R e t a i l M a r k e t M o n i t o r Tuesday, 13 January 2015

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1 MARKET NEWS The FBMKLCI added 2.64pt to close at 1, yesterday on the back of gains in selected index counters despite weakness in regional markets. Most Asian markets fell amid concerns over how Europe s stimulus plans may not solve the euro region s economic woes and after an unexpected drop in US wages clouded the outlook for US interest rates. The FBMKLCI s top gainers were Skpetro (+3.8%), YTL (+2.4%) and Pchem (+2.4%) while the top losers were CIMB (-2.6%), Petdag (-0.8%) and GENM (- 0.8%). In the broader market, gainers outpaced losers 394 to 317 with 286 counters unchanged. Turnover stood at 1.36b shares valued at RM1.46b. From a technical perspective, the FBMKLCI managed to close in a positive mode even though the outlook for our index remains timid as a lack of catalysts pared down earlier gains. The index formed a hammer pattern on yesterday s trading activity as the selling pressure has been absorbed. But based on the DMI, the selling pressure has overcome the buying pressure at the moment and we expect a sideway movement ahead with the benchmark index likely to consolidate further. Support and resistance levels are as follows: Support: 1,700, 1,685 Resistance: 1,748, 1,770 The US markets extended their decline as oil prices continued to retreat. The S&P 500 fell 0.8%, to 2, while the DJIA closed 0.5% lower at 17, Oil futures plunged on Monday, with the US benchmark trading below the US$46/bbl threshold for the first time in nearly six years after Goldman Sachs cut its crude outlook. West Texas Intermediate crude oil for February delivery fell 4.7%, to close at US$46.07/bbl after trading as low as US$ Meanwhile, Brent North Sea crude oil for February lost US$2.68, or 5.4%, to US$47.43/bbl, its lowest finish since Mar 09. WHAT S IN THE PACK Malayan Banking (MAY MK/BUY/RM8.58/Target: RM10.30) The market may have overreacted to concerns of a potential default on the bank s exposure to a bridging loan to 1MDB as provision is likely to be much lower than expected. Re-iterate BUY. Dagang Nextchange (DNEX MK) Technical BUY on breakout with +33.9% potential return BUY on breakout with a target price of RM0.395 and stop-loss at RM0.24. DNEX s chart shows that the upside movement will be intact if the price can penetrate the RM0.295 level. London Biscuits (LBB MK) Technical BUY on breakout with +21.4% potential return BUY on a breakout with a target price of RM0.795 and stop-loss at below RM0.57 We expect the stock to continue trending upwards towards the breakout level of RM0.655 along with the current upleg. Thong Guan Industries (TGI MK) Technical BUY with +15.3% potential return Buy with a target price of RM2.49 and a stop-loss below RM1.99. A buying signal has been given as the price just penetrated the Ichimoku cloud. FBMKLCI CHART Source: BursaStation KEY INDICES Prev Close Chg (%) YTD (%) DJIA 17, (0.54) (1.02) S&P 500 2, (0.81) (1.49) FTSE 100 6, (0.98) CSI 300 3, (0.93) (0.57) FSSTI 3, (0.60) HSCEI 12, (0.53) 0.27 HSI 24, JCI 5, (0.55) (0.75) KLCI 1, (1.49) KOSPI 1, (0.19) 0.28 Nikkei , (1.45) SET 1, TWSE 9, (0.40) (1.39) BDI (7.54) CPO (RM/mt) 2, Nymex Crude (US$/bbl) (0.63) (14.06) Source: Bloomberg TOP VOLUME Stock Price (RM) Chg (%) Vol ( 000) Ifca Msc Bhd ,721 Hubline Bhd ,343 Daya Materials Bhd ,030 Knm Group Bhd 0.46 (2.15) 30,004 Jag Bhd ,889 TOP GAINERS Stock Price (RM) Chg (%) Vol ( 000) Nwp Holdings Bhd Key Asic Bhd ,056 Perak Corp Bhd ,114 Bintai Kinden Corp Integrax Bhd ,192 TOP LOSERS Stock Price (RM) Chg (%) Vol ( 000) Malaysian 0.38 (17.39) 0.3 Perwaja Holdings 0.05 (16.67) 65.0 Malaysia Building 2.19 (9.13) 14,911. Xox Bhd 0.05 (9.09) 60.0 Ralco Corp Bhd 0.69 (8.67) 3.0 Source: Bloomberg w w w. u t r a d e. c o m. m y 1

2 TRADERS CORNER Dagang Nextchange (DNEX MK) Technical BUY on breakout with +33.9% potential return Last price : RM0.28 Target price : RM0.345, RM0.395 Support : RM0.245 Stop-loss : RM0.24 BUY on breakout with a target price of RM0.395 and stop-loss at RM0.24. DNEX s chart shows that the upside movement will be intact if the price can penetrate the RM0.295 level. Currently both indicators such as the RSI and DMI show positive signals to support the upward momentum. We peg our target at RM0.345 and RM0.395 respectively in the near term. Expected Timeframe: 2 weeks to 1 month London Biscuits (LBB MK) Technical BUY on breakout with +21.4% potential return Last price : RM0.64 Target Price : RM0.735, RM0.795 Support : RM0.575 Stop-loss : RM0.57 BUY on a breakout with a target price of RM0.795 and stop-loss at below RM0.57. Currently LONBISC just passed the consolidation phase and formed a Double Bottom pattern which is a bullish reversal pattern. The uptick in the DMI together with the increase in trading volume, suggests that the buying momentum is set to continue in the near term. We expect the stock to continue trending upwards towards the breakout level of RM0.655 along with the current upleg. A breakout above this level would extend the uptrend towards the immediate resistance of RM0.74 and previous high of RM0.56. Expected Timeframe: 2 weeks to 2 months w w w. u t r a d e. c o m. m y 2

3 TRADERS CORNER Thong Guan Industries (TGI MK) Technical BUY with +15.3% potential return Last price : RM2.16 Target Price : RM2.34, RM2.49 Support : RM2.00 Stop-loss: RM1.99 Buy with a target price of RM2.49 and a stop-loss below RM1.99. A buying signal has been given as the price just penetrated the Ichimoku cloud. This is supported by the Heat Wave indicators; Tenkan-sen line, Kinjun-sen line and the Chikao span line showing a bullish signal. The uptick in the RSI together with the high trading volume, suggests that the buying momentum is set to continue in the near term. Currently both indicators such as MACD and DMI show bullish crossovers to support the upward momentum. Expected Timeframe: 2 weeks to 2 months w w w. u t r a d e. c o m. m y 3

4 CORPORATE NEWS CIMB-RHB-MBSB: Mega bank merger off, announcement expected this week. The proposed mega merger of CIMB Group Holdings Bhd, RHB Capital Bhd and Malaysia Building Society Bhd (MBSB) is off and an announcement is expected before the end of this week, sources said. The respective boards are supposed to meet on Wednesday, when it will be formally expressed that the deal is off, one source close to the negotiations told The Edge Financial Daily. The move comessix months after the proposed merger was first announced in July The Edge weekly on Jan 10 reported there was a strong possibility the merger could be called off due to several factors, including the economic landscape has become tougher. Another factor was that RHBCap was seeking revision of the terms, after the substaintial fall in CIMB s share price. Sources said instead of an all-share deal in its merger with CIMB, RHBCap now wants a cash portion to be included, making the deal potentially more expensive for CIMB. (Source: The Edge Financial Daily) MAHB: Records 83.3m passenger movements in Malaysia Airports Holdings Bhd (MAHB) group recorded 83.3 million passenger movements in 2014, an increase of 4.7% from a year, but this was below its expectations due to the twin tragedies involving Malaysia Airlines. MAHB said on Monday this was the first-time that passenger movements exceeded the 80 million mark, but added passenger traffic performance was affected by the negative sentiment from the two major unprecedented MAS incidents. The impact from MH370 was significant for the China sector and also sentiment more generally, as closure in the form of official incident findings seem to be elusive at this juncture, it said. In contrast, MH17 caused a dent in the Europe sector traffic to KLIA and resultant flows to other airports both domestic and in South-East Asia. From an average 9.0% year-on-year growth in the first seven months of 2014, the Europe sector traffic deteriorated to an average decline of negative 1.9% in the last five months, the highest decline being negative 6.1%. MAHB pointed out that based on the load factor and airlines seat analysis, the indication of latent demand remains strong. (Source: The Star) SP Setia: PNB Merdeka Ventures CEO joins SP Setia board. PNB Merdeka Ventures Sdn Bhd chief executive officer Tengku Datuk Ab. Aziz Tengku Mahmud has joined the board of SP Setia Bhd as a non-executive director. SP Setia said on Monday Ab. Aziz is responsible for the development of Warisan Merdeka project, comprising 118-storey tower, retail mall, hotels and condominiums. Before joining PNB Merdeka Ventures a unit of Permodalan Nasional Bhd (PNB) -- on April 1, 2010, he was the head, property development of Sime Darby Property Bhd from August 2008 to March The statement said he was responsible for the property development operations in addition to the hospitality, leisure and asset management of the property division. Ab. Aziz, 57, had also served in Kumpulan Guthrie Bhd as head, property and as the CEO, Guthrie Property Development Holding Bhd from 2005 to (Source: The Star) Telekom Malaysia: Appoints Sulaiman as new chairman. Telekom Malaysia Bhd (TM) has appointed Tan Sri Sulaiman Mahbob as the new chairman effective today. Sulaiman succeeds Datuk Seri Halim Shafie, who has been appointed new chairman of Malaysian Communications and Multimedia Commission's (MCMC). "We are happy to welcome Sulaiman as the new chairman of TM board. "With his vast experience and knowledge, we look forward to Sulaimans guidance and leadership as the company continues on its transformation journey and next phase of growth," TM's group chief executive officer, Tan Sri Zamzamzairani Mohd Isa, told Bursa Malaysia. Sulaiman, 66, is currently chairman of the Minority Shareholders Watchdog Group, Malaysian Institute of Economic Research and Jambatan Kedua Sdn Bhd. (Source: The Star) w w w. u t r a d e. c o m. m y 4

5 MEGB: SMRT, Creador to make RM112m offer for MEGB. Education service provider SMRT Holdings Bhd and private equity firm Creador will be making a general offer for a 30.75% stake in Masterskill Education Group Bhd (MEGB) for around RM112mil in the next few days. The subsidiaries of SMRT and Creador respective subsidiaries entered into a share sale agreement to acquire the stake from MEGB major shareholder and executive director Siva Kimar M. Jeyapalan for 60 sen each. This is despite speculation that SMRT and Creador could raise the offer price, following the extension in due diligence on the deal. Their offer was subject to a 30-day due diligence, which was then extended for a further 15 days. MEGB shares have risen almost 70% to 71 sen as at Friday s close, since SMRT and Creador expressed interest in buying up a stake. (Source: The Business Times) SECTOR CPO: Malaysia s December CPO production slides 22% due to floods. Malaysia s total crude palm oil (CPO) production fell 22.04% to million tonnes in December 2014 from million tonnes in November as floods wreak havoc in the east coast states of Peninsular Malaysia. The Malaysian Palm Oil Board said on Monday CPO production in Peninsular Malaysia was slashed by 30.13% to 608,613 tonnes from 871,042 tonnes. Sabah also reported a decline in production by 13.99% to 489,781 tonnes and Sarawak saw a decline of 14.08% to 266,403 tonnes. Stocks of processed palm oil fell 11.55% to million tonnes in December from million tonnes in November. MPOB said palm oil exports edged up slightly by 0.43% to million tonnes from million tonnes. However, there was a sharp fall in biodiesel exports which fell by 97.3% on-year to 614 tonnes in December from 22,753 tonnes in October. (Source: The Business Times) w w w. u t r a d e. c o m. m y 5

6 FROM THE REGIONAL MORNING NOTES... Malayan Banking : Default Risk To 1MDB Has Been Overplayed (MAY MK/BUY/RM8.58/Target: RM10.30) Share price sentiments on Maybank have been recently impacted by concerns of a potential default on its exposure to a bridging loan to 1 Malaysia Development Board (1MDB). We believe that the market may have overreacted to such concerns as provision is likely to be much lower than expected if any. Re-iterate BUY with a RM10.30 target price, based on 1.7x 2014F P/B (ROE: 13.4%). For more reports, please log in to or open an account now to gain access. Explore our trading tools designed to assist you in your trading ShareXplorer, ChartGenie, TechAnalyzer, Stock Alerts! Broaden your knowledge through our educational events. Contact us now at to find out more about our ongoing promotions (get FREE* live feed on foreign markets). *T&C apply. w w w. u t r a d e. c o m. m y 6

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