R e t a i l M a r k e t M o n i t o r Thursday, 2 February 2017

Transcription

1 MARKET NEWS The FBMKLCI continued to slide lower for the second consecutive day by 14.82pt to close at 1, yesterday amid persistent selling pressure in index-linked counters. Meanwhile, Asian stocks slumped and gold advanced as Donald Trump s firing of the US acting attorney general added to concerns over the unpredictability of decisions in the new administration. The MSCI Asia Pacific Index dropped 0.8%. The FBMKLCI s top gainers were Maxis (+3.2%), KLCC Property Holdings (+1.9%) and PPB Group (+1.2%) while the top losers were Sime Darby (-3.5%), Astro Malaysia Holdings (-2.5%) and British American Tobacco (-2.4%). In the broader market, losers outpaced gainers 367 to 354 with 327 counters unchanged. Turnover was 1.16b shares valued at RM1.61b. Based on the daily candlestick analysis, the FBMKLCI did not start the week on a positive note after plunging 14.82pt yesterday. The index slipped below the BBI lines yesterday, suggesting the short-term trend remains vulnerable to further corrections. For now, the FBMKLCI will stay above the trendline but a further slip may change the overall bullish outlook to a much more neutral bias. Going forward, there would be more downward pressure on the index if it closes below the immediate support. Support and resistance levels are as follows: Support: 1,658,1,651 Resistance: 1,700,1,721 US stocks closed up modestly ON Wednesday after the Federal Reserve stood pat on interest rates and offered a positive view of the economy, while shares of Apple rallied a day after the iphone maker reported strong earnings. The Dow Jones Industrial Average rose 26.85pt, or 0.1%, to finish at 19,890.94, with Apple contributing about 50pt to the blue-chip gauge. The S&P 500 index advanced 0.35pt to close at 2, The benchmark index had earlier risen as much as 0.4%. The Nasdaq Composite Index rose 27.8pt, or 0.5%, to finish at 5, WHAT S IN THE PACK Banking Loan approval (-12.8% yoy) and application (-8.0% yoy) in Dec 16 continue to point towards a moderating growth environment. Public Bank and BIMB remain as our top picks. Rimbunan Sawit (RSAW MK) Technical BUY on breakout with 22.9% potential return BUY on breakout with a target price of RM0.67 and stop-loss at RM0.48. The chart shows the upside trend will remain intact if the stock can penetrate the RM0.545 level. Benalec Holdings (BHB MK) Technical BUY on breakout with +33.0% potential return BUY on breakout with a target price of RM0.625 and stop-loss at RM Based on the daily chart, BHB formed a series of higher highs and higher lows that indicate an uptrend. Dolomite Corporation (DOLM MK) Technical BUY with +41.6% potential return BUY with a target price of RM0.545 and stop-loss at RM Yesterday, the stock penetrated the breakout level of RM0.375 and closed above the BBI line. FBMKLCI CHART Source: Bursa Station KEY INDICES Prev Close Chg (%) YTD (%) DJIA 19, S&P 500 2, FTSE 100 7, (0.49) CSI 300 3, FSSTI 3, HSCEI 9, (0.48) 3.85 HSI 23, (0.18) 5.99 JCI 5, KLCI 1, (0.88) 1.82 KOSPI 2, Nikkei , SET 1, (0.06) 2.16 TWSE 9, BDI (1.75) (18.21) CPO (RM/mt) 3, (1.34) (2.57) Nymex Crude (US$/bbl) (0.59) (2.01) TOP VOLUME Stock Price (RM) Chg (%) Vol ( 000) Airasia Bhd ,398 Sc Estate Builder Bhd 0.04 (12.50) 28,567 Hibiscus Petroleum ,269 Berjaya Corp Bhd ,266 Airasia X Bhd ,468 TOP GAINERS Stock Price (RM) Chg (%) Vol ( 000) Eka Noodles Bhd ,025 Nakamichi Corp Bhd Mbm Resources Bhd At Systematization Dbe Gurney TOP LOSERS Stock Price (RM) Chg (%) Vol ( 000) Hubline Bhd 0.01 (50.00) 816 Sino Hua-An 0.03 (16.67) 106 Focus Point Holdings 0.25 (15.25) 100 Stone Master Corp 0.10 (13.64) 1,778 Smtrack Bhd 0.04 (12.50) 200 Source: Bloomberg w w w. u t r a d e. c o m. m y 1

2 TRADERS CORNER Rimbunan Sawit (RSAW MK) Technical BUY on breakout with +22.9% potential return Last price : RM0.525 Target price : RM0.63, RM0.67 Support : RM0.485 Stop-loss: RM0.48 BUY on breakout with a target price of RM0.67 and stop-loss at RM0.48. The chart shows the upside trend will remain intact if the stock can penetrate the RM0.545 level. Currently, both the MACD and DMI indicators show a positive signal to support the upward momentum. This is also supported by an uptick in the RSI. We expect the stock will continue to move towards our targets at RM0.63 and RM0.67 in the near term. Expected time frame: 2 weeks to 2 months Benalec Holdings (BHB MK) Technical BUY on breakout with +33.0% potential return Last price : RM0.455 Target price : RM0.545, RM0.625 Support : RM0.42 Stop-loss : RM0.415 BUY on breakout with a target price of RM0.625 and stop-loss at RM Based on the daily chart, BHB formed a series of higher highs and higher lows that indicates an uptrend. The uptick in the DMI and the increase in trading volume suggest buying momentum is set to continue in the near term. We expect the stock to continue moving towards our targets at RM0.545 and RM0.625 in the current upleg. Expected time frame: 2 weeks to 2 months. w w w. u t r a d e. c o m. m y 2

3 TRADERS CORNER Dolomite Corporation (DOLM MK) Technical BUY with +41.6% potential return Last price : RM0.385 Target price : RM0.445, RM0.545 Support : RM0.33 Stop-loss : RM0.325 BUY with a target price of RM0.545 and stop-loss at RM Last Tuesday, the stock penetrated the breakout level of RM0.375 and closed above the BBI line. This is supported by the MACD s bullish crossover and consistent with the uptick in the RSI which suggests stronger buying momentum ahead. Additionally, the positive DMI readings suggest a stronger momentum which should lift the stock towards our target prices of RM0.445 and RM 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 Axiata: India associate in merger talks with Vodafone. Axiata Group s 20%-owned India associate, Idea Cellular Ltd, is initiating preliminary negotiation with UK-based Vodafone Group for a merger of operations through a cashless deal. In a statement on 30 Jan 17, Vodafone confirmed it is in discussions with Aditya Birla Group about an all-share merger of Vodafone India (excluding Vodafone's 42% stake in Indus Towers Ltd) and Idea. Aditya Birla owned a 23.26% stake in Idea and a 16% stake in Indus Towers as at 31 Mar 16. (Source: The Edge Financial Daily) DRB-Hicom: Indirect unit consolidates vehicle leasing business. DRB-Hicom Bhd s indirect unit, Edaran Otomobil Nasional Bhd (EON), is disposing of its entire equity in DRB-Hicom Leasing Sdn Bhd (DLSB) to DRB-Hicom EZ- Drive for RM14.97m. EZ-Drive and DLSB are wholly-owned subsidiary companies of EON. Upon completion of the proposed internal reorganisation, DLSB will become a whollyowned subsidiary company of EZ-Drive. (Source: The Star) EON: Sells loss-making roadside assistance business. Edaran Otomobil Nasional (EON) is hiving off its emergency roadside assistance subsidiary, Multi Automotive Service and Assist Sdn Bhd (MASA), for RM1. DRB-Hicom Bhd, which indirectly owns a 100% stake in the Proton and Jeep distributor and retailer, told Bursa Malaysia that EON s proposed sale of MASA to Vikneswaran Suppiah was in line with the group s plan to streamline its operations by divesting insignificant businesses and to focus on its core businesses. MASA s main activities are membership recruitment incorporating the provision of emergency roadside assistance and the supply of autorelated products and services. The cash consideration of RM1 was arrived at based on willing buyer-willing seller. (Source: The Star) Geely: Leads in bid for Proton. Chinese car manufacturer Geely Automobile Holdings is said to be leading the race to become the technical partner of national car manufacturer Proton Holdings Bhd. Also, it is learnt that the national car manufacturer has made some changes to the top executives of its operations in preparation for the entry of a new technical partner. Towards this end, among the changes are said to involve chief technical officer Abdul Rashid Musa being slated to take over the group s sales division, Proton Edar Sdn Bhd, to boost sales. (Source: The Star) Kerjaya Prospek: Eyes RM800m new jobs this year. Construction company Kerjaya Prospek Group Bhd, formerly Fututech Bhd, hopes to secure more construction jobs to meet its internal replenishment orderbook target of RM800m for this year, according to executive chairman Datuk Tee Eng Ho. We are looking towards [securing] bigger jobs in the second and third quarters of FY17 because that is usually when there are more [movements] with [property] developers, he said in a recent interview. (Source: The Edge Financial Daily) PetDag: Plan to divest Vietnam ops hits a snag. Petronas Dagangan s (PetDag) plan to divest its entire Vietnam business has hit a snag as Totalgaz Vietnam Ltd Liability Co (TGV) cancelled an agreement to buy its liquefied petroleum gas (LPG) storage and bottling subsidiary, Thang Long LPG Co Ltd (TLLCL). PetDag, the principal domestic marketing arm of Petroliam Nasional Bhd, told Bursa Malaysia that TGV had issued a notice to terminate the 2015 agreement that it had signed with PetDag s unit PetDag (Netherlands) BV effective 31 January. PetDag s statement did not give any reason why the deal fell through despite the parties having agreed to two time extensions since last December. Interestingly, PetDag had managed to complete the divestment of its other indirect unit in Vietnam - LPG processor and distributor Petronas Vietnam Co Ltd - to TGV on 24 May 16. (Source: The Star) w w w. u t r a d e. c o m. m y 4

5 Shell Refining Co: Shareholders reject MHIL s takeover offer. Most shareholders of Shell Refining Co (Federation of Malaya) Bhd (SRC) heeded independent adviser AmInvestment Bank s advice to reject Malaysian Hengyuan International Ltd s (MHIL) unconditional takeover offer of the refiner at RM1.92 per share. The petroleum product manufacturer said SRC managed to receive acceptances representing only 0.02% of SRC s paid-up share capital as at 5pm on 31 Jan 17, the closing date. This brought the equity shareholding of MHIL and persons acting in concert to 51.02%. MHIL, ultimately owned by China s Shandong Hengyuan Petrochemical Co Ltd, completed the purchase of 135m SRC shares, or a 51% stake, from Shell Overseas Holdings Ltd (SOHL) at an offer price of RM1.92 in Dec 16, on a day when the share price closed at RM2.29. (Source: The Star) TYS: To review The Store ops. The owner of The Store Corp Bhd will undertake a review of the retailer s operations after taking the company private, which includes closing some of its underperforming businesses. TYS Consolidated Sdn Bhd, which now controls close to 98% of The Store Corp, will focus on opening new outlets at select locations. In The Store s 2016 annual report, chairman Datuk Seri Md Kamal Bilal said that businesses considered to be less viable would likely be terminated. (Source: The Star) w w w. u t r a d e. c o m. m y 5

6 FROM THE REGIONAL MORNING NOTES... Banking: BNM Dec 16 Statistics: Deposit Growth Improves Leading loan growth indicators, such as loan approval (-12.8% yoy) and application (-8.0% yoy), in Dec 16 continued to point towards a moderating growth environment. On a brighter note, the sharp mom growth recovery in deposits should help ease competition for deposits. We continue to like Public Bank and BIMB for their high provision buffers, ahead of the MFRS9 implementation, and Maybank as an immediate-term election play. Maintain MARKET WEIGHT. 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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