Analyst calls for June 6
KUALA LUMPUR, June 6 — This is a selection of morning calls by local research houses for the day.
From HwangDBS Vickers
Amid the light trading volume – which stood at just 638m shares yesterday – the FBM KLCI could move up and down swiftly for the time being. And following yesterday’s mild technical rebound, the benchmark index may swing sideways as it strives to pull away from the immediate support level of 1,555 ahead.
This comes as key US equity indices rose between 0.2 per cent and 0.7 per cent last night on better economic reports. Talking about the economy, we will get an update in Malaysia when the external trade data for Apr is released later today.
On the corporate front, investors will probably find added interest today in: (a) Berjaya Sports Toto, after it has proposed to list the Malaysian gaming business in the form of a business trust in Singapore (that may include a special dividend payment of as much as 50 sen per share; and (b) Bumi Armada, which has won an oil & gas charter contract in Turkmenistan for an undisclosed amount.
From RHB Research
Sector Update
Semicon – Recovery On Track Despite Looming Dark Clouds Overweight
Sector Update
Unisem – (Fair value is RM1.84 based on 1.2x forward FY12 P/BV) Outperform
MPI – (Fair value is RM4.08 based on 1.2x forward CY12 P/BV) Outperform
Notion Vtec – (Fair value is RM1.38 based on 9x CY12 FD EPS) Outperform
Recent economic data were not impressive to say the least, but we believe economic growth remains sustainable given that any Eurozone break-up could be limited whereas China has adequate policy initiatives to boost the economy. Thus, we believe these factors should provide support to the sector’s recovery.
Already, we see positive signs as Apr 12 global chip sales of USUS$24.1 were down 2.9 per cent yoy but improved from Mar 12 decline of 8.0 per cent yoy which suggests that the global chip sales is getting positive.
In the same vein, we understand most major tech players have reiterated positive revenue guidance for 2Q2012. More importantly, ASE and SPIL have stick to its revenue guidance for 2Q2012 of 15 per cent and 7-11 per cent respectively.
From OSK Research
DAILY TRADING STOCKS: MISC, PNH, KUAB, MYEG, SCB, CSL, AMRB, AXRB
TECHNICAL ANALYZER: FKLI & FCPO
The negative bias that took over last Friday is still exerting its influence on the index, despite the higher close yesterday. Weakness was underlined by the failure of the index to close above the 1,560-pt resistance level, after trading above this level yesterday, thus leaving Monday’s gap uncovered. The index also remains below the 50-day MAV line. This keeps the 2-month correction (that started from the false breakout at 1,600 pts in early April) going, with the series of lower highs at 1,606, 1,585 and 1,582 pts. 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: Dow Jones Industrial Average
The weak bias derived from the “Flag” pattern of late-May was spot on, as the index broke below the 12,300-pt support level last Friday on a “Long Black Day”. This confirms the false break of the 12,500-pt resistance level last week and extends the down move, arising from the failed test of the 13,300-pt resistance level in early May. The declining 50-day MAV line is confirming this trend too and the index is also below the 200-day MAV line, which could lead to a change in the current 3-year uptrend. Nonetheless, selling took a break in the past 2 days, as seen from the latest 2 “Dojis”, with the index now finding support at the 12,000-pt psychological level.
* 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.
