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

Transcription

1 MARKET NEWS FBMKLCI CHART The FBMKLCI was up 3.92pt (+0.23%) to close at 1, yesterday, exhibited a technical rebound after six consecutive days of losses. The FBMKLCI s top gainers were Axiata Group (+2.7%), CIMB Group Holdings (+2.4%) and RHB Bank (+2.1%) while the top losers were Hong Leong Bank (-1.8%), IHH Healthcare (-1.5%) and Genting Bhd (-1.4%). In the broader market, gainers outpaced losers 546 to 360 with 338 counters unchanged. Turnover was 3.02b shares valued at RM2.33b. From a technical viewpoint, the FBMKLCI rebounded yesterday and formed a bullish candle, suggesting a potential reversal is on the cards. This is consistent with an uptick and a bullish crossover in RSI, suggesting a shift from selling to buying bias. Nevertheless, a positive follow-through needs to be established to validate the potential reversal as the index is still trading below 21-day EMA lines, indicating that weakness has not diminished yet. Moving forward we expect a positive upward movement along the long-term trendline. Support and resistance levels are as follows: Support: 1,679,1,667 Resistance: 1,700, 1,713 US markets closed at a new round of records on Wednesday as investors welcomed President Trump s conciliatory tone during his address to a joint session of Congress, despite a lack of details on his economic plans. Also, expectations for a rate hike by the Federal Reserve as early as mid-march have increased significantly. The DJIA gained 1.5% to settle at 21,115.55, the S&P500 added 1.4% to 2, and the NASDAQ Composite index gained 1.4% to 5, Rising stocks outnumbered declining ones on the NYSE by 2,187 to 1,048 and 33 ended unchanged. On the Nasdaq SE, 1,879 rose and 626 declined, while 111 ended unchanged. WHAT S IN THE PACK 4Q16 Results Review 4Q16 earnings affirm our view that corporate profits have troughed in 3Q16 and are staging a moderate recovery in Relevant investment themes include laggard large caps, infrastructurerelated, China FDI and E&E plays. Affin Holdings (AHB MK/HOLD/RM2.55/Target: RM2.65) While net credit cost is expected to normalise upwards sharply, management remains confident in sustaining the positive NIM trend as well as stronger loans growth. Raise our target price to RM2.65. Yinson (YNS MK/BUY/RM3.13/Target: RM3.75) Conditions are favourable for smooth execution of Ghana and Ca Rong Do FPSOs. By adhering to a winning formula of prioriting contract quality vs risks, Yinson will remain selective in securing new contracts. PCCS Group (PCCS MK) Technical BUY on breakout with 29.6% potential return BUY on breakout with a target price of RM0.655 and stop-loss at RM0.315 Yesterday, the share price closed above the BBI line to keep up the bullish momentum towards the previous resistance. Dataprep Holdings (DATA MK) Technical BUY with +31.3% potential return BUY with a target price of RM0.315 and stop-loss at RM Based on the daily chart, the price has penetrated the short term downtrend line and a buy signal has been given with Positive Directional Index (+DI) crossing above the Negative Directional Index (-DI). Excel Force MSC (EFM MK) Technical BUY on breakout with 16.4% potential return BUY on breakout with a target price of RM1.99 and stop-loss at RM1.51. Based on the daily chart, EFM s upside trend is intact if the price can penetrate the RM1.71 level. Source: Bursa Station KEY INDICES Prev Close Chg (%) YTD (%) DJIA 21, S&P 500 2, FTSE 100 7, CSI 300 3, FSSTI 3, HSCEI 10, (0.10) 9.51 HSI 23, JCI 5, (0.44) 1.25 KLCI 1, KOSPI 2, Nikkei , SET 1, TWSE 9, (0.78) 4.55 BDI (9.37) CPO (RM/mt) 2, (8.94) Nymex Crude (US$/bbl) (0.20) (3.08) TOP VOLUME Stock Price (RM) Chg (%) Vol ( 000) Dagang Nexchange ,029 Borneo Oil Bhd ,519 Bumi Armada Bhd ,712 Jag Bhd 0.13 (10.71) 69,159 Hibiscus Petroleum ,475 TOP GAINERS Stock Price (RM) Chg (%) Vol ( 000) Hb Global Ltd China Automobile ,614 Pccs Group Bhd Ta Win Holdings Bhd Censof Holdings Bhd ,982 TOP LOSERS Stock Price (RM) Chg (%) Vol ( 000) Advance Information 0.28 (30.00) Compugates Holdings 0.03 (14.29) 6,400.0 Progressive Impact 0.17 (13.16) 1,819.3 Dgb Asia Bhd 0.04 (12.50) 50.0 G Neptune Bhd 0.04 (12.50) Source: Bloomberg w w w. u t r a d e. c o m. m y 1

2 TRADERS CORNER PCCS Group (PCCS MK) Technical BUY on breakout with +29.6% potential return Last price : RM0.39 Target price : RM0.525, RM0.655 Support : RM0.32 Stop-loss: RM0.315 BUY on breakout with a target price of RM0.655 and stop-loss at RM0.315 Yesterday, the share price closed above the BBI line to keep up the bullish momentum towards the previous resistance. This was supported by the MACD s bullish crossover and is consistent with the uptick in the RSI which suggests stronger buying momentum ahead. We peg our target prices at RM0.525 and RM0.655 once it manages to break the breakout level of RM Expected time frame: 2 weeks to 2 months Dataprep Holdings (DATA MK) Technical BUY with +31.3% potential return Last price : RM0.24 Target price : RM0.295, RM0.315 Support : RM0.21 Stop-loss : RM0.205 BUY with a target price of RM0.315 and stop-loss at RM Based on the daily chart, the price has penetrated the short term downtrend line and a buy signal has been given with Positive Directional Index (+DI) crossing above the Negative Directional Index (-DI). The ADX line shows a positive uptrend at this level. Currently, the MACD is on the verge of making a golden cross to the positive signal. We peg our targets at RM0.295 and RM0.315 in the near term. 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 Excel Force MSC (EFM MK) Technical BUY on breakout with +16.4% potential return Last price : RM1.68 Target price : RM1.94, RM1.99 Support : RM1.52 Stop-loss : RM1.51 BUY on breakout with a target price of RM1.99 and stop-loss at RM1.51. Based on the daily chart, EFM s upside trend is intact if prices can penetrate the RM1.71 level. Positive readings from the RSI show buying momentum has overcome selling momentum. This is supported by a bullish crossover in the DMI. We expect the stock price will continue the upward movement towards the all-time high at RM1.96 and our target at RM1.99 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 3

4 CORPORATE NEWS Bank Negara: Slams MyCC s decision to fine PIAM and its members. Bank Negara Malaysia has defended the General Insurance Association of Malaysia (PIAM) and its 22 members against the Malaysia Competition Commission s (MyCC) decision to fine them RM213.45mil for an anti-competitive agreement with a group of workshops. The proposed decision is most unfortunate as it will severely impact consumers interest. Public benefits are served by the arrangement that was mutually agreed between PIAM and the Federation of Automobile Workshop Owners Association of Malaysia (FAWOAM), the central bank said in a statement on Wednesday. The statement came in shortly after PIAM issued a statement asking MyCC to reconsider its proposed decision and the imposition of the financial penalty and saying it would seek legal advice to defend its position that the agreement with FAWOAM was not anti-competitive. (Source: The Star) HeiTech Padu: Signs RM41.87m agreement with PNB. HeiTech Padu Bhd has signed a RM41.9m contract with Permodalan Nasional Bhd (PNB) to provide managed wide area network (WAN) infrastructure for PNB and Amanah Saham Nasional Bhd. The supply, installation, commissioning, operation and maintenance contract is for a period of five years until Aug 31, 2021, said HeiTech Padu in a filing today. It said the deal is expected to have a positive effect on its earnings per share but will have no material effect on its dividend policy, gearing, share capital and the substantial shareholders' shareholding. (Source: The Edge Financial Daily) Matrix Concepts: Inks MoU with Changhua Christian Hospital. Matrix Concepts Holdings Bhd has inked a memorandum of understanding (MoU) with Taiwan-based Changhua Christian Hospital (CCH) for the proposed establishment of a medical and specialist healthcare service provider in Bandar Sri Sendayan, Negeri Sembilan, to be known as Matrix Global Specialist Center (MGSC). In a filing with Bursa Malaysia, Matrix said with the execution of the MoU, both itself and CCH have agreed, pursuant to the terms of the MoU, to jointly establish a joint working group for the review, feasibility study, construction and development of MGSC. It said the MoU shall take effect from today for a period of six months, with the option to extend its validity to a further six months, subject to a mutual agreement for such extension. (Source: The Edge Financial Daily) Petrol One Resources: Inks support services deal with Dalian. Petrol One Resources Bhd has secured a support services agreement for the Asia Petroleum Hub Terminal Facilities project in Tanjung Bin, Johor. In a filing with the bourse, Petrol One said the agreement was signed between its indirect wholly-owned subsidiary Petrol One Offshore Sdn Bhd (POOSB) and Dalian Jinzhou Heavy Machinery Co Ltd (DJHM). Under the contract, POOSB will provide a supply base measuring five acres on a plot of land located adjacent to the Port of Tanjung Pelepas in Johor, along with warehouse and logistic support, agency services and custom clearance, and marine support services. Meanwhile, DJHM will pay a fee for the support services at a rate of cost plus 5%. (Source: The Edge Financial Daily) Tiger Synergy: Aborted corporate proposals. Tiger Synergy Bhd has aborted its plan to undertake a series of corporate proposals, including a rights issue to raise as much as RM41.72 million. The property developer announced the decision in a bourse filing this afternoon. The proposals were announced on June 1 last year. The proposed rights issue involved issue of irredeemable convertible preference shares (ICPS) on the basis of three rights ICPS for every one existing share, to raise as much as RM41.72m for capital expenditure and working capital. (Source: The Edge Financial Daily) w w w. u t r a d e. c o m. m y 4

5 ECONOMICS General: Downgrades trumped upgrades by five to one in 2016, says RAM. Negative ratings over corporations and financial institutions still held reign in 2016, with downgrade ratings exceeding upgrades by five to one, said RAM Rating Services Bhd. However, it noted that the pace of downgrades slowed down compared to the previous two years, signaling the easing of credit deterioration amid nascent signs of a delicate economic recovery in the fourth quarter of "While downgrades may still ultimately exceed upgrades in 2017, we expect downgrades to be contained and the rating drift should gradually improve towards neutral territory by the end of 2017/2018," it added in a statement. RAM said the magnitude of rating downgrades was also less severe in 2016, with entities charting an average downgrade of 1.4 notches compared with 2.1 notches in (Source: The Edge Financial Daily) w w w. u t r a d e. c o m. m y 5

6 FROM THE REGIONAL MORNING NOTES... 4Q16 Results Review On The Mend 4Q16 results affirm our view that corporate earnings have troughed since 3Q16 and are staging a modest recovery in The breadth of pleasant surprises vs disappointments has improved significantly. We raise our end-17 FBMKLCI target to 1,750 from 1,720. We will still focus on the infrastructure, China FDI and E&E related investment themes. Top picks: Large -cap laggards Axiata, Gamuda, Tenaga, YTL Power, and mid-small caps Ann Joo, Inari and VS Industry. Affin Holdings: Lumpy Recoveries Driving Earnings Growth (AHB MK/HOLD/RM2.55/Target: RM2.65) While net credit cost is expected to normalise sharply upwards to the 15-20bp level in 2017 (2016: 4bp), management remains confident in sustaining the positive NIM trend as well as stronger loans growth. This has prompted us to raise our 2017/18 earnings forecasts by an additional 7%/6% respectively. Consequently, our TP is raised to RM2.65 (0.57x 2017F P/B, 5.9% ROE). That said, 2017 earnings are still expected to reflect a yoy contraction given 2016 s very low provision base. Maintain HOLD. Yinson: Adhering To Its Winning Formula Of Quality And Risk Mitigation (YNS MK/BUY/RM3.13/Target: RM3.75) Yinson s achievement of minimal outstanding issues during the Ghana FPSO sailaway is a major positive and a smooth execution to Aug 17 first oil. By adhering to its winning formula of prioritising contract quality and risk mitigation, Yinson will remain selective in new contracts. Also, conditions are favourable for the smooth execution of the Ca Rong Do contract by 3Q19. Potential upside beyond the 15-year firm charter for Ghana is not factored in. Maintain BUY. Target price: RM3.75. 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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