Analyst calls for June 5
KUALA LUMPUR, June 5 — This is a selection of morning calls by local research houses for the day.
From HwangDBS Vickers
Alam Maritim
Alam announced that Alam Radiance (L) Inc, its 50:50 JV with the Singapore-based Pacific Radiance Group, will acquire a 402-men accommodation work barge identified as Crest Station 3 for US$31.55m (~RM94.65m) from Pacific Crest Pte Ltd, a 100 per cent-owned subsidiary of Pacific Radiance Group.
We maintain our earnings forecast at this juncture as we have imputed 80 per cent vessel utilization in FY12. Alam’s earnings may be dogged by project delays and margin pressure going forward given the stiff competition, especially for its underwater services. Reiterate our Hold call with RM0.55 TP.
Genting Malaysia
GENM’s subsidiary Genting New York (GENNY) will not proceed with a binding MOU to develop an integrated mixed-use complex next to Resorts World at New York. The State of New York announced that the parties were unable to agree on mutually acceptable terms and will bid out the convention centre proposal (already started talking to other gaming companies). GENNY also announced that "the uncertainties and difficulties regarding the constitutional amendment, competitive landscape, tax rate and infrastructure support made any decision difficult" but GENNY will participate in the bid process for the convention centre when it is announced.
There will be minimal impact on our earnings estimates and sum-of-parts as we have yet to factor in any contribution from RWNY Phase 2. We have stated previously that the approval of table games in New York remains a long shot as: a) legislature changes could take a while, especially with strong opposition from tribal casinos & pari-mutuels; and b) intense competition from other large casino operators (eg Las Vegas Sands, Wynn Resorts, MGM).
Maintain Hold on GENM and TP of RM4.10, based on sum-of-parts.
From RHB Research
Banking Sector Update
The results of the banks were slightly ahead of our expectations in the recent 1QCY12 reporting quarter with two banks reporting stronger-than-expected results mainly due to lower-than-expected loan impairment allowances while the remaining five banks reported results that were within expectations. As compared to consensus, Affin’s results were ahead of expectations while the rest were in line. The trends were similar with the previous quarter, with lower-than-expected loan impairment allowances being the key variance to the stronger-than-expected results.
Generally, there were no major downward revisions in targets with the banks expecting 2H12 to be a stronger period, supported by the ETP.
Maintain Neutral stance on the sector with Maybank and Public Bank as our top picks.
From OSK Research
Technical analyzer: FKLI & FCPO
The weakness seen last Friday as indicated by the false crossover of the 50-day MAV line was confirmed by the lower close yesterday. The index gapped and closed below the 1,560 support level, highlighting the weak bias. This extends the correction that started from the false breakout at 1,600 pts in early April, adding last week’s high of 1,582 pts to the series of lower highs of 1,606 and 1,585 pts in the past 2 months. Nonetheless, the index is above the 200-day MAV line, which indicates that the longer-term trend is still up. This is also reinforced by the longer-term positive indication of a “Golden Cross” that emerged in February.
Technical analyzer: Comex gold futures – long white day
The commodity recorded remarkable gains last Friday, rising nearly 4 per cent to close at the highest in a month. Such “Long White Day”, which came after another “Long White Day” of 17 May and “Hammer” of 30 May, should at least confirm the start of a rebound. This also indicates the holding of the 8-month medium-term support of USD1,535 and this could signal that the longer-term uptrend is still not over yet as the series of higher lows charted since 2008 stays intact. Nonetheless, further positive developments must take place to stem the decline since the formation of a “Long Black Day” on 29 Feb. The 3-month downtrend line that connects the series of lower highs on 12 March, 27 March, 12 April, 1 May, and the latest one at last week’s high of USD1,629 is still intact. The commodity has remained below the important 100-day MAV line too.
* 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.
