Analyst call for June 11
KUALA LUMPUR, June 11 — This is a selection of morning calls by local research houses for the day.
From HwangDBS Vickers
We will probably see a short-term boost in Asian equities today after the Eurozone has granted Spain access to a 100b Euros fund to shore up its banking system over the weekend. Reflecting the positive vibes, the DJIA Jun futures contract jumped to hover at a 150-pointpremium to the spot rate this morning.
The better external sentiment is expected to lift our Malaysian bourse too. On the chart, the benchmark FBM KLCI could rise towards the immediate resistance threshold of 1,580 ahead.
Among the stocks that may ride on the market strength today include: (a) Yinson Holdings, after a business weekly reported that its venture in Vietnam might be getting a US$700 million (RM2.1 billion) FPSO job; (b) ECM, which could pay bumper dividend of at least 60 sen per share following the sale of its investment banking & securities businesses to K&N Kenanga (according to one news article); and (c) Gas Malaysia, as it makes its debut listing on the Main Board this morning.
From RHB Research
We expect Gamuda’s 9MFY07/12 core net profit to come in at RM355-365m, and that will have met our forecast but trailed the market expectations. At RM355-365m, 9MFY07/12 core net profit will have grown 19-22 per cent year-on-year, underpinned largely by:
(1) Stronger construction profits on improved margins driven by more stable input costs; and
(2) Stronger property profits underpinned by recorded property sales over the last 1 - 2 years on the back of a property upcycle.
We do not expect Gamuda’s construction margins in 3QFY07/12 to substantially deviate from the normalised level of 10 – 15per cent at the EBIT level, taking the cue from the continued normalisation in margins of peer IJM in its just-released Jan-Mar 2012 results, thanks to the comparatively stable input cost environment.
Utilities – 1st Generation IPPs May Take A Deep Cut
The Edge, quoting industry sources, over the weekend reported that the 1st generation IPPs could see their PPA rates reduced by about 80 per cent.
This is not a clear cut positive for TNB since the Government may flow the savings to consumers either in the form of keeping electricity tariffs stable despite rollback in gas subsidies or by subsidising the purchase of LNG which will be imported at market prices.
In any case, should TNB reap all the savings in capacity payments, we estimate earnings to jump by 27 per cent/22 per cent/18 per cent in FY12/13/14. If YTL Power is successful in seeking a PPA extension, the share price may come under pressure as dividends may be cut.
From OSK Research
TECHNICAL ANALYZER: FTSE Bursa Malaysia KLCI
The index stayed firm above the 1,566 support level, having rebounded well from the lowest RSI reading in 8 months. This improves the chances for the index to scale higher but does not mark an end to the downward movement that was triggered by the formation of the negative “Evening Star” on 2 - 4 April. The 2-month downtrend line that connects the series of lower highs, at 1,610, 1,601, 1,591, and 1,582 points, remains unbroken. The line again acted as a firm resistance where the index failed last Thursday and Friday. Weakness is also marked by another false crossover of the 50-day MAV line last week. With the short-term series of lower highs, the only positive indication is the fact that the index is staying above the 200-day MAV line.
* These recommendations are solely the opinion of the respective research firms and not endorsed by The Malaysian Insider. The Malaysian Insider shall not be liable for any loss arising from any investment based on any recommendation, forecast or other information contained here.
