Analyst calls for June 20
KUALA LUMPUR, June 20 — This is a selection of morning calls by local research houses for the day.
From RHB Research
Sector Outlook: Auto
Auto sales recorded its best month for the year to date. Malaysian Automotive Association (MAA) data show May TIV of 58,299 units that is 22.1 per cent and 26.6 per cent up mom and yoy respectively. Cumulative TIV for YTD May reached 244,579 units that is still down 4.2 per cent yoy.
The improved sales were due to the gradual normalisation of supplies, recent new launches of attractive new models, in addition to the gradual adaptation to the new stricter financing rules as loan approval process times improve.
While all the key marques reported improved sales, the bulk of the mom improvement can be attributed to stronger deliveries of Proton and Perodua vehicles that gained 42.2 per cent and 23.1 per cent mom respectively. Toyota remained the star performer with another strong month as cumulative sales reached 35,804 units (+16.9 per cent yoy) that is on track to meet our 2012 forecast of 102,000 units. The new Camry (launched 1 Jun) will also lift sales going forward.
The sales recovery is in line with expectations with YTD May TIV reaching 40 per cent of our 2012 TIV forecast of 612,000 units (+2 per cent yoy). We expect the sales recovery to continue in the coming months with YTD Jun TIV likely to show yoy gains.
We reiterate our Outperform calls on UMW, MBM and DRB-HICOM.
From OSK Research
FKLI: On Towards 1,600 pts
Our positive bias despite the lower close on Monday was not off the mark, as the index closed firmer yesterday. It formed a “Long White Day”, closing convincingly above the 1,583.50 resistance level. This surely ended the 2-month series of lower highs at 1,606, 1,585 and 1,582 pts, which began after the false breakout at the 1,600 psychological level in early April. It is also comfortably above the 50-day MAV line and the rising 200-day MAV line, which is reinforced by the longer term positive “Golden Cross” that emerged in February.
Thus, the upward bias from the two “Long White Day” in the past 3 days should be supportive and propel the index higher. Strong resistance is now at the 1,600 pts psychological level, which needs to be violated to fully erase the negative bias of the 2-month correction. This will be the third test of the psychological level since last July and a successful violation will see the continuation of the rally since the lows of Mar 2009. However, a failure to break the major resistance should bring about a return in selling. The first support is the broken resistance of 1,591 pts, and a very strong market should not see this level violated. Further supports are at 1,583.50 pts, Monday’s low of 1,576 pts and a stronger one at 1,570 pts.
* 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.
