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Bursa Malaysia Daily Market Report - 12 July

Mohd Noordin
By Mohd Noordin
4 years ago
Bursa Malaysia Daily Market Report - 12 July

Ard, Mal, Commenda, Rub, Sales


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  1. Wednesday , 12 July, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED REPORTS’ News 1. Daily Market Commentary 2. Daily Brief Fundamental Reports 1. UMW Holdings Bhd: Fairly Valued for Now Technical Reports 1. Daily Technical Stock Picks 2. Daily Stock Screen 3. Foreign Technical Stock Watch (AUS, HK & FSSTI) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research
  2. Daily Note Daily Market Commentary (A Participating Organisation of Bursa Malaysia Securities Bhd) Menara TA One, 22 Jalan P Ramlee, 50250 Kuala Lumpur Tel : 603 - 2072 1277. Fax : 603 - 2032 5048 Wednesday, 12 July 2017 TA Research e-mail : [email protected] For Internal Circulation Only Review & Outlook KLSE Market Statistics (11.07.2017) Volume (mil) +/-chg (RMmn) Main Market 1,093.3 -4.7 1,953.9 Warrants 172.4 54.5 17.2 ACE Market 424.9 8.7 92.1 Bond 40.5 5.6 7.5 ETF 0.0 -0.01 0.0 Total 1,731.1 2,070.7 Off Market 21.3 -19.6 71.3 Value +/-chg 539.7 2.4 13.5 -0.1 -0.01 50.3 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP July Futures Other Markets DOW JONES NASDAQ (US) FTSE (UK) NIKKEI (JAPAN) KOSPI (KOREA) HANG SENG (HK) FSSTI (S'PORE) SET (BANGKOK) JCI (JAKARTA) SHANGHAI SHENZHEN AUSTRALIA Up Down 128 513 41 124 25 75 4 2 0 1 198 715 % chg % YTD chg -0.12 -0.26 -1.07 -0.31 6.90 8.92 16.49 7.40 1,755.03 12,488.94 17,141.83 1,756.50 -2.10 -31.99 -185.66 -5.50 21,409.07 6,193.31 7,329.76 20,195.48 2,396.00 25,877.64 3,218.80 1,569.24 5,773.33 3,203.04 1,891.60 5,728.93 0.55 0.00 16.91 0.27 -40.27 -0.55 114.50 0.57 13.90 0.58 377.58 1.48 -27.55 -0.85 -0.20 -0.01 1.82 0.03 -9.60 -0.30 -13.77 -0.72 4.49 0.08 Top 10 KLCI Movers Mkt Cap. Off Market (mn) PMETAL 10.0 BJASSET 2.0 BIMB 2.0 MLGLOBAL 2.0 BKAWAN 1.0 SIME 1.0 SWSCAP 1.0 ANZO-WC 1.0 Value/ Volume 1.79 0.10 0.22 0.19 1.07 1.20 3.35 @ @ @ @ @ @ @ @ (RM) 2.70 1.30 4.48 1.12 18.90 9.54 1.00 0.05 Exchange Rate USD/MYR 4.2975 0.0021 USD/JPY 114.33 0.1100 EUR/USD 1.140 0.0005 Counter Mkt Cap. (RM’mn) TENAGA 79,792 SIME 64,744 IHH 57,843 AXIATA 42,958 MAXIS 41,639 PETGAS 37,319 IOICORP 32,564 HLBANK 28,152 RHBBANK 20,130 AMBANK 15,071 8.33 15.05 2.62 5.66 18.24 17.62 11.73 1.70 9.00 3.20 -3.94 1.11 Based on Chg Vol. (RM) (mn) -0.02 10.84 -0.02 4.97 -0.14 25.82 -0.01 3.21 -0.05 5.54 -0.04 0.35 -0.08 0.98 -0.01 1.11 -0.05 1.10 -0.01 1.80 Commodities Futures Palm Oil (RM/mt) 2,565.00 -1.00 Crude Oil ($/Barrel) 45.76 1.21 Gold ($/tr.oz.) 1,217.00 3.30 The local market extended correction on Tuesday, with banks leading blue chip weakness, as continued profit-taking interest offset the regional rebound encouraged by strength in US tech stocks. The KLCI slid another 2.1 points to close at 1,775.03, after falling from 1,758.27 high to 1,752.74 low, as losers swarmed gainers 715 to 198 on higher total turnover of 1.73bn shares worth RM2.07bn. Given the weak technical picture, further correction can be expected to lessen bearish momentum, before a base building process can ensue. Immediate support stays at the 100-day moving average at 1,752, matching yesterday's low, with stronger support at 1,729, a key support level in April, while crucial uptrend support is from the 200-day moving average at 1,704. Immediate resistance for the index stays at the 50-day moving average (1,773), next 1,782, followed by the recent peak of 1,796. The weak chart pattern and bearish technical momentum on CIMB shares implied likely profit-taking correction towards the 123.6%FP (RM6.23), with stronger support from the 100-day ma (RM5.86) which mirror the prior March 2017 peak, while overhead resistance is from the 150%FP (RM6.69). Similarly, RHBBank shares should retrace to better retracement supports from the 61.8%FR (RM4.92) or 50%FR (RM4.72), while immediate overhead hurdles are from the 76.4%FR (RM5.18) and 100day ma (RM5.21). • • • • • • • • • • • • Important Dates TDM - 1:10 Bonus Issue - BI of 150.5m shares. 1 bonus share for every 10 existing shares. Entitlement Date: 03/07/2017. LISTING ON: 04/07/2017. SCC - 1:10 Bonus Issue - BI of 4.3m shares. 1 bonus share for every 10 existing shares. Ex-Date: 06/07/2017. Entitlement Date: 10/07/2017. LISTING ON: 11/07/2017. • • News Bites Malaysia will be compelled to reevaluate options on trade with France following the latter's plan to restrict the use of palm oil in biofuels, to reduce deforestation in the countries of origin. Nepal Rastra Bank, Nepal's central bank, has barred Axiata Group Bhd from repatriating its dividends until the issue of capital gains tax related to the Ncell deal is settled. WCT Holding Bhd announced that the disposal of the Ascent office tower building together with the elevated car park by its 70% owned joint venture Jelas Puri Sdn Bhd to the Employees Provident Fund Board, for RM347mn has been completed. Mudajaya Group Bhd has proposed a private placement of up to 10% of its issued shares at an indicative issue price of RM1.25 per placement share that could raise up to RM75.5mn to fund the construction of a new solar power plant. Boustead Heavy Industries Corp Bhd's subsidiary Boustead DCNS Naval Corp Sdn Bhd has been hit with liquidated damages claim totalling RM147.7mn from the Defence Ministry with regards to its Scorpene submarines support contract. DiGi.com Bhd has redesignated its current non-executive director, who was also its former chief executive officer, Lars-Ake Valdemar Norling as the new chairman. ML Global Bhd's 70% owned subsidiary, MGB Geotech Sdn Bhd, has bagged a RM68.1mn subcontract from Samling Ekovest JV Sdn Bhd to undertake piling works. UPA Corp Bhd would be awarded RM32.7mn by the government for the compulsory acquisition of three plots of land it owns. Far East Holdings Bhd is selling two plots of agricultural land collectively measuring 275.1 hectares in Pahang to TR Plantations Sdn Bhd for a total of RM8.2mn cash. Pasukhas Group Bhd had entered into a MoU with IR Hariyanto for the proposed acquisition of a 61% equity interest in the share capital of PT Indomuda Satria Internusa to further strengthen its involvement in power investment business and expand in Indonesia. Sealink International Bhd has bagged a charter contract for one of its safety standby vessels and is selling two ageing vessels for combined proceeds of RM52mn. Metronic Global Bhd has terminated its chief financial officer Eric Boon Chuan Kit in view of his deemed obstruction and compromising of the independency of a special audit to review certain projects and transactions undertaken by the group. MESB Bhd, the distributor of Alain Delon and Pierre Cardin apparel brands in Malaysia, has proposed to raise RM9.2mn via placement, which it plans to use for business expansion and working capital. Substantial reduction in trade between the European Union and the UK, following Brexit, could hurt the UK economy as it would force it to produce goods that are currently imported and raise costs, said Bank of England Deputy Governor Ben Broadbent. DISCLAIMER The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD Kaladher Govindan, Head of Research
  3. TA Securities Wednesday , July 12, 2017 FBMKLCI: 1,755.03 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Daily Brief Market View, News In Brief: Corporate, Economy, and Share Buybacks THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TA Research Team Coverage Market View Tel: +603-2072 1277 [email protected] www.taonline.com.my More Correction to Lessen Bearish Momentum The local market extended correction on Tuesday, with banks leading blue chip weakness, as continued profit-taking interest offset the regional rebound encouraged by strength in US tech stocks. The KLCI slid another 2.1 points to close at 1,775.03, after falling from 1,758.27 high to 1,752.74 low, as losers swarmed gainers 715 to 198 on higher total turnover of 1.73bn shares worth RM2.07bn. Key Supports at 1,752/1,729 Given the weak technical picture, further correction can be expected to lessen bearish momentum, before a base building process can ensue. Immediate support stays at the 100day moving average at 1,752, matching yesterday’s low, with stronger support at 1,729, a key support level in April, while crucial uptrend support is from the 200-day moving average at 1,704. Immediate resistance for the index stays at the 50-day moving average (1,773), next 1,782, followed by the recent peak of 1,796. Take Profit CIMB & RHBBANK The weak chart pattern and bearish technical momentum on CIMB shares implied likely profit-taking correction towards the 123.6%FP (RM6.23), with stronger support from the 100-day ma (RM5.86) which mirror the prior March 2017 peak, while overhead resistance is from the 150%FP (RM6.69). Similarly, RHBBank shares should retrace to better retracement supports from the 61.8%FR (RM4.92) or 50%FR (RM4.72), while immediate overhead hurdles are from the 76.4%FR (RM5.18) and 100-day ma (RM5.21). Asian Markets Higher as Investors Await Yellen Testimony Asian stock markets traded mostly higher on Tuesday, tracking overnight strength in U.S tech companies. Fed Government Lael Brainard was due to speak in New York on Tuesday, ahead of Chairwoman Janet Yellen’s testimony to congressional committees on Wednesday and Thursday. The testimony will be closely scrutinized for clues about when the Fed will again raise interest rates. The Nikkei shares average rose 0.57 percent to 20,195.48 as a weaker yen supported many export-oriented stocks. Meanwhile, Korean Kospi ended 0.58 percent higher to close at 2,396.00. In down under, the benchmark ASX200 ended higher by 0.08 percent to close at 5,728.90 with resources stocks among the best performers. China stocks ended mixed, with the blue-chip index hitting a fresh 18-month high as investors chased companies with solid fundamentals. The blue-chip CSI300 index rose 0.47 percent to 3,670.81 points, while the Shanghai Composite Index lost 0.3 percent to 3,203.04 points. Wall Street Flat as Politics Drive Stocks U.S stock markets went on a wild ride on Tuesday as traders debated the impact of emails released by Donald Trump Jr. Stocks fell sharply in late-morning trading after the emails cited Russian support for his father's 2016 election campaign. The market recovered later as U.S Senate Republican leader Mitch McConnell announced a two-week delay in the Senate's August recess to provide more time to work on legislation and approve nominees, signaling prospects of progress on the Republican agenda. The Dow eked out a slight gain after a brief Page 1 of 7
  4. TA Securities 12-Jul-17 A Member of the TA Group bout of selling sent it down more than 100 points . Energy stocks rose 0.5 percent in the S&P 500, leading gains, while U.S crude for August delivery added 1.4 percent to $45.04 a barrel. Upcoming congressional testimony from Federal Reserve Chair Janet Yellen could shed light on the pace of U.S. monetary tightening. Yellen will deliver her semi-annual monetary policy testimony before the House Financial Services Committee on Wednesday. The Dow Jones Industrial Average gained 0.55 points, to 21,409.07, the S&P 500 fell 1.90 points, or 0.08 percent, to 2,425.53 and the Nasdaq Composite rose 16.91 points, or 0.27 percent, to 6,193.31. Page 2 of 7
  5. TA Securities 12-Jul-17 A Member of the TA Group News In Brief Corporate Nepal Rastra Bank , Nepal’s central bank, has barred Axiata Group Bhd from repatriating its dividends until the issue of capital gains tax related to the Ncell deal is settled. As the custodian of the foreign exchange reserve, the central bank is authorised to issue the final approval for dividend repatriation. (The Himalayan Times) Comments: We are negative on the development, as it appeared that the issue had been resolved. Recall, of the 25% capital gains tax (CGT) owed by TeliaSonera, Ncell is responsible for the collection and deposition of advanced CGT at a rate of 15.0%. This had been concluded in June, with the group making an additional payment of US$133mn (RM571mn), to fulfill the required conditions. To date, it has made a total advanced deposit of US$227mn (RM975mn). In the event the group is required to pay the remainder 10%, we estimate Ncell would have to fork out an additional US$151mn (RM649mn). This may then result in a one-off expense to its earnings. We leave our earnings unchanged at this juncture. Maintain HOLD on Axiata with a TP of RM5.25/share. DiGi.com Bhd, Malaysia’s third largest mobile operator, has redesignated its current nonexecutive director, who was also its former chief executive officer, Lars-Ake Valdemar Norling as the new chairman. Norling replaces Morten Karlsen Sorby, who resigned from the current post, following organisational changes in Telenor ASA, which owns a 49% stake in DiGi and is the telco firm’s largest shareholder. (The Edge) IJM Corporation Bhd's wholly-owned subsidiary, IJM Land Bhd, has entered into a conditional share sale agreement with Aseania Development Sdn Bhd to acquire the entire issued shares of Giant Hectares Sdn Bhd (GHSB) for RM250,000. (Bernama) WCT Holding Bhd announced that the disposal of the Ascent office tower building together with the elevated car park by its 70% owned joint venture Jelas Puri Sdn Bhd (JPSB) to the Employees Provident Fund Board, for RM347mn has been completed on 11 July 2017. (Bursa Malaysia) Comments: The disposal was part of the group’s ongoing degearing exercises to strengthen the financial position of the company, its subsidiaries as well as JPSB. It was estimated that the exercise would incur share of losses of RM26.2mn, including expenses and taxes associated with the disposal. The sales proceeds would be utilised to reduce the borrowings of JPSB and to fund its ongoing development at Paradigm Petaling Jaya. No change to our earnings forecasts as the losses would be treated as exceptional items. Maintain SELL call on WCT with an unchanged target price of RM1.49/share. Far East Holdings Bhd is selling two plots of agricultural land collectively measuring 275.1 hectares in Pahang to TR Plantations Sdn Bhd for a total of RM8.2mn cash. (Bursa Malaysia) Mudajaya Group Bhd has proposed a private placement of up to 10% of its issued shares. At an indicative issue price of RM1.25 per placement share, representing a 9.4% discount to the stock’s 5-day volume weighted average market price, the private placement could raise up to RM75.5mn. The bulk of proceeds is intended to be utilised to fund the construction of a new solar power plant in Kuala Kangsar, Perak. (Bursa Malaysia) Boustead Heavy Industries Corp Bhd’s subsidiary Boustead DCNS Naval Corp Sdn Bhd has been hit with liquidated damages claim totalling RM147.7mn from the Defence Ministry with regards to its Scorpene submarines support contract. (The Star) ML Global Bhd’s 70% owned subsidiary, MGB Geotech Sdn Bhd, has bagged a RM68.1mn subcontract from Samling Ekovest JV Sdn Bhd to undertake piling works in the Bau–Lundu stretch and the KSR section in Sarawak under the Pan Borneo Highway project. (The Edge) Paper and printing machine seller UPA Corp Bhd announced that the government, via the Federal Territory Lands and Mines Office, has notified the group that it would be awarded RM32.7mn for the compulsory acquisition of three plots of land it owns. (The Edge) Page 3 of 7
  6. TA Securities 12-Jul-17 A Member of the TA Group Pasukhas Group Bhd (PGB) had entered into a memorandum of understanding with IR Hariyanto for the proposed acquisition of a 61% equity interest in the share capital of PT Indomuda Satria Internusa (PT Indomuda). PT Indomuda provides construction, coal mining production and trading, power plant development, and offshore and onshore drilling services in the Asia Pacific region. The proposed acquisition is intended to enhance and further strengthen PGB’s involvement in power investment business and to grant PGB the opportunities to expand its power investment business in Indonesia. (Bursa Malaysia) Kobay Technology Bhd announced that a RM2.9mn suit has been filed by NGL Tech Sdn Bhd against its wholly-owned unit, Bend Weld Engineering Sdn Bhd, over a dispute concerning the completion of residual work under a purchase order. (The Edge) Shipping group Sealink International Bhd has bagged a charter contract for one of its safety standby vessels and is selling two ageing vessels for combined proceeds of RM52mn. (The Edge) Metronic Global Bhd has terminated its chief financial officer Eric Boon Chuan Kit in view of his deemed obstruction and compromising of the independency of a special audit launched in May 2017 to review certain projects and transactions undertaken by the group. (Bursa Malaysia/The Star) Loss-making MESB Bhd, the distributor of Alain Delon and Pierre Cardin apparel brands in Malaysia, has proposed to raise RM9.2mn via placement, which it plans to use for business expansion and working capital. (The Edge) Page 4 of 7
  7. TA Securities 12-Jul-17 A Member of the TA Group News In Brief Economy Asia Malaysia May Reevaluate Trade with France Over Palm Biofuels Stand Malaysia will be compelled to reevaluate options on trade with France if the country keeps its stand on palm biofuels , said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong. He said this following the recent announcement by the French Minister of Environment, Nicholas Hulot, who suggested for measures be taken to restrict the use of palm oil in biofuels, to reduce deforestation in the countries of origin. “This has put pressure on the palm oil industry as well as the producer. “I believe that for trade between Malaysia and France to stay strong and grow, such attacks against the palm oil industry must stop,” he told reporters after officiating the Transfer of Technology Seminar and Exhibition 2017. Mah said the statement by the French Minister was largely misplaced, given that more than 65% of current European rapeseed oil production had been diverted for use as biofuels and other renewable energy associated applications. Malaysia, as a major palm oil producer and exporter had traditionally encouraged sustainable production of palm oil, and would adopt mandatory industry-wide sustainability certification through its own ISO benchmarked Malaysian Sustainable Palm Oil Standard. (The Star) Australia Business Conditions Strongest since 2008 A measure of Australian business conditions climbed to its highest since early 2008 in June as sales and profits picked up across a range of industries, another sign the economy had regained its feet after stumbling early in the year. National Australia Bank surveyed more than 400 firms to compile its index of business conditions which rose 4 points to +15 in June, and far above the long-run average of +5. The survey’s measure of business confidence added 1 point to +9, again beating the long-run average. Separately, the total number of home loans in Australia gained a seasonally adjusted 1.0% on month in May that missed forecasts for 1.5% following the 1.9% decline in April. Loans for the construction of new dwellings gained 2.4% at A$6.024bn, while loans for the purchase of new dwellings jumped 3.7% to A$2.886bn and loans for the purchase of established dwellings added 0.7% to A$45.152bn. (RTT News) Japan M2 Money Stock Increased by 3.9% The M2 money stock in Japan was up 3.9% on year in June, the Bank of Japan said - coming in at 976.6 trillion yen. That was in line with expectations and up from the downwardly revised 3.8% increase in May (originally 3.9%). The M3 money stock came in at 3.3%, shy of expectations for 3.4% but up from the downwardly revised 3.2% increase in the previous month. The L money stock was up an annual 3.1% to 1,695.3 trillion yen after gaining 2.8% a month earlier. For the second quarter of 2017, M2 was up 3.9%, while M3 added 3.3% and L gained 2.8%. (RTT News) Philippine Exports Rise Less than Expected in May Philippine exports increased at a slower-than-expected pace in May, preliminary figures from the Philippine Statistical Authority showed. Exports climbed 13.7% year-over-year in May, well below the 17.7% growth economists had expected. The positive growth was mainly attributed to the increases in seven major commodities out of the top ten commodities for the month, the agency said. Exports of electronic products, accounting for 50.0% of total exports, expanded by 17.8%. Imports surged 16.6% in May from a year ago, much faster than the expected increase of 2.2%. As a result, the visible trade deficit of the country widened to $2.75 billion in May from $2.24 billion in the corresponding month last year. (RTT News) United States Job Openings Dropped in May as Hiring Rate Increased The pace of hiring rose in May while the number of job openings dropped but remained near a record level, the latest sign that the labor market has continued to exhibit signs of strength in the second quarter of the year. The hiring rate climbed to 3.7% in May from 3.5% the prior month, according to the Labor Department’s monthly Job Openings and Page 5 of 7
  8. TA Securities 12-Jul-17 A Member of the TA Group Labor Turnover Survey , known as Jolts. May’s figure remains below the hiring rates that were reached in late 2015 and early 2016. There were about 5.7 million job openings at the end of May, down from about 6 million at the end of April. About 5.3 million people left a job, and 5.5 million people were hired in May. Both numbers were up from April. The Jolts report was once a widely-watched labor market indicator, but has generated less interest in recent years. The rates in the report haven’t changed much since 2015. The report is also released with a lag; this month’s release only provides data through May. The primary jobs report for June, which showed a robust pace of hiring, has already been released. That report showed that employers added 222,000 positions in June. Most economists consider the rates in the Jolts report healthy, but not spectacular. (The Wall Street Journal) Wholesale Inventories Post Largest Gain in 5 Months U.S. wholesale inventories increased more than previously estimated in May as automobile stocks rose amid declining sales, but inventory investment still likely weighed on economic growth in the second quarter. The Commerce Department said wholesale inventories climbed 0.4%. That was the biggest gain since December 2016 and followed a 0.4% decline in April. The department reported last month that wholesale inventories increased 0.3% in May. Auto inventories jumped 0.7% after declining 1.4% in April. The auto sector has been hit by slowing demand, which has seen manufacturers reporting a decrease in sales for four straight months. The component of wholesale inventories that goes into the calculation of gross domestic product - wholesale stocks excluding autos - increased 0.3% in May. A report last week showed inventories at factories slipped 0.1% in May. Data on retail inventories will be published on Friday. Economists expect inventory investment slowed further in the second quarter and remained a drag on GDP growth during the period. (CNBC) Fed’s Yellen Likely to Discuss Rates, Balance Sheet in Congressional Testimony Federal Reserve Chairwoman Janet Yellen heads to Capitol Hill on Wednesday to address the House Financial Services Committee in her twice-yearly Humphrey Hawkins testimony and to take questions from lawmakers. She will deliver the same testimony at a separate hearing of the Senate Banking Committee on Thursday. Fed officials have signaled they plan to keep raising short-term interest rates as the economy gains strength. The Fed already has lifted rates twice this year and penciled in a third move later this year. That could make some Democrats nervous. Some lawmakers and activists have argued the Fed should keep interest rates lower for longer to generate more momentum in the economy to help minority and low-income groups, who are usually the last to benefit from economic expansions and the first to suffer in downturns. Some Fed policy makers also have indicated they want to hold off on raising rates again until they see inflation rebound after weakening in recent months. Lawmakers are likely to press Ms. Yellen on whether she still expects inflation to pick up and justify another rate increase this year. (The Wall Street Journal) Europe and United Kingdom BoE's Broadbent Warns of Hit From Reduced EU-UK Trade Post Brexit Substantial reduction in trade between the European Union and the UK, following Brexit, could hurt the UK economy as it would force it to produce goods that are currently imported and raise costs, Bank of England Deputy Governor Ben Broadbent said. The policymaker made no reference to the interest rate outlook during his speech at the Scottish Council for Development and Industry in Aberdeen. "A significant curtailment of trade with Europe would force the UK to shift away from producing the things it's been relatively good at, and therefore tends to export to the EU, and towards the things it currently imports and is relatively less good at," he said. A shift in UK export from services, mainly financial services, to goods would tend to lower UK income and raise costs, notably of food and machinery, Broadbent said. And the same would be true for the EU, albeit on a smaller scale, he added. "Trade really is mutually beneficial and less of it costs us all," Broadbent said. His speech was keenly awaited for any clue on his policy stance. At least three of the eight members of the Monetary Policy Council are in favor of raising interest rates. Of the trio of hawks, Ian McCafferty and Michael Saunders already voted for a hike in June, while Andrew Haldane revealed his stance later. (RTT News) Page 6 of 7
  9. TA Securities 12-Jul-17 A Member of the TA Group Commodity Electricity Investment Overtakes Oil , Gas for First Time Ever in 2016 Investments in electricity surpassed those in oil and gas for the first time ever in 2016 on a spending splurge on renewable energy and power grids as the fall in crude prices led to deep cuts, the International Energy Agency (IEA) said. Total energy investment fell for the second straight year by 12% to US$1.7 trillion compared with 2015, the IEA said. Oil and gas investments plunged 26% to US$650 billion, down by over a quarter in 2016, and electricity generation slipped 5%. Oil and gas investment is expected to rebound modestly by 3% in 2017, driven by a 53% upswing in US shale, and spending in Russia and the Middle East, the IEA said in a report. The rapid ramp up of US shale activities has triggered an increase of US shale costs of 16% in 2017 after having almost halved from 2014-16. The global electricity sector, however, was the largest recipient of energy investment in 2016 for the first time ever, overtaking oil, gas and coal combined, the report said. (The Star) Share Buy-Back: 11 July 2017 Company FITTERS GLBHD GRANFLO SALCON TEXCHEM TROP Bought Back Price (RM) Hi/Lo (RM) 1,600,000 100,000 15,000 310,000 2,500 90,000 0.405/0.40 0.60 0.23 0.53/0.52 1.35/1.33 0.96/0.955 0.405/0.395 0.60 0.23/0.22 0.53/0.515 1.35/1.30 0.96/0.95 Total Treasury Shares 21,817,800 7,464,800 6,453,800 36,891,000 2,589,000 3,108,942 Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 7 of 7 We accept no
  10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 11-Jul-17 1.96 2.20 5.55 Target Price BETA (RM) EPS (sen) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 2.37 2.28 5.04 0.94 0.61 1.26 10.3 24.1 19.8 15.8 25.3 30.6 19.0 9.1 28.1 12.4 8.7 18.1 6.0 4.1 2.3 8.1 4.1 3.6 2.44 2.70 6.47 -19.7 -18.5 -14.2 1.88 1.96 4.09 4.3 12.2 35.6 -8.0 2.8 31.4 4.80 3.70 5.70 8.00 17.50 11.00 23.60 5.80 10.00 1.29 0.96 1.33 1.38 0.66 0.96 0.79 1.32 0.69 33.6 29.4 43.9 49.6 105.2 73.4 137.2 50.7 40.3 30.5 33.6 48.4 55.2 115.5 82.9 142.4 54.5 39.0 11.3 9.0 11.4 12.9 15.1 13.1 14.8 9.9 25.8 12.4 7.9 10.3 11.6 13.8 11.6 14.3 9.2 26.6 4.2 3.0 3.5 3.2 2.6 5.2 2.8 2.4 3.3 4.2 3.0 3.6 3.5 2.6 5.2 2.9 2.4 3.3 4.49 3.00 5.70 6.87 16.30 9.68 20.66 5.59 11.14 -15.6 -11.7 -12.3 -7.0 -2.3 -0.5 -1.6 -10.2 -6.8 3.60 2.08 3.90 4.11 12.70 7.50 19.26 4.53 8.20 5.3 27.4 28.2 55.4 25.4 28.4 5.5 10.8 26.6 1.9 10.9 16.0 41.7 17.9 17.4 3.0 6.6 17.3 0.40 1.29 5.45 3.45 0.65 1.17 2.02 1.95 5.88 0.45 1.57 6.00 3.50 0.78 0.58 2.26 1.49 6.26 0.79 0.63 1.05 1.09 1.01 1.27 na 1.09 0.10 5.6 14.6 28.1 15.3 4.9 8.3 12.6 11.9 42.0 5.6 13.5 34.8 20.3 5.7 9.6 12.5 12.0 45.8 7.0 8.8 19.4 22.5 13.1 14.1 16.0 16.3 14.0 7.1 9.6 15.6 17.0 11.4 12.1 16.1 16.3 12.9 0.0 2.2 2.2 2.2 3.8 0.9 2.7 1.5 4.3 0.0 2.2 2.2 2.8 3.8 0.9 2.7 1.5 4.3 0.51 1.37 5.52 3.61 0.74 1.39 2.15 2.48 6.15 -22.5 -5.8 -1.3 -4.4 -11.6 -15.8 -6.0 -21.2 -4.4 0.37 0.89 4.65 3.07 0.36 0.41 1.56 1.48 5.57 6.8 45.8 17.2 12.4 83.1 188.9 29.5 31.7 5.6 -9.2 22.9 14.0 7.8 7.4 103.5 18.8 13.4 0.0 1.98 2.00 0.49 11.0 11.5 18.0 17.2 5.1 5.1 2.19 -9.6 1.93 2.6 -1.5 15.08 18.06 17.84 21.08 0.50 0.59 74.8 93.1 81.3 20.2 101.9 19.4 18.5 17.7 4.9 4.6 5.4 5.1 15.30 19.10 -1.4 -5.4 13.72 15.56 9.9 16.1 8.3 10.3 2.19 7.36 25.38 1.20 83.42 3.50 1.95 4.90 0.91 2.23 8.62 27.41 1.39 88.66 4.10 2.46 4.41 1.23 0.49 0.35 0.32 0.46 0.36 0.48 0.64 0.43 0.56 6.7 26.4 121.1 6.1 290.1 22.3 27.5 15.7 8.1 7.9 40.6 151.0 6.3 327.7 24.7 27.0 16.6 11.6 32.6 27.9 21.0 19.8 28.8 15.7 7.1 31.2 11.2 27.8 18.1 16.8 19.1 25.5 14.2 7.2 29.4 7.9 1.8 1.4 2.8 5.0 3.3 4.3 3.1 0.9 2.7 2.2 2.0 3.0 5.1 3.4 4.9 4.1 1.0 3.8 3.00 8.89 26.52 1.33 85.20 3.66 2.04 5.00 1.07 -27.0 -17.2 -4.3 -9.6 -2.1 -4.2 -4.4 -2.0 -15.0 2.11 7.30 22.44 1.13 74.12 2.26 1.47 4.14 0.78 3.8 0.8 13.1 6.1 12.5 54.8 32.7 18.3 16.7 -14.8 0.4 8.1 4.3 6.7 37.8 12.7 13.1 14.5 42.76 52.08 1.01 198.6 187.4 21.5 22.8 4.7 4.7 55.64 -23.1 40.61 5.3 -3.2 9.08 5.65 11.51 6.54 1.35 1.29 49.3 25.7 54.7 27.7 18.4 22.0 16.6 20.4 0.6 1.4 0.6 1.6 10.00 6.38 -9.2 -11.4 7.50 4.20 21.1 34.4 14.3 25.0 2.40 0.12 3.34 0.13 0.75 1.25 19.3 0.4 23.2 0.4 12.4 33.1 10.3 33.3 5.8 0.0 6.7 0.0 3.42 0.16 -29.8 -25.0 2.38 0.05 0.8 140.0 -18.9 140.0 5.98 4.24 6.39 4.70 0.77 0.51 9.5 13.3 15.0 16.5 62.7 31.8 40.0 25.7 0.6 1.4 0.6 1.8 6.73 4.37 -11.1 -3.0 5.54 3.85 7.9 10.1 -5.8 1.4 6.80 6.86 1.94 5.63 1.58 6.80 7.60 1.80 6.05 2.20 0.58 0.16 0.33 -0.20 0.29 17.2 35.8 12.3 26.4 3.7 24.4 40.0 15.1 29.8 5.5 39.5 19.2 15.7 21.3 42.4 27.8 17.2 12.9 18.9 28.8 1.2 2.6 1.9 2.4 0.6 1.6 2.9 2.3 2.7 0.9 7.40 7.07 2.38 5.94 2.64 -8.1 -3.0 -18.5 -5.2 -40.2 4.06 5.62 1.88 4.20 1.51 67.5 22.1 3.2 34.0 4.6 40.8 4.1 -8.1 5.2 -33.1 INDUSTRIAL SCIENTX SKPRES 8.50 1.29 9.71 1.80 0.53 0.50 54.5 8.6 66.3 10.6 15.6 15.0 12.8 12.1 2.1 3.2 2.4 4.0 8.99 1.44 -5.5 -10.4 6.01 1.15 41.4 12.2 26.9 0.0 MEDIA ASTRO MEDIA PRIMA STAR 2.55 0.88 2.37 3.45 0.60 1.40 1.06 0.65 0.64 13.2 1.7 7.1 14.5 2.8 6.5 19.3 51.5 33.4 17.6 31.1 36.5 4.9 1.6 7.6 5.1 2.6 7.6 3.01 1.52 2.67 -15.3 -42.1 -11.2 2.51 0.87 2.19 1.6 1.1 8.2 -1.9 -23.5 5.8 -15.2 -31.9 -6.5 -9.0 -10.4 -22.9 -64.9 0.20 0.78 7.03 0.44 6.43 1.33 0.37 200.0 1.3 5.1 39.1 8.7 21.8 0.0 129.4 -13.7 0.5 36.0 0.1 0.0 -58.3 -21.7 1.30 19.2 -8.8 BANKS & FINANCIAL SERVICES AFG 3.79 AFFIN 2.65 AMBANK 5.00 CIMB 6.39 HLBANK 15.92 MAYBANK 9.63 PBBANK 20.32 5.02 RHBBANK BURSA 10.38 CONSTRUCTION BPURI GADANG GAMUDA IJM PESONA SENDAI SUNCON WCT LITRAK Building Materials WTHORSE CONSUMER Brewery CARLSBG HEIM Retail AEON AMWAY F&N HUPSENG NESTLE PADINI POHUAT QL SIGN Tobacco BAT GAMING Casino GENTING GENM NFO BJTOTO LUSTER HEALTHCARE Hospitals IHH KPJ Rubber Gloves HARTA KOSSAN SUPERMX TOPGLOV KAREX OIL & GAS DNEX 0.59 0.76 1.02 3.7 4.6 16.0 12.8 1.7 1.7 0.69 MHB 0.79 0.87 1.83 -1.2 1.3 na 60.3 0.0 0.0 1.16 MISC 7.39 6.85 0.79 56.4 48.9 13.1 15.1 4.1 4.1 7.90 PANTECH 0.61 0.69 1.27 4.1 4.9 14.6 12.3 3.0 3.2 0.67 PCHEM 6.99 7.74 1.06 39.2 40.5 17.8 17.3 3.0 3.1 7.80 SENERGY 1.62 1.71 2.49 6.6 4.0 24.5 40.9 0.6 0.6 2.10 UMWOG 0.37 0.80 2.06 -11.7 -3.5 na na 0.0 0.0 1.04 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.55 1.55 1.48 12.0 12.6 13.0 12.3 0.0 0.0 1.98
  11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA 1.64 3.00 4.48 24.76 9.52 6.48 Target Price BETA (RM) 1.55 3.88 4.15 26.19 10.02 7.52 1.78 0.46 1.07 0.86 1.23 0.43 EPS (sen) PER (X) FY17 FY18 FY17 FY18 4.2 12.3 18.7 111.8 34.0 37.6 8.5 15.7 21.0 119.1 37.5 34.5 38.9 24.4 23.9 22.2 28.0 17.3 19.3 19.1 21.3 20.8 25.4 18.8 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg 3.0 2.3 2.2 2.2 2.6 3.5 3.0 2.7 2.7 2.4 3.3 2.6 2.52 3.70 4.81 25.50 9.70 6.58 -34.9 -18.9 -6.9 -2.9 -1.9 -1.5 1.42 2.99 4.21 22.92 7.42 5.53 PROPERTY GLOMAC 0.64 0.70 0.57 1.6 6.3 39.8 10.1 4.7 4.7 0.83 -23.0 0.63 HUAYANG 1.03 1.07 0.66 17.3 17.4 6.0 5.9 3.9 3.4 1.43 -28.1 1.02 IBRACO 0.80 0.92 0.36 4.9 10.2 16.4 7.8 4.4 5.0 1.05 -23.8 0.79 IOIPG 2.16 2.25 0.86 17.4 17.4 12.4 12.4 3.2 3.5 2.46 -12.2 1.85 MAHSING 1.56 1.76 0.73 14.3 13.5 10.9 11.5 4.2 4.2 1.70 -8.2 1.34 SNTORIA 0.85 0.98 0.27 6.2 10.3 13.8 8.2 1.2 1.2 1.00 -15.0 0.69 SPB 4.90 5.98 0.59 25.6 22.8 12.8 14.4 2.4 2.4 5.19 -5.6 4.32 SPSETIA 3.28 4.10 0.67 27.3 29.4 14.3 13.3 4.3 4.3 4.50 -27.1 2.80 SUNWAY 3.90 3.95 0.47 18.3 18.6 13.1 12.8 3.1 3.1 4.05 -3.7 2.84 Note: SUNWAY proposed bonus issue of shares and warrants. Ex-Target price RM1.69. For more details please refer to 15.06.17 report. REIT SUNREIT 1.69 1.86 0.51 8.9 10.1 19.1 16.7 5.2 6.0 1.84 -8.2 1.63 CMMT 1.56 1.72 0.58 8.1 8.6 19.3 18.1 5.4 5.7 1.72 -9.3 1.45 % Chg YTD 15.5 0.3 6.4 8.0 28.3 17.2 5.8 -11.8 1.8 3.2 17.5 8.0 0.8 1.0 1.9 16.9 16.4 23.2 13.4 17.1 37.2 -8.6 -8.8 -20.0 10.8 9.1 6.2 10.8 4.8 30.0 3.7 7.6 -1.7 2.0 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.02 23.88 18.86 14.10 1.43 1.13 21.47 19.60 17.37 1.90 0.76 0.76 0.77 1.02 0.53 7.1 98.4 88.2 131.9 8.2 6.4 102.3 101.3 130.8 10.7 14.3 24.3 21.4 10.7 17.4 15.9 23.4 18.6 10.8 13.4 6.9 3.1 3.3 3.1 7.0 6.9 3.2 3.8 3.3 7.0 1.80 25.70 22.50 14.90 1.64 -43.3 -7.1 -16.2 -5.4 -12.8 1.01 22.92 18.10 13.00 1.39 1.0 4.2 4.2 8.5 2.9 -25.5 0.3 -11.5 1.4 -4.0 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 4.64 5.00 5.50 6.50 5.25 4.95 5.70 7.50 1.31 0.93 0.71 0.66 14.6 20.8 24.8 21.4 16.0 21.1 25.0 22.3 31.8 24.0 22.1 30.3 29.0 23.7 22.0 29.1 1.6 4.2 3.6 3.0 1.7 4.2 3.6 3.1 5.99 5.19 6.60 6.90 -22.5 -3.7 -16.7 -5.8 4.11 4.71 5.48 5.81 12.9 6.2 0.4 11.9 -1.7 3.5 -8.0 9.2 TECHNOLOGY Semiconductor & Electronics IRIS 0.17 INARI 2.17 MPI 13.10 UNISEM 3.55 0.28 2.30 15.60 3.95 1.31 0.80 0.51 0.82 -2.6 10.3 94.2 26.9 -0.3 na 12.4 21.1 112.9 13.9 27.1 13.2 na 17.5 11.6 13.1 0.0 3.7 2.1 3.4 0.0 2.2 2.1 3.4 0.24 2.23 13.58 3.70 -31.3 -2.7 -3.5 -4.1 0.10 1.44 7.20 2.27 65.0 50.5 81.9 56.4 50.0 30.7 76.8 50.4 3.14 8.55 3.34 8.10 1.10 1.44 37.6 17.2 37.1 17.5 8.3 49.6 8.5 48.9 1.3 1.2 1.6 1.2 3.59 9.45 -12.5 -9.5 2.16 5.76 45.4 48.4 37.1 41.1 1.73 3.68 2.05 4.05 0.75 0.67 14.3 17.1 22.7 15.1 12.1 21.5 7.6 24.3 2.5 3.5 4.0 3.1 1.87 4.59 -7.5 -19.8 1.47 3.61 17.7 1.9 8.8 -14.4 TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 20.77 OCBC 10.79 UOB 23.25 PLANTATIONS WILMAR IFAR 3.33 0.48 Target Price Beta (S$) EPS (cent) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52week 52week FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 23.30 12.00 25.40 1.23 1.14 1.08 173.8 87.7 195.6 190.2 12.0 92.4 12.3 209.3 11.9 10.9 11.7 11.1 2.9 5.7 3.0 2.9 6.7 3.0 21.2 11.0 24.0 -1.9 -1.5 -3.2 14.72 8.84 17.51 41.1 30.5 32.8 19.8 21.0 14.0 3.72 0.53 0.91 1.13 28.9 4.9 31.1 5.2 10.7 9.2 2.4 2.5 2.7 2.7 4.0 0.6 -16.8 -19.3 2.96 0.44 12.5 9.1 -7.2 -8.6 11.5 9.9 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
  12. COMPANY UPDATE TA Securities Wednesday , July 12, 2017 FBMKLCI: 1,755.03 Sector: Automotive A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 TP: RM5.04(-9.2%) UMW Holdings Bhd Last Traded: RM5.55 Fairly Valued for Now Sell THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Abel Goon Tel: +603 2072 1277 ext. 1641 [email protected] Following the demerger of UMW Holdings Bhd (UMW)’s listed oil & gas (O&G) arm in 3 July 2017, prospects appear marginally better. That said, near-term earning headwinds remain. This includes: - 1) pricing war in the auto division, and UMW’s lack of new models, 2) intense competition, coupled with government policies that drag on the equipment division, 3) gestation period for the Rolls Royce plant and 4) losses arising from the unlisted oil & gas division. That said, we maintain our sanguine outlook on UMW’s medium to long term prospects, premised on:- 1) new automotive plant and 2) maiden contribution from the Rolls Royce plant in FY19. After adjusting our SOP valuation, we arrive at a revised TP of RM5.04. We maintain SELL as we believe UMW is fairly valued at this juncture. www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) Par Value 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) UMWH MK 4588 Main Market 1,168.3 6,484.1 0.50 6.47/4.09 964 22.1 1.38 PNB - 47.8 EPF - 12.0 KWAP - 8.1 Forecast Revision Target Sales Achievable We believe UMW will achieve its sales target of 70k units, given current YTD sales of 28.7k, which comprise 41.1% of the target. Additionally, 4 new facelift models (Vios, Hilux, Fortuner and possible Camry) will be launched in 2H17, which could further excite the market. Therefore, management is confident of achieving its FY17 sales target. That said, sales in June will likely be weak as the assembly plant was closed for Hari Raya festivities and maintenance. Besides that, we expect the Toyota CH-R to only be launched next year as opposed to our earlier expectation of 2H17. Furthermore, the CH-R will likely be launched as a CBU unit until completion of UMW’s new plant. Hence, the group would likely lose the pricing war in the near-term. All things considered, we believe our sales assumption of 70k units, which is in-line with UMW’s guidance is achievable. Figure 1. Toyota & Lexus Sales Volume Total Forecasted Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 0.3 (0.1) 231 358 260 404 89 89 Sell (Maintain) Financial Indicators Net Debt / Equity (%) FCPS (sen) Price / CFPS (x) Core ROA (%) NTA/Share (RM) Price/NTA (x) FY17 35.0 70.0 7.9 1.9 2.3 2.4 FY18 36.1 64.9 8.5 2.8 2.5 2.3 Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth UMW (0.2) (0.6) 30.0 9.4 FBM KLCI (1.9) 0.6 4.6 6.1 YoY Growth (12-Mth) Share Price relative to the FBM KLCI 120,000 15 10 100,000 5 0 80,000 -5 60,000 -10 -15 40,000 -20 -25 20,000 -30 0 -35 2011 2012 2013 2014 2015 2016 Source: MAA, TA Research Page 1 of 4 YTD2017 Source: Bloomberg
  13. TA Securities 12-Jul-17 A Member of the TA Group Expanding Margins We note that margins for UMW dropped significantly in the past 2 years . This was underpinned by the high USD/MYR rate, coupled with intense industry competition. Recall that the USD/MYR rate increased from RM3.30/USD in CY14, to a high of RM4.50/USD in CY16. Although the rate has dropped to circa RM4.30/USD recently, UMW did not benefit from this in 1H17, as it hedged the currency at rates of RM4.35-4.40/USD. We understand from management that the Group’s hedging has since lapsed. Thus, we expect margins to improve in the near-term as 2H17 should benefit from the stronger Ringgit. We expect margin expansion in the longer-term, following completion of UMW’s new plant. To recap, the new plant will increase production capacity to about 120k units immediately, with higher automation from 52 robots (current: 8). Additionally, production of Vios, Camry and a brand-new model will begin immediately. We expect the new model to be a passenger car in the SUV segment given the lack of Toyota models in this category. Going forward, capacity at the new plant may also cater for the export market. At this juncture, progress at the plant is on track with expected completion in end-2018. Figure 2: Automotive PBT Margins Figure 3: USD/MYR rate 18% 4.6 16% 4.4 14% 4.2 12% 4.0 10% 3.8 8% Source: Company, TA Research Source: Bloomberg, TA Research Near-term Earning Headwinds Remain In spite of marginal margin expansion and recovering sales volume, earnings headwinds remain for UMW’s auto segment. This is underpinned by: 1) margin compression from pricing war, 2) intense competition, 3) lack of new models, 4) increasing costs of car ownership and 5) move to alternative transportation. We note that two of the new facelift models (Fortuner and Hilux) that will be launched by UMW in FY17 are for brand new models launched in FY16. Accelerated new model launches and facelifts are a testament to intense competition in the sector. Equipment Demand Robust, Leasing Business Success According to management, demand for its equipment remains robust. However, competition in the heavy equipment industry is intense. The demand mainly emanates from mega construction projects in Malaysia. We note that demand from Myanmar remains non-existent as the new government has imposed a blanket ban on equipment imports for jade mining. However, according to management, aftersales service revenue has increased. On the bright side, we do not expect this situation to persist over the longer-term. This is because the new government would likely draft new legislation for the jade industry given that it makes up almost half of the nation’s GDP. Lastly, UMW’s strategy to lease forklifts instead of outright sales has proved successful. Revenue contribution from industrial (forklift) equipment has increased to 65% from 40% in FY14. UMW plans to further increase overall leasing revenue contribution to 50% from 35% currently. Page 2 of 4 May-17 Jan-17 Mar-17 Nov-16 Jul-16 Sep-16 May-16 Jan-16 Mar-16 Nov-15 Jul-15 Sep-15 May-15 Jan-15 Mar-15 Nov-14 3.0 Jul-14 3.2 0% Sep-14 2% May-14 3.4 Jan-14 4% Mar-14 3.6 6%
  14. TA Securities 12-Jul-17 A Member of the TA Group Completed Rolls Royce Plant The long-awaited plant for the production of fan-casing for Roll Royce aircraft engines is completed and is currently undergoing final safety checks . First delivery is expected in FY17, with production of less than 10 units this year. Production is expected to gradually ramp up thereafter, with less than 100 units in FY18, and full capacity in FY19. Demand is expected to remain robust, given Rolls Royce massive order backlog of GBP71bn. That said, we believe margins for the group will be lower at inception, but will gradually expand marginally in subsequent years. The plant is only expected to breakeven in FY19. Outlook According to management, distribution of dividends is possible this year. Recall that UMW did not pay any dividends in FY16. Management believes that FY19 will be the turnaround year following the launch of its new auto plant. The plant would result in margin expansion and allow Toyota to launch new attractive models. Furthermore, the Rolls Royce plant is expected to attain full utilisation in the same year. Lastly, it expects to complete the disposal of all its unlisted oil and gas assets by end-18. Earnings Forecast We include contribution from UMW’s Rolls Royce plant in our earnings forecast, underpinned by the following assumptions: 1) ASP: USD800k per fancasing and 2) 6/75/175 units manufactured in FY17/18/19. We also performed some housekeeping on our forecasts. Thus, our earnings are tweaked by 0.3%/-0.1%/0.5% for FY17/18/19. Valuation We make the following changes to our SOP valuation: 1. Removed contribution from UMW-OG as the stock has gone ex. 2. Removed “Others” segment contribution as we expect UMW to sell assets at book value 3. Incorporated shareholder’s loan owed by UMW-OG Thus, our SOP valuation is revised to RM5.04/share (previous: RM5.51/share), which implies 13.3x FY18 PER. We maintain our Sell recommendation as we believe UMW has run ahead of its fundamentals on improved sentiment, following the sale of its oil and gas division. SOP Valuation . FY18 PER (x) Equity Value (RM mn) Reasoning Automotive 13 6,131 Peers’ average PER Equipment 12 1,419 Regional Peers’ average PER M&E 10 (27) Regional Peers’ average PER Segments Total Equity Value Net debts (holding co.) 7,522 (1,286) Add: Shareholder's loan 308 Shares outstanding (mn) 1,168 Holding co. discount 10% SOP TP (RM) 5.04 Page 3 of 4
  15. TA Securities 12-Jul-17 A Member of the TA Group Earnings Summary Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 4 of 4
  16. Wednesday , 12 July, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED LOCAL TECHNICAL REPORTS’ Local Technical Reports 1. Daily Technical Stock Picks 2. Daily Stock Screen Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research
  17. T e c h n i c a l TA Securities V i e w Wednesday , July 12, 2017 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Daily Technical Stock Picks Malaysia FBM KLCI: 1,755.03 (-2.10, -0.12%) THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Chartist: Stephen Soo Name FBMKLCI AFFIN AFG AMBANK AXIATA CIMB DIGI GAMUDA GENTING GENM IHH IOICORP MALAKOFF MAXIS MAYBANK MBSB RHBBANK SIME TENAGA TM WPRTS AIRASIA AIRASIA X ARMADA BINAPURI CMSB DIALOG ECO WORLD EKOVEST GADANG HSL ISKANDAR KIMLUN KKBE MUDAJAYA MRCB NAIM SAPURA ENERGY SUNCON UEMS WASEONG WCT Close 11/7/2017 1755.03 2.65 3.79 5.00 4.64 6.39 5.00 5.45 9.08 5.65 5.98 4.48 1.02 5.50 9.63 1.24 5.02 9.52 14.10 6.50 3.68 3.14 0.40 0.73 0.40 4.00 1.91 1.55 1.13 1.29 1.63 1.40 2.23 1.25 1.38 1.38 1.26 1.62 2.02 1.20 0.92 1.95 Change (2.10) 0.01 -0.05 -0.01 -0.05 -0.14 0.02 0.03 0.05 0.04 0.07 -0.01 0.00 -0.01 0.01 -0.04 -0.05 -0.02 -0.02 0.01 0.01 -0.01 0.00 0.00 -0.01 0.00 0.00 -0.06 -0.03 -0.01 0.03 -0.08 0.00 -0.01 -0.02 -0.08 -0.02 -0.01 0.00 -0.02 -0.01 -0.14 Tel: +603-2167-9607 High Low 1,758.27 1,752.74 2.66 3.84 5.03 4.77 6.50 5.00 5.45 9.11 5.67 5.99 4.52 1.03 5.54 9.63 1.29 5.07 9.54 14.12 6.55 3.69 3.17 0.41 0.74 0.41 4.02 1.92 1.60 1.16 1.32 1.63 1.47 2.24 1.25 1.40 1.47 1.28 1.65 2.02 1.23 0.93 2.08 2.63 3.79 4.98 4.62 6.34 4.96 5.39 9.00 5.59 5.90 4.46 1.01 5.50 9.60 1.23 5.00 9.52 14.06 6.45 3.66 3.12 0.40 0.73 0.40 3.99 1.91 1.53 1.12 1.26 1.59 1.37 2.22 1.25 1.36 1.38 1.24 1.60 2.01 1.20 0.90 1.95 Bollinger Bands Lower Mid Upper 1,751.60 1,774.84 1,798.08 2.63 3.77 4.87 4.64 6.44 4.95 5.35 9.04 5.47 5.81 4.42 0.99 5.20 9.57 1.27 5.02 9.48 13.98 6.50 3.59 3.06 0.40 0.71 0.40 3.99 1.90 1.57 1.15 1.27 1.61 1.46 2.21 1.25 1.31 1.31 1.24 1.45 1.98 1.17 0.90 1.99 2.67 3.91 5.01 4.88 6.61 4.99 5.43 9.52 5.65 5.94 4.50 1.08 5.71 9.62 1.32 5.08 9.57 14.22 6.59 3.70 3.22 0.41 0.75 0.41 4.06 1.92 1.63 1.19 1.30 1.63 1.58 2.25 1.27 1.43 1.41 1.27 1.70 2.01 1.23 0.95 2.08 2.71 4.04 5.15 5.12 6.79 5.03 5.52 10.00 5.83 6.08 4.57 1.17 6.22 9.67 1.38 5.14 9.66 14.47 6.69 3.82 3.38 0.42 0.79 0.43 4.12 1.94 1.70 1.23 1.34 1.65 1.69 2.30 1.29 1.54 1.50 1.30 1.94 2.04 1.28 0.99 2.17 [email protected] RSI Moving Averages 14d 10d 30d 50d 37.13 1,764.78 1,775.19 1,773.48 DMI DI + DI - ADX Diff 15.83 26.72 21.33 (10.89) 38.62 34.97 46.56 24.99 41.23 49.62 56.06 31.14 48.91 53.05 47.56 19.99 17.20 60.80 29.84 33.35 50.13 48.18 42.26 43.95 43.69 39.22 40.94 35.22 34.92 46.87 37.56 30.08 47.30 48.36 22.36 44.92 40.01 45.88 43.44 41.15 39.40 51.11 42.98 43.10 33.01 13.93 10.77 20.21 12.64 23.16 8.17 17.44 5.55 23.45 18.63 25.03 4.06 11.30 20.24 13.51 13.07 25.13 20.06 15.17 16.71 15.60 10.35 18.56 23.23 16.88 12.60 19.23 13.38 20.57 16.09 14.59 24.85 29.67 29.11 27.06 15.59 16.25 17.05 13.79 27.53 18.32 2.66 3.85 4.98 4.78 6.55 5.00 5.46 9.32 5.63 5.90 4.49 1.04 5.53 9.64 1.31 5.07 9.53 14.12 6.59 3.66 3.19 0.41 0.75 0.41 4.03 1.92 1.64 1.18 1.31 1.63 1.54 2.25 1.26 1.40 1.42 1.27 1.63 2.02 1.21 0.93 2.07 2.69 3.99 5.04 4.92 6.59 4.99 5.40 9.65 5.69 5.93 4.51 1.11 5.90 9.58 1.32 5.15 9.53 14.12 6.56 3.75 3.20 0.41 0.75 0.41 4.07 1.93 1.61 1.20 1.29 1.63 1.60 2.26 1.27 1.45 1.40 1.28 1.74 2.03 1.24 0.93 2.10 2.78 4.11 5.21 5.04 6.32 5.02 5.38 9.74 5.76 5.98 4.54 1.15 6.14 9.50 1.31 5.26 9.45 14.02 6.52 3.81 3.27 0.44 0.76 0.42 4.21 1.92 1.58 1.23 1.29 1.66 1.87 2.28 1.31 1.39 1.48 1.38 1.82 2.04 1.25 0.92 2.15 19.11 26.76 18.87 27.19 27.93 16.12 22.26 35.25 20.38 19.38 11.75 32.58 39.64 17.75 27.29 26.09 13.79 17.99 20.69 17.04 23.67 22.14 31.62 31.35 25.05 15.99 30.45 24.79 20.14 19.35 36.27 34.26 37.05 25.24 24.61 21.84 24.28 17.65 21.74 24.86 33.38 12.83 33.21 9.23 33.77 32.49 23.97 11.98 42.63 12.47 18.13 19.88 65.60 59.78 16.98 21.03 27.72 27.37 29.68 18.04 6.42 16.75 24.26 15.19 15.43 37.57 14.45 36.12 18.42 20.41 11.28 15.27 15.08 9.99 21.93 21.06 23.55 24.67 14.95 23.50 26.23 14.05 (5.19) (16.00) 1.34 (14.55) (4.77) (7.95) (4.82) (29.70) 3.07 (0.74) 13.28 (28.52) (28.34) 2.49 (13.77) (13.02) 11.33 2.08 (5.53) (0.33) (8.07) (11.79) (8.12) (8.18) (3.39) (3.39) (11.22) (11.41) 0.43 (3.25) (21.68) (9.41) (7.37) 3.86 2.45 (6.25) (8.04) (0.60) (7.96) 2.67 (15.06) www.taonline.com.my Line (4.27) -0.03 -0.08 -0.04 -0.10 0.04 0.00 0.02 -0.17 -0.03 -0.01 -0.01 0.01 -0.20 0.05 -0.01 -0.05 0.02 0.02 0.01 -0.05 -0.02 -0.01 0.00 0.00 -0.05 0.00 0.01 -0.02 0.01 -0.01 -0.09 -0.01 -0.01 0.00 -0.01 -0.03 -0.06 0.00 -0.01 0.00 -0.02 MACD Signal Diff (1.48) (2.789) -0.03 -0.07 -0.05 -0.08 0.09 -0.01 0.03 -0.12 -0.03 -0.02 -0.01 0.02 -0.20 0.06 0.00 -0.06 0.03 0.05 0.03 -0.05 -0.02 -0.01 0.00 0.00 -0.05 0.00 0.02 -0.02 0.01 -0.01 -0.10 -0.01 -0.01 0.00 -0.02 -0.04 -0.06 0.00 -0.01 0.01 -0.02 0.003 (0.001) 0.011 (0.021) (0.049) 0.002 (0.006) (0.054) 0.008 0.005 0.003 (0.011) 0.005 (0.011) (0.011) 0.005 (0.015) (0.026) (0.019) 0.006 (0.008) 0.000 (0.001) (0.001) 0.002 (0.004) (0.011) (0.003) (0.002) 0.000 0.004 (0.003) 0.001 (0.006) 0.012 0.008 0.005 0.001 0.000 (0.005) (0.003) DMI MACD Recent Signal SELL SELL DMI MACD Signal Change - SELL SELL BUY SELL SELL SELL SELL SELL BUY SELL BUY SELL SELL BUY SELL SELL BUY BUY SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL BUY SELL SELL SELL SELL BUY BUY SELL SELL SELL SELL BUY SELL SELL SELL SELL BUY SELL BUY SELL SELL BUY SELL SELL BUY BUY BUY SELL BUY SELL SELL BUY SELL SELL SELL BUY SELL BUY SELL SELL BUY SELL SELL SELL SELL BUY BUY SELL BUY SELL BUY BUY BUY BUY BUY SELL SELL SELL BUY BUY SELL SELL BUY BUY SELL The table above is a compilation of actively traded stocks with some popular technical indicators. The technical BUY/SELL signals on the last four columns are auto generated; the first two being existing or recent signals while the last two represent a signal change from BUY to SELL or the reverse, otherwise no change is indicated by a dash. INTERPRETATION OF TECHNICAL INDICATORS: Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders tend to buy on price breakouts above the upper band, and sell when price breaks down below the lower band. 14-day Relative Strength Index (RSI): A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30-day moving average should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day average is bearish and imply further near-term downside risk. Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day average, and negative if it remains below. A longer-term uptrend is intact if share price sustain above the 50-day average, and is deemed broken if it breaches below this level. Directional Movement Indicator (DMI): The DMI is an indicator of trend strength. A positive DMI difference (DMI diff) value is bullish and indicate a higher DI+ vs. DI-, while a negative DMI diff is bearish due to a lower DI+ vs. DI- (DMI diff = DI+ minus DI-). A crossover of DI+ above DI- triggers a BUY signal, while a SELL signal is flashed when the DI+ crosses below the DI-. The Average Directional Movement Index (ADX) indicates the strength of a trend, whether it is up or down. The higher the value of ADX, the stronger the trend. An ADX value above 25 suggests a trending market or stock, while a value below 20 signal congestion or absence of trend. Daily Moving Average Convergence Divergence (MACD): The MACD diff value is derived from the difference between the MACD line (the 12-day EMA minus the 26-day EMA) and the MACD signal line (the 9-day EMA of the MACD). A positive MACD diff value is bullish, while a negative MACD diff is bearish. A BUY signal is generated when the MACD diff rises above zero, and SELL signal sparked when the MACD diff value falls below zero. Page 1 of 4
  18. Technical Comments : Take Profit CIMB & RHBBANK The weak chart pattern and bearish technical momentum on CIMB shares implies likely profit-taking correction towards the 123.6%FP (RM6.23), with stronger support from the 100-day ma (RM5.86) which mirror the prior March 2017 peak, while overhead resistance is from the 150%FP (RM6.69). Similarly, RHBBank shares should retrace to better retracement supports from the 61.8%FR (RM4.92) or 50%FR (RM4.72), while immediate overhead hurdles are from the 76.4%FR (RM5.18) and 100-day ma (RM5.21). CIMB Upper Middle RM6.39 (-0.14) BOLLINGER BANDS RM RM 6.79 6.61 10-day 30-day RM 6.44 50-day Lower DMI Recent Signal SELL Recent Signal SELL Signal Change RHBBANK Recent Signal Signal Change BOLLINGER BANDS RM RM RM DMI RM 6.32 DAILY MACD Signal Change Upper Middle Lower SIMPLE MOVING AVERAGES RM 6.55 RM 6.59 SELL RM5.02 (-0.05) 5.14 5.08 5.02 SELL SIMPLE MOVING AVERAGES RM 5.07 RM 5.15 RM 5.26 DAILY MACD Recent Signal BUY Signal Change 10-day 30-day 50-day Page 2 of 4
  19. T e c h n i c a l TA Securities V i e w Wednesday , July 12, 2017 FBMKLCI: 1,755.03 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Daily Stock Screen s Malaysia End Day Census of 11.07.2017 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Chartist: Stephen Soo Tel: +603-2167 9607 [email protected] www.taonline.com.my Report Description: The Daily Stock Screen is a retail product which can be a very useful guide for momentum trading and trading ideas .The following list is derived from the screening of more than 1000 stocks currently listed on Bursa Malaysia to identify: the top 20 breakout, 20 breakdown, and 30 ‘potential’ breakout stocks which just climbed above the middle Bollinger band, with potential to appreciate toward the upper Bollinger band. [MIDDLE BOLLINGER RANGEBOUND] List of 30 Potential Breakout Stocks (Short-term BUY for upside toward Upper Bollinger Band or higher to TAKE PROFIT/SELL) No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Stock Name Price FRONTKEN CORP PASUKHAS GROUP MPAY IRIS CORP BHD IFCA MSC BHD GAMUDA BHD FOCUS DYNAMICS G MALAYAN BANKING GENTING MALAYSIA COMFORT GLOVE BH MAJUPERAK HOLDIN LNG RESOURCES AEMULUS HOLDINGS PRIVASIA TECHNOL DIGI.COM BHD NWP HLDGS BHD JOHAN HLDGS BHD EVERGREEN FIBREB EDUSPEC HOLDINGS IOI PROPERTIES SUNWAY CONSTRUCT UCHI TECH BHD PANTECH GROUP MMS VENTURES BHD TALAM TRANSFORM EA HOLDINGS SILVER RIDGE TFP SOLUTIONS LIEN HOE CORP POH KONG HOLDING 0.33 0.18 0.23 0.17 0.37 5.45 0.27 9.63 5.65 0.88 0.43 0.20 0.51 0.17 5.00 0.21 0.25 0.86 0.17 2.16 2.02 1.88 0.61 1.47 0.05 0.10 0.23 0.18 0.42 0.50 RSI Bollinger Band Moving Average Lower Middle Upper 14-day 10-day 30-day 50-day 0.28 0.14 0.19 0.14 0.33 5.35 0.21 9.57 5.47 0.79 0.25 0.17 0.47 0.15 4.95 0.19 0.22 0.80 0.15 2.10 1.98 1.82 0.58 1.29 0.04 0.08 0.19 0.15 0.36 0.49 0.31 0.17 0.22 0.16 0.37 5.43 0.26 9.62 5.65 0.86 0.42 0.19 0.50 0.16 4.99 0.20 0.24 0.84 0.16 2.16 2.01 1.88 0.60 1.45 0.04 0.09 0.21 0.16 0.41 0.49 0.35 0.21 0.26 0.19 0.41 5.52 0.30 9.67 5.83 0.94 0.59 0.21 0.53 0.18 5.03 0.21 0.26 0.89 0.17 2.22 2.04 1.93 0.62 1.61 0.05 0.10 0.23 0.18 0.46 0.50 57.25 58.15 50.81 45.83 46.51 56.06 55.41 60.80 48.91 58.52 51.66 57.25 53.22 50.68 49.62 50.06 48.95 51.54 61.61 52.22 51.11 54.06 52.06 59.65 52.90 49.16 63.06 57.63 56.59 52.54 0.33 0.19 0.24 0.18 0.37 5.46 0.26 9.64 5.63 0.90 0.49 0.19 0.51 0.17 5.00 0.21 0.25 0.86 0.16 2.18 2.02 1.85 0.60 1.52 0.04 0.09 0.22 0.16 0.41 0.49 0.30 0.16 0.22 0.16 0.38 5.40 0.26 9.58 5.69 0.83 0.38 0.18 0.50 0.16 4.99 0.20 0.24 0.85 0.16 2.14 2.03 1.87 0.60 1.36 0.04 0.10 0.21 0.17 0.39 0.49 0.29 0.15 0.23 0.18 0.40 5.38 0.23 9.50 5.76 0.78 0.37 0.19 0.49 0.18 5.02 0.21 0.26 0.87 0.17 2.12 2.04 1.87 0.61 1.25 0.04 0.10 0.21 0.17 0.37 0.49 Vol 17,551,600 13,794,600 11,902,800 11,160,800 9,774,200 7,237,000 6,678,700 6,102,400 5,211,600 4,304,800 3,074,000 2,658,000 2,522,500 2,415,000 2,326,200 2,244,500 2,136,800 2,129,500 2,041,000 1,882,600 1,722,100 1,680,100 1,569,900 1,534,600 1,533,100 1,415,200 1,387,500 1,243,400 1,132,500 1,058,300 20-day avg vol 27,565,510 13,948,960 7,353,775 10,554,200 7,598,595 5,470,220 3,096,995 11,663,090 6,443,440 7,469,350 3,970,045 926,060 2,863,165 1,625,640 3,346,975 2,632,635 2,606,820 3,314,565 221,640 1,945,385 1,531,235 570,650 1,370,685 2,538,270 5,607,980 5,206,375 1,353,115 164,065 1,885,195 256,975 Raw data sourced from Bloomberg *Note: To qualify in this list above, the first sorting criteria is stock price must have just climbed or stayed ABOVE the middle Bollinger Band, followed by a second criteria that trading volume for the day must be significantly strong. This is a good watch list for momentum traders looking for short-term BUY ideas, as they are laggards with good upside potential towards the upper Bollinger band or higher to TAKE PROFIT/SELL. Caveat: Some stocks may continue to stay range bound and trade sideways, hence traders should refer to their respective charts to spot accumulation (volume growth) or breakout patterns. INTERPRETATION OF TECHNICAL INDICATORS: Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The mediumterm trend is positive if share price stays above the 30-day, and negative if it remains below this average. 14-day RSI: A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30-day SMA should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day SMA is bearish and imply further near-term downside risk. Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders will buy on price breaks above the upper band, and sell when price breaks below the lower band. Alternatively, a sharp move that originates at one band tends to go all the way to the other band, a useful observation when projecting price targets. Page 1 of 2
  20. TA Securities A Member of the TA Group *Note: To qualify in the breakout list below, the first sorting criteria is stock price must close ABOVE the upper Bollinger Band, followed by a second criteria that trading volume for the day must be significantly higher than the 20-day average volume, which signal a bullish breakout. Caveat: We would caution momentum traders that a highly overbought 14-day RSI reading (> 80) and share price pullback BELOW the upper Bollinger Band are early warning signals to exit buy breakout trades. [UPPER BOLLINGER BREAKOUT] Top 20 Breakout Stocks (Generally BULLISH, but can be short-term TAKE PROFIT/SELL guide) No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Stock Name Price YGL CONVERGENCE MAGNA PRIMA BHD EDUSPEC HOLDINGS ENRA GROUP BHD TFP SOLUTIONS MLABS SYSTEMS PRESTARIANG BHD RAYA INTERNATION CENTRAL IND BHD TATT GIAP BARAKAH OFFSHORE CHEE WAH CORP KOSSAN RUBBER IN MTOUCHE TECH CI HOLDINGS BHD NOTION VTEC BHD AWC BHD BATU KAWAN BHD PNE PCB BHD 0.25 1.55 0.17 3.05 0.18 0.29 2.20 0.28 1.11 0.21 0.63 1.40 6.86 0.47 2.47 1.28 1.14 19.02 0.55 2.59 ORIENTAL INTERES Raw data sourced from Bloomberg 20 Bollinger Band RSI Moving Average Lower Middle Upper 14-day 10-day 30-day 50-day 0.12 1.44 0.15 2.58 0.15 0.04 2.03 0.21 0.92 0.17 0.58 0.43 6.29 0.24 2.27 1.09 1.06 18.69 0.49 2.38 0.16 1.49 0.16 2.80 0.16 0.14 2.10 0.24 1.01 0.18 0.60 0.74 6.52 0.34 2.37 1.18 1.10 18.85 0.52 2.48 0.21 1.55 0.17 3.02 0.18 0.24 2.16 0.27 1.10 0.20 0.62 1.05 6.76 0.44 2.46 1.27 1.13 19.01 0.54 2.58 80.31 62.19 61.61 62.44 57.63 89.35 62.65 68.97 69.09 59.61 58.94 89.52 68.84 84.81 59.50 65.14 64.30 61.15 60.10 55.85 0.17 1.48 0.16 2.79 0.16 0.17 2.11 0.25 1.03 0.18 0.61 0.69 6.57 0.38 2.39 1.21 1.10 18.91 0.52 2.48 0.16 1.50 0.16 2.83 0.17 0.13 2.12 0.24 1.00 0.19 0.60 0.72 6.43 0.33 2.40 1.19 1.08 18.83 0.52 2.49 0.16 1.51 0.17 2.79 0.17 0.12 2.21 0.23 1.00 0.20 0.61 0.73 6.32 0.31 2.37 1.21 1.09 18.83 0.52 2.59 Vol 20,777,900 1,542,100 2,041,000 88,000 1,243,400 42,960,700 1,892,300 7,081,800 10,000 760,900 4,808,200 138,600 1,703,700 2,506,400 21,000 1,999,600 2,673,500 32,200 170,800 100 20-day avg vol 1,363,125 148,345 221,640 11,525 164,065 5,853,005 345,335 1,487,310 2,315 211,810 1,453,965 46,270 637,055 943,600 8,800 887,015 1,218,935 37,350 231,540 285 *Note: As for the top 20 breakdown list below, the sole sorting criteria is stock price must close significantly BELOW the lower Bollinger Band, with the largest distance from the lower band at the top of the table, signaling a severe sell-off which is bearish. Caveat: A stock should bottom out if share price moves ABOVE the falling lower Bollinger Band, which can be a good buy signal for technical rebound upside after the sharp sell-off. [LOWER BOLLINGER BREAKDOWN] Top 20 Breakdown Stocks (Generally BEARISH, but can be short-term BUY guide) No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Stock Name Price LPI CAPITAL BHD ISKANDAR WATERFR PENTAMASTER CORP GENTING PLANTATI MALAYAN FLOUR PRESTAR RESOURCE NYLEX MALAYSIA CIMB GROUP HOLDI WCT HOLDINGS BHD PHARMANIAGA BHD SALUTICA BHD CONCRETE ENGINEE DRB-HICOM BHD ATTA GLOBAL GROU MALAYSIA BUILDNG SEREMBAN ENGINEE O&C RESOURCES BH CCM DUOPHARMA AYS VENTURES BHD VERSATILE CREATI 18.42 1.40 3.56 10.84 2.26 1.19 0.98 6.39 1.95 4.38 1.47 1.48 1.69 1.12 1.24 0.61 0.56 2.10 0.52 1.45 Bollinger Band RSI Moving Average Lower Middle Upper 14-day 10-day 30-day 50-day 18.57 1.46 3.62 10.90 2.31 1.24 1.03 6.44 1.99 4.42 1.50 1.51 1.72 1.15 1.27 0.63 0.58 2.12 0.54 1.47 18.86 1.58 3.72 11.05 2.42 1.31 1.11 6.61 2.08 4.54 1.58 1.59 1.77 1.34 1.32 0.69 0.62 2.21 0.61 1.59 19.14 1.69 3.82 11.20 2.53 1.38 1.20 6.79 2.17 4.65 1.66 1.68 1.82 1.53 1.38 0.76 0.66 2.29 0.68 1.70 28.18 22.36 44.73 30.48 43.32 38.86 36.08 41.23 33.02 33.10 33.26 34.89 44.92 33.07 29.84 35.31 28.26 24.37 34.59 36.55 18.77 1.54 3.71 11.00 2.40 1.29 1.11 6.55 2.07 4.51 1.56 1.58 1.76 1.28 1.31 0.69 0.60 2.19 0.59 1.58 18.88 1.60 3.64 11.11 2.35 1.27 1.07 6.59 2.10 4.57 1.59 1.61 1.73 1.31 1.32 0.69 0.61 2.23 0.60 1.57 18.60 1.87 3.48 11.29 2.17 1.21 1.03 6.32 2.15 4.66 1.66 1.60 1.65 1.22 1.31 0.66 0.62 2.26 0.55 1.49 Vol 87,400 15,369,300 1,113,400 226,800 3,011,600 3,980,100 6,965,300 25,819,100 3,038,600 21,700 630,200 1,900 6,657,500 2,462,400 8,035,100 69,900 2,172,000 30,300 6,130,500 2,582,400 20-day avg vol 52,745 8,622,485 578,660 345,360 820,530 1,868,540 2,829,085 19,823,200 1,616,940 16,420 524,615 290 5,675,825 1,605,710 6,538,380 95,210 1,674,375 50,140 5,077,500 2,045,450 Raw data sourced from Bloomberg Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 2 of 2