November trader scompass

Transcription

1 November trader scompass For Internal Circulation Only DISCLAIMER The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. TA SECURITIES H OLDINGS B ERHAD (14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan, Head of Research Menara TA One, 22 Jalan P Ramlee, Kuala Lumpur. Malaysia Tel : Fax :

2 TA Securities AMemberoftheTAGroup November trader scompass Contents Page MARKET FOCUS Economic Outlook 1 Technical Outlook 6 Blue Chip Picks 15 Major Events For Bursa 21 CORPORATE EARNINGS SUMMARY 22 DERIVATIVES Warrants 29 Convertible Unsecured Loan Stock 36 Redeemable Unsecured Loan Stock 37 A-share & Preference Shares 38 ENTITLEMENTS Bonus & Rights Issues 39 Dividend / Interest Payments 41

3 TA Securities A Member of the TA Group Nov 2011 trader s Compass Economic Outlook Receding Fears from the US US recesssionary fears recede as GDP grew by 2.5% in 3Q11 driven by domestic demand. Eurozone slid closer to a recession as unemployment surged unexpectedly in the recent months. We expect GDP growth of 5.4% for 2011 and 4.6% for M3 continues to advance at a healthy 12.5% to RM1.188tn in September. Benchmark interest rate to stay at 3.0% level during the final MPC meeting of the year. US Economic Overview The US grew by an annualized 2.5% in 3Q11 (or +1.6% YoY), blunting fears that the economy would plunge into a recession in The overall economic expansion relied heavily on consumption expenditure, which alone constituted approximately 70% of the economy. Based on recent statistics, consumers are spending more even as wages stagnate and savings reduce. Despite the continued high unemployment of above 9.0% level through to September 2011, consumer spending rose by an annualized 2.4% in 3Q following an increase of 0.7% in the preceding quarter. Spending increases despite high rate of unemployment Is US and Japan alike? Unlike Japan, we believe that the US will probably not tag along the same path of stagflation. The disastrous decade of stagnation and deflation in Japan was inevitable as the Bank of Japan had been slow to loosen the monetary policy in order to spur the economy. A self-induced paralysis sparked in Japan following the plunge in stock prices and real-estate prices in 1990 as the unconventional quantitative easing and purchases of long-term government bonds had proceeded only by March The Bank of Japan didn t start lowering its benchmark interest rate until July 1991 and borrowing cost was reduced to zero only by February US recesssionary fears recede Figure 1: Personal Spending increases in the US Personal Income YoY % (LHS) Personal Savings YoY % (RHS) Personal Spending YoY % (LHS) Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Sources: Bloomberg, TA Securities Technical Outlook [ 1 ]

4 TA Securities A Member of the TA Group Nov 2011 trader s Compass 6 Figure 2: GDP growth and private consumption expenditure (YoY %) Mar-00 Oct-00 May-01 Dec-01 Jul-02 Feb-03 Sep-03 Apr-04 Nov-04 Jun-05 Jan-06 Aug-06 Mar-07 Oct-07 May-08 Dec-08 Jul-09 Feb-10 Sep-10 Apr-11-6 Personal consumption expenditure GDP Sources: Bloomberg, TA Securities Whereas, the US started reducing its benchmark rate as early as September 2007 and was near zero by December Aside fom the expansionary monetary policy, the fiscal stimulus had also been introduced with two rounds of bond purchases: (1) USD1.7tn that ended in March 2010; and (2) USD600bn which completed in June However, note that the economy had undergone six consecutive quarters of contractions from 3Q08 till 4Q09. Figure 3: US Interest rate Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Sources: Bloomberg, TA Securities Recessionary impulse in Europe The Eurozone slid closer to a recession as unemployment surged unexpectedly in the recent months and inflation continued to trend well above the ECB s target of 2.0%. The threat of a faltering Eurozone may continue to drag down the E&E exports. Note that Malaysia s E&E exports had been declining for the past five months through to August Nevertheless, we believe that Malaysia s attractiveness in terms of doing business may thus attract the inflows of FDI. Unemployment and inflation soared in Eurozone Technical Outlook [ 2 ]

5 TA Securities A Member of the TA Group Nov 2011 trader s Compass 6 Figure 4: Eurozone GDP Mar-00 Oct-00 May-01 Dec-01 Jul-02 Feb-03 Sep-03 Apr-04 Nov-04 Jun-05 Jan-06 Aug-06 Mar-07 Oct-07 May-08 Dec-08 Jul-09 Feb-10 Sep-10 Apr GDP (YoY %) Sources: Bloomberg, TA Securities Figure 5: Unemployment Rate and inflation (%) Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Unemployment Inflation (%) Sources: Bloomberg, TA Securities Domestic demand remained strong through to September As for Malaysia, the broad money M3 grew by 12.5% YoY totalling RM1.188tn during the month of September 2011 (August: +10.6% YoY). Partly, the advancement in M3 and strong domestic consumption is underpinned by the overall healthy labour market condition through to August this year. Meanwhile, total loans and advances jumped by healthy double-digit 13.8% YoY to RM972.2bn (August 2011: +13.3% YoY). M3 growth of 12.5% in September Ringgit appreciated 3.9% MoM against USD The Ringgit had been trading rather volatile during the month of October. As at the end of the month though, the Ringgit had closed relatively stronger against most foreign currencies including the USD. Partly attributable to the continued surplus through trade and commendable reserves held at BNM, Ringgit strengthened on a sequential basis against JPY (+5.5% MoM); IDR (4.7%); USD (3.9%); CNY (3.5%); THB (2.6%); PHP (1.4%); GBP (1.4%); and EUR (0.6%). Nonetheless, the Ringgit had depreciated against AUD by 4.1% MoM. Appreciation in Ringgit in October Technical Outlook [ 3 ]

6 TA Securities A Member of the TA Group Nov 2011 trader s Compass Figure 6: M3 advances by 12.5% YoY in September ,250,000 1,200,000 1,150,000 1,100,000 1,050,000 1,000, , , ,000 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 M3 (RM/ mn) (LHS) yoy % (RHS) Sources: Department of Statistics, TA Securities Figure 7: MoM gains for the Ringgit in October 2011 (%) JPY IDR USD CNY THB PHP GBP EUR SGD AUD Note: Figure 1 depicts the monthly gains of the Ringgit vis-à-vis foreign currencies. Sources: Bank Negara Malaysia, TA Securities GDP growth in 3Q11 Malaysia s 3Q11 GDP statistical announcement will be released by 16 th November. We expect 3Q to be driven by both the domestic demand and international trade. Despite the ongoing uncertainties, economic data for 3Q had been favourable in terms of growth. We expect GDP to register an expansion of 6.0% YoY following a growth of 4.0% in the preceding quarter. Pending on further updates, we are maintaining our full year projections for both this year and next year at 5.4% and 4.6% YoY respectively. GDP to grow by 5.4% in 2011 Sustainable growth for Malaysia Domestic economic activities will probably continue to register a sustainable growth going forward. Note that the Leading Index rose by 0.2% MoM (or +1.1% YoY) to points in August. In the same manner, the level of Diffusion Index for LI remains above 50.0% adhering that the economy will expand moderately in the near term. November s release of key economic data will be based on the schedule below (refer to Figure 9). Moving forward Technical Outlook [ 4 ]

7 TA Securities A Member of the TA Group Nov 2011 trader s Compass Figure 8: Malaysia s Real GDP (YoY %) GDP Components f 2012f 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11f 4Q11f GDP 4.8 (1.6) Demand Side Government Final Consumption Expenditure (9.8) Private Final Consumption Expenditure Gross Fixed Capital Formation Exports Imports Supply Side Agriculture, Forestry & Fishing (AF) (3.9) (0.2) Mining & Quarrying (0.7) (1.2) (4.2) (9.2) Manufacturing (Mfg) Construction Services Notes: The 2011e and 2012f represent TA's latest projections and forecast respectively. Sources: Department of Statistics, TA Securities Figure 9: Statistical Releases for November 2011 Dates Source Events 4 Statistics Department External trade for September BNM BNM statement of account as at 30 October Statistics Department Index of Industrial Production for September Statistics Department Manufacturing sales for September BNM Monetary policy Statement (6/6) 16 Statistics Department National Account for 2Q11 (GDP) not later than 22 BNM BNM statement of account as at 15 November Statistics Department Employment and unemployment in September Statistics Department Consumer Price Index for October BNM Release of Monthly statistical bulletin October BNM Detailed disclosure of international reserves at end October Statistics Department Producer Price Index in October 2011 Sources: BNM, Department of Statistics, TA Securities Technical Outlook [ 5 ]

8 TA Securities A Member of the TA Group Nov 2011 trader s Compass Technical Outlook Recovery to Sustain Towards Year-End KLCI Down-Wave Terminated at 1,310 Low Up 7.4% on average in 4Q for past 21 years Peak Likely Below 1,529 by 1Q 2012 Maintain Buy on Sharp Dip for Year-End Recovery October Market Review Bursa Malaysia shares sustained recovery momentum in October, which lifted the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) from a 14-month low for a V-shaped recovery, encouraged by the strong rebound on external markets on easing euro-zone concerns after France and Germany pledged to recapitalize European banks ahead of the G20 summit. The expansion of the lending capacity of the European Financial Stability Facility (EFSF) to more than 1tn euros and agreement by bondholders to take 50% haircut on Greek debt helped further boost sentiment by month-end. Resurgent buying momentum which spread to lower liner property and construction and also penny stocks ensured the broader market sustained their robust gains. V-shape recovery in October boosted by strong external markets as euro-zone fears subside For the month of October, the FBM KLCI jumped points, or 7.55% to settle at 1,491.89, with Genting Bhd (+RM1.66), CIMB (+60sen), Tenaga (+81sen), IOI Corp (+60sen) and Petronas Chemical (+89sen) representing more than half of the index s rise. Year-to-date, the index improved substantially to register only a mild 1.78% loss. Average daily traded volume and value last month rose to 1.2bn shares and RM1.39bn respectively, compared with 807.5mn shares and RM1.45bn average in September, as rotational plays on lower liners and penny stocks dominated trading. On global peers, US and European markets reversed their losses in the previous month and mostly latched on strong double digit gains to outperform in October, followed by Hong Kong and South Korea tagging along with gains of 12.9% and 7.9%. Year-to-date, the US Dow Jones Industrial Average rose to pole position with a 3.26% rise, replacing the Indonesian stock exchange which still out-performed with a 2.36% gain, followed by Nasdaq (+1.19%). On the flip side, most other markets remain deeply stuck in double-digit losses, the worst being Shenzen (-19.36%), Taiwan (-15.43%), Hong Kong ( %) and India (-13.67%) (please refer to Table 1). Small cap stocks also reversed losses to out-perform last month, with the FTSE Bursa Malaysia Small Cap (FBMSC) index, a capitalization weighted index of the top 98% of main board stocks, excluding the FTSE Bursa Malaysia 100 (FBM100) index, rallying 1, points, or 11.06% to 11, The FTSE Bursa Malaysia EMAS (FBMEMAS) index, a capitalization weighted index of stocks in the FBM100 and FBMSC, climbed points, or 8.21% to 10, Year-to-date, the FBMSC is still down 8.55% while the FBMEMAS shed 1.98%. Genting, CIMB, TNB, IOI & PChem contribute more than half of KLCI rally US & Europe out-perform in October, followed by Hong Kong & Korea Dow Jones up 3.26% YTD to out-perform FBMSC still down 8.55% while FBMEMAS shed 1.98%YTD Technical Outlook [ 6 ]

9 TA Securities A Member of the TA Group Nov 2011 trader s Compass The table below (Table 1) depicts the performance of KLCI, FBM Emas and FBM Small Cap Indices compared with major global and regional stock indices for the month of October and year-to-date. Table 1 net Oct-11 net YTD Index 31-Dec Sep Oct-11 chg % chg chg % chg Dow Jones Nasdaq S&P (4.3) (0.3) FTSE (355.7) (6.0) GDAX (772.8) (11.2) Nikkei (1240.5) (12.1) Hang Seng (3170.6) (13.8) Korea (142.0) (6.9) Taiwan (1384.8) (15.4) S'pore (334.3) (10.5) Thailand (58.0) (5.6) Jakarta India (2804.1) (13.7) Shanghai (339.8) (12.1) Shenzen (249.9) (19.4) 0.0 KLCI (27.0) (1.8) FBMEMAS (205.7) (2.0) FBMSC (1079.1) (8.5) Following the rebound from a 14-month low of 1,310 on 26 September, the FBM KLCI saw extended recovery from 1, low on 3 October to peak at high of 1, on 17 October, fueled by merger optimism as RHB Capital Bhd and OSK Holdings Bhd secured Bank Negara s approval to start merger talks. Late program selling on selected blue chips forced the index s slump to intra-day low of 1, on 21 October, but the agreement on an expanded euro-zone bailout fund from the 26 October summit helped the market recover further towards month-end. The index peaked at a fresh two-month high of 1, on 31 Oct. KLCI slump to 1,371 low on program selling offset by optimism over euro-zone bailout Chart , high (18/1/11) FBMKLCI (1,484.66, 1,493.28, 1,475.71, 1,491.89, ) 1,597 high (11/7/11) 0.0% 1,565 high (4/4/11) 1,566 high (31/5/11) 50-day ma (1,435) % 100-day ma (1,495) 1, % 1, ,474 low (28/2/11) 50.0% 61.8% 1,420 1,454 1,423 low (9/8/11) day ma (1,512) 76.4% 1, % 1,310 low (26/9/11) ,293 (38.2%FR of 801 low (Oct 2008) to 1,597 peak (July 2011) Relative Strength Index ( ) February March April May June July August September October November Decembe Technical Outlook [ 7 ]

10 TA Securities A Member of the TA Group Nov 2011 trader s Compass On the weekly chart (Chart 2), the recent sharp July to Sept correction could represent down-wave a of a similar a-b-c correction in early 2008, terminating at the 1,310 low on 26/9/11, which is slightly above 1,293, the 38.2% Fibonacci Retracement (FR) of the uptrend from 801 low (28/10/08) to the 1,597 peak (11/7/11). The strong October upswing should be the subsequent up-wave b, which could sustain towards yearend, with a peak likely by 1Q next year below 1,529, the 23.6%FR of the 1,597 to 1,310 sell-off. This key hurdle ties in with the 1,525 peak of 14/1/08, prior to the US sub-prime mortgage crisis tumble. The ensuing down-wave c should then take the index down towards 1,293 (38.2%FR), 1,199 (50%FR) or 1,105 (61.8%FR) by mid 2012, to complete the a-b-c correction. KLCI down-wave a terminated at 1,310 low, up-wave b peak likely below 1,529 by 1Q 2012 Chart , (14/1/08) Head 0.0% FBMKLCI (1,484.66, 1,493.28, 1,475.71, 1,491.89, ) 1,576 high (6/1/11) (3) 1,597 high (11/7/11) b , high (26/2/07) LS 30wk SMA b RS 23.6% 1,305 high (29/4/08) 38.2% 3/3 SRL 2/3 SRL a 1,409 1, ~ 1,150 Neckline a 1,157 low (14/3/08) 50.0% 61.8% 76.4% 50wk SMA (1) 200wk SMA (1,269) 1,310 low (26/9/11) 1/3 SRL 1,199 c 1, low (15/6/06) 100.0% 801 low c (28/10/08) 836 low (12/3/09) (2) Speed Resistance Line (SRL) MACD ( ) Weekly MACD hooking up to trigger early buy signal A M J J A S O N D 2007 A MJ J A S O N D 2008 A M J J A S O N D 2009 A MJ J A S O N D 2010 A MJ J A S O N D 2011 A M J J A S O N D 2012 A MJ J A S O N D 2013 A M -100 On the monthly KLCI chart below (Chart 3), despite the October rally, the bearish divergence position against the index and sell signal on the monthly MACD remain intact, barring a convincing breakout above the 1,597 all-time high to neutralize the negative signals which is very unlikely at the moment. The 50-month moving average, currently at 1,279, must hold base to prevent deeper correction towards the 100-day moving average at 1,115. This key support is reinforced by the rising Fibonacci Fan Line (FFL) from the 261 low of Sept The 200- month moving average is presently at 957. Monthly MACD sell signal intact, key supports at 1,279 & 1,115 Technical Outlook [ 8 ]

11 TA Securities A Member of the TA Group Nov 2011 trader s Compass Chart low (12/87) BULL CYCLE 1332 peak (1/94) b a a c % 1279 peak (2/97) 4 BEAR CYCLE 5 b 1, % 38.2% 50.0% b 61.8% a FBMKLCI (1,381.81, 1,493.28, 1,353.45, 1,491.89, ) % c c 261 low (9/98) 3 2 1, ,021 high (2/00) 4 a b c low (4/01) BULL CYCLE ,525 high (1/08) 4 5 a 3 b c Fibonacci Fan Lines (FFL) (1) (2) 836 low (03/09) (3) a 1,597 high (11/7/11) 50m SMA 100m SMA 200m SMA MACD ( ) Bearish divergence vs KLCI Monthly MACD sell signal The table below (Table 2) illustrates the performance of the KLCI for October, November, December and the fourth quarter since For the month of October, the index rose in 16 of the past 22 years, with average return of 2.26%. For November, gains almost equaled losses with average return of 0.2%, while December showed the best performance with an average gain of 4.5% and the index rising in 18 of the past 21 years. The strong performance in December is expected given the upside driven by year-end window-dressing. As for the fourth quarter, the KLCI was positive in 15 of those 21 years, with a strong average return of 7.4%. The best periods were in 1993, 1998 and 1999, when the benchmark rallied 49.4%, 56.9% and 20.3% respectively. On the opposite side of the scale, the index suffered doubledigit losses in 1994, 1997 and 2008, with falls of 14%, 27% and 13.9% respectively. Index up 7.4% on average in 4Q for past 21 years Technical Outlook [ 9 ]

12 Table 2 TA Securities A Member of the TA Group Nov 2011 trader s Compass Oct mom Nov mom Dec mom 4Q KLCI Index Sept Oct Nov Dec chg % chg chg % chg chg % chg chg % chg (27.0) (5.5) , , , , (20.9) (1.9) (95.7) (8.6) (41.9) (4.1) (158.6) (14.0) , (43.0) (4.3) (5.9) (0.6) (5.4) (0.5) , , , , (149.9) (18.4) (119.3) (17.9) (220.1) (27.0) (8.2) (1.1) (22.4) (3.0) (50.3) (6.9) (33.9) (4.7) (15.3) (2.5) (30.4) (4.6) (37.8) (4.6) (9.8) (1.1) (16.8) (1.8) (14.6) (1.6) (27.8) (3.0) , , , , , , (16.7) (1.2) , (155.1) (15.2) (141.9) (13.9) , , , , , , , , (20.4) (1.4) , , Average return Gain Loss Total Gain ratio Summary The recent sharp July to Sept correction on KLCI could represent downwave a, terminating at the 1,310 low on 26/9/11, while the strong October upswing should be the subsequent up-wave b, which could sustain towards year-end, with a peak likely by 1Q next year below 1,529, which ties in with the 1,525 peak of 14/1/08. The ensuing downwave c should then take the index down towards 1,293 (38.2%FR), 1,199 (50%FR) or 1,105 (61.8%FR) by mid 2012, to complete the a-b-c correction. As the bearish divergence position against the index and sell signal on the monthly MACD remains intact, there could be downside risk in the longer term. The 50-month moving average, currently at 1,279, must hold base to prevent deeper correction towards the 100-day moving average at 1,115. Given the strong recovery in October, the trading strategy for November should be to buy into sharp dips to stronger retracement supports, to profit from a year-end recovery. On blue-chip stock picks for November, please refer to the updated list of the FTSE Bursa Malaysia KLCI (FBM KLCI) Index 30 component stocks, with 10 of them highlighted with corresponding charts on the following pages. KLCI up-wave b peak likely below 1,529 by 1Q 2012 Monthly MACD sell signal intact, key support at 1,279 on correction Maintain Buy on Sharp Dip for Year-End Recovery Technical Outlook [ 10 ]

13 TA Securities A Member of the TA Group Nov 2011 trader s Compass Technical View on Key US and Regional Indices The following is our technical outlook for the US Dow Jones Industrial Average (DJIA), Hong Kong s Hang Seng Index (HSI) and Singapore s FTSE Straits Times Index (FSSTI) for November All charts are updated to 31 October, Chart 1: DJIA DAILY 11, % 12,106 (23.6%FR) 23.6% 11,630 (38.2%FR) 38.2% 11,245 (50%FR) 50.0% 10,860 (61.8%FR) 61.8% 76.4% Neckline 100.0% 9,614 low (2/7/10) 11,451 high (5/11/10) Highest since June ,876 high (2/5/11) Fibonacci Fan Lines (FFL) 12,391 high (18/2/11) DJI (12,229.22, 12,229.29, 11,954.41, 11,955.01, ) 10,384 (76.4%FR) 200d SMA 10,604 low (9/8/11) 10,404 low (4/10/11) 0.382FFL 0.5FFL 100d SMA 0.618FFL 50d ma MACD ( ) Bullish expansion on daily MACD June July August September October November December 2011 February March April May June July August September October November December 2012 Despite breaking below the pivot lows of 10,604 (9/8/11) and 10,597 (22/9/11), the DJIA bounced back from 10,404 low on 4 Oct, just 20 points above the crucial 10,384 (76.4%FR)support, triggered by decisive action by EU leaders to curb debt contagion and better-than-expected economic data. The US stock market benchmark index surged to peak at 12,284 on 27 Oct, a three-month high matching the 0.5 Fibonacci Fan Line (FFL), reversing the daily MACD into bullish expansion mode. Strong rebound from 10,404 low reversed MACD to bullish mode Chart 2: DJIA WEEKLY 11, % DJI (12,229.22, 12,229.29, 11,954.41, 11,955.01, ) 14, (11/10/07) 13,780 high (Dec 2007) ,136 high (May 2008) 12,876 high (2/5/11) % 12,374 11,867 high (Aug 2008) 11,750 high (Jan 2008) % 11, % 10, wk SMA (10,623) ,708.4 (29/10/04) UTC fm 2003 low 61.8% 76.4% 8,294 9,422 Record 18% weekly loss 7, low (21/11/08) 30wk SMA (11,913) 50wk SMA (11,900) , low (11/10/02) 100.0% 6, low (6/3/09) MACD ( ) Weekly MACD flashed BUY signal Technical Outlook [ 11 ]

14 TA Securities A Member of the TA Group Nov 2011 trader s Compass On the weekly chart, while the MACD flashed a buy signal, resistance from 12,876 (May 2011 high) and 13,136 (May 2008 high) should cap upside, with profit-taking retracement anticipated to bring down the index to consolidate above revised supports at 11,630 and 11,245, the respective 38.2%FR and 50%FR on the daily chart. Upside Capped by 12,876 & 13,136, Supports at 11,630 & 11, Chart 3: HSI DAILY 19, HSI (20,027.72, 20,155.62, 19,699.33, 19,864.87, ) ,988 high (8/11/10) 100.0% % 200d SMA 22,907 (76.4%FR) % 21,620 (61.8%FR) 100d SMA 0.618FFL % 38.2% 23.6% 20,579 (50%FR) 19,538 (38.2%FR) 18,251 (23.6%FR) Fibonacci Fan Lines (FFL) 18,868 low (9/8/11) 50d ma 0.5FFL 0.382FFL % 16,170 low (4/10/11) MACD ( ) Daily MACD turn bullish September October November December 2011 February March April May June July August September October November December 2012 The HSI suffered a sell-off to low of 16,170 on 4 Oct, the lowest level seen since May 2009, prior to a bullish reversal which saw the index climb back to trade at early-september levels. While the daily MACD has turned bullish, the index is not out of the woods yet, with resistance from 20,579 (50%FR), 21,620 (61.8%FR) and 200-day moving average capping upside. Resistance From 20,579 (50%FR) & 21,620 (61.8%FR) Technical Outlook [ 12 ]

15 TA Securities A Member of the TA Group Nov 2011 trader s Compass Chart 4: HSI WEEKLY 19, % HSI (20,027.72, 20,155.62, 19,699.33, 19,864.87, ) 31,958 all-time high (Oct 2007) Fibonacci Fan Lines (FFL) % 26, FFL % 23, FFL FFL % 21, % 15, % 18,806 30wk SMA 50wk SMA (22,025) 200wk SMA (20,497) wk SMA (21,140) % 10,918 low (May 2004) 10,676 low (27/10/08) ,331 low (April 2003) MACD ( ) Fresh buy signal on weekly MACD On the weekly HSI chart, a fresh buy signal on MACD supports further upside, but a breakout above the 200-week moving average at 20,497, and 21,317 (50%FR) is needed to sustain and strengthen the recovery. A pullback is likely after enjoying a strong 12.9% gain in October, with key retracement support at 18,806 (61.8%FR). Pullback Likely, Key Retracement Support at 18,806 (61.8%FR) Chart 5: STI DAILY 2, STINDEX (2,903.97, 2,903.97, 2,855.77, 2,855.77, ) ,313 high (9/11/10) % % 3,127 (76.4%FR) 200d ma % 50.0% 2,918 (50%FR) 3,011 (61.8%FR) 0.618FFL 100d ma % 2,824 (38.2%FR) 0.5FFL % 2,709 (23.6%FR) 2,680 low (22/8/11) 50d ma 0.382FFL % 2,521 low (5/10/11) MACD ( ) Daily MACD turn positive October November December 2011 February March April May June July August September October November December Technical Outlook [ 13 ]

16 TA Securities A Member of the TA Group Nov 2011 trader s Compass The Singapore STI slid to a low of 2,521 by 5 Oct, the lowest since August 2009, before reversing course and gained strength to test the 0.5 FFL and 100-day moving average resistance areas by month-end. Even as technical indicators have reversed to bullish mode, watch for resistance from 2,918 (50%FR) and 3,011 (61.8%FR), matching the 200-day moving average, to cap upside. 2,918 (50%FR) & 3,011 (61.8%FR) to Cap Upside Chart 6: STI WEEKLY 2, % 3,906 all-time high (Oct 2007) STINDEX (2,903.97, 2,903.97, 2,855.77, 2,855.77, ) 3,621 high (Dec 2007) FFL 0.50 FFL % 38.2% 2,923 3, FFL % 61.8% 2,363 2,643 50wk SMA (3,038) % 1,690 low (May 2004) 100.0% 2,016 Fibonacci Fan Lines (FFL) 200wk SMA (2,724) 1,473 low (28/10/08) 1,455 low (10/3/09) 30wk SMA (2,971) ,205 low (March 2003) MACD ( ) Early buy signal on weekly MACD On the weekly chart, the significant rebound back above 2,643 (50%FR) and 200-week moving average is positive, with these levels acting as important support points going forward. The other key support would be the 5 Oct pivot low of 2,521. The weekly MACD has hooked up to trigger an early buy signal, improving the technical outlook. 2,643 (50%FR) & 2,521 low as Key Supports Technical Outlook [ 14 ]

17 TA Securities A Member of the TA Group Nov 2011 trader s Compass Blue Chip Picks for Nov 2011 Listed below is the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) 30 component stocks sorted by market capitalization in descending order, which represent above 70% of the total market cap of the FTSE Bursa Malaysia 100 Index. Stocks with their statistics in bold reflect our blue chip picks for November 2011, with more details and corresponding charts in the following pages. Stock Close Bollinger Bands RSI Moving Averages DMI MACD DMI MACD Name 31-Oct Lower Mid Upper 14d 10d 30d 50d DI + DI - ADX Diff Line Signal Diff Recent Signal KLCI BUY BUY MAYBANK BUY BUY PBBANK BUY BUY CIMB BUY BUY SIME (24.01) SELL BUY AXIATA (4.00) SELL BUY GENTING BUY BUY IOI CORP (16.32) SELL BUY TNB BUY BUY DIGI BUY BUY PCHEM BUY BUY AMMB BUY BUY MAXIS BUY BUY KLK (32.60) SELL BUY TM BUY BUY MISC (15.37) SELL BUY PET GAS (15.59) SELL BUY GENM BUY BUY PPB GROUP (5.04) SELL BUY PLUS BUY BUY HL BANK (0.43) SELL BUY BAT BUY BUY YTL CORP BUY BUY GAMUDA BUY BUY UMWH (0.01) BUY SELL YTLPOWER BUY BUY PET DAG BUY BUY HLFG (7.72) SELL BUY RHBCAP BUY BUY MMC CORP BUY BUY MMHE BUY BUY INTERPRETATION OF TECHNICAL INDICATORS: Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. buy when price touches the middle band and sell when price touches the upper band. Momentum traders tend to buy on price breakouts above the upper band, and sell when price breaks down below the lower band. 14-day Relative Strength Index (RSI): A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30-day moving average should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day average is bearish and imply further near-term downside risk. Moving Averages: A stock s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day average, and negative if it remains below. A longer-term uptrend is intact if share price sustain above the 50-day average, and is deemed broken if it breaches below this level. Directional Movement Indicator (DMI): The DMI is an indicator of trend strength. A positive DMI difference (DMI diff) value is bullish and indicate a higher DI+ vs. DI-, while a negative DMI diff is bearish due to a lower DI+ vs. DI- (DMI diff = DI+ minus DI-). A crossover of DI+ above DI- triggers a BUY signal, while a SELL signal is flashed when the DI+ crosses below the DI-. The Average Directional Movement Index (ADX) indicates the strength of a trend, whether it is up or down. The higher the value of ADX, the stronger the trend. An ADX value above 25 suggests a trending market or stock, while a value below 20 signal congestion or absence of trend. Daily Moving Average Convergence Divergence (MACD): The MACD diff value is derived from the difference between the MACD line (the 12-day EMA minus the 26-day EMA) and the MACD signal line (the 9-day EMA of the MACD). A positive MACD diff value is bullish, while a negative MACD diff is bearish. A BUY signal is generated when the MACD diff rises above zero, and SELL signal sparked when the MACD diff value falls below zero. Blue Chip Picks [ 15 ]

18 TA Securities A Member of the TA Group Nov 2011 trader s Compass MAYBANK RM8.36 BOLLINGER BANDS SIMPLE MOVING AVERAGES Upper RM day RM 8.28 Middle RM day RM 8.19 Lower RM day RM 8.38 DMI DAILY MACD Recent Signal BUY Recent Signal BUY CIMB RM7.57 BOLLINGER BANDS SIMPLE MOVING AVERAGES Upper RM day RM 7.29 Middle RM day RM 7.09 Lower RM day RM 7.23 DMI DAILY MACD Recent Signal BUY Recent Signal BUY Blue Chip Picks [ 16 ]

19 TA Securities A Member of the TA Group Nov 2011 trader s Compass GENTING BHD RM10.76 BOLLINGER BANDS SIMPLE MOVING AVERAGES Upper RM day RM Middle RM day RM 9.51 Lower RM day RM 9.57 DMI DAILY MACD Recent Signal BUY Recent Signal BUY PCHEM RM6.45 BOLLINGER BANDS SIMPLE MOVING AVERAGES Upper RM day RM 6.18 Middle RM day RM 5.82 Lower RM day RM 6.02 DMI DAILY MACD Recent Signal BUY Recent Signal BUY Blue Chip Picks [ 17 ]

20 TA Securities A Member of the TA Group Nov 2011 trader s Compass AMMB RM5.97 BOLLINGER BANDS SIMPLE MOVING AVERAGES Upper RM day RM 5.89 Middle RM day RM 5.85 Lower RM day RM 6.06 DMI DAILY MACD Recent Signal BUY Recent Signal BUY TM RM4.24 BOLLINGER BANDS SIMPLE MOVING AVERAGES Upper RM day RM 4.23 Middle RM day RM 4.15 Lower RM day RM 4.17 DMI DAILY MACD Recent Signal BUY Recent Signal BUY Blue Chip Picks [ 18 ]

21 TA Securities A Member of the TA Group Nov 2011 trader s Compass GENTING MALAYISA RM3.85 BOLLINGER BANDS SIMPLE MOVING AVERAGES Upper RM day RM 3.71 Middle RM day RM 3.55 Lower RM day RM 3.51 DMI DAILY MACD Recent Signal BUY Recent Signal BUY GAMUDA RM3.40 BOLLINGER BANDS SIMPLE MOVING AVERAGES Upper RM day RM 3.20 Middle RM day RM 2.99 Lower RM day RM 3.02 DMI DAILY MACD Recent Signal BUY Recent Signal BUY Blue Chip Picks [ 19 ]

22 TA Securities A Member of the TA Group Nov 2011 trader s Compass RHB CAP RM7.70 BOLLINGER BANDS SIMPLE MOVING AVERAGES Upper RM day RM 7.37 Middle RM day RM 7.28 Lower RM day RM 7.78 DMI DAILY MACD Recent Signal BUY Recent Signal BUY MMHE RM6.30 BOLLINGER BANDS SIMPLE MOVING AVERAGES Upper RM day RM 6.06 Middle RM day RM 5.78 Lower RM day RM 6.09 DMI DAILY MACD Recent Signal BUY Recent Signal BUY Blue Chip Picks [ 20 ]

23 Major Events (October) November 2011 trader scompass Oct Bumi Armada Bhd won a RM1.46bn contract from Australia's Apache Energy Ltd. to supply and operate a floating, production, storage and offloading vessel for the Australian firm Oct a. San Miguel Corp said it is in discussions to sell a stake in Bank of Commerce, a Philippine lender, to CIMB Group Holdings Bhd. b. The European Central Bank unveiled new measures to support banks and prevent a credit crunch from sweeping the euro zone, but stopped short of cutting interest rates to spuran anemic economy, citing too high inflation Oct The government announced a people centric 2012 Budget worth RM232.8bn that strives to achieve GDP growth of 5% to 6% with a lower deficit of 4.7% Oct Mah Sing Group Bhd partnered with a Chinese firm to build three towers at its RM408mn Icon Residence Mont' Kiara project in Mont' Kiara, Kuala Lumpur Oct Sime Darby Bhd is not obliged to make a mandatory general offer for Eastern & Oriental Bhd, following a review by the Securities Commission Oct The U.S. Senate passed a bill aimed at punishing China for keep ing the Yuan undervalued Oct The Malaysian Institute of Economic Research has cut its 2011 economic growth forecast to 4.6 percent, which is below the government's target, due to slower exports Oct Leader Universal Holdings Bhd received a buyout offer valued at RM480.1mn (RM1.10/share) from HNG Capital Sdn Bhd for the entire business of Leader Oct China's economy grew 9.1% in the third quarter from a year earlier, the slowest pace since 2009, driving stocks lower on concerns that Europe's debt crisis is dragging on the global recovery Oct The KLCI slumped to an extreme low of 1, due to late program selling on selected blue chips, before rebounding to close 2.35 points lower at 1, Oct EU leaders agreed to boost the lending capacity of the Euro pean Financial Stability Facility (EFSF) to 1tn Euros (USD1.4tn) and bondholders reached an agreement to take a 50% haircut on Greek debt Oct US 3Q11 GDP rose at a 2.5% annual rate, higher than the 1.3% pace in 2Q Oct Tenaga Nasional Bhd's FY11 net profit plunged 84% to RM499.5mn mainly due to higher fuel costs Oct RHB Capital Bhd and OSK Holdings Bhd have secured Bank Negara Malaysia's approval to commence negotiations for a possible merger between RHB Banking Group and OSK Investment Bank Bhd. MajorEvents [21]

24 Corporate Earnings Summary - Stocks Analysis Corporate Earnings Summary - Stocks Analysis Recom. Share Target % Net Earnings EPS EPS Growth PER Gross Div Div Yield NTA/ Price / Debt/ Mkt Company FYE (***) Price Price upside (RMm) (sen) (%) (X) (sen) (%) Shr NTA Equity Cap. (RM) (RM) FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 FY11 FY12 FY11 FY12 (RM) (X) (x) (RMm) AUTOMOBILE EPMB Dec Buy % na MBM Dec Sell % (43) 112 (14) PROTON Mar Sell % (23) (4) nm nm (36) (51) na ,472 UMW Dec Sell % (34) 76 (5) ,746 TA Securities AMemberoftheTAGroup [ 22 ] BANKS & FINANCIAL SERVICES AFG Mar Buy % (40) ,449 AMMB Mar Buy % 861 1,009 1,343 1, ,995 CIMB Dec Sell % 2,807 3,521 3,846 4, ,266 HLBANK Jun Buy % 905 1,009 1,135 1, ,927 MAYBANK Dec Buy % 692 3,818 6,615 5, (76) (22) ,518 PBBANK Dec Hold % 2,517 3,048 3,370 3, (2) ,926 RHBCAP Dec Buy % 1,201 1,420 1,580 1, ,878 FINANCIAL SERVICES BURSA Dec Buy % (36) ,610 CONSTRUCTION GAMUDA Jul Sell % (40.4) ,023 IJM Mar Sell % (44.2) 14.6 (3.4) ,840 NAIM Dec Buy % (42.2) TRC Dec Buy % (40.2) (39.4) WCT Dec Buy % (4.0) ,092 LITRAK Mar Buy % (2.5) (15.8) ,752 Building Materials LEADER Dec Buy % (18) (7) MELEWAR Jun Sell % (156) (69) na na (91) 509 na (***) : Strickly Based on Total Return defined in the Definition of Recomendations section. Call may vary from the last published report. November 2011 trader scompass

25 Corporate Earnings Summary - Stocks Analysis [ 23 ] Corporate Earnings Summary - Stocks Analysis Recom. Share Target % Net Earnings EPS EPS Growth PER Gross Div Div Yield NTA/ Price / Debt/ Mkt Company FYE (***) Price Price upside (RMm) (sen) (%) (X) (sen) (%) Shr NTA Equity Cap. (RM) (RM) FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 FY11 FY12 FY11 FY12 (RM) (X) (x) (RMm) CONSUMER Brewery CARLSBG Dec Buy % (0) ,166 GUINESS Jun Hold % ,257 Retail AEON Dec Sell % ,457 AMWAY Dec Buy % (24) ,447 COCOLND Dec Sell % (52) F&N Sep Sell % (28) ,129 KFC Dec Buy % ,753 NESTLE Dec Sell % ,819 QL Mar Buy % (48) ,380 Tobacco BAT Dec Hold % (8) (2) (9) ,220 JTINTER Dec Buy % (2) ,663 TA Securities AMemberoftheTAGroup EDUCATION SEG Dec Buy % GAMING Casino GENTING Dec Buy % 1,044 2,203 2,731 2, ,973 GENM Dec Sell % 1,450 1,374 1,468 1, (5) ,799 NFO BJTOTO Apr Buy % (8) (17) (0.1) (30.0) 1.2 5,769 HEALTHCARE KPJ Dec Buy % ,437 YSPSAH Dec Hold % na (***) : Strickly Based on Total Return defined in the Definition of Recomendations section. Call may vary from the last published report. November 2011 trader scompass

26 Corporate Earnings Summary - Stocks Analysis Corporate Earnings Summary - Stocks Analysis Recom. Share Target % Net Earnings EPS EPS Growth PER Gross Div Div Yield NTA/ Price / Debt/ Mkt Company FYE (***) Price Price upside (RMm) (sen) (%) (X) (sen) (%) Shr NTA Equity Cap. (RM) (RM) FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 FY11 FY12 FY11 FY12 (RM) (X) (x) (RMm) INDUSTRIAL Rubber Glove Manufacturing SUPERMX Dec Buy % (37) ,258 TOPGLOV Aug Sell % (54) ,653 Manufacturing & Packaging JADI Dec Buy % (33) FIBON May Hold % (52) KIANJOO Dec Buy % (33) SCIENTX July Buy % (18) TA Securities AMemberoftheTAGroup [ 24 ] INSURANCE ALLIANZ Dec Buy % KURASIA Dec Buy % na (87) MEDIA AMEDIA Dec Buy % na na na na na MEDIA PRIMA Dec Sell % (67) 380 (11) ,712 STAR Dec Buy % (9) ,371 OIL & GAS KENCANA Jul Buy % ,152 KNM Dec Buy % (55) (21) ,442 MHB Mar Sell % ,080 PANTECH Feb Buy % (18) (42) PCHEM Mar Buy % 2,857 2,994 3,745 4, (28) ,600 PERISAI Dec Buy % (70) PENERGY Dec Buy % (64) (83) PERDANA Dec Buy % 29 (71) (16) 2 9 (78) na na na PETDAG Mar Buy % , ,193 PETGAS Mar Buy % 1,001 1,374 1,474 1, ,921 SAPCRES Jan Buy % (2) ,183 TGOFFS Dec Buy % (92) (***) : Strickly Based on Total Return defined in the Definition of Recomendations section. Call may vary from the last published report. November 2011 trader scompass