Business

Analyst calls for May 8

May 08, 2012

KUALA LUMPUR, May 8 — This is a selection of morning calls by local research houses for the day.

From HWANGDBS – Vickers:

Bumi Armada announced that it has been awarded a 5-year contract for its DP2 accommodation workboat, Armada Firman 3, estimated to be worth c.RM200m, by the Mexican-based Tecnologías Relacionadas con Energía y Servicios Especializados, S.A. de C.V. (TRESE). The contract is effective 7 May 2012 and comes with an extension option of 5 years.

Sime Darby: well balanced, cash rich

Buy for 22 per cent upside; TP raised to RM11.90. Any near-term downside is an opportunity to add to positions. Lower Indonesian FFB yield this year will be more than offset by higher Industrial contribution. FY12F-14F earnings raised 3-17 per cent on higher CPO prices.

IJM Plantations: Still waiting to grow

No near term catalyst on the horizon. Hold for 10 per cent upside over the next 12 months. 4QFY12 earnings expected to decline by 28 per cent q-o-q on account of 34 per cent sequential drop in CPO output. FY12F-14F earnings raised by 0-23 per cent on higher CPO forecasts.

MSM Malaysia: No surprises

1Q12 net profit of RM66.4m was within our and consensus’ estimates. Revenue growth was driven by higher export volume and ASP, but impact was mitigated by higher raw sugar prices. Maintain Fully Valued rating and RM4.15 TP.

From OSK Research:

FKLI: Below 50-day MAV line

The selling pressure detected last Friday intensified as the index closed lower yesterday. Weakness is underlined by the failure to close above 1,578.50 pts, the high of the gap created yesterday. A false breakout of the 50-day MAV line has likely occurred last week too, as the index closed back below the 50-day MAV line. Nonetheless, the upward bias from the “Long White Day” of last Wednesday is not erased. The candle keeps the series of higher lows since Sept 2011 intact, with the latest low at 1,560 pts. The index is well above the rising 200-day MAV line, which is also boosted by the longer-term positive indication of a “Golden Cross” that occurred back in February.

Thus, the index has to close below the “Long White Day” low of 1,565 today to confirm the return of selling. A close below the 1,560-pt support is then required to ascertain the continuation of selling that started in early April. Further support lies at the 50 per cent retracement of the Feb-April rally at 1,550 pts and the 62 per cent retracement level of 1,540 pts. Minor support is also expected at 1,570 pts, the low of yesterday.

However, a failure to break the 1,560 level in the coming days may signal the return of buying arising from the oversold daily RSI since Aug 2011. A close above 1,578.50 pts could see the index trading higher and resistance levels remain at the broken supports of 1,588.50 and 1,594 pts, also Fibonacci levels of the April decline. Again, a close above the psychological 1,600 pts is required to completely erase the negative bias of the false breakout above the 1,600 psychological level on 3 April.

* 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.

 

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