R e t a i l M a r k e t M o n i t o r Thursday, 23 June 2016

Transcription

1 MARKET NEWS FBMKLCI CHART The FBMKLCI rose 3.46pt (+0.2%) to close at 1, on Tuesday. Meanwhile, Asian stocks rose, poised for the biggest three-day rally in two months, as the yen retreated ahead of a testimony by Federal Reserve Chair Janet Yellen and as investors watched polls for the looming Brexit referendum. The MSCI Asia Pacific Index advanced 0.8% to The FBMKLCI s top gainers were SapuraKencana Petroleum (+2.9%), Astro Malaysia Holdings (+2.5%) and YTL Corporation (+2.5%) while the top losers were Axiata Group (-1.8%), MISC (-0.9%) and British American Tobacco (-0.7%). In the broader market, gainers outpaced losers 371 to 370 with 374 counters unchanged. Turnover was 1.35b shares valued at RM1.45b. The FBMKLCI recorded gains for three consecutive days, erasing fears after last week s panic selling and setting a new mood among investors. Despite adding 3.46pt last Tuesday, the medium-term bearish bias remains, particularly as the RSI line is still treading below the 50pt threshold level as well as the presence of a strong resistance at 1,660. We maintain our view that the index will trade sideways and a lack of catalyst may pull the index lower to 1,620-1,650 in the near term. Support and resistance levels are maintained as follows: Support: 1,610, 1,600 Resistance: 1,660, 1,674 US stocks pared earlier gains on Wednesday to close slightly lower for the session, as the Leave campaign surged ahead in two closely-watched Brexit public opinion polls, providing downward pressure on oil and global equities. CBOE's VIX Volatility Index surged above at one point in Wednesday's session, before closing at 20.96, near three-month highs. The DJIA fell 48.9pt or 0.27% to settle at 17, while the S&P500 retraced 3.45pt or 0.17% to settle at An online survey by Opinium showed 45% of respondents are in favour of ditching the EU while 44% prefer to stay. 9% of voters were undecided. The Fed Chair Janet Yellen is the latest high-profile person to warn of the negative consequences of a Brexit vote, citing it "could have significant economic repercussions". WHAT S IN THE PACK Top Glove (TOPG MK/HOLD/RM4.61/Target: RM4.39) Management s prognosis of an increasingly competitive nitrile glove market segment resonates with industry peers outlook. Tambun Indah Land (TILB MK) Technical BUY on breakout with 17.8% potential return BUY on breakout with a target price of RM1.72 and stop-loss at RM1.36. Since correcting from a previous high, share price is recovering gradually and moved above the 7- and 21-day EMA last Tuesday, effectively reversing its downtrend. ManagePay Systems (MPSB MK) Technical BUY on breakout with 37.2% potential return BUY on breakout with a target price of RM0.295 and stop-loss at RM0.18. The stock is consolidating within the immediate support of RM0.185 before last Tuesday s positive closing above the BBI set a new tone for the short-term outlook. Superlon Holdings (SLON MK) Technical BUY with 16.5% potential return BUY with a target price of RM2.54 and stop-loss at RM2.04. A buying signal is seen as the stock is trading above the Ichimoku cloud. Source: Bursa Station KEY INDICES Prev Close Chg (%) YTD (%) DJIA 17, (0.27) 2.04 S&P 500 2, (0.17) 2.03 FTSE 100 6, CSI 300 3, (16.00) FSSTI 2, (0.12) (3.35) HSCEI 8, (9.29) HSI 20, (5.11) JCI 4, KLCI 1, (3.24) KOSPI 1, Nikkei , (0.64) (15.59) SET 1, (0.43) TWSE 8, BDI CPO (RM/mt) 2, (1.08) (4.47) Nymex Crude (US$/bbl) TOP VOLUME Stock Price (RM) Chg (%) Vol ( 000) Vivocom International ,853 Trive Property Group ,448 Nexgram Holdings ,695 Sanichi Technology 0.14 (3.57) 40,403 Airasia Bhd ,798 TOP GAINERS Stock Price (RM) Chg (%) Vol ( 000) Kuantan Flour Mills Kym Holdings Bhd Scope Industries Bhd Inix Technologies Hock Heng Stone TOP LOSERS Stock Price (RM) Chg (%) Vol ( 000) Java Bhd 0.06 (33.33) 2 Comintel Corp Bhd 0.67 (28.88) 30,659 Malaysia Building 0.80 (23.19) 10,910 China Ouhua Winery 0.03 (16.67) 350 China Automobile 0.03 (14.29) 4,028 Source: Bloomberg w w w. u t r a d e. c o m. m y 1

2 TRADERS CORNER Tambun Indah Land (TILB MK) Technical BUY on breakout with 17.8% potential return Last price : RM1.41 Target price: RM1.58, RM1.72 Support : RM1.37 Stop-loss : RM1.36 BUY on breakout with a target price of RM1.72 and stop-loss at RM1.36. Since correcting from a previous high, share price is recovering gradually and moved above the 7- and 21-day EMA last Tuesday, effectively reversing its downtrend. Currently, both the MACD and the DMI show positive signals to support the upward momentum. We peg our targets at RM1.58 and RM1.72 in the near term. Expected Timeframe: 2 weeks to 2 months. ManagePay Systems (MPSB MK) Technical BUY on breakout with +37.2% potential return Last price : RM0.20 Target price : RM0.255, RM0.295 Support : RM0.185 Stop-loss : RM0.18 BUY on breakout with a target price of RM0.295 and stop-loss at RM0.18. The stock is consolidating within the immediate support of RM0.185 before last Tuesday s positive closing above the BBI set a new tone for the short-term outlook. We expect the stock to continue to make higher highs and higher lows once it breaches the breakout level of RM A bullish bias has been established following an uptick in the RSI as well as a bullish crossover in the MACD and the DMI. We peg our targets at RM0.255 and RM0.295 in the near term. 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 Superlon Holdings (SLON MK) Technical BUY with +16.5% potential return Last price : RM2.18 Target price : RM2.47, RM2.54 Support : RM2.05 Stop-loss : RM2.04 BUY with a target price of RM2.54 and stop-loss at RM2.04. A buying signal is seen as the stock is trading above the Ichimoku cloud. This is supported by the Heat Wave indicators - the Tenkan-sen line, Kinjun-sen line and Chikao span line - which suggest a bullish signal. This is supported by an uptick in the DMI that suggests buying momentum is set to continue in the near term. Currently, the MACD is showing a bullish crossover to support the upward momentum. Based on 1.38x and 1.61x Fibonacci extension levels, our targets are RM2.47 and RM2.54 in the medium term. Expected Timeframe: 2 weeks to 3 months. w w w. u t r a d e. c o m. m y 3

4 CORPORATE NEWS Aeon Credit: Cautious on growth prospects. Retail financial outfit Aeon Credit Service (M) Bhd expects the improved consumer sentiment since early this year to help the company to meet, if not better, its earnings target this year, said managing director Kenji Fujita. While consumer sentiment has improved slightly in early 2016 and economic growth of 4% to 4.5% has been forecast for this year, the company remains cautious on growth prospects for the financial year ending February 2017 (FY17). The key focus areas for the year include asset quality management via improved credit analysis, credit evaluation and credit management, continued efforts on the utilisation of the customer database for cross selling, and the digitalisation of branch operations for improved customer experience and satisfaction. (Source: The Star) Airasia: Buys private jet used by its Chairman and group CEO. AirAsia Bhd is buying for US$10m (RM40.3m) the private jet plane that has been used by its executive chairman Datuk Kamarudin Meranun and group chief executive officer Tan Sri Tony Fernandes since In a statement to Bursa Malaysia on Tuesday, AirAsia said it had signed an agreement to buy the Bombardier BD-700-1A10 Global Express 9M-CJG from Caterhamjet Global Ltd (CJG), a Tune Group member. This is considered a related party transaction as Kamaruddin and Fernandes are also directors and shareholders of CJG (with 18.56% indirect stake each). CJG s main business is providing private jet charter as well as the maintenance support for the aircraft. (Source: The Star) Airasia: Weighs BNP, Credit Suisse, RHB to sell leasing unit. AirAsia Bhd is considering hiring BNP Paribas SA, Credit Suisse Group AG and RHB Capital Bhd. to help sell its aircraft leasing unit as part of plans to raise funds and strengthen its finances, the group's Chief Executive Officer Tan Sri Tony Fernandes said. Asia's biggest discount carrier also plans to garner between $75m and $100m from a sale of new shares in its Philippine arm, Fernandes said in an interview in his office in Sepang, near Kuala Lumpur. Besides the existing shareholders, three other parties are also interested in Philippines AirAsia and the carrier will mandate banks for the sale in two or three weeks, he said. (Source: The Star) Axiata: Celcom Trading wins RM264m claim against Tajudin. The High Court here has allowed Celcom Trading Sdn Bhd s claim against Tan Sri Tajudin Ramli of RM264.52m with interest of 5% from May 13, Axiata Group Bhd announced to Bursa Malaysia yesterday that the High Court had also dismissed Tajudin s counterclaim with costs of RM100,000 after full trial of the suit. To recap, Celcom Trading, then known as Rego Multi-Trades Sdn Bhd, had filed a suit against Tajudin pursuant to an investment agreement with Aras Capital Sdn Bhd and an indemnity letter given by Tajudin. (Source: The Star) EPF: RM100b for new EPF fund. The Employees Provident Fund s (EPF) syariah-compliant investment product, called Simpanan Syariah, will have an initial size of RM100b and be open for registration from Aug 8. Contributors can start registering with the pension fund to shift their savings to Simpanan Syariah and it is open to all members regardless of race, religion and nationality. The registration will close on Dec 23. EPF chief executive officer Datuk Shahril Ridza Ridzuan said the fund has been investing in syariahcompliant assets for more than five years and about 45% or RM295b of existing total assets are already syariah-compliant. He expects the EPF s investment in syariahcompliant assets to grow by about RM25b a year on average. (Source: The Star) w w w. u t r a d e. c o m. m y 4

5 Oriental Holdings: Sells unit to Berjaya Assets for RM32.5m. Oriental Holdings Bhd is selling its car assembly and automotive parts manufacturing unit to Berjaya Assets Bhd for RM32.5m. In a filing with Bursa Malaysia yesterday, Oriental Holdings said the disposal of Oriental Assemblers Sdn Bhd was aligned with the group s core strategy of streamlining businesses and exiting the automotive assembly operations. Upon completion, the disposal would allow the automotive division within the group to focus more on the lucrative retail business. (Source: The Star) Sona Petroleum: To close shop. Sona Petroleum Bhd, a special-purpose acquisition vehicle (SPAC), is expected to "close shop" soon after failing to make any qualifying acquisition (QA) which it has to complete until July 31 this year under the SPAC guideline. Executive director and managing director, Datuk Seri Hadian Hashim, said Sona would go through the process of liquidation and the matter was being discussed as the company was solvent. "The company is in the process of appointing a liquidator after July and how long it will take to liquidate would depend on the liquidator," he told reporters at its annual general meeting on Tuesday. Hadian said the company has cash in hand of over RM500m and each investor was expected to get back about 48 sen a share after deducting tax. (Source: The Star) Scomi: Gets court injunction against Prasarana again. The High Court has granted Scomi Transit Projects Sdn Bhd (STP), a unit of Scomi Engineering Bhd, an interim order and injunction restraining Prasarana Malaysia Bhd (PMB) from terminating its contract until further orders from the court. This came after STP initiated legal proceedings against PMB following the termination of its contract on June 9, This is the second time STP has been granted an interim injunction. On March 1, 2016, the court granted a similar injunction restraining PMB from terminating the contract pursuant to faulty notices issued on Jan 4 and Feb 18. The interim injunction was granted when STP claimed that PMB should not be allowed to terminate the contract without dealing with STP s extension of time claims. (Source: The Star) SECTOR Construction: Sungai Buloh-Kajang MRT Line 85% complete. The construction of the Sungai Buloh-Kajang Line is 85% complete and progressing well and the service is scheduled to begin operations in December, said Mass Rapid Transit Corp Sdn Bhd (MRT Corp). Its strategic communications and stakeholder relations director, Datuk Najmuddin Abdullah, said all civil structural works for the elevated stations were completed, as well as for the elevated guideways and track work on viaduct section. Station architectural works are in full swing and nearing completion in the north and progressing well in the south, he said at MRT Corp s media iftar in Kuala Lumpur on Tuesday. He said work on the entrances and installation of link bridges across roads and facilities under the station were in progress. Najmuddin said as for the underground section, all stations structure works were also completed, except for entrances and vent structures above ground level and entrances. (Source: The Star) ECONOMICS Reserves: BNM international reserves at RM383.2b. Bank Negara international reserves amounted to RM383.2b (US$97.4b) as of June 15, 2016 from RM382.6b (US$97.3b) a fortnight ago. The reserves position is sufficient to finance 8.1 months of retained imports and is 1.2 times the short-term external debt, Bank Negara said in a statement. (Source: The Star) w w w. u t r a d e. c o m. m y 5

6 FROM THE REGIONAL MORNING NOTES... Top Glove: Strikes A Cautious Tone (TOPG MK/HOLD/RM4.61/Target: RM4.39) Management s prognosis of an increasingly competitive nitrile glove market segment resonates with peers. While we concur with management that any excess oversupply could be easily absorbed by the market within 2-3 quarters, we cut our FY17-18 earnings forecasts on an expected weaker recovery in nitrile glove ASPs. We also expect prolonged lukewarm sentiment towards the stock on likely weaker numbers in FY17. Maintain HOLD but cut our target price to RM4.39. Entry price: RM4.00. 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

7 Disclosures/Disclaimers This report is prepared by UOB Kay Hian (Malaysia) Holdings Sdn. Bhd. ("UOBKHM") which is a licensed corporation providing investment advisory services in Malaysia. This report is provided for information only and is not an offer or a solicitation to deal in securities or to enter into any legal relations, nor an advice or a recommendation with respect to such securities. This report is prepared for general circulation. It does not have regard to the specific investment objectives, financial situation and the particular needs of any recipient hereof. Advice should be sought from a financial adviser regarding the suitability of the investment product, taking into account the specific investment objectives, financial situation or particular needs of any person in receipt of the recommendation, before the person makes a commitment to purchase the investment product. This report is confidential. This report may not be published, circulated, reproduced or distributed in whole or in part by any recipient of this report to any other person without the prior written consent of UOBKHM. This report is not directed to or intended for distribution to or use by any person or any entity who is a citizen or resident of or located in any locality, state, country or any other jurisdiction as UOBKHM may determine in its absolute discretion, where the distribution, publication, availability or use of this report would be contrary to applicable law or would subject UOBKHM and its associated persons (as defined in the Capital Market Services Act 2007) to any registration, licensing or other requirements within such jurisdiction. The information or views in the report ( Information ) has been obtained or derived from sources believed by UOBKHM to be reliable. However, UOBKHM makes no representation as to the accuracy or completeness of such sources or the Information and UOBKHM accepts no liability whatsoever for any loss or damage arising from the use of or reliance on the Information. UOBKHM and its associate may have issued other reports expressing views different from the Information and all views expressed in all reports of UOBKHM and its connected persons are subject to change without notice. UOBKHM reserves the right to act upon or use the Information at any time, including before its publication herein. Except as otherwise indicated below, (1) UOBKHM, its associated persons and its officers, employees and representatives may, to the extent permitted by law, transact with, perform or provide broking, underwriting, corporate finance-related or other services for or solicit business from, the subject corporation(s) referred to in this report; (2) UOBKHM, its associated persons and its officers, employees and representatives may also, to the extent permitted by law, transact with, perform or provide broking or other services for or solicit business from, other persons in respect of dealings in the securities referred to in this report or other investments related thereto; (3) the officers, employees and representatives of UOBKHM may also serve on the board of directors or in trustee positions with the subject corporation(s) referred to in this report. (All of the foregoing is hereafter referred to as the Subject Business ); and (4) UOBKHM may otherwise have an interest (including a proprietary interest) in the subject corporation(s) referred to in this report. As of the date of this report, no analyst responsible for any of the content in this report has any proprietary position or material interest in the securities of the corporation(s) which are referred to in the content they respectively author or are otherwise responsible for. IMPORTANT DISCLOSURES FOR U.S. PERSONS This research report is prepared by UOBKHM, a company authorized, as noted above, to engage in investment advisory in Malaysia. UOBKHM is not a registered broker-dealer in the United States and, therefore, is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This research report is provided for distribution by UOBKHM (whether directly or through its US registered broker dealer affiliate named below) to major U.S. institutional investors in reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the Exchange Act ). All US persons that receive this document by way of distribution from or which they regard as being from UOBKHM by their acceptance thereof represent and agree that they are a major institutional investor and understand the risks involved in executing transactions in securities. Any U.S. recipient of this research report wishing to effect any transaction to buy or sell securities or related financial instruments based on the information provided in this research report should do so only through UOB Kay Hian (U.S.) Inc ( UOBKHUS ), a registered broker-dealer in the United States. Under no circumstances should any recipient of this research report effect any transaction to buy or sell securities or related financial instruments through UOBKHM. UOBKHUS accepts responsibility for the contents of this research report, subject to the terms set out below, to the extent that it is delivered to and intended to be received by a U.S. person other than a major U.S. institutional investor. The analyst whose name appears in this research report is not registered or qualified as a research analyst with the Financial Industry Regulatory Authority ( FINRA ) and may not be an associated person of UOBKHUS and, therefore, may not be subject to applicable restrictions under FINRA Rules on communications with a subject company, public appearances and trading securities held by a research analyst account. w w w. u t r a d e. c o m. m y 7

8 Analyst Certification/Regulation AC Each research analyst of UOBKHM who produced this report hereby certifies that (1) the views expressed in this report accurately reflect his/her personal views about all of the subject corporation(s) and securities in this report; (2) the report was produced independently by him/her; (3) he/she does not carry out, whether for himself/herself or on behalf of UOBKHM or any other person, any of the Subject Business involving any of the subject corporation(s) or securities referred to in this report; and (4) he/she has not received and will not receive any compensation that is directly or indirectly related or linked to the recommendations or views expressed in this report or to any sales, trading, dealing or corporate finance advisory services or transaction in respect of the securities in this report. However, the compensation received by each such research analyst is based upon various factors, including UOBKHM s total revenues, a portion of which are generated from UOBKHM s business of investment advisory. Reports are distributed in the respective countries by the respective entities and are subject to the additional restrictions listed in the following table. General Hong Kong Indonesia Malaysia Singapore Thailand United Kingdom United States of America ( U.S. ) This report is not intended for distribution, publication to or use by any person or entity who is a citizen or resident of or located in any country or jurisdiction where the distribution, publication or use of this report would be contrary to applicable law or regulation. This report is distributed in Hong Kong by UOB Kay Hian (Hong Kong) Limited ("UOBKHHK"), which is regulated by the Securities and Futures Commission of Hong Kong. Neither the analyst(s) preparing this report nor his associate, has trading and financial interest and relevant relationship specified under Para of Code of Conduct in the listed corporation covered in this report. UOBKHHK does not have financial interests and business relationship specified under Para of Code of Conduct with the listed corporation covered in this report. Where the report is distributed in Hong Kong and contains research analyses or reports from a foreign research house, please note: (i) recipients of the analyses or reports are to contact UOBKHHK (and not the relevant foreign research house) in Hong Kong in respect of any matters arising from, or in connection with, the analysis or report; and (ii) to the extent that the analyses or reports are delivered to and intended to be received by any person in Hong Kong who is not a professional investor, or institutional investor, UOBKHHK accepts legal responsibility for the contents of the analyses or reports only to the extent required by law. This report is distributed in Indonesia by PT UOB Kay Hian Securities, which is regulated by Financial Services Authority of Indonesia. Where the report is distributed in Indonesia and contains research analyses or reports from a foreign research house, please note recipients of the analyses or reports are to contact PT UOBKH (and not the relevant foreign research house) in Indonesia in respect of any matters arising from, or in connection with, the analysis or report. Where the report is distributed in Malaysia and contains research analyses or reports from a foreign research house, the recipients of the analyses or reports are to contact UOBKHM (and not the relevant foreign research house) in Malaysia, at , in respect of any matters arising from, or in connection with, the analysis or report as UOBKHM is the registered person under CMSA to distribute any research analyses in Malaysia. This report is distributed in Singapore by UOB Kay Hian Private Limited ("UOBKH"), which is a holder of a capital markets services licence and an exempt financial adviser regulated by the Monetary Authority of Singapore. Where the report is distributed in Singapore and contains research analyses or reports from a foreign research house, please note: (i) recipients of the analyses or reports are to contact UOBKH (and not the relevant foreign research house) in Singapore in respect of any matters arising from, or in connection with, the analysis or report; and (ii) to the extent that the analyses or reports are delivered to and intended to be received by any person in Singapore who is not an accredited investor, expert investor or institutional investor, UOBKH accepts legal responsibility for the contents of the analyses or reports only to the extent required by law. This report is distributed in Thailand by UOB Kay Hian Securities (Thailand) Public Company Limited, which is regulated by the Securities and Exchange Commission of Thailand. This report is being distributed in the UK by UOB Kay Hian (U.K.) Limited, which is an authorised person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Conduct Authority. Research distributed in the UK is intended only for institutional clients. This report cannot be distributed into the U.S. or to any U.S. person or entity except in compliance with applicable U.S. laws and regulations. It is being distributed in the U.S. by UOB Kay Hian (US) Inc, which accepts responsibility for its contents. Any U.S. person or entity receiving this report and wishing to effect transactions in any securities referred to in the report should contact UOB Kay Hian (US) Inc. directly. Copyright 2016, UOB Kay Hian (Malaysia) Holdings Sdn. Bhd. All rights reserved. w w w. u t r a d e. c o m. m y 8