on an improved earnings outlook on the back of expectations that crude palm oil prices will rise further on strong demand. IOI Corp was up 20 sen at RM13.00.
 
Among highlights for today, Malaysia Airports Holdings at RM1.85 (-1 sen); Dceil International at 41.5 sen (+4 sen); Maxbiz Corp at 20 sen (-0.5 sen); Sunrise at RM1.39 (-1 sen); Malaysian Merchant Marine at 50.5 sen (-0.5 sen); British American Tobacco at RM37.50 (+75 sen); QSR Brands at RM3.22 (unchanged).
 
Japan's Nikkei 225-Average merely inched upwards, with gains curbed by poor earnings results from technology companies. The Nikkei 225-Average finished 0.16% higher at 13,417.08. Investors' sentiment has been improving towards domestically focused stocks, which pushed the sector up 3.1% and the real estate sector up 1.8%. But the electrical machinery sector, which includes most of the big technology stocks, fell 0.6%. Construction companies continued their rise, the sector has enjoyed a spectacular week, boosted by UBS' estimate of strong demand to replace properties built during the 1965 to 1975 construction boom. But the sector that leapt the furthest was insurance, up 6.6% after Goldman Sachs spoke of the possibility of takeovers of non-life companies because of excess capital. The securities sector, which has risen strongly in recent weeks, was up 2.0% ahead of quarterly results from Nomura, the country's biggest securities house. Investors' confidence in the sector was rewarded by Nomura's announcement after market close of a quarterly profit 19 times higher than a year ago, boosted by higher equity trading and sales of investment funds. Regional indices were mostly lower, Hong Kong's Hang Seng at 14,381.06 (-0.53%); Singapore's STI at 2,201.90 (-1.21%); South Korea's KOSPI at 1,166.36 (-1.07%); Taiwan's TWSE at 5,661.18 (-0.69%); Thailand's SET at 684.88 (-0.02%); Philippines' PCOMP at 1,941.46 (+0.36%); Indonesia's JCI at 1,063.697 (+0.14%).
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20051027 Technical Outlook JetFM

CI closed up on 2nd day; but stock portfolio liquidation continued. After registering a 1st up close on 25/10/2005 since 13/10/2005, CI continued to rise to an intraday high of 907.79 on some bargain hunting activity before settled at 905.21. However, CI could not sustain well at higher level as "Funds" again saw that as an opportunity to further liquidate their stock portfolio. For Thursday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 907.4 & 909.9; 1st and 2nd support levels will be 903.0 & 900.9.
 
Chart wise: Strong hands not seen in the trade. CI may have traded at 903.33 on the opening bell, 1.42 points lower than previous day close of 904.75; but the stock index charged its way up to a high of 907.79 to give an indication that there was certain buying interest in the market. An analysis of this price behavior revealed that the buying interest may want to see the CI higher; however, they were not strong enough to keep the up move as bigger selling pressure was waiting to unload each time CI tried to go higher. Anyone who took a glance at the CI performance would agree that CI seemed to have stabilized in the past 2 days, some buying interest were noted to support the CI. On examination of the recent price and volume relationship, strong hands were still not in sight, they were not buying; so, whoever bought in the market in the past few days were the weak hands. CI had a 2nd up close in a row after a string of 9th consecutive down closes from 12/10/2005 to 24/10/2005; we should therefore be seeing a few more up closes in next few days. While it is certainly healthy to see some up closes, we should not be getting over excited of that on the other hand.  With a close of 905.21, CI now has 3 closes below 909-level, that certainly would strengthen the technical evidence of the valid violation of CI on 24/10/2005. In addition, the base formation was not solid enough to create an urgent buy scenario, market may carry the CI higher; but these up closes would only be reactions of the recent downward move. In fact, the base was rather weak, an up close should not be deemed as a beginning of a rally. Traders should not rush to buy more stocks even they may appear "cheap"; instead, they should take that as an opportunity to further reduce stock portfolio in hand. A study of the market action showed that buying power was greater than selling pressure. CI could trade higher than 907.79.
 
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. MACD readings fell to -4.09 (26/10/2005) from -3.57 (25/10/2005) with signal line readings also dropped to -1.88 (26/10/2005) from -1.25 (25/10/2005), an indication of a downtrend market. On Directional Movement Index, -DMI continued to stay above the +DMI. On the reading scales, -DMI was down to 36 from 43 on 25/10/2005 and +DMI was up to 4 from 1 on 25/10/2006. ADX rose higher from 73 (25/10/2005) to 74 (26/10/2005), an indication of a better trending situation compared to 25/10/2005. As for Stochastics, %K line continued to stay below the %D line in the oversold zone. %K line was seen starting to curve up slightly, instead of moving further from %D line, a sign of bottom out. %K rose to 10.11 from 11.6 (25/10/2005) with %D also fell from 17.4 (25/10/2005) to 13.7 (26/10/2005). Traders must therefore start to exercise some caution for a possible correction.
 
Our stock recommendation for today is:
Lion Diversified (Trading Buy) at RM1.95 with a stop loss at RM1.84

20051026 Market Roundup JetFM

Rebound on buying of selected blue chips
 
At 5 pm, the Kuala Lumpur Composite Index (KLCI) added 0.46 points to 905.21. Volume expanded to 296.19 mln shares valued at RM553.75 mln. Losers outpaced gainers 356 to 286, while 332 counters were unchanged and 446 untraded. The Emas Index increased 0.29 points to 205.76, while the Second Board fell 0.17 points to 83.43. Some institutional buying of oversold selected blue chips nudged the KLCI marginally higher, but the overall breadth of the market was still lackluster. Among blue chips, Tenaga lost 10 sen to RM10.20, Malayan Banking closed at RM11.50 was unchanged, while Telekom was 5 sen lower to RM9.90. Asia Poly Holdings made its debut on the MESDAQ Market 29.5 sen higher to 63.5 sen against its IPO price of 34 sen. The counter was the most active with 16.24 mln shares done.
 
Top Glove Corp may build a biomass plant to power its factories in Klang, which will allow it to cut energy costs sharply. Its Ipoh factory is now powered by biomass, saving RM0.5 mln monthly. It currently uses different energy sources for its 11 factories in 3 countries.  Other local plants are powered by natural gas, while the one in China uses coal. It is in the midst of converting the energy source for 2 factories in Thailand from liquefied petroleum gas to biomass, and is expecting big savings on the switch in a few months. It is not clear how much it needs to invest for a biomass plant in Klang but Top Glove spent about RM5 mln to set up the plant in Ipoh. Top Glove at RM5.05 declined 5 sen.
 
Oriental Holdings' (RM4.02 unch) 60% owned Oriental-Hyundai aims to increase the sales of Hyundai cars by 30% p.a.  Oriental Holdings expects to sell more than 8,000 units in 2005 from 3 Hyundai models it assembles. Since it began assembling Hyundai CKD (completely knocked-down) vehicles, it has managed to increase its sales volume by 20% annually.  Oriental-Hyundai said the new Hyundai Sonata could be assembled in mid-2006 and that prices of cars will not drop. Oriental-Hyundai may later cross-sell Hyundai cars with Hyundai-Sime Darby, the distributor of CBU (fully imported) Hyundai cars. 
 
Penerbangan Malaysia is looking for other financing options following the recent deferrment of its USD1 bln bond sale. Its corporate services vice-president Shahril Mokhtar said the next round of fund raising exercise would not necessarily be confined to bond sales. Currently, PMB is still considering the various financing options available in the market. Malaysian Airline System at RM3.08 improved 4 sen.
 
Digi (RM6.20;+5 sen) reported its 3Q2005 earnings rose 73.2% YoY and profits also rose 41.5% YoY for the YTD period.  Revenues rose 29.1% oY in 3Q2005 while rising 26.4% for the 9 month period.  Finance costs dropped 94.7% (51.2% for the YTD period), contributing to the profit growth.  Profit from operations rose 47.4% YoY for the quarter (26.9% YoY for the YTD period).  Almost 93% of revenues for the YTD period were mobile related and wholesale sales contributed 5.6%.  The subscriber base rose to almost 4.2 million as Sept2005.  Prepaid ARPU was stable at RM54 while the blended ARPU dropped slightly to RM58.  EBITDA margin improved by 0.7% to 43.9% from 43.2% achieved in the preceding quarter due to reduced finance charges. 
 
Among other highlights today, Kulim at RM2.62 (+2 sen); QSR Brands at RM3.22 (unchanged); Southern Bank at RM3.82 (+2 sen); Bumiputra-Commerce at RM5.50 (-15 sen); Maxis Communications at RM8.95 (+25 sen); AirAsia at RM1.63 (+7 sen); Suremax Group at 23 sen (-1 sen); Unimech Group at 42 sen (unchanged); Perisai Petroleum Teknologi at RM1.26 (unchanged); Sime Darby at RM6.15 (+5 sen).
 
Japanese stocks rose on Wednesday, with broad increases across the board that included export and domestically focused stocks. The Nikkei 225-Average finished trading up 0.86% to 13,395.02. The transport equipment sector, whose reliance on exports makes it highly sensitive to any changes in sentiment on the US economy, was up 1.1% despite an unexpected fall in US consumer confidence overnight. Sentiment towards export stocks was supported by strong monthly export figures published by the Japanese government on Wednesday. But the domestic real estate sector continued its riseon  by expectations of strong demand for office property.  Construction companies rose on a UBS report saying they would benefit from the need to rebuild office property put up during the 1965 to 1975 construction boom.  The securities sector rose 1.6%, continuing to benefit from recent high share trading volume.

20051026 Hwang DBS Daily Focus

Highlights
>
> Tenaga Nasional - Disappointing 4Q05 - Maintain Buy
>
> FY05 results (excl. forex and exceptional items) came in below consensus
> estimate and our expectation by 16% and 18% respectively. Revenue growth
> was within expectation but EBITDA margin fell from 31.8% to 29.3% mainly
> due to higher fuel cost, which resulted in a 11.6% drop in core earnings
> for FY05. We maintain our view that a tariff increase in early 2006 (which
> Tenaga said the proposal is still under review by the government) is
> inevitable in view of rising generation cost. Hence, we maintain our BUY
> call on Tenaga with a DCF-based target price of RM12.00.
>
> Comments
>
> AirAsia - Receives investment allowance incentive from Government -
> Maintain Buy
>
> The Ministry of Finance has approved AirAsia investment allowance
> incentive application. The incentive constitutes income tax exemption of
> 60% on qualifying capital expenditure incurred within a 5 year period (1
> July 2004 to 30 June 2009), to be deducted up to 70% of statutory income
> for each year of assessment. The incentive is in addition to the normal
> 100% allowance for capital expenditure.
>
> The incentive will lower cash taxes (on the cash flow statement) and
> improve net cash flow. However, the impact to the profit and loss may
> depend on whether there will be deferred taxes recognized. The recognition
> is cosmetic. The incentive is a major positive for AirAsia in view of
> their aircraft acquisition program. We maintain our Buy call on AirAsia
> with a RM1.75 price target. 
>
> Construction - Second Penang bridge work should start by 2008 - Maintain
> Neutral
>
> Works Minister Datuk Seri S. Samy Vellu said that construction of a second
> bridge to Penang should start by 2008 (and be completed by 2013), if
> traffic congestion is to be prevented. He added that the construction of a
> third lane on both sides of the RM1.25bn bridge would not be able to
> absorb the additional traffic. The expansion work, which includes a
> special lane for motorcycles at a cost of RM402m, is scheduled for
> completion in Mar 2008.
>
> The construction of a second bridge should improve sentiment for the
> sector. UEM Builders (Not Rated) should be among the contractors eyeing
> the construction of a second bridge.

2005026 Technical Outlook JetFM

CI broke below 907.37 low on continued stock portfolio liquidation. Low buying interest capped CI from going up, the stock index went up to an intraday high of 906.87 as light bargain hunting activity pushed the CI higher after the opening bell; but "Funds" saw that as an opportunity to further liquidate their stock portfolio. As a result, CI fell to below previous day's low of 904.45 to reach 902.60 before closed at 904.7. For Wednesday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 906.88 & 909.01; 1st and 2nd support levels will be 902.61 & 900.47.
Chart wise: CI settled below 909, 900-level to be broken on intraday basis. 900-level was nearly tested as CI traded down to 902.6; but the buying interest was weak to lift the CI higher, stock index closed below 909 again on a 2nd consecutive day after the violation on 24/10/2005. As a rule of thumb, a minimum of 3 closes below 909 was required to strengthen the technical evidence of a valid violation, we still short of 1 close below 909. With a close of 904.75, CI finally has 1 up close after registering 9th consecutive down close since 12/10/2005. An up close after a string of down closes was in fact a healthy sign for the market, it gave market a chance to align what to be adjusted, we could now expect a few more up closes in next few days. An up close should not be deemed as a beginning of a rally. Traders should not rush to buy more stocks even they may appear "cheap"; instead, they should take that as an opportunity to further reduce stock portfolio in hand. Market may carry the CI higher; but these up closes would only be market reactions of the recent downward move. As at 25/10/2005, CI has not provided any concrete positive sign of turning up yet. CI may have closed at 904.75, slightly higher than previous close of 904.7; but a study of the market action showed that selling pressure was greater than buying power. CI could trade lower than 902.6; however, some renewed buying interest would be seen as CI goes near 900 - 904 level today. A preliminary review indicated that an intraday break below 900 would be likely in today's market; however, there would be market attempts to push the CI back up 900-level. In an analysis of Fibonacci Retracement studies, CI next downside target would be 888 based on was at 161.8% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005).
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. MACD readings fell to -3.57 (25/10/2005) from -2.8 (24/10/2005) with signal line readings also dropped to -1.25 (25/10/2005) from 0.59 (24/10/2005), an indication of a downtrend market. On Directional Movement Index, -DMI continued to stay above the +DMI. On the reading scales, -DMI was flat at 43, unchanged from 24/10/2005 and +DMI was down to 1 from 2 on 24/10/2006. ADX rose higher from 67 (24/10/2005) to 73 (25/10/2005), an indication of a better trending situation compared to 24/10/2005. As for Stochastics, %K line continued to stay below the %D line in the oversold zone. %K line was seen starting to curve up slightly, instead of moving further from %D line, a sign of bottom out. %K dropped to 11.6 from 15 (24/10/2005) with %D also fell from 23.2 (24/10/2005) to 17.4 (25/10/2005). Traders must therefore start to exercise some caution for a possible correction.
Our stock recommendations for today are:
Digi (Trading Buy) at RM6.15 with a stop loss at RM5.90
Redtone (Trading Buy) at RM1.80 with a stop loss at RM1.69

20051025 Market Roundup JetFM

KLCI ends unchanged in lackluster mood
 
At 5 pm, the Kuala Lumpur Composite Index (KLCI) added 0.05 points to 904.75. Volume expanded to 323.53 mln shares valued at RM628.93 mln. Losers outpaced gainers 431 to 241, while 326 counters were unchanged and 422 untraded. The Emas Index dropped 0.18 points to 205.47, while the Second Board fell 0.29 points to 83.60. Share prices were lower given the absence of positive leads and the impending release of key index heavyweight Tenaga's full-year results later today. Southern Bank's denial that it is seeking to merge with CIMB also affected market sentiment. Among blue chips, Tenaga at RM10.30 and Telekom at RM9.95 were both unchanged, while Malayan Banking at RM11.50 gained 20 sen. MNC Wireless at 28.5 sen was 3.5 sen lower against its initial public offering price on the MESDAQ market of Bursa Malaysia. The counter was the most active with 19.42 mln shares done.
 
Killinghall's 10 mln irredeemable unsecured convertible loan stocks (ICULS) were traded off-market on October 25. According to stock market data, the ICULS were traded at a RM16 mln or RM1.60 a unit. The ICULS ended day at RM1.51 down 5 sen, while Killinghall at RM2.49 fell 10 sen.
 
KNM Group lost 2 sen to RM3.32, despite a report saying that the company plans to increase its production capacity by 30% annually over the next 2 years to meet growing demand for process equipment in the crude oil and gas, petrochemical and mineral sectors.
 
DXN Holdings has booked a 13.3% on-year jump on group revenue to RM95.344 mln for the 6 months ended 31 August 2005 thanks to robust overseas and domestic sales. DXN is a manufacturer of health supplements, but recently it has ventured into property development in Penang. DXN at 65 sen was flat.
 
Top Glove Corp will spend RM100 mln on factories in China and Malaysia to boost capacity and help meet its target for record profit next fiscal year. Top Glove, which has 11 factories, will build a 2nd plant in China and 2 more in Malaysia by August next year, boosting capacity by 40%, according to Chief Executive Officer Lim Wee-Chai. Top Glove at RM5.10 increased 10 sen.
 
LCTH Corp promised shareholders a high dividend payout of 7.6 sen for calendar 2005. Last year, the company rewarded shareholders with a 8.56 sen dividend per share. LCTH at 46 sen improved 1 sen. Titan Chemicals Corp was higher in early trade after shareholders approved the company's plans to buy back up to 10% of its shares. Titan closed unchanged at RM1.63.
 
Among highlights for today, Southern Bank at RM3.80 (unchanged); NCB Holdings at RM2.45 (unchanged); Atlan Holdings at RM2.15 (-3 sen); Kuala Lumpur Kepong at RM7.85 (+5 sen); IOI Corp at RM12.70 (-10 sen); IOI Oleochemical Industries at RM11.60 (unchanged); Asian Pac Holdings Warrants at 1.5 sen (-1.5 sen); Asian Pac Holdings at 11.5 sen (unchanged); AirAsia at RM1.56 (+5 sen); Supermax Corp at RM3.76 (+2 sen); Seal Polymer Industries at RM1.20 (unchanged); MBf Corp at 5.5 sen (unchanged); Tanjung Offshore at RM1.99 (+6 sen); SAAG Consolidated at 75.5 sen (+0.5 sen); Equine Capital at 43.5 sen (-1 sen); Ramunia Holdings at RM1.17 (-3 sen).
 
Japanese stocks rose sharply on Tuesday, boosted by renewed optimism about the US economy. The Nikkei 225-Average jumped 1.33% to 13,280.62. Shares of several exporters climbed strongly after US stocks showed their biggest daily increase in 6 months overnight, responding to the nomination of Ben Bernanke to succeed Alan Greenspan as chairman of the Federal Reserve. Mr. Bernanke pledged to maintain continuity with the policies and policy strategies established during the Greenspan years. The transport equipment sector, which is highly exposed to the US market, climbed 1.5%. The internationally exposed iron and steel sector also jumped 2.3%. Some domestically focused sectors also performed well. Securities companies, which have under-performed other financial and domestic stocks in general this year, made up by rising 2.3%. Construction companies rose after UBS increased target prices, citing the need to rebuild many office buildings completed in the 1965 to 1975 construction boom.
 
Regional indices were in mixed performance, Hong Kong's Hang Seng at 14,424.88 (+0.16%); Singapore's STI at 2,226.46 (+0.16%); South Korea's KOSPI at 1,181.28 (-0.28%); Taiwan's TWSE at 5,721.31 (+0.07%); Thailand's SET at 679.91 (-0.92%); Philippines' PCOMP at 1,927.49 (+0.52%); Indonesia's JCI at 1,062.172 (-1.02%).

20051025 Technical Outlook JetFM

CI broke below 907.37 low on continued stock portfolio liquidation. "Funds" continued to sell in the market in absence of fresh leads, CI broke below last Friday's low of 907.37 to reach an intraday low of 904.45 before settled at 904.7. For Tuesday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 909.94 & 915.19; 1st and 2nd support levels will be 901.95 & 899.21.
 
Chart wise: CI settled below 909, 900 level to be broken on intraday basis. With a close of 904.7, CI has now registered a 9th consecutive down close since 12/10/2005, a scenario that has not been seen for some time. In general, a straight down close for 9 consecutive days was a bearish pattern and did not present a comfortable picture to any traders. While the market expected to see more downside below 900-level in next few days; but a preliminary analysis of the situation revealed that we should begin to see some up closes first after 1 or 2 more down closes before we could see CI falling below 900-level. An up close should not be deemed as a beginning of a rally. Thus, traders should not rush in to buy more stocks; instead, they should take that as an opportunity to further reduce stock portfolio in hand as the up closes should be seen just a market reaction of the recent downward move. As at 24/10/2005, CI has not provided any positive sign of turning up yet. In view of that, CI was expected to trade lower than 904.5; however, some renewed buying interest would be seen as CI goes near 900 - 904 level today. An analysis of this price and volume relationship showed that an intraday break below 900 would be likely in today's market as there would be attempt to push the CI back up 900-level. Yesterday CI may have closed below 909; but the close was not accompanied by decisive volume, that could probably signal a limited downside. In an analysis of Fibonacci Retracement studies, CI next downside target would be 888 based on was at 161.8% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005).
 
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. MACD readings fell to -2.8 (24/10/2005) from -1.78 (21/10/2005) with signal line readings also dropped to -0.59 (24/10/2005) from 0.04 (21/10/2005), an indication of stock market into downtrend. On Directional Movement Index, -DMI continued to rise above the +DMI as market closed lower. On the reading scales, -DMI was down to 43 from 45 (21/10/2005) and +DMI was flat at 2, unchanged from 21/10/2006. ADX rose higher from 61 (21/10/2005) to 67 (24/10/2005), an indication of a better trending situation compared to 21/10/2005. As for Stochastics, %K line continued to stay below the %D line in the oversold zone. %K line moved further away from %D line, a sign of lower market. %K dropped to 15.0 from 22.8 (21/10/2005) with %D also fell from 31.3 (21/10/2005) to 23.2 (24/10/2005). Traders must therefore start to exercise some caution for a possible correction in next few days.
 
Our stock recommendation for today is:
Selangor Property (Trading Buy) at RM2.44 with a stop loss at RM2.33

20051024 Market Roundup JetFM

Bearish regional
 
At 5 pm, the Kuala Lumpur Composite Index (KLCI) dropped 4.88 points to 904.70. Volume expanded to 343.36 mln shares valued at RM769.78 mln. Losers outpaced gainers 461 to 208, while 300 counters were unchanged and 451 untraded. The Emas Index fell 0.96 points to 205.65, while the Second Board lost 0.14 points to 83.89. Share prices were lower, tracking last Friday's weaker close on the Dow Jones Industrial Average. Most investors were reluctant to take any heavy positions amid concerns about a slowdown in the domestic economy and a pick-up in inflation. Among blue chips, Tenaga at RM10.30 shed 20 sen, Telekom lost 15 sen to RM9.95, while Malayan Banking closed at RM11.30 was lower by 10 sen.
 
Penerbangan Malaysia, the parent of state carrier Malaysian Airline System (MAS), said on Monday it was aborting a planned bond sale due to documentation issues. Penerbangan said this month it wanted to raise USD1 bln through a bond sale. The statement announcing the cancellation of the sale gave no other details. MAS at RM3.02 fell 18 sen.
 
Parkson Retail Group Ltd, the China retail unit of Malaysia's Lion Diversified Holdings, is set for a listing hearing on Thursday with the Hong Kong bourse for an IPO worth as much as USD180 mln, sources familiar with the situation said on Monday. Lion Diversified plans to invest USD124 mln over the next 4 years to expand its flagship Parkson retail operations in China to be funded partly by the unit's listing. Lion Diversified at RM1.85 added 5 sen.
 
Proton Holdings slumped 45 sen to RM7.90, is carrying about 2 months worth of stock, or 30,000 cars, the Edge weekly magazine reported, citing unidentified analysts and vendors. Proton may have to make provisions that could hurt earnings if it doesn't sell the bulk of the vehicles by the end of the year.
 
Ramunia Holdings was slightly higher in early trade on a report that it has won a construction contract worth more than RM100 mln from Petronas Carigali. Ramunia ended the day unchanged at RM1.20
 
Among the banking stocks, Southern Bank at RM3.80 (+30 sen), the counter was most active with 18.14 mln shares done; Commerce Asset-Holdings at RM5.70 (-5 sen); CIMB at RM6.30 (unchanged); AMMB Holdings at RM2.32 (+4 sen); Public Bank at RM6.45 (unchanged); Hong Leong Bank at RM5.15 (-5 sen). 
 
Among other highlights for today, Killinghall at RM2.59 (+58 sen); Malaysian Resources Corp at 66 sen(+2 sen); UDA Holdings at RM2.17 (-1 sen); Chin Foh at 85 sen (-2 sen); WCT Engineering at RM3.36 (+2 sen); Melewar Industrial Group at RM1.26 (+1 sen); Oilcorp at 70 sen (-4 sen); Key West Global Telecommunications at 38 sen (-3 sen); Sumatec Resources at 55.5 sen (-1 sen); PPB Oil Palms at RM4.90 (+4 sen).
 
Tokyo shares fell moderately on Monday, with some machinery stocks severely damaged by last Friday's grim earnings from Caterpillar in the US. Nikkei 225-Average ended trading down 0.71% at 13,106.18. The machinery sector fell 1.2%, dragged down by sharp falls in some equipment stocks in response to Caterpillar's disappointing results and gloomy outlook. Looking ahead, the company warned of higher raw material costs. Most domestically focused stocks put in a dull or moderately negative performance as the quarterly earnings season began. Although domestic stocks are up strongly on the year as international investors bet on the recovery of Japan's economy, their prices often fall back ahead of next batch of strong economic figures. The services sector fell 0.5%, with banking and retailing both down 0.4%. But the securities sector rose 0.6%.
 
Thailand's stock market was closed today for the Chulalongkorn Day holiday, the rest of the regional bourses all lost ground except for South Korea's KOSPI at 1,184.60 (+0.09%); Hong Kong's Hang Seng at 14,402.35 (-0.59%); Singapore's STI at 2,222.83 (-0.74%); Taiwan's TWSE at 5,717.28 (-0.37%); Philippines' PCOMP at 1,917.47 (-0.26%); Indonesia's JCI at 1,073.082 (-0.27%).

Southern Bank warrants

20051024 CIMB announced negotiations opened to take stake in Southern Bank Berhad. This chart highlight a few things:
'Long term' play on quality stocks eventually pay off, so don't get sucked into plunging into the market when things get 'hot', as any remisier would advise. Gaining exposure through the warrants in 2003 when the price was RM0.60-70 woul give a very good annual return on investment superior to any 'sampah' (rubbish) 2nd or 3rd liner stocks on Bursamalaysia.

20051024 Hwang DBS Daily Focus

Highlights
>
> 
>
> CAHB approved to negotiate for SBB - Maintain Overweight
>
> 
>
> Commerce Asset (CAHB MK) made a surprise move with its plan to commence
> merger discussions with shareholders of Southern Bank (SBKF MK). We view
> this as a possible hostile takeover of SBKF, suggesting the start of the
> 2nd round market-driven consolidation. If successful, this acquisition is
> synergistic to CAHB because SBKF has the retail customer base, which
> compliments CAHB's corporate customers. However, price remains the key
> issue and it is still too early to conclude if it would be a fair deal for
> CAHB since CAHB has just begun negotiating with SBKF shareholders. We
> believe that it would not be easy for CAHB to gain control or to trigger a
> general offer given the potential resistance from SBKF's CEO Dato' Tan. As
> such, a hefty price tag and speculative interest on SBKF is expected.
> Hence, we upgrade SBB to Trading Buy. Meanwhile we maintain our Hold call
> on CAHB.  

20051024 Technical Outlook JetFM

Long liquidation continued to pressure CI. Following the sharp fall on 19/10/2005, long liquidation on stock portfolio continued to pressure the CI to go lower, CI fell to an intraday low of 907.37 before closed at 909.58 as "Funds" reduced their stock position further ahead of weekend. For Monday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 913.42 and 917.27; 1st and 2nd  support levels will be 906.66 and 903.53.
 
Chart wise: 8th consecutive down close, a lower market was expected. CI registered a 8th consecutive down close since 12/10/2005, the straight down close patterns certainly did not look good in the eyes of traders, some of the stock may have looked cheaper. But traders were not willing to jump into the game to pick up stocks yet and would likely to continue staying sideline for a another few days as there was still no "clear" sign of market making an up turn as at 21/10/2005. In view of that, CI was expected to trade lower than 907.37. But some renewed buying interest would be seen as CI goes near 904-level and this buying action would likely to carry the CI to close above 909. As mentioned earlier in previous write up, it was important for CI NOT to close below 909, this market view still hold. Nevertheless, should the buying power not strong enough to carry the CI to close above 909 as expected, a stronger bearish scenario would be created, we would be in for more downside. Having studied the price action on 21/10/2005, it seemed that there was now a higher possibility of CI to close below 909 on Monday. We must be prepared for it to happen. The volume on last Friday was below 300 million shares, lower than that of 20/10/2005, it basically reflected low trading interest in the market with no much of panic selling pressure or keen buying power. A preliminary analysis of this price and volume relationship showed that a lower market could be expected; however, downside could be limited, unless the close below 909 would be accompanied with decisive volume. In an analysis of Fibonacci Retracement studies, CI was at 93.58% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005).
 
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. MACD readings fell to -1.78 (21/10/2005) from -0.92 (20/10/2005) with signal line readings also dropped to 0.04 (21/10/2005) from 0.56 (20/10/2005), an indication of stock market into downtrend. On Directional Movement Index, -DMI continued to rise above the +DMI as market closed lower. On the reading scales, -DMI rose to 45 from 42 (20/10/2005) and +DMI was slightly lower to 2 (21/10/2005) from 3 on 20/10/2006. ADX rose higher from 54 (20/10/2005) to 61 (21/10/2005), an indication of a better trending situation compared to 20/10/2005. As for Stochastics, %K line continued to stay below the %D line in the neutral zone. %K line moved further away from %D line, a sign of lower market. %K dropped to 22.8 from 31.4 (20/10/2005) with %D also fell from 39.9 (20/10/2005) to 31.3 (21/10/2005). However, %K was approaching the oversold zone, traders must therefore start to exercise some caution(s) for a possible correction in next few days.
 
Our stock recommendation for today is:
Samudra (Trading Buy) at RM2.20 with a stop loss at RM1.98

20051021 Market Roundup JetFM

Bursa 2 points lower ignoring rebound in most regional markets
 
At 5 pm, the Kuala Lumpur Composite Index (KLCI) shed 2.11 points to 909.58.  Volume expanded to 297.13 mln shares valued at RM628.91 mln. Losers outpaced gainers 409 to 233, while 322 counters were unchanged and 456 untraded. The Emas Index lost 0.43 points to 206.61, while the Second Board fell 0.54 points to 84.03. Share prices ended Friday lower on light selling in selected blue chips by foreign funds. Concerns over rising inflation and a slowing economy kept investors at bay, while trading remained thin.  Most traders are reluctant to take positions ahead of the weekend. Among blue chips, Tenaga at RM10.50 and Telekom at RM10.10 were both unchanged, while Malayan Banking at RM11.40 dropped 10 sen.  AMMB Holdings, 2sen lower at RM2.27, was heavily traded (volume:11.36 mln shares).
 
Penerbangan Malaysia (PMB) may increase the size of the 30-year tranche of its USD1 bln of bonds to USD400 mln after strong investor interest for Malaysia's largest US Dollar-denominated issue this year, a source close to the deal said Friday. PMB planned to sell USD750 mln of 10-year paper and the rest in 30-year bonds. The guidance on the 30-year paper is 145 basis points over US Treasury or 96 bps over mid-swaps. The 10-year paper is being offered at 35 points over mid-swaps or 83 points above Treasury. Final pricing for the government-backed paper is expected Friday in New York. The bond is widely viewed as a proxy for Malaysian government issuance, as the company is wholly owned by state investment arm Khazanah National. PMB owns 69% of national carrier Malaysian Airline System (at RM3.20, -2 sen) and will use the funds to acquire aircraft, refinance debt and for working capital.
 
The new management of Astral Supreme plans to seek legal advice on a RM7.5 mln investment that has since gone bad. The investment, made in October 2003, was meant to protect a put option agreement with privately held Gagah Timur. However, Astral has only managed to recover part of its investment, and it is now mulling legal action, according to executive chairman Mohamed Shafeii Abdul Gaffoor. Astral Supreme at 62 sen gained 2 sen.
 
Malaysia Airports Holdings (MAHB) is acquiring another 26% of Urusan Teknologi Wawasan (UTW) from Ranhill for RM2.75 mln. MAHB said its wholly owned subsidiary, Malaysia Airports Management and Technical Services (MAMTS), yesterday signed a conditional share sale and purchase agreement with Ranhill. With the acquisition, MAMTS will hold 75% equity interest in UTW. This will make UTW a subsidiary of MAHB, the company said in its filing to Bursa Malaysia. MAHB at RM1.89 lost 1 sen.
 
Safeguards Corp was up 2 sen at 95.5 sen after the company reported a net profit of RM2.08 mln 1st quarter to September, compared with RM1.35 mln a year earlier. Amsteel Corp plans to sell a 0.65 ha site to Public Mutual for RM58.99 mln, as part of its corporate and debt restructuring scheme. Amsteel at 11.5 sen declined 0.5 sen.
 
Among highlights for today, Naim Indah Corp at 21 sen (-1 sen); Ann Joo Resources at RM1.27 (-1 sen); Sunway Holdings Inc at 51.5 sen (-1 sen); Amway Holdings at RM6.65 (-5 sen); DiGi.Com at RM6.15 (+10 sen); IOI Corp at RM12.60 (-10 sen); Petra Perdana at RM2.85 (unchanged); REDtone International at RM1.81 (+8 sen); ConnectCounty Holdings at 21.5 sen (-2.5 sen); APL Industries at 37.5 sen (+2 sen); Supermax Corp at RM3.74 (+2 sen); BIMB Holdings at RM1.37 (unchanged); Sime Engineering Services at 88.5 sen (+4 sen); Malaysian Industrial Development Finance at RM1.11 (unchanged).
 
Tokyo's Nikkei 225-Average edged up 0.07% to 13,199.95 on Friday, as Toshiba Corp and other firms with strong earnings outlooks helped lift the benchmark after it fell below 13,000 for the 1st time in a month. Auto stocks continued to slide weighed down by concerns about their sales prospects in the key US market. Rises by Toshiba and Internet communications conglomerate Softbank Corp helped pull the tech-sensitive Nikkei into positive territory by late afternoon. During the mid-session break, Japan's 2nd ranked electronics conglomerate upped its profit estimates for the 6 months ended September 30 to reflect strong demand for its flash memory chips. Auto stocks struggled after the Nihon Keizai financial daily said on Friday that car sales in the United States had fallen in October due to higher gasoline prices and that Japanese auto makers had also seen their sales decline.
 
Regional indices were up, HK's Hang Seng at 14,487.85 (+0.55%); Singapore's STI at 2,239.36 (+0.56%); South Korea's KOSPI at 1,183.48 (+1.83%); Taiwan's TWSE at 5,738.76 (-0.16%); The Thai SET at 684.95 (+0.44%); Philippines' PCOMP at 1,922.50 (-1.14%); Jakarta's JCI at 1,075.962 (+0.05%).
JetFM Customer Relations

20051021 Hwang DBS Daily Focus

Highlights
>
> Motor sector - New National Auto Policy revealed - Maintain Neutral
>
> The 10-page National Auto Policy Framework (NAPF) revealed yesterday
> suggests that Malaysia is liberalising the auto sector by eliminating
> rebates on excise duties given to the national producers, and providing
> financial assistance and grants to all qualified domestic producers. The
> award of Approved Permits was also restructured. Separately, it was also
> reported that the government has reduced import and excise duties. We
> believe this is the right step taken to strengthen the auto sector's
> international competitiveness and to attract foreign investments into the
> sector. While further financial details are needed, it appears that the
> national producers are net losers and the winners are non-national
> producers. Bumiputera-controlled PLCs will gain from the ability to apply
> directly for Approved Permits (AP). Maintain Neutral call on the sector,
> Buys on UMW and MBM Resources, and Sell on Proton.
>
> Amway (M) - FY05 results below expectations - Fully Valued (Downgrade
> from Hold)
>
> Amway's FY05 NI came in 4.4% below our lower-than-consensus forecast, as
> 4QFY05 earnings disappointed with pretax profit coming in flat y-o-y. Full
> year revenue growth was in line with our expectations at 11.1%, bringing
> revenue to RM507.0m, but NI fell 3.2% to RM51.9m as EBIT margins
> disappointed, falling 1.3ppt to 13.3% due to continuing sales support and
> brand building during the year in conjunction with Amway's 30th
> Anniversary Celebrations. We are downgrading our FY06-07 forecast by c.10%
> factoring rising costs and a more cautious outlook. We are downgrading the
> stock to Fully Valued, with a target price of RM6.65, but note Amway's
> high dividend yield of 7.5%.
>
> Unisem (M) - Better than expected 3Q05 - Maintain Hold
>
> We expect increased SLP production (which carries a higher profit margin)
> to sustain margins in 4QFY12/05.  No change in our Hold recommendation.
> However, we are looking to upgrade our FY12/05 earnings forecast by 10-15%
> pending today's analyst briefing. While short term demand for
> semiconductors is strong, potential slower economic growth in FY12/06 and
> FY12/07 due to high oil prices could present some downside risks on ASPs,
> chip demand as well as Euro/US$ exchange rate. Target price remains
> unchanged at RM2.10 (based on 1.5x P/Book).
>  <<20051020.pdf>>

 

 

20051021 Technical Outlook JetFM

CI down on lower volume. After experiencing a heavy sell down on 19/10/2005, CI yesterday did not encounter much selling pressure, the stock index traded to an intraday low of 911.21 before settled at 911.69. For Friday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 914.15 & 916.61; 1st and 2nd support levels will be 910.22 & 908.75.
Chart wise: 6th consecutive down close; but critical support at 909 is still intact. The stock portfolio liquidation activities obviously have slowed down yesterday as "Funds" started to adopt a wait and see strategy. "Funds" may not want to be seen as leader to push down the CI at this juncture; but a trading action would be taken to realize some of the trading profits at some point of time. If that happens, CI would be under pressured to go lower. 909-level would be a key area to watch. CI must not break below 909 on close basis; otherwise, the general market would take that indication as a beginning of a bear downtrend market. So, to avoid such a possible major sell down in the market, certain "Funds" would certainly come in to support the CI from falling below this critical point as the stock index moves near to 909. On examination of the price actions, CI may look weak and even go lower to reach 905; but the stock index was likely to stay above 909 price area for the time being. Any deliberate attempt to "whack" down the CI was not expected to be successful at this juncture. With a close at 911.69, CI has registered a 6th consecutive down close in the past 6 trading days. This pattern may have reflected a weak underlying market; but one should not expect to see another immediate sharp decline. In an analysis of Fibonacci Retracement studies, CI was at 89.1% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005).
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. MACD readings fell to -0.92 (20/10/2005) from -0.02 (19/10/2005) with signal line readings also dropped to 0.56 (20/10/2005) from 0.994 (19/10/2005), an indication of stock market into downtrend. On Directional Movement Index, -DMI continued to rise above the +DMI as market closed lower. On the reading scales, -DMI rose to 42 from 48 (19/10/2005) and +DMI was flat at 3, unchanged from 19/10/2006. ADX rose higher from 46 (19/10/2005) to 54 (20/10/2005), an indication of a better trending situation compared to 19/10/2005. As for Stochastics, %K line continued to stay below the %D line in the neutral zone. %K line moved further away from %D line, a sign of lower market. %K dropped to31.4 from 41.4 (19/10/2005) with %D also fell from 48.4 (19/10/2005) to 39.9 (20/10/2005).
Our stock recommendation for today is:
Yikon (Trading Buy) at RM3.20 with a stop loss at RM2.98

20051020 Market Roundup JetFM

Lower again on lackluster sentiment
 
At 5 pm, the Kuala Lumpur Composite Index (KLCI) lost 2.48 points to 911.69. Volume expanded to 352.97 mln shares valued at RM761.61 mln. Losers outpaced gainers 460 to 226, while 305 counters were unchanged and 429 untraded. The Emas Index dropped 0.58 points to 207.04, while the Second Board fell 0.24 points to 84.57. Share prices ended the day lower in quiet trade on worries over an economic slowdown after the Malaysian Institute of Economic Research (MIER) announced a cut in its 2005 Malaysian GDP growth forecast. MIER cut its GDP growth forecast for this year to 4.9% from 5.1% earlier, amid lingering uncertainties over crude oil prices and a still fragile recovery in the electronics sector. Among blue chips, Tenaga at RM10.50, Telekom at RM10.10 and Malayan Banking at RM11.50 were all unchanged.
 
ConnectCounty Holdings made a poor debut on the MESDAQ Market of Bursa Malaysia on October 20 by closing at 24 sen or 8 sen lower from its reference price of 32 sen. The most active counter today was Petaling Tin was up 1 sen at 20.5 sen with 18.48 mln shares done.  The share shed 16sen yesterday. 
 
BNP Paribas Arbitrage Hong Kong Ltd has emerged as a substantial shareholder in Foremost Holdings after it acquired a 6.5% stake in August, 2005. In a filing to the stock exchange on October 19, the company announced that BNP Paribas acquired the 3.42 mln shares in the open market. Foremost at 43 sen was unchanged.
 
Malaysian Airline System (MAS) has commenced litigation against its former executive chairman Tan Sri Tajudin Ramli, former vice-president of cargo Ralph Manfred Gotz and the company's ex-consultant Uwe Juergen Beck. MAS is claiming RM174,620,695 for "losses suffered from breach of duties" during Tajudin's tenure as executive chairman of the company. MAS at RM3.22 was flat.
 
Wijaya Baru Global has signed a letter of intent with Chongqing Zhan Xiang Properties Development Co Ltd Chongqing to take over the Chongqing International Building project for RM1.00. The purchase consideration of RM1.00 is subject to a due diligence to be carried out by Wijaya on the building to make sure that the total liabilities incurred in the construction of the building so far have not exceeded an approximate sum of CNY260 mln. Wijaya Baru Global at RM2.00 gained 2 sen.
 
AirAsia at RM1.50 (unchanged), was ranked alongside Singapore water treatment firm Hyflux, Philippine fast-food giant Jollibee and India's Satyam Computer are among Asia's best for companies with annual revenues under USD1 bln US Dollars, according to Forbes Asia magazine.
 
Among highlights for today, DRB-Hicom at RM1.52 (-1 sen); REDtone International at RM1.73 (-26 sen); UMW Holdings at RM5.80 (+15 sen); I-Bhd at RM1.08 (+3 sen); Unisem at RM1.41 (+2 sen); Octagon Consolidated at 78 sen (+7 sen); Mahajaya at 68.5 sen (unchanged); Tanjung Offshore at RM1.94 (unchanged); Amway Holdings at RM6.70 (+5 sen); Unisem at RM1.41 (+2 sen).
 
Japan bulls breathed a sigh of relief on Thursday as Tokyo stocks ended their 6-day losing streak on gains in domestically focused stocks. The Nikkei 225-Average finished trading up 0.46% at 13,190.46. Retailers, banks, real estate and services all rose by a little under 1.0%, as the Japanese market resumed this year's rally, prompted by increasing confidence about the economy. But the most spectacular increase among domestic stocks came from insurers, up 2.2% as investors became more positive about the sector's equity exposure. Export-oriented stocks performed poorly by comparison. Morning gains by tech stocks in response to the sharp overnight rise in US tech shares were pared by the close of afternoon trading. The auto sector slipped 1.1%, hit by profit taking after a strong month and a downbeat assessment of the global market at the Tokyo Motor Show by Carlos Ghosn, joint chief executive of Renault and Nissan.
 
Regional bourses were mostly higher other than Thailand's SET at 681.83 (-0.33%), Philippines' PCOMP at 1,944.62 (-0.49%) and Indonesia's JCI at 1,075.401 (-0.05%); Hong Kong's Hang Seng at 14,408.94 (+0.25%); Singapore's STI at 2,226.88 (+0.39%); South Korea's KOSPI at 1,162.23 (+0.79%); Taiwan's TWSE at 5,748.00 (+0.95%).

20051020 Hwang DBS Daily Focus

Highlights
>
> Motor sector - New National Auto Policy revealed - Maintain Neutral
>
> The 10-page National Auto Policy Framework (NAPF) revealed yesterday
> suggests that Malaysia is liberalising the auto sector by eliminating
> rebates on excise duties given to the national producers, and providing
> financial assistance and grants to all qualified domestic producers. The
> award of Approved Permits was also restructured. Separately, it was also
> reported that the government has reduced import and excise duties. We
> believe this is the right step taken to strengthen the auto sector's
> international competitiveness and to attract foreign investments into the
> sector. While further financial details are needed, it appears that the
> national producers are net losers and the winners are non-national
> producers. Bumiputera-controlled PLCs will gain from the ability to apply
> directly for Approved Permits (AP). Maintain Neutral call on the sector,
> Buys on UMW and MBM Resources, and Sell on Proton.
>
> Amway (M) - FY05 results below expectations - Fully Valued (Downgrade
> from Hold)
>
> Amway's FY05 NI came in 4.4% below our lower-than-consensus forecast, as
> 4QFY05 earnings disappointed with pretax profit coming in flat y-o-y. Full
> year revenue growth was in line with our expectations at 11.1%, bringing
> revenue to RM507.0m, but NI fell 3.2% to RM51.9m as EBIT margins
> disappointed, falling 1.3ppt to 13.3% due to continuing sales support and
> brand building during the year in conjunction with Amway's 30th
> Anniversary Celebrations. We are downgrading our FY06-07 forecast by c.10%
> factoring rising costs and a more cautious outlook. We are downgrading the
> stock to Fully Valued, with a target price of RM6.65, but note Amway's
> high dividend yield of 7.5%.
>
> Unisem (M) - Better than expected 3Q05 - Maintain Hold
>
> We expect increased SLP production (which carries a higher profit margin)
> to sustain margins in 4QFY12/05.  No change in our Hold recommendation.
> However, we are looking to upgrade our FY12/05 earnings forecast by 10-15%
> pending today's analyst briefing. While short term demand for
> semiconductors is strong, potential slower economic growth in FY12/06 and
> FY12/07 due to high oil prices could present some downside risks on ASPs,
> chip demand as well as Euro/US$ exchange rate. Target price remains
> unchanged at RM2.10 (based on 1.5x P/Book).
>  <<20051020.pdf>>

 

 

20051020 Technical Outlook JetFM

Technical Outlook ( 20/10/2005 ) by Jupiter Research
CI experienced a "blow off" after weeks of small trading range. Having confined in tight trading range for so many weeks, CI yesterday experienced a "blow off" with highest fluctuation of 12.79 points since 10/6/2006. CI trended downward immediately after the opening bell, the stock index traded to an intraday lower of 909.54 as some stock portfolio liquidation activities powered its way down; however, CI recovered from the low to close at 914.17 on bargain hunting. For Thursday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 921.15 & 928.14; 1st and 2nd support levels will be 908.36 & 902.56.
 
Chart wise: 5th consecutive down close; but renewed buying interest likely as CI draws near 905. A true picture of supply and demand relationship was finally reflected in CI after weeks of lacklustre trading; that was believed to be what traders wanted to see all this while, the true side of the market. CI was down heavily yesterday as market forces particularly the "selling" side created the volatile fluctuation in the stock market. CI has not only registered the biggest fall in weeks; but the down close yesterday represented the 5th consecutive down close in the past 5 trading days. That was simply a reflection of an underlying weak market. While market was expected to go lower, renewed buying interest would begin to roll in as CI started to move near 905-level. CI down pace accelerated when it crossed below 920, because more "Funds" were better informed of a lower market. On examination of the market action, selling pressure was certainly much stronger than buying power; thus market today would likely to open at previous day close level before trade down to 905. In an analysis of Fibonacci Retracement studies, CI was at 83.88% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005).
 
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. MACD readings fell to -0.02 (19/10/2005) from 0.88 (18/10/2005) with signal line readings also dropped to 0.994 (19/10/2005) from 1.28 (18/10/2005), an indication of stock market into downtrend. On Directional Movement Index, -DMI continued to rise above the +DMI as market closed lower. On the reading scales, -DMI went up to 48 from 24 (18/10/2005) and +DMI was down to 3 from 5 (18/10/2006), an indication of stronger selling than buying. ADX inched higher from 36 (18/10/2005) to 46 (19/10/2005), an indication of a better trending situation compared to 18/10/2005. As for Stochastics, %K line continued to stay below the %D line in the neutral zone. %K line moved further away from %D line, a sign of lower market. %K dropped to 41.4 from 49.3 (18/10/2005) with %D also fell from 55.3 (18/10/2005) to 48.4 (19/10/2005).
 
Our stock recommendation for today is:
BRDB (Trading Buy) at RM1.18 with a stop loss at RM1.14

20051019 Market Roundup JetFM

Bears on the Rampage Across Asia
 
At 5 pm, the Kuala Lumpur Composite Index (KLCI) shed 8.47 points to 914.17. Volume expanded to 511.02 mln shares valued at RM865.66 mln. Losers outpaced gainers 664 to 122, while 260 counters were unchanged and 373 untraded. The Emas Index edged off 2.14 points to 207.62, while the Second Board eased 1.09 points to 84.81. The Malaysian stock market was broadly lower on October 19, with declining counters hammering advancers nearly 6 to 1, reflecting the weaker Asian markets which were concerned about inflation. Among blue chips, Tenaga at RM10.50 fell 20 sen, Malayan Banking at RM11.50 dropped 10 sen, while Telekom at RM10.10 was unchanged. Tenaga will allocate RM1.2 bln next year in a move to enhance the maintenance of its asset, President and Chief Executive Officer Dato' Che Khalib Mohamad Noh said here Wednesday. He said that this move was needed to ensure that electricity supply could be channeled effectively, on time and is of quality. The expenditure was an increase of more than 30% from RM900 mln allocated for the financial year ended August 31, 2005.
 
The Consumer Price Index (CPI) for September 2005 rose by 3.4% to 109.8 from 106.2 in the same month of last year and was 0.1% higher when compared to 109.7 in the preceding month. On a cumulative basis, CPI from January to September 2005, increased by 2.9% to 108.6 from 105.5 in the same period last year, the Statistics Department said in a statement, here Wednesday.
 
WCT Engineering, which has a book order of RM1.6 bln, is targeting Indonesia, India and the Middle East to secure more contracts. WCT executive director Chua Siow Leng said the RM1.6 bln in contracts will keep it busy until December 2007 but it will also seek out overseas contracts as local ones were more difficult to secure due to dwindling projects. He added that the company is targeting Middle East countries like Bahrain, Oman and Kuwait. As for Malaysia, it will focus on Sabah and Sarawak where it expected the bulk of construction projects, under the proposed 9th Malaysia Plan. WCT at RM3.28 lost 4 sen.
 
Malaysian Airline System (MAS) has deferred indefinitely flights to new destinations in India and China as part of its efforts to contain cost and improve performance. It said the northern winter 2005 pattern, which takes effect from October 30, 2005 to March 26, 2006, MAS would consolidate its network by increasing frequencies and capacity to selected destinations while revisiting sectors that had demonstrated poor performance. Currently, MAS operates 30 weekly flights from Kuala Lumpur to seven Indian cities, New Delhi, Chennai, Mumbai, Bangalore, Kolkata, Ahmedabad and Hyderabad. MAS at RM3.22 was flat.
 
icapital.biz closed 1 sen higher at RM1.01 on its debut on the Main Board of Bursa Malaysia. Karambunai Corp Warrants at 1 sen was the most active counter today with 55.71 mln shares done. Among highlights for today, Commerce Asset Holdings at RM5.60 (unch.); AMMB at RM2.38 (-8 sen); Public Bank at RM6.55 (-15 sen); UMW at RM5.65 (+5 sen); DRB-Hicom at RM1.53 (-1 sen); MBM Resource at RM2.68 (-1 sen); REDtone at RM1.99 (-7 sen); Petaling Tin at 19.5 sen (-16 sen); IOI Corp at RM12.80 (-20 sen); Freight Management Holdings at 66.5 sen (-0.5 sen); mTouche Technology at RM1.93 (+3 sen); Green Packet at RM1.79 (-2 sen); Top Glove Corp at RM4.96 (-4 sen); PLUS Expressways at RM3.14 (+4 sen); Seal Polymer Ind. at RM1.19 (-1 sen); Southern Bank at RM3.44 (-4 sen).
 
The Nikkei 225-Average fell on Wednesday to a 4-week low, extending its losses almost across the board for the 6th straight day.  It closed 1.67% lower at 13,129.49. Japanese stocks were hit by worrying news from the US. These included disappointing revenue forecast from Intel, the world's biggest chipmaker, which damaged semiconductor-related stocks. The biggest rise in US producer prices in 15 years also increased fears of a rise in US interest rates, hitting exporters. But most domestically focused sectors also suffered a battering, as investors worried about whether this year's strong rally in Japanese stocks has been overdone. Iron and steel stocks continued their recent volatility by dropping 2.5%, canceling out much of Tuesday's gain. Japanese steel stocks, which are still sharply up on their January levels, have been the subjects of considerable hedge fund interest this year. Transport equipment, which is heavily reliant on exports, slipped 1.5%.  The domestically focused securities sector also lost 1.5%.
 
Bearish sentiment was seen throughout the whole region except of Philippines' PCOMP at 1,954.29 (+0.36%); Hong Kong's Hang Seng at 14,372.76 (-1.54%); Singapore's STI at 2,218.13 (-2.89%); South Korea's KOSPI at 1,153.13 (-2.79%); Taiwan's TWSE at 5,694.16 (-2.34%); Thailand's SET at 684.27 (-1.57%);Indonesia's JCI at 1,075.912 (-1.82%).

20051018 Hwang DBS Daily Focus

 Highlights
>
> 
>
> PBKF - 3Q05 results in line despite higher LLP - Maintain Buy
>
> 
>
> Public Bank's (PBKF MK) 9MFY05 net profit of RM1.06bn was within our and
> consensus expectations on an annualized basis despite a one-off jump in
> provision of c.RM20m in 3Q05. PBKF's 3Q05 loans grew 19.4% y-o-y while
> gross NPL was steady q-o-q at 2.6%. With loan growth momentum firm, we
> have raised our FY05 loan growth projection to 19% from 18%. Incorporating
> the latest set of results, we have lowered our FY05 EPS by 4%, but tweaked
> up FY06-07 forecasts. We reiterate our Buy call with a price target of
> RM7.70. The share price is supported by 11.6% gross dividend yield with
> room for another special of up to 9%.
>
> 
>
> Comments
>
> 
>
> CAHB - CAHB is not exiting HP business - Maintain Hold
>
> 
>
> Quoting sources, the Singapore Business Times (SBT) reported that CAHB is
> considering exiting the hire purchase (auto financing) business in
> relation to the retrenchment exercise.
>
> 
>
> Our checks with management indicated that there is no such plan. Perhaps
> the SBT misinterpreted the idea of CAHB retrenching finance company
> (finco) staff (hire purchase had traditionally been handled by fincos, not
> commercial banks). We understand that the retrenchment is part of the
> CIMB-BCB merger exercise and that only 75 of finco staff involved is in
> this retrenchment exercise vs. c.11,000 employees in the merged CIMB-BCB
> entity.
>
> 
>
> It made no sense to us that CAHB would consider exiting the lead loan
> growth driver of the lending industry. Besides, CAHB has a tie-up with
> Proton to finance Proton automobiles established just a few years ago, an
> area of financing that CAHB is trying to make a presence in.
>
> 
>
> We maintained our Hold call on CAHB with a price target of RM6.00.
>
> 
>
> Auto - September 2005 vehicle sales rose 14.7% y-o-y  - Maintain Neutral
>
> 
>
> Sept auto sales rose 14.7% y-o-y to 50,391 units, driven largely by new
> model launches by carmakers like Perodua and Toyota. For the first nine
> months of 2005, auto sales rose 12.6% to 407,184 units. Sept passenger car
> and commercial vehicle (CV) sales increased 2.4% y-o-y to 35,881 units and
> 63% y-o-y to 14,510 units respectively. The slowdown in passenger car
> sales reflects cannibalization of Proton cars by Perodua's Myvi and
> classification of MPVs as CVs.
>
> 
>
> We maintain our Neutral call on the auto sector and expect a slowing
> growth momentum as consumers cut back in reaction to rising inflation and
> a slowing economy.  Growth prospects in 2005 will be more muted - we
> project only 6% growth - mainly to reflect the lack of significant new
> models being launched.
>
> 
>
> Maintain our Buy calls on MBM Resources (MBM MK, RM3.00 target price) and
> UMW Holdings (UMWH MK, RM6.50 target price) as both companies will
> continue to benefit from an exceptionally strong demand for Perodua's
> Myvi. Maintain Sell on Proton (PROH MK, RM7.50 target price), in
> anticipation of potentially further provisions and/or writedowns.
>  <<20051019.pdf>>

 

 

20051018 Technical Outlook JetFM

CI closed below 924 to see a lower market. Despite traded lower on 17/10/2005 after broken below the short term upward sloping support line on the downside on 14/10/2005, CI rose to an intraday high of 926.58 before settled at 922.64 as profit taking activities came in to force the CI lower. For Wednesday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 925.95 & 929.27; 1st and 2nd support levels will be 919.95 & 917.27.
 
Chart wise: 4th consecutive down close, a reflection of weak market. CI may have only registered a marginal down yesterday; but, yesterday close was the 4th consecutive down close in past 4 days. That was simply a reflection of an underlying weak market, CI was therefore believed not to stay strong at present level. Profit taking activities would continue to roll in gradually at this juncture as there were traders who still held the belief that the market was "strong" and reluctant to accept the violation of short term upward sloping support line as an initial sign of a down move. Market should find some buying support as CI approaches 915. However, the selling pressure was expected to accelerate when 915-level were to be penetrated on the downside, because more traders would be likely to rush into market to cash out part of their stock portfolio as more traders become better "informed" of the real trading situation. CI may be still about 7.64 points away from 915-level, it was not that far actually, traders should begin to look into the possibility of market going down lower and be prepared to design an exit trading plan to take profit. In an analysis of Fibonacci Retracement studies, CI was at 34% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005). At 50% of retracement level, CI would be at 930.21.
 
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. This line crossing should provide a signal to traders that a further decline could not be underestimated. MACD readings fell to 0.88 (18/10/2005) from 1.22 (17/10/2005) with signal line readings also dropped to 1.28 (18/10/2005) from 1.39 (17/10/2005). On Directional Movement Index, -DMI was above the +DMI as market closed lower. On the reading scales, -DMI went up to 24 from 15 (17/10/2005) and +DMI was down to 5 from 7 (17/10/2006), an indication of stronger selling than buying. ADX inched higher from 29 (17/10/2005) to 36 (18/10/2005), an indication of a better "trending" situation compared to 17/10/2005. As for Stochastics, %K line continued to stay below the %D line in the neutral zone. %K line moved further away from %D line, a sign of lower market. %K dropped to 49.3 from 56.2 (17/10/2005) with %D also fell from 61.3 (17/10/2005) to 55.3 (18/10/2005).
 
Our stock recommendation for today is:
 
VS industries (Trading Buy) at RM1.19 with a stop loss at RM1.14

20051018 Market Roundup JetFM

Bursa dropped in range bound trade
 
At 5 pm, the Kuala Lumpur Composite Index (KLCI) fell 1.63 points to 922.64. Volume expanded to 367.07 mln shares valued at RM563.17 mln. Losers outpaced gainers 403 to 277, while 335 counters were unchanged and 403 untraded. The Emas Index dropped 0.29 points to 209.76, while the Second Board lost 0.28 points to 85.90. Share prices closed lower in range bound trade as most investors kept to the sidelines ahead of the 3rd quarter earnings report season. Among blue chips, Tenaga at RM10.70 and Telekom at RM10.10 were both unchanged, while Malayan Banking at RM11.60 was higher by 10 sen. Time dotCom at 61 sen advanced 5 sen with 13.47 mln shares done was the most active counter today. This was follow by Berjaya Group at 9.5 sen added 0.5 sen.
 
Sales in the manufacturing sector rose 16.8% or RM5.9 bln to RM41.0 bln in August this year compared with RM35.1 bln in the same month last year. The manufacturing sector posted an increase in sales value of 3.5% or RM1.4 bln as against RM39.6 bln reported in July this year.  Vehicle sales in Malaysia rose for a 2nd month in September as carmakers such as UMW Holdings sold new models.  Sales of passenger cars and commercial vehicles rose 15% last month to 50,391 units from 43,923 a year earlier, the Malaysian Automotive Association said today in a faxed statement. Sales surged 19% in August, the fastest in 5 months.  Nominal sales values are however, not a good indicator of economic activities as they also reflect inflationary tendencies. 
 
Titan Chemicals Corp will halve the interest it pays on outstanding debt it took out in January using a new USD710 mln loan arranged by Standard Chartered. Titan will reduce its cost of borrowing after its IPO in June and said it planned to cut debts relative to the value of its total assets. Titan at RM1.65 shed 1 sen.
 
Dominant Enterprise's entire capital will be transferred to the Main Board of Bursa Malaysia under the "Industrial Products" sector Thursday, a stock exchange circular said. The stock exchange said the company's additional 34.46 mln shares of 50 sen each, arising from a bonus issue will also be listed and quoted on Bursa Malaysia on the same day. Dominant at 50 sen was unchanged.
 
Scomi Marine offered to pay as much as USD31.6 mln to buy the 50.93% of PT Rig Tenders Indonesia that it does not yet own.  The offer to buy 310.22 mln more shares followed Scomi Marine's purchase of 49.07% of the Indonesian company at IDR1,000 each from Chuan Hup Holdings Ltd, Scomi unit International Marine Services Pte Ltd said to Bisnis Indonesia.  Scomi at RM1.18 fell 1 sen.
 
Proton Holdings was up 10 sen at RM8.65 ahead of the national auto policy announcement, reportedly due tomorrow, which is expected to be positive for the national carmaker. Pan Malaysia Corp said it bought back 1.2 mln of its shares at prices ranging from 48.5 sen to 49.5 sen each for a total of RM596,703 yesterday. Pan Malaysia at 47.5 sen decreased 0.5 sen.
 
Among highlights for today, Commerce Asset-Holding at RM5.60 (-5 sen); Petra Group at RM4.34 (unchanged); Redtone International at RM2.06 (-11 sen); Setron at 68 sen (+6.5 sen); Malaysian Merchant Marine at 55 sen (+1 sen); Wah Seong Corp at RM1.97 (unchanged); Farm's Best at RM1.01 (+6 sen); Bank Islam at RM1.39 (+4 sen); KKB Engineering at RM1.16 (unchanged); Tronoh Consolidated Malaysia at RM3.08 (+6 sen); Tractors Malaysia Holdings at RM3.52 (unchanged); Supermax Corp at RM3.74 (+2 sen).
 
Tokyo shares fell on Tuesday for the 5th straight day, their longest losing streak since May, led by losses in technology stocks and weakness in domestic-focused sectors such as services and retailing. The Nikkei 225-Average closed down 0.36% at 13,352.24. Some tech stocks declined on continuing nervousness ahead of earnings reports from big US tech companies such as Yahoo and Intel. Warehouse stocks also fell after extremely strong rises in recent days. Although the Nikkei has fallen for a full trading week, the cumulative effect has been a muted 3.3% slide. The banking sector rebounded after being hit by profit taking earlier this week. The iron and steel sector, another recent victim of profit taking after a stellar performance this year, also rebounded, rising 4.9%. Japanese steel stocks have been rewarded for high dividend payments and their production of high-quality products. Regional market were mixed, Hong Kong's Hang Seng at 14,597.40 (+0.39%); Singapore's STI at 2,284.16 (-0.19%); South Korea's KOSPI at 1,186.22 (+0.84%); Taiwan's TWSE at 5,830.79 (+0.08%); Thailand's SET at 695.66 (-0.09%); Philippines' PCOMP at 1,947.33 (-0.01%); Indonesia's JCI at 1,095.873 (+0.53%).

20051018 Hwang DBS Daily Focus

Highlights
>
> REDtone International - Disappointing 2QFY06 results - Fully Valued
> (Downgrade from Hold)
>
> RIB's share price had fallen 8% since our profit warning three weeks ago.
> Its 2QFY06 results announced yesterday were below both our and market
> expectations. Net income of RM6m eased 3% q-o-q after absorbing one-off
> items. Its Malaysian unit disappointed, coming in c.7% below our earlier
> estimates. Fortunately, its Pakistani unit remained on track to record PBT
> of RM5m in FY2/06. We have factored RIB's lower Malaysian contribution for
> FY2/06 and continuing earnings deterioration. As such, we have cut our
> FY2/06-08 earnings by 18%-21%, and lowered our price target to RM2.00
> (based on 13.8x FY07 earnings). We downgrade RIB to Fully Valued. Also, we
> have eliminated net dividend of 10 sen for this FY.
>
> Comments
>
> Proton Holdings - Dr M: Proton might as well close shop - Maintain Sell
>
> Stung by criticisms over Proton's competitiveness its adviser Dr. Mahathir
> Mohamad said that the national car industry might as well close shop. He
> was responding to readers' comments in a newspaper that it was best to
> close down Proton. (The Star)
>
> While the comments were impromptu, we take the view that the government
> will eventually allow potential suitors like VolksWagon AG to possibly
> take a controlling stake in Proton. However, we remain skeptical of any
> potential white knight's ability to reverse Proton's sliding market share,
> especially when market liberalization is just a few years away. Meanwhile,
> we remain wary of potential write-offs of capitalized R&D expenses and
> past investments, as well as continuing losses at subsidiary MV Augusta.
> Maintain our Sell call and RM7.50 target price (based on 0.6x P/NTA).
>
> KFC Holdings - Four QSR minorities asking for higher General Offer -
> Maintain Fully Valued
>
> Four QSR Brands minority shareholders, who hold less than a 1% stake, are
> seeking a higher price of RM3.40-3.60/share after another party had in
> January triggered a mandatory general offer (MGO) when the said party got
> hold of more than 33% of QSR shares. On Oct 16, the minority shareholders
> - Sim Chee Kuan, Yap Chee Ching, Ong King Kok and Hazman Ahmad - formed an
> ad hoc action committee to fight for their rights and benefits. (The
> Edgedaily)
>
> Separately, the Securities Commission (SC) stated that there were no
> issues arising from the QSR Brands Bhd voting shares acquired or deemed to
> be acquired by Kulim (Malaysia) Bhd for the purpose of determining the
> level of acceptances of the takeover offer.
>
> While we continue to take the view that QSR will ultimately be taken over
> by Kulim, which is deemed a positive by minority shareholders, the
> takeover could still be long-drawn. Until then, we maintain our Fully
> Valued call on KFC with RM3.10 target price, based on a 25% discount to
> RNAV.

20051018 Technical Outlook JetFM

CI broke below support line. Having broken the short term upward sloping support line on the downside on 14/10/2005, CI yesterday continued to trade to an intraday low of 913.65 before closed at 924.27 as traders started to take profit on their stock portfolio amid thin buying support in the stock market. For Tuesday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 927.78 and 931.3; 1st and 2nd support levels will be 922.2 and 920.14.
 
Chart wise: Traders should begin to work out an exit strategy. After staying above 922-level for 14 days since 27/9/2005 without penetrating 930 on a close basis, CI finally broke below the upward sloping support line as sellers decided to pocket some of the realized profit. Traders should not underestimate this downside penetration pattern, they should instead starting to plan out an exit strategy because ignoring a “simple” pattern could sometime proved to be very costly at the end of the day. There is nothing wrong to take profit even a small one. In a trading environment, you may see a profit now; but if one is not disciplined enough to do what it ought to be done, the stock price may fall without one even have a chance to realize that. When that happens, a profitable trading stock would end up as a long term investment, one may probably have to wait for weeks to see that kind of profit again. Therefore, with this low settlement level, CI was expected to trade lower again today as more traders become better “informed” of the market situation. Nevertheless, market should find some buying support as CI draws near to 915. In an analysis of Fibonacci Retracement studies, CI was at 37.4% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005). At 50% of retracement level, CI would be at 930.21.
 
Technical wise: MACD line has cut down the signal line from above to emit a “sell” signal. MACD line fell to 1.22 (17/10/2005) from 1.50 (14/10/2005) with signal line readings also dropped to 1.39 (17/10/2005) from 1.44 (14/10/2005). Traders should therefore be prepared to work out an exit strategy. On Directional Movement Index, +DMI was above the -DMI. On the reading scales, +DMI was at 7, down from 9 (14/10/2006); but -DMI went up to 15 from 7 (14/10/2005). That indicated a stronger selling than buying. ADX inched lower from 30 (14/10/2005) to 29 (17/10/2005), it showed a  trendless situation for CI. As for Stochastics, %K line continued to stay below the %D line and was seen getting further away from %D line, a sign of lower stock market. %K dropped to 56.2 from 64.3 (14/10/2005) with %D also fell from 66.9 (14/10/2005) to 61.3 (17/10/2005).
 
Our stock recommendation for today is:
ACP Industries (Trading Buy) at 67 sen with a stop loss at 63.5 sen.

20051017 Market Roundup JetFM

Another point lower
 
At 5 pm, the Kuala Lumpur Composite Index (KLCI) lost 1.32 points to 924.27. Volume expanded to 389.56 mln shares valued at RM520.58 mln. Losers outpaced gainers 488 to 193, while 328 counters were unchanged and 410 untraded. The Emas Index fell 0.47 points to 210.05, while the Second Board dropped 0.51 points to 86.18. Share prices closed lower in generally sluggish trade except in the shipping sector, which gained slightly on expectations that the improved outlook for freight rates will boost their earnings. Among blue chips, Tenaga at RM10.70, Malayan Banking at RM11.50 and Telekom at RM10.10 were all unchanged.
 
"We just close down Proton if this is what the people want."  This is the gist of Tun Dr Mahathir Mohamad's comments today on calls to close down the national carmaker as it is said to be, among others, not competitive and the national car policy had burdened the people besides paying a high price for the national car. SMS responses published by a newspaper today made stinging comments about the current state of Proton, many of them went to the extent of proposing that it be closed down. Proton at RM8.55 added 5 sen.
 
Thai AirAsia, a unit of AirAsia, will start its Clark-Macau-Bangkok flights by end-November after securing provisional permit from the Civil Aeronautics Board (CAB) last Friday, the Philippine Daily Inquirer newspaper reported. The report quoted CAB executive director Tomas Manalac as saying that the regulator had given Thai AirAsia a 30-day authority to fly the route. Meanwhile, Manalac said Tiger Airways Ltd, a low-cost carrier based in Singapore, had not been given a permit to fly the same route due to undisclosed outstanding issues on its application. AirAsia at RM1.53 gained 1 sen.
 
Southern Bank said it bought back a total of 3.18 mln shares for RM10.95 mln at prices ranging from RM3.38 to RM3.54 per share. The purchases were made during October 3 till October 12. Following the repurchases, it had 37.31 mln shares in its treasury account. Southern Bank at RM3.42 increased 4 sen.
 
Closing prices for the 8 companies in the benchmark KLCI that will be replaced: Nikko Electronics at 98 sen (-2 sen); Tradewinds at RM2.51 (-2 sen); Nylex at 69 sen (+1 sen); Leader Universal Holdings at 31.5 sen (-0.5 sen); MNRB Holdings at RM3.68 (-4 sen); MNI Holdings at RM3.88 (unchanged); AMDB at 12 sen (+0.5 sen); Selangor Dredging at 38.5 sen (-0.5 sen).  For the 8 companies that would be included: Diversified Holdings at RM1.79 (+3 sen); Titan Chemicals Corp at RM1.66 (+1 sen); DRB-Hicom at RM1.55 (+3 sen); Lion Industries Corp at 81.5 sen (-1 sen); Malaysian Plantations at RM2.39 (+1 sen); Kurnia Asia at RM1.09 (unchanged); MK Land Holdings at 90.5 sen (+2 sen); Island & Peninsular at RM1.38 (+1 sen).
 
Share prices of Malaysian shipping stocks responded to press reports on the shipping industry, Malaysian Merchant Marine at 54 sen (+2.5 sen); Global Carriers at 37.5 sen (+7.5 sen); Nepline at 38.5 sen (+1 sen); Malaysian Bulk Carriers at RM2.24 (unchanged); Halim Mazmin at 76.5 sen (+1.5 sen); MISC at RM9.65 (+5 sen). Among other highlights for the day, CI Holdings at RM1.15 (-1 sen); QSR Brands at RM3.24 (+2 sen); Hong Leong Bank at RM5.30 (-5 sen); Ann Joo Resources at RM1.32 (-1 sen); Johor Port at RM2.20 (unchanged); Malaysian Airline System at RM3.30 (+14 sen); PPB Oil Palms at RM4.88 (-2 sen); Scicom MSC at 80 sen (-3 sen); Dataprep Holdings at 59.5 sen (+2 sen); Sindora at RM1.29 (-1 sen); Plenitude at RM1.18 (+1 sen).
 
Japanese stocks closed Monday almost unchanged. Gains in the market were checked by news that Premier Koizumi, had visited the controversial Yasukuni war shrine. The Nikkei 225-Average was down 0.15% at 13,400.29.  The Yasukuni shrine visit worried investors because countries such as China regard such visits as a sign that Tokyo is unrepentant about past war crimes. Japanese share prices were hit in April by large-scale protests in China about Japan's alleged failure to acknowledge atrocities committed there. This provoked fears that China's role as a manufacturer and consumer of Japanese products could be disrupted. The iron and steel sector fell partly on further profit taking, and partly because China-based factories are big customers for Japanese steel.  The whole region was in red except for Hong Kong's Hang Seng at 14,541.35 (+0.38%); Singapore's STI at 2,288.54 (-0.64%); South Korea's KOSPI at 1,176.36 (-1.16%); Taiwan's TWSE at 5,826.27 (-2.39%); Thailand's SET at 697.28 (-0.39%); Philippines' PCOMP at 1,947.46 (-0.29%); Indonesia's JCI at 1,090.091 (-0.60%).

20051017 Hwang DBS Daily Focus

Highlights
>
>
>
> PLUS Expressways - Upside remains limited - Maintain Hold
>
>
>
> PLUS Expressways (PLUS)'s share price has lost 4% since announcing traffic
> volume dropped 4% y-o-y (+2% m-o-m) in August. Although YTD traffic volume
> growth of 1% (versus same period last year) is below our projection of 3%,
> we do not expect significant impact to our earnings forecast at this
> point. Nevertheless, upside to our RM3.50 price target (based on 10%
> discount to DCF value of RM3.90) remains relatively limited. We maintain
> our Hold recommendation for the expected step-up in dividend from 7.5 sen
> net in FY04 to 11.5 sen net (3.7% dividend yield) in FY06.
>
>
>
> Comments
>
>
>
> TNB - Open tender for Sabah power plant - Maintain Buy
>
>
>
> The Edge weekly reported that Tenaga Nasional has received the
> government's nod to call for tenders for a 300MW of coal-fired independent
> power plant (IPP) in Sabah, hence paving the way for the first power plant
> project to be implemented on a competitive basis. (In the past, the
> Economic Planning Unit gives out the IPP projects to individuals or
> private companies, which later go on to negotiate a power purchase
> agreement (PPA) with Tenaga.) Tenaga is said to be finalising on the terms
> and conditions of the open tender and targets to float it before year end.
>
>
>
>
> Implication on the industry: We are neutral towards the tender bidding
> process in the immediate term (as current reserve margin approximates 40%)
> but positive over the longer term impact. We believe the open tender
> process will benefit the nation and Tenaga by providing cheaper sources of
> energy cost.
>
> Implication on Tenaga: The new Sabah power plant will help reduce the cost
> of energy production of Sabah Electricty Sdn Bhd (SESB), an 80% owned
> subsidiary of Tenaga. Currently, SESB has an available generation capacity
> of 690MW and is currently heavily reliant on diesel power plants (an
> expensive energy source). But this new power plant will only come on board
> earliest 3 years from now and we only expect marginal impact on the bottom
> line of Tenaga. Hence, we maintain our Buy recommendation with RM12.00
> price target, based on its RNAV.
>
>
>
> Transmile - Competitor FedEx serving India-China link - Maintain Hold
>
>
>
> Competitor of Transmile's customer, FedEx, has launched the first daily
> overnight express delivery link between India and China. DHL is a key
> customer of Transmile. We do not expect competition from FedEx to affect
> Transmile's growth strategy in India, which provides modest but
> fast-growing earnings contributions to Transmile. The Indian market is
> certainly large enough to accommodate both FedEx and Transmile, which
> serves the Hong Kong-India route.
>
>
>
> Maintain our Hold call and RM11.00 target price. There could be room for
> upgrading our call; presently, we are still gauging the short term lease
> demand for its MD-11 during the critical 4Q season.

20051017 Technical Outlook JetFM

CI continued to trade sideways as traders decided not to add new position into their book over the weekend. As a result, CI traded to an intraday high of 929.12 before settled at 925.59. For Monday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 927.94 and 930.30. 1st and 2nd support levels will be 924.41 and 923.24.
 
Chart wise: ODDS Probability Cone showed CI upside was capped. It was undeniable that there were certain "players" in the stock market trying to create a higher high scenario for the CI in the past 2 weeks; but the market forces apparently did not buy into the "story" due to uncertainties of market direction. Following the short term upward support line violation on 13/10/2005, CI opened slightly higher on last Friday in an attempt to "distract" traders' attention from the "bearish" pattern on 13/10/2005; but market acknowledged that "bearish" pattern on 14/10/2005, this can be seen from the settlement level at the low of the day, 925.59. Therefore, with this low settlement level, CI was expected to trade lower today as more traders become better "informed" of the market situation. On the other hand, the use of ODDS Probability Cone methodology on CI showed that CI may have been reached its "top" since the rebound from the low of 906.54 on 2/9/2005. Each time CI tried to make a higher high, it could only reach the maximum height of the upper curve as shown on the chart; it did not go beyond the upper curve line. In short, we should not expect the market to go up at this juncture, unless the market strength is so strong that it carries the CI higher than the upper curve line of ODDS Probability Cone. In an analysis of Fibonacci Retracement studies, CI was at 40.2% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005). At 50% of retracement level, CI would be at 930.21.
 
Technical wise: MACD line remained above the Signal line; however, the rate of increasing for MACD line seemed to have slowed down, making MACD line closer to cut below the signal line. MACD line fell to 1.50 (14/10/2005) from 1.65 (13/10/2005) with signal line readings up to 1.44 (14/10/2005) from 1.43 (13/10/2005). In view of this, traders should be ready for possible cross down to give a "sell" signal scenario. On Directional Movement Index, +DMI was above the -DMI. On the reading scales, +DMI was at 9, down from 11 (13/10/2006); but, -DMI also down to 7 from 9 (13/10/2005). That gave no sign of stronger down or up move; nevertheless, traders should begin to look at the market from downside bias perspective. ADX inched lower from 34 (13/10/2005) to 30 (14/10/2005) as the market continued to fluctuate in a small range, a sign of trendless situation. As for Stochastics, %K line was staying below the %D line and was seen getting further away from %D line, a sign of lower stock market. %K dropped to 64.3 from 66.7 (13/10/2005) with %D also fell from 69.0 (13/10/2005) to 66.9 (14/10/2005).
 
Our stock recommendation for today is:
Jak Resources (Trading Buy) at RM1.04 with a stop loss at RM1.00