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Bursa Malaysia Daily Market Report - 16 March

Mohd Noordin
By Mohd Noordin
5 years ago
Bursa Malaysia Daily Market Report - 16 March

Ard, Islam, Mal, Sukuk , Wakalah, Commenda, Sales


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  1. Thursday , 16 March, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED REPORTS’ News 1. Daily Market Commentary 2. Daily Brief Fundamental Reports 1. IPO - Eco World International Bhd: Proxy for Foreign Investment Exposure 2. Karex Berhad: Opportunity Emerges from Recent Sell Down 3. US Economy: Fed Raises Rates for Second Time in 3 Months; Signaling for 2 More Hikes in 2017 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 Thursday , 16 March 2017 For Internal Circulation Only KLSE Market Statistics (15.03.2017) Volume (mil) +/-chg (RMmn) Main Market 2,644.1 -533.7 2,114.3 Warrants 204.5 -62.1 22.6 ACE Market 425.5 -40.7 94.0 Bond 29.0 21.9 3.6 ETF 0.0 0.01 0.0 Total 3,303.0 2,234.5 Off Market 93.4 23.0 222.4 Value +/-chg -1018.5 -4.5 6.0 2.1 0.01 179.5 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP March 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 1,717.36 12,143.63 16,685.25 1,723.00 20,950.10 5,900.05 7,368.64 19,577.38 2,133.00 23,792.85 3,137.43 1,540.80 5,432.38 3,241.76 2,026.76 5,774.00 Off Market (mn) (RM) APFT 33.0 @ 0.01 TAADMAX 27.0 @ 0.42 OCR 9.3 @ 0.60 LITRAK 4.4 @ 5.90 FPGROUP 3.6 @ 0.70 UTDPLT 3.3 @ 27.80 CMMT 3.2 @ 1.54 SALUTE 2.0 @ 1.53 ECOFIRS 2.0 @ 0.30 KBUNAI-WC 1.6 @ 0.03 DAIBOCI 1.5 @ 1.73 DLADY 1.3 @ 57.30 Exchange Rate USD/MYR 4.4492 -0.0014 USD/JPY 114.65 -0.4200 EUR/USD 1.062 -0.0015 -5.11 -31.51 25.97 -6.00 Up Down 294 354 44 86 50 36 7 3 0 1 395 480 % chg % YTD chg -0.30 -0.26 0.16 -0.35 4.61 5.90 13.39 5.35 Mkt Cap. (RM’mn) MAYBANK 89,192 TENAGA 77,324 PCHEM 58,240 MAXIS 47,841 CIMB 47,535 DIGI 39,808 PETGAS 39,100 MISC 33,032 IOICORP 29,302 TM 23,713 TA Research e-mail : taresearch@ta.com.my Review & Outlook Value/ Volume 0.80 0.11 0.22 0.13 0.98 0.68 2.38 112.73 0.54 43.23 0.74 10.79 0.15 -32.12 -0.16 -0.78 -0.04 -35.10 -0.15 -5.97 -0.19 -2.35 -0.15 0.80 0.01 2.43 0.08 -0.35 -0.02 14.86 0.26 Top 10 KLCI Movers Mkt Cap. Counter (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 6.01 9.60 3.16 2.42 5.26 8.15 8.91 -0.14 2.56 4.45 2.93 1.91 Based on Chg (RM) -0.10 -0.06 -0.02 -0.06 -0.06 -0.01 -0.02 -0.01 -0.03 -0.04 Vol. (mn) 7.22 5.68 9.95 2.29 9.60 5.78 0.80 0.63 7.96 7.02 Commodities Futures Palm Oil (RM/mt) 2,745.00 59.00 Crude Oil ($/Barrel) 48.96 0.46 Gold ($/tr.oz.) 1,219.60 21.10 Important Dates IOIPG - 1:4 Rights Issue - RI of up to 1,109.9m shares. 1 rights share for every 4 existing shares held, at an issue price of RM1.38 per rights share. Application Closed: 17/03/2017. LISTING ON: 31/03/2017. Local blue chips ended lower Wednesday, pressured by profit-taking interest ahead of the US Federal Reserve's decision on raising interest rates. The KLCI closed 5.11 points down at 1,717.36, off an early high of 1,719.27 and low of 1,713.92, as losers beat gainers 480 to 395 on reduced turnover of 3.3bn shares worth RM2.23bn. The local market should rebound today following the overnight rebound on oil prices and the less hawkish tone from the US Federal Reserve after it raised interest rates. Immediate uptrend supports for the index are revised lower to 1,705 and 1,690, representing the rising 30 and 50-day moving averages. Key upside hurdles remains the recent high of 1,734, next at 1,744, the 3/8/15 peak, and 1,758, the 23.6%FR of the 1,310 to 1,896 upswing. Any price weakness on Hock Seng Lee shares towards the low of 12/08/ 16 (RM1.58), matching the lower Bollinger band, would be good buying opportunity for rebound towards 38.2% FR (RM1.79), and FR 50%FR (RM1.86) with stronger resistance coming at 61.8% FR (RM1.93).Similarly, further dip on Sunway Construction shares towards the 76.4%FR (RM1.61), would be attractive to buy towards the peak of 02/21/17 100%FR (RM1.81) with confirmed breakout to target the 123.6%FR (RM2.01) and 138.2% (RM2.13), going forward. News Bites • The validity of the letter of award to the Gamuda Bhd-led consortium chosen as project delivery partner for the RM46bn Penang Transport Master Plan has been extended till Aug 31. • Fraser & Neave Holdings Bhd has invested RM31.5mn in a ultra-high temperature processing line at its plant in Kuching to capture increasing demand with an added capacity of 3.4mn cases a year. • Malakoff Corp Bhd's wholly-owned subsidiary Tanjung Bin Energy Sdn Bhd has issued RM800 million worth of Sukuk Wakalah for redemption of its outstanding junior term loan facility, totalling RM1.3bn. • TSR Capital Bhd has bagged a RM119.7mn contract from the East Coast Economic Region Development Council to build a port link road in Kuantan Port City, Pahang. • Ekovest Bhd announced that it has received the nod from Kuala Lumpur City Hall for a RM79mn "Blue River Project" contract, which is part of the long-due project spanning 10.7 km along the Klang River and Gombak River. • UEM Edgenta Bhd will issue Islamic commercial papers and Islamic medium-term notes with a combined aggregate up to RM1bil in nominal value and a sub-limit of RM300mm. • Puncak Niaga Holdings Bhd's unit Puncak Niaga Construction Sdn Bhd has been ordered to pay its former subcontractor, Genbina Sdn Bhd, RM5.9mil out of the principal claim sum of RM15.7mn. • My EG Services Bhd has joined forces with a Philippine company to develop electronic government services projects and provide electronic payment services in the Philippines. • Digistar Corp Bhd has launched its comprehensive security system and services - Panther Mobile - and it has roped in Celcom Axiata Bhd as partner. • Scomi Group Bhd is forming a joint venture company with a solar power firm Synergy Generated Sdn Bhd to bid for engineering, procurement and construction contracts in the renewable energy sector, particularly for solar photovoltaic farms. • Berjaya Food Bhd 3QFY17 net profit fell 36.83% YoY to RM4.7mn due to losses incurred by Kenny Rogers Roasters chain operation as a result of weak consumer sentiment in Malaysia as well as higher write down of fixed assets. • The US Federal Reserve raised interest rates by 25 basis points in its March 2017 FOMC meeting and continued to project two more increases this year. • China targets about 6.5% economic growth this year, which is slower than the 6.7% expansion achieved in 2016. 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 Thursday , March 16, 2017 FBMKLCI: 1,717.36 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 p 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 taresearch@ta.com.my www.taonline.com.my Rebound Likely on Less Hawkish US Fed Tone Local blue chips ended lower Wednesday, pressured by profit-taking interest ahead of the US Federal Reserve’s decision on raising interest rates. The KLCI closed 5.11 points down at 1,717.36, off an early high of 1,719.27 and low of 1,713.92, as losers beat gainers 480 to 395 on reduced turnover of 3.3bn shares worth RM2.23bn. Supports Revised Lower to 1,705/1,690 The local market should rebound today following the overnight rebound on oil prices and the less hawkish tone from the US Federal Reserve after it raised interest rates. Immediate uptrend supports for the index are revised lower to 1,705 and 1,690, representing the rising 30 and 50-day moving averages. Key upside hurdles remains the recent high of 1,734, next at 1,744, the 3/8/15 peak, and 1,758, the 23.6%FR of the 1,310 to 1,896 upswing. Buy Weakness in Hock Seng Lee & Sunway Construction Any price weakness on Hock Seng Lee shares towards the low of 12/08/16 (RM1.58), matching the lower Bollinger band, would be good buying opportunity for rebound towards 38.2% FR (RM1.79), and FR 50%FR (RM1.86) with stronger resistance coming at 61.8% FR (RM1.93).Similarly, further dip on Sunway Construction shares towards the 76.4%FR (RM1.61), would be attractive to buy towards the peak of 02/21/17 100%FR (RM1.81) with confirmed breakout to target the 123.6%FR (RM2.01) and 138.2% (RM2.13), going forward. Asian Stocks Mixed as Toshiba Plunged 12% on Delisting Fear Asian equities struggled on Wednesday, ahead of a rates decision from the U.S. Federal Reserve and as Dutch voters head to the polls. In Japan, the Nikkei 225 closed down 0.16 percent or 32.1 points at 19,577.38, as the yen strengthened against the dollar. A stronger yen is generally seen as a negative for Japanese stocks. Toshiba fell 12.3 percent to 189.50 yen per stock, after the Tokyo Stock Exchange put its shares under supervision to see whether it meets the delisting criteria following the conglomerate postponing its official third-quarter earnings. Australia's ASX 200 closed up 0.26 percent or 14.9 points at 5,774. South Korea's Kospi closed almost flat at 2,133. Earlier, local media outlets said the country would hold a presidential election on May 9 to replace impeached leader Park Geun-hye. On the Chinese mainland, the Shanghai composite finished up 0.08 percent or 2.6 points at 3,241.94 and the Shenzhen composite closed flat at 2,026.76. During Asian hours, oil prices recouped some of their losses. U.S. crude was up 1.49 percent at USD48.43 a barrel while Brent crude added 1.24 percent to USD51.55. All eyes were on the Fed's monetary policy decision, due Thursday morning Asian time. Market expectations for a 25-basis-point rate hike stood at 93 percent on the CMC Group FedWatch Tool. Page 1 of 7
  4. TA Securities 16-Mar-17 A Member of the TA Group Wall Street Higher as Fed Raise Rates U .S. stocks closed higher Wednesday, helped by a bounce in oil prices, after the Federal Reserve took a less aggressive stance than expected. The central bank did raise interest rates, as expected. Financial stocks were the only decliner in the S&P 500. The energy sector led advancers, closing up nearly 2.1 percent as oil reversed a seven-day losing streak. U.S. crude oil futures settled up 2.39 percent at USD48.86 a barrel after weekly crude inventory data showed a drawdown in stockpiles. In economic news, the Empire State Manufacturing Index edged lower to 16.4 for March. The new orders index climbed eight points to 21.3, its highest level since 2009, according to the New York Fed. A separate report showed home builder sentiment hit 71 in March, its highest in 12 years. The Dow Jones industrial average closed up 112.73 points, or 0.54 percent, at 20,950.10. Caterpillar was the greatest advancer, while American Express was the greatest laggard. The S&P 500 closed up 19.81 points, or 0.84 percent, at 2,385.26. Energy was the top advancer, while financials were the only decliner. The Nasdaq composite gained 43.23 points, or 0.74 percent, to 5,900.05. Page 2 of 7
  5. TA Securities 16-Mar-17 A Member of the TA Group News In Brief Corporate The validity of the letter of award to the Gamuda Bhd-led consortium chosen as project delivery partner for the RM46bn Penang Transport Master Plan has been extended till Aug 31 . This is second extension of the LOA by the Penang government after the previous one, announced on July 29 last year, expired on Feb 28. Gamuda holds a 60% stake in the consortium known as SRS Consortium. Its partners are Ideal Property Development Sdn Bhd and Loh Phoy Yen Holdings Sdn Bhd, which both own 20% stakes. (Bursa Malaysia / The Edge) Comment: This is the second extension and no reason was provided for the extension of the validity of the letter of award. We are not entirely surprised given the scale and complexity of this project, and the unconventional payment structure of the project. We have not factored in any contribution from this project given the uncertainty in the implementation of the project. Maintain our BUY call on the stock with an unchanged target price of RM5.62/share. Fraser & Neave Holdings Bhd (F&N) has invested RM31.5mn in a ultra-high temperature (UHT) processing line at its plant in Kuching. This first-of-its-kind UHT line in Sarawak, will allow the company to capture increasing demand with an added capacity of 3.4mn cases a year. F&N pointed out the investment in the line was part of the over RM300mn capex budgeted for two years to ensure the sustainability of the group’s business for the future. The new line is expected to offer the group an estimated annual savings of RM2.8mn in logistics cost over the next decade. Within the 7.4-acre site, F&N has a carbonated soft drink (CSD) canning line, a CSD polyethylene terephthalate (PET) line, a cordial line, a bag-in-box (BIB) line and now we have a brand new UHT line. (StarBiz) Comment: We are not surprised by this news as this is in line with F&N growth strategy to have an integrated production line for costs efficiency optimization. The new line will add 3.0% more capacity to the total existing Malaysia soft drink operations, which prior to this has a total capacity of 112.0mn cases a year with a utilization rate of 85%. We have already accounted the amount of CAPEX in our model with an average of RM150mn annually between FY17-FY18 and funding is not an issue as F&N has been in a net cash position since FY14. Hence no change in our earnings forecast. with a maintained Sell call based on 21x CY17 EPS. Target price is retained at RM21.63/share. Malakoff Corp Bhd’s wholly-owned subsidiary Tanjung Bin Energy Sdn Bhd (TBE) has issued RM800 million worth of Sukuk Wakalah. Malakoff said proceeds from the sukuk will be used for redemption of its outstanding junior term loan facility, totalling RM1.3bn. The loan was in pursuant to the turnkey contract entered into in 2012, between Tanjung Bin Energy and Tanjung Bin Energy Issuer Bhd. Malakoff said the sukuk is backed by an unconditional and irrevocable subordinated cash deficiency support from the company. (Bursa Malaysia / The Edge) TSR Capital Bhd has bagged a RM119.7mn contract from the East Coast Economic Region Development Council (ECERDC) to build a port link road in Kuantan Port City, Pahang. TSR said its wholly-owned subsidiary TSR Bina Sdn Bhd has accepted a letter of acceptance from ECERDC for the project under Package 3B, which includes constructing a toll plaza, trumpet interchange, Malaysia-China Kuantan Industrial Park (Phase 2) inner road and drainage diversion works. The project's construction period is 130 weeks, commencing from the date of site possession. (Bursa Malaysia / The Edge) Ekovest Bhd announced that it has received the nod from Kuala Lumpur City Hall (DBKL) for a RM79mn “Blue River Project” contract. The The Blue River Project is part of the longdue ROL project spanning 10.7 km along the Klang River and Gombak River, of which Ekovest-Malaysian Resources Corp Bhd (MRCB) consortium was the project delivery partner (PDP) since 2011. (Bursa Malaysia / The Edge) Page 3 of 7
  6. TA Securities 16-Mar-17 A Member of the TA Group UEM Edgenta Bhd will issue Islamic commercial papers (ICP programme) and Islamic medium-term notes (IMTN) with a combined aggregate up to RM1bil in nominal value and a sub-limit of RM300mm. It said the proceeds raised from the sukuk programmes would be utilised for its syariah-compliant general corporate purposes. (Bursa Malaysia / StarBiz) Puncak Niaga Holdings Bhd’s unit Puncak Niaga Construction Sdn Bhd (PNCSB) has been ordered to pay its former subcontractor, Genbina Sdn Bhd, RM5.9mil out of the principal claim sum of RM15.7mn. Puncak Niaga said PNCSB had “successfully defended” a substantial portion of Genbina’s claims in relation to judgements for the notices of adjudication dated May 27 and June 14, 2016. (Bursa Malaysia / StarBiz) My EG Services Bhd (MyEG) has joined forces with a Philippine company to develop electronic government services projects and provide electronic payment services in the Philippines. The company signed an agreement with i-Pay Commerce Ventures Inc (IPCVI) to establish a joint venture company with MyEG holding a 40% stake and IPCVI 60%. IPCVI is a payment processing provider and a direct agent of Western Union in Philippines. (Bursa Malaysia / The Edge) Digistar Corp Bhd has launched its comprehensive security system and services - Panther Mobile – and it has roped in Celcom Axiata Bhd as partner. In a statement Wednesday, Digistar said Panther Mobile was an expansion from the state-of-the-art Panther911 Central Monitoring Station (CMS) Command Centre. (StarBiz) Scomi Group Bhd is forming a joint venture company with a solar power firm Synergy Generated Sdn Bhd to bid for engineering, procurement and construction (EPC) contracts in the renewable energy sector, particularly for solar photovoltaic farms. Scomi said the group will be the majority shareholder of this JV company with 51% interest while Synergy Generated will hold the remaining 49%. (The Edge) SCGM Bhd experienced a marginal drop in its third quarter net profit at RM7.0mn for the period ended Jan 31, 2017 (3QFY17) from RM7.1mn a year ago. The lower earnings were due to higher cost of production resulting from an increase in resin price, higher depreciation of property, plant and equipment, and higher electricity consumption. For the cumulative nine months ended Jan 31, 2017 (9MFY17), net profit grew 7.1% to RM17.9mn from RM16.7mn in 9MFY16. (Bursa Malaysia / The Edge) Berjaya Food Bhd (BFood) posted a 36.83% fall in net profit for the third quarter ended Jan 31, 2017 (3QFY17) to RM4.7mn, from RM7.4 million a year earlier. The company mentioned that the lower net profit was mainly due to losses incurred by Kenny Rogers Roasters chain operation as a result of weak consumer sentiment in Malaysia as well as higher write down of fixed assets arising from the closure of certain non-performing restaurants. For the cumulative nine months of FY17, its net profit fell 25.4% to RM14.7mn from RM19.7mn a share a year ago. (Bursa Malaysia / The Edge) Page 4 of 7
  7. TA Securities 16-Mar-17 A Member of the TA Group News In Brief Economy Asia Indonesia Export , Import Growth Slowdown in February Indonesia's exports and imports expanded at a slower pace in February compared to a month earlier, as expected in a poll, data from the statistics bureau showed. Shipments from Southeast Asia's largest economy rose 11.16% on an annual basis in February to $12.57 billion. Consensus had expected a 15.19% growth. Imports rose 10.61% in February from the same month a year ago to $11.26 billion. Analysts in the poll had expected a growth of 13%. Indonesia's trade surplus for February stood at $1.31 billion, smaller than the revised $1.43 billion the country had in January. The poll had seen a surplus of $1.22 billion. (CNBC) China Set to See Steady Growth, Says Li China's economy is set to log steady growth and there is no scope for hard landing, Premier Li Keqiang said. Nonetheless, the economy faces significant external risks, he told reporters after the conclusion of the annual national legislative session. China targets about 6.5% economic growth this year, which is slower than the 6.7% expansion achieved in 2016. There are no systemic risks to China's financial system. Policymakers have a good reserve of policy tools if needed to avoid such risks, he added. Further, Li said China and the U.S. share common interest on areas like jobs, foreign exchange and security. China doesn't want to see a trade war with the US, Li said. (RTT News) Continued Capital Outflow from China to Constrain Monetary Policy, says Moody's Moody's Investors Service says that the likely persistence of capital outflows from China (Aa3 negative) over the rest of this year could constrain monetary policy and may lead to a more activist fiscal policy, if the government's growth target is to be achieved. "Moreover, if capital outflows persist, domestic liquidity conditions are likely to tighten further, with small- and mid-sized banks -- which are most reliant on wholesale funding -- feeling the greatest impact," says Michael Taylor, a Moody's Managing Director. "However, we expect most rated banks and non-financial companies to remain resilient both to the intensified application of capital controls and to a hypothetical further modest depreciation of the RMB," adds Taylor. Moody's conclusions are contained in its just-released report on China credit, "Sustained Capital Outflows Constrain Policy and Pressure the Currency, but Companies Largely Resilient". In his report on government work delivered on 5 March, Premier Li Keqiang stated that China will strive to maintain a stable currency within the global monetary system during year. (The Star) Japan Industrial Production Falls Less than Estimated Japan's industrial production declined less than initially estimated in January, latest figures from the Ministry of Economy, Trade and Industry showed. Industrial production fell 0.4% month-over-month in January instead of a 0.8% drop estimated earlier. It was the first decline in six months. In December, production had risen 0.7%. Inventories dropped 0.1% over the month, while it showed no variations in the preliminary data. At the same time, shipments grew 0.3% in January, revised from a 0.4% decline seen in the flash data. On an annual basis, industrial production climbed at a faster pace of 3.7% in January, following a 3.2% gain in the prior month. Data also revealed that capacity utilization edged up 0.1% monthly in January, after 0.6% increase in December. (RTT News) Australia Consumer Confidence Steady in March – Westpac Consumer confidence in Australia showed little movement in March, the latest survey from Westpac Bank and the Melbourne Institute showed with an index score of 99.7 - up 0.1% from the February reading. That follows the 2.3% jump in February to a score of 99.6. But the index remains below the boom-or-bust line of 100 that separates optimism from pessimism. (RTT News) Singapore’s Unemployment and Layoffs Up Last Year, While Job Vacancies Fell On several counts, the labor market in 2016 went through its roughest patch in years. Page 5 of 7
  8. TA Securities 16-Mar-17 A Member of the TA Group Unemployment rose , and more people took longer to find work. Layoffs went up as well, continuing an uptrend since 2010. The number of job vacancies fell, lowering the ratio of job openings to job seekers. The bright spot was that employment growth for locals strengthened, as 11,200 more were in jobs at the end of 2016 compared to the start of the year, up from growth of just 700 the year before. These trends shown in the official fullyear data that the Ministry of Manpower (MOM) released largely confirmed the preliminary data released in January. The annual average unemployment rate last year rose to 2.1% overall, up from 1.9% the year before. For Singaporeans, it rose to 3.1%, up from 2.9%, while for Singaporeans and permanent residents combined, it rose to 3% from 2.8%. (The Straits Times) U.S. Fed Sees Two More Rate Increases in 2017 Federal Reserve officials still expect to raise short-term interest rates two more times this year after lifting them—and they see no major changes in their economic outlook. In economic projections released Wednesday following a two-day policy meeting, officials also penciled in three more quarter-percentage-point moves in 2018. They also see interest rates settling at their long-run average of 3% by the end of 2019, slightly sooner than they foresaw in their December projections. Officials took the first step by raising their benchmark federal-funds rate as expected by a quarter-percentage-point to a range between 0.75% and 1 %. Minneapolis Fed President Neel Kashkari cast the only dissenting vote, saying he preferred to stand pat. The Fed’s new projections suggest officials remain confident the economy will evolve as they expect. Economic projections changed little from December, indicating that nothing has happened in the past three months to knock them off their outlook. Nine of the 17 Fed officials who submitted projections indicated three rate increases would be appropriate in 2017, up from six officials in December. Only three officials saw the need for fewer than three moves this year versus six in December. The latest projections are a sign that officials believe they are moving toward a faster pace of rate increases than in the past few years. The Fed began 2015 expecting to raise rates three times and 2016 expecting to raise them four times. But they ended up having to backtrack on those projections and made only one move in each of those years. Fed Chairwoman Janet Yellen indicated in a March 3 speech that she expects a faster pace than in those earlier years. (The Wall Street Journal) U.S. Consumer Prices Rose 0.1% in February U.S. consumer prices rose further in February, the latest sign inflation is near the Federal Reserve’s target and likely clearing the path for higher interest rates. The consumer-price index, measuring what Americans pay for everything from cars to dental care, increased 0.1% in February from a month earlier, the Labor Department said. Outside of energy and food costs, so-called core prices rose 0.2%. The figures matched economists’ expectations and bolster the Fed’s view of underlying strength in the economy. Consumer prices have risen 2.7% over the past year, the biggest annual gain since the 12 months through March 2012. Core prices have risen 2.2% from a year earlier. Wednesday’s report showed most major consumer expenses are raising. Food costs climbed 0.2% from a month earlier. The cost of clothing and rent also increased. Energy costs fell 1% from January but were still 15% higher from a year ago. Prices of new used vehicles also fell from the prior month. Separately, the Labor Department said workers’ earnings grew modestly. Private sector workers earned an average 0.1% more a week, after inflation, compared with the prior month. Their earnings rose because of an increase in hourly wages and steady weekly hours. (The Wall Street Journal) U.S. Retail Sales in February Post Smallest Gain in Six Months U.S. retail sales in February posted the smallest gain in six months, indicating a tempering of the consumer spending that’s been carrying the economy. Purchases rose 0.1%, matching the Bloomberg survey median estimate, after a 0.6% increase in the prior month that was stronger than previously reported, Commerce Department figures showed. Just Page 6 of 7
  9. TA Securities 16-Mar-17 A Member of the TA Group four of the 13 major retail categories saw gains in February sales . Receipts dropped at electronics and appliances stores, apparel outlets and car dealers, a sign of more moderate consumption in the first quarter. While purchases may have been restrained by a temporary slowdown in individual tax refunds, robust confidence, healthy job growth and steady incomes may provide some fuel for a recovery in spending. (Bloomberg) New York Manufacturing Index Pulls Back Less Than Expected in March Activity in the New York manufacturing sector grew at a modestly slower rate in the month of March, according to a report released by the Federal Reserve Bank of New York y. The New York Fed said its business conditions index dipped to 16.4 in March from 18.7 in February, although a positive reading still indicates growth. Economists had expected the index to drop to 15.0. (RTT News) U.K. UK Unemployment Rate Drops to Lowest Level Since 1975 Britain’s unemployment rate has dropped to the joint-lowest level since 1975, but workers are facing a renewed squeeze on their living standards as wage growth weakens and inflation begins to bite. The official unemployment rate fell from 4.8% to 4.7% in the three months to January, while the employment rate held steady at a record high of 74.6%, the Office for National Statistics said. Unemployment also fell to 4.7% in 2005, but has not been lower than this level since the summer of 1975. The UK labor market has been resilient in the wake of the country’s vote to leave the EU last June, though the pace of job creation has slowed. The number of people in work increased 92,000 in the three months to January, less than the average growth of 137,000 per quarter between 2012 and 2015. Average annual wage growth slowed from 2.6% to 2.2% in the three months to January, the ONS said. After inflation, this meant that real wage growth was just 0.8%, the lowest level recorded since 2014. Real wages actually fell between December and January, though the figures can be volatile from month to month. (Financial Times) Share Buy-Back: 15 Mar 2017 Company ANNJOO BKAWAN FIAMMA P&O SIGN SNTORIA TEXCHEM WTHORSE Bought Back Price (RM) Hi/Lo (RM) 33,100 109,500 360,000 81,000 130,000 50,000 1,000 35,000 2.55/2.54 19.32/19.28 0.58 1.27/1.26 0.90/0.89 0.75/0.72 1.47 2.00 2.58/2.54 19.36/19.28 0.58 1.27/1.25 0.90/0.89 0.755/0.715 1.47/1.45 2.00/1.97 Total Treasury Shares 22,202,900 31,762,031 13,598,000 9,812,800 9,810,200 571,000 2,526,200 10,832,300 Source: Bursa Malaysia 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 7 of 7
  10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 15-Mar-17 2.07 2.47 6.13 Target Price BETA (RM) EPS (sen) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) FY17 FY18 52weeks 52weeks High Price % Chg Low Price % Chg % Chg YTD 2.36 2.20 5.12 0.98 0.58 1.19 10.8 22.7 17.7 15.8 23.8 27.6 19.2 10.9 34.7 13.1 10.4 22.2 5.7 3.6 1.8 7.6 3.6 2.9 2.44 2.70 7.04 -15.2 -8.5 -12.9 1.95 1.95 4.43 6.2 26.7 38.4 -2.8 15.4 34.1 3.90 3.20 5.00 5.60 14.90 8.60 20.90 4.40 8.50 1.25 0.94 1.27 1.30 0.66 0.93 0.80 1.27 0.67 35.8 29.4 46.4 50.6 101.3 73.7 136.6 49.0 36.4 37.7 33.1 50.6 55.6 109.8 82.8 140.4 51.7 38.2 11.2 9.7 10.4 10.6 13.4 11.9 14.5 10.6 25.2 10.6 8.6 9.5 9.6 12.4 10.6 14.1 10.0 24.0 3.8 2.8 3.3 3.8 3.0 5.7 2.8 2.3 3.7 3.8 2.8 3.7 4.2 3.0 5.7 2.9 2.3 3.7 4.37 2.89 5.03 5.50 13.76 9.20 20.28 5.25 9.43 -8.5 -1.0 -4.4 -2.5 -1.3 -4.9 -2.1 -1.3 -2.7 3.60 2.08 3.90 4.11 12.70 7.50 18.48 4.37 8.20 11.1 37.5 23.3 30.3 6.9 16.7 7.5 18.6 12.0 7.5 19.7 11.6 18.8 0.6 6.7 0.7 10.0 3.7 0.45 1.27 5.00 3.40 0.63 1.72 1.86 5.91 0.49 1.45 5.62 3.27 0.58 1.90 1.50 5.58 0.82 0.70 1.03 1.07 1.12 na 1.05 0.14 6.0 12.9 32.9 16.8 9.6 12.6 12.8 44.4 6.0 13.2 36.7 20.9 9.9 12.5 12.7 45.8 7.4 9.8 15.2 20.2 6.5 13.6 14.5 13.3 7.4 9.6 13.6 16.2 6.4 13.7 14.6 12.9 0.0 2.2 2.4 2.8 1.6 3.2 1.6 4.2 2.2 2.2 2.4 2.8 1.6 3.2 1.6 4.2 0.51 1.35 5.07 3.61 0.77 1.81 1.98 6.06 -12.7 -6.1 -1.4 -5.8 -18.2 -5.0 -6.1 -2.5 0.36 0.76 4.59 3.07 0.41 1.42 1.41 5.00 23.6 68.0 8.9 10.7 55.6 21.1 31.9 18.2 2.3 21.0 4.6 6.2 9.6 1.2 7.5 0.5 2.00 2.00 0.47 15.4 15.6 13.0 12.8 5.0 5.0 2.40 -16.7 1.93 3.6 -0.5 14.38 17.50 15.41 21.08 0.58 0.58 69.6 93.1 77.5 20.7 101.9 18.8 18.6 17.2 4.8 4.8 5.4 5.2 15.20 18.74 -5.4 -6.6 12.38 13.60 16.2 28.7 3.3 6.8 2.32 7.59 23.96 76.60 2.90 1.94 4.50 0.90 2.23 9.59 21.63 83.86 4.00 2.08 4.17 1.10 0.43 0.35 0.34 0.38 0.48 0.64 0.47 0.60 6.5 35.9 97.9 291.3 23.5 22.9 12.7 9.6 7.5 40.5 119.6 318.0 26.5 22.9 15.8 13.2 35.7 21.1 24.5 26.3 12.3 8.5 35.5 9.4 30.8 18.8 20.0 24.1 10.9 8.5 28.5 6.8 0.8 4.0 2.6 3.7 5.2 4.1 1.0 5.6 1.0 5.0 3.1 3.9 6.2 4.1 1.1 5.6 3.00 9.58 27.00 81.80 3.08 1.99 4.70 1.07 -22.7 -20.8 -11.3 -6.4 -5.8 -2.5 -4.2 -15.7 2.11 7.31 19.66 73.82 1.92 1.42 4.14 0.78 10.0 3.8 21.9 3.8 51.2 36.6 8.6 15.4 -9.7 3.6 2.0 -2.0 13.7 12.1 3.9 13.2 46.60 54.22 1.03 271.1 271.8 17.2 17.1 5.6 5.7 55.78 -16.5 40.31 15.6 5.5 9.62 5.35 10.34 6.10 1.33 1.25 45.0 25.7 51.0 27.9 21.4 20.8 18.9 19.2 0.5 1.5 0.6 1.7 9.83 5.51 -2.2 -2.8 7.50 4.17 28.3 28.2 21.1 18.4 2.93 0.11 4.01 0.10 0.71 1.14 24.5 0.2 24.7 0.3 11.9 46.6 11.9 34.8 7.2 0.0 7.3 0.0 3.47 0.11 -15.6 -4.5 2.86 0.05 2.4 110.0 -1.0 110.0 5.94 4.05 6.40 4.61 0.78 0.51 13.9 13.3 17.9 16.5 42.7 30.4 33.1 24.6 0.7 1.5 0.8 1.9 6.79 4.37 -12.5 -7.3 5.78 3.97 2.8 2.0 -6.5 -3.1 4.77 6.30 1.98 5.20 2.07 4.50 6.80 1.90 4.90 2.55 0.55 0.10 0.37 -0.21 0.30 18.2 35.8 16.2 25.6 4.3 21.2 40.5 18.2 30.0 7.1 26.2 17.6 12.3 20.3 48.3 22.4 15.6 10.9 17.3 29.3 1.7 2.8 2.4 2.5 0.5 2.0 3.2 2.8 2.9 0.9 5.03 7.07 2.88 5.51 2.74 -5.2 -10.9 -31.3 -5.6 -24.5 3.81 5.90 1.98 4.20 1.96 25.2 6.8 0.0 23.8 5.6 -1.2 -4.4 -6.2 -2.8 -12.3 INDUSTRIAL SCIENTX SKPRES 7.30 1.37 8.50 1.75 0.54 0.57 67.9 9.3 78.0 14.4 10.8 14.7 9.4 9.5 2.7 3.2 3.2 5.0 7.57 1.44 -3.6 -4.9 5.56 1.12 31.3 22.3 9.0 6.2 MEDIA ASTRO MEDIA PRIMA STAR 2.82 1.05 2.44 3.30 0.85 1.95 1.06 0.62 0.55 11.9 7.7 15.0 13.5 8.0 15.8 23.6 13.6 16.3 21.0 13.2 15.4 4.4 5.9 7.4 4.6 6.1 7.4 3.02 1.54 2.70 -6.6 -31.8 -9.6 2.56 1.00 2.20 10.2 5.0 10.9 8.5 -8.7 8.9 OIL & GAS EATECH MHB MISC PANTECH PCHEM SKPETRO UMWOG UZMA 0.67 0.92 7.40 0.52 7.28 1.80 0.65 1.74 0.45 0.96 8.16 0.52 7.91 1.92 0.54 1.40 na 1.78 0.87 1.25 1.15 2.41 1.95 1.43 11.5 -0.4 49.5 3.7 34.7 5.3 -14.7 11.3 11.9 1.1 56.1 4.3 39.3 4.6 -12.4 12.2 5.8 na 14.9 14.0 21.0 34.3 na 15.4 5.6 82.4 13.2 12.1 18.5 38.8 na 14.2 5.0 0.0 4.1 2.9 2.6 0.0 0.0 0.0 6.0 0.0 4.1 3.3 3.0 0.0 0.0 0.0 1.25 1.34 9.00 0.55 7.59 2.17 1.04 2.04 -46.4 -31.3 -17.8 -4.6 -4.1 -17.1 -37.5 -14.7 0.45 0.84 6.88 0.44 5.95 1.29 0.61 1.30 50.6 9.5 7.6 19.5 22.4 39.5 7.4 33.8 8.1 0.5 0.7 16.9 4.3 11.1 -25.7 2.4 BANKS & FINANCIAL SERVICES AFG 4.00 AFFIN 2.86 AMBANK 4.81 CIMB 5.36 HLBANK 13.58 MAYBANK 8.75 PBBANK 19.86 5.18 RHBBANK BURSA 9.18 CONSTRUCTION BPURI GADANG GAMUDA IJM SENDAI SUNCON WCT LITRAK Building Materials WTHORSE CONSUMER Brewery CARLSBG HEIM Retail AEON AMWAY F&N 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
  11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA 1.90 3.22 4.66 24.50 9.13 5.81 Target Price BETA (RM) 1.53 3.88 3.93 22.75 8.24 6.53 1.73 0.49 1.06 0.93 1.25 0.50 EPS (sen) PER (X) FY17 FY18 FY17 FY18 6.3 13.7 18.7 111.8 30.8 25.8 11.1 15.7 21.1 119.1 35.3 32.0 30.0 23.5 24.9 21.9 29.7 22.5 17.1 20.5 22.1 20.6 25.8 18.1 Div Yield (%) FY17 FY18 2.6 2.2 2.1 2.2 2.4 2.8 2.6 2.5 2.6 2.4 3.1 2.8 52weeks 52weeks High Price % Chg Low Price % Chg 2.52 3.74 5.04 25.50 9.30 6.19 -24.6 -13.9 -7.5 -3.9 -1.8 -6.1 1.31 3.18 4.07 22.62 7.10 5.53 45.0 1.3 14.5 8.3 28.6 5.1 % Chg YTD 22.6 -5.3 5.9 2.1 12.7 -3.2 PROPERTY GLOMAC 0.71 0.69 0.64 3.4 7.0 20.6 10.1 5.6 5.6 0.84 -15.5 0.68 4.4 2.2 HUAYANG 1.13 1.09 0.65 20.0 17.4 5.7 6.5 3.5 3.1 1.45 -21.9 1.05 7.6 0.0 IOIPG 1.90 2.10 0.90 14.7 15.3 12.9 12.4 3.7 3.9 2.46 -22.8 1.85 2.8 -2.5 Note: IOIPG 1 for 4 rights issue share, at an issue price of RM1.38 per rights share. Ex-Target price RM1.98. For more detail please refer to 21.11.16 report. MAHSING 1.41 1.60 0.64 14.5 12.5 9.7 11.3 4.3 3.9 1.70 -17.1 1.31 7.6 -1.4 SNTORIA 0.72 0.80 0.31 6.4 9.7 11.3 7.4 1.4 1.4 0.86 -16.3 0.69 4.3 -10.0 SPSETIA 3.40 3.82 0.68 27.7 24.5 12.3 13.9 4.1 4.1 3.59 -5.3 2.80 21.4 8.6 SUNWAY 3.15 3.40 0.50 31.2 33.3 10.1 9.5 3.8 3.8 3.24 -2.8 2.87 9.8 4.0 REIT SUNREIT 1.70 1.79 0.54 8.9 10.1 19.2 16.8 5.2 5.9 1.84 -7.6 1.51 12.6 -1.2 CMMT 1.65 1.78 0.62 8.1 8.5 20.4 19.4 5.5 5.7 1.72 -4.1 1.40 17.9 7.8 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.19 23.50 19.76 13.68 1.48 1.45 20.19 19.64 17.19 1.81 na 0.80 0.78 1.02 0.58 6.9 98.4 89.4 129.4 8.8 8.3 102.3 91.6 132.7 10.6 17.2 23.9 22.1 10.6 16.9 14.4 23.0 21.6 10.3 14.0 5.9 3.1 3.2 2.6 6.8 4.9 3.2 3.0 2.6 6.8 1.80 25.70 22.66 14.90 1.64 -33.9 -8.6 -12.8 -8.2 -9.8 1.14 22.16 19.56 13.00 1.38 4.4 6.0 1.0 5.2 7.2 -13.1 -1.3 -7.2 -1.6 -0.7 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 4.67 5.12 6.37 6.31 5.25 4.90 5.95 6.95 1.25 0.97 0.73 0.70 16.7 20.8 25.1 21.4 17.6 21.1 25.4 22.3 27.9 24.6 25.4 29.4 26.5 24.3 25.0 28.3 1.8 4.1 3.1 3.1 1.9 4.1 3.1 3.2 6.00 5.15 6.49 6.90 -22.2 -0.6 -1.8 -8.6 4.11 4.31 5.36 5.81 13.6 18.8 18.8 8.6 -1.1 6.0 6.5 6.1 TECHNOLOGY Semiconductor & Electronics IRIS 0.14 INARI 1.91 MPI 10.16 UNISEM 3.04 0.14 2.05 10.55 3.15 1.25 0.77 0.46 0.77 -1.2 10.7 88.9 26.9 0.9 na 12.8 17.8 101.9 11.4 29.1 11.3 14.9 14.9 10.0 10.5 0.0 2.2 2.3 3.9 0.0 2.6 2.3 3.9 0.24 2.01 10.20 3.07 -43.8 -5.0 -0.4 -1.0 0.10 1.28 6.86 2.12 35.0 49.0 48.1 43.4 22.7 15.1 37.1 28.8 2.86 6.93 3.02 7.68 1.18 1.44 33.5 9.8 34.9 10.2 8.5 70.4 8.2 68.1 0.0 1.4 0.0 1.4 3.30 7.30 -13.3 -5.1 1.72 5.76 66.3 20.3 24.9 14.4 1.62 3.83 1.88 4.51 0.85 0.71 15.5 19.3 21.7 17.4 10.4 19.8 7.5 22.0 3.4 3.8 4.3 3.4 1.76 4.59 -8.0 -16.6 1.22 3.74 32.8 2.4 1.9 -10.9 TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 19.13 OCBC 9.65 UOB 21.51 PLANTATIONS WILMAR IFAR 3.62 0.52 Target Price Beta (S$) EPS (cent) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) FY17 FY18 52week 52week High Price % Chg Low Price % Chg % Chg YTD 16.70 8.50 19.40 1.21 1.13 1.08 173.8 87.8 195.7 190.2 11.0 92.5 11.0 209.4 11.0 10.1 10.4 10.3 3.1 5.7 3.3 3.1 6.7 3.3 19.4 9.8 22.0 -1.2 -1.3 -2.0 14.63 8.84 17.41 30.8 17.5 23.5 10.3 8.2 5.4 3.45 0.51 0.91 1.12 28.9 3.9 31.1 4.3 11.6 12.2 2.2 1.8 2.5 2.0 4.0 0.6 -9.5 -16.8 2.96 0.44 22.3 18.2 0.8 -1.0 12.5 13.3 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. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
  12. IPO TA Securities Thursday , 16 March 2017 FBM KLCI: 1,717.36 Sector: Property A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Fair Value: RM 1.34 Eco World International Bhd Main Market Listing Proxy for Foreign Investment Exposure Not Rated THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Thiam Chiann Wen Tel: +603-2167 9615 cwthiam@ta.com.my Background Eco World International Bhd (EWI) is principally involved in investment holdings. EWI owns a 75% stake in three on-going property development projects in London, United Kingdom (UK) and 100% stake in an on-going property development project in West Sydney, Australia. The combined GDV of these projects is estimated at RM13.0bn. IPO Structure The IPO entails an offering of 2.2bn new shares, which make up 89.7% of the enlarged issued and paid-up capital of EWI. The institutional price will be determined by way of book building while for the retail application, it is payable at RM1.20 upon application. All in, the IPO is expected to raise gross proceeds of up to around RM2.6bn. Investment Case • Experienced key management team with extensive track record • Backed by established property developers • Benefit from sustained demand for property in London and Australia Key Risks • Project concentration risk • Foreign currency risk www.taonline.com.my Share Information Listing Main Market Enlarged Share Capital (mn) 2400.0 Market Cap @ RM1.20 (RM mn) 2880.0 Issue price (RM) 1.20 Estimated free float (%) 35.7 Tentative listing date 3-Apr-17 Tentative Listing Dates Event Tentative Date Opening of the IPO 9-Mar-17 Closing of the IPO 20-Mar-17 Balloting of Applications 22-Mar-17 Allotment of Shares 30-Mar-17 3-Apr-17 Listing Ratio & Analysis Forecast and Valuation EWI is poised to remain in the red in FY17, due to mismatch between initial expenses incurred and revenue recognition for projects in UK, which are based on completion method. Nevertheless, we expect EWI to enjoy bumper earnings in FY18 and FY19, driven by lumpy revenue recognition of its London projects. We arrive at a fair value of RM1.34/share for EWI, based on 1.1x FY18 P/B after ascribing a 22% premium to the Malaysia developers’ average P/B of 0.9x. We think this is justifiable considering EWI’s favourable prospect driven by strong management team and established branding NTA per share (post IPO) (sen) 1.10 Price to NTA (x) 1.09 Proforma ROE (%) nm Proforma ROA (%) nm Proforma Gearing (x) Utilisation of Proceeds Debt Repayment Net Cash RM(mn) % 1367.0 52.9 Settlement of acquisition of EW Investment 38.0 Earnings Summary (RM mn) YE Oct 31 2015# 2016# 2017F 2018F 2019F Revenue 7.5 1.0 1.1 1.2 1.3 EBITDA (78.8) (191.8) (29.5) (32.5) (35.8) EBITDA Margins (%) (1,057.2) (19,772.1) (2,764.8) (2,772.1) (2,772.5) Share of profit/(loss) in JVs (41.7) (59.7) (59.7) 397.8 567.1 Pretax profit (101.5) (236.9) (149.7) 330.0 521.2 Net profit (99.3) (238.3) (117.2) 247.3 392.5 Net profit -adj (99.3) (238.3) (117.2) 247.3 392.5 EPS -Adj (sen) (40.3) (96.7) (4.9) 10.3 16.4 EPS Growth (%) nm nm nm >100 58.7 PER (x) nm nm nm 11.6 7.3 Gross Div - adj (sen) 4.1 Div Yield (%) 3.4 ROE (%) nm nm nm 9.0 13.0 #: Proforma * EWI’s 75% interest in the EW-Ballymore is accounted as a JV using the equity method of accounting. Its contribution is reflected in the line item” Share of profit/(loss) in JV” Source: Prospectus, TA Securities Page 1 of 9 1.5 Working Capital 1126.0 43.6 Listing Expenses 53.0 2.1 2584.0 100.0 TOTAL
  13. TA Securities 16-Mar-17 A Member of the TA Group Background Eco World International Bhd (EWI) is principally involved in property development in international markets outside of Malaysia. EWI owns a 75% stake in three on-going property development projects in London, UK and 100% stake in one on-going property development project in West Sydney, Australia. The combined GDV of these projects is estimated at RM13.0bn. See Figure 1 for EWI group structure. EWI is scheduled to be listed on 3 April 2017. Based on the IPO price of RM1.20/share, EWI’s market capitalisation will be RM2.9bn. Figure 1: EWI Group Structure Source: Prospectus, TA Securities IPO Structure The IPO is expected to raise gross proceeds of up to around RM2.6bn, entailing an offering of 2.2bn new shares. These new shares make up 89.7% of the enlarged issued and paid-up capital of EWI. The remaining 10.3% is held by Tan Sri Liew Kee Sin, the Executive Vice Chairman of EWI. Specifically, the IPO involves; 1) shares allocation to strategic investors namely Eco World Development Group Bhd (EW Bhd) and GuocoLand Ltd, holding 1.3bn shares comprising 54% in total; 2) a retail offering of 408mn new shares comprising 17%; and 3) an institutional offering of 449mn shares comprising 18.7%. Figure 2: IPO Structure Beakdown of the Offering: No. of offer units (mn) % of total Units upon listing Retail Offering El i gi bl e EWI Pe rs ons : - Di rectors 38.0 1.58 - El i gi bl e empl oyee s 25.2 1.05 El i gi bl e EW Bhd Pers ons : - Di rectors 24.0 1.00 - El i gi bl e empl oyee s 32.8 1.37 240.0 10.00 Enti l tl e d s ha rehol ders of EW Bhd Ma l a ys i a n Publ i c (vi a ba l l oti ng) Subtotal 48.0 2.00 408.0 17.00 449.5 18.73 Institutional Offering Ma l a ys i a n a nd fore i gn i ns ti tuti ona l a nd s el ected i nve s tors EW Bhd Al l oca ti on 648.00 27.00 GuocoLa nd Al l oca ti on 648.00 27.00 Subtotal Ta n Sri Li ew & Da to' Beh Ha ng Kong Total 1,745.46 72.73 246.54 10.27 2,400.00 100.00 * Dato' Beh Holds two EWI shares Source: Prospectus, TA Securities Page 2 of 9
  14. TA Securities 16-Mar-17 A Member of the TA Group Note that , EWI has also signed a master cornerstone placement agreement with Employees Provident Fund Board (EPF), Permodalan Nasional Bhd (PNB) and Kumpulan Wang Persaraan (Diperbadankan) (KWAP), which have agreed to subscribe for 212.4mn shares in aggregate, out of the 449.5mn new shares allocated under the IPO’s institutional offering. The three investors cover approximately 47.3% of the institutional offering or 8.9% of the total offering size. The institutional price will be determined by way of book building while for the retail application, it is payable at RM1.20 upon application. If the final retail price is lower, the difference will be refunded. Figure 3: Illustrative Post-IPO shareholding structure upon listing Source: Prospectus, TA Securities Lock-up agreements According to prospectus, the major shareholders have entered lock-up agreements as set out below. Figure 4: Shareholders Lock-up Agreements Shareholders Lock-up period from listing date IPO Shares Warrant Shares Tan Sri Dato' Sri Liew Kee Sin 12 months 12 months Eco World Development Holdings Sdn Bhd, Dato' Leong Kok Wah, Liew Tian Xiong, Puan Sri Datin How Teng Teng, Sinarmas Harta Sdn Bhd and Tan Sri Abdul Rashid bin Abdul Manaf 6 months 6 months Throughout tenure of shareholders' agreement 6 months 12 months 6 months EWB GuocoLand Source: Prospectus, TA Securities Proposed Bonus Issue of EWI Warrants In conjunction with the proposed IPO of EWI and as an incentive to the shareholders of EWI subsequent to the proposed IPO of EWI, EWI will implement a bonus issue of up to 960mn EWI warrant to shareholders on a basis of two EWI warrants for every five EWI shares. Assuming all the warrants are converted into shares at the exercise price of RM1.45, this would enable it to raise RM1.4bn. Page 3 of 9
  15. TA Securities 16-Mar-17 A Member of the TA Group Utilisation of IPO Proceeds The group is targeting to raise RM2 .6bn from its IPO, of which 52.9% or RM1.4bn will be used for debt repayment within six months, while RM1.1bn or 43.6% will be earmarked for working capital to fund EWI’s existing four projects, namely, Wardian, Embassy Gardens and London City Island in London, as well as West Village in Parramatta, Sydney. Figure 5: Utilisation of Proceeds Details Estimated timeframe for the use of proceeds upon the listing of EWI RM mn % 1,211 46.9 156 6.0 1,367 52.9 38 1.5 1,126 43.6 Debt repayment - Repayment of bank borrowings Within 6 months - Repayment of advances Within 6 months Subtotal Settlement of the acquisition of Within 1 month EW investment Working Capital and/or future Within 36 months land acquisition(s) Estimated listing expenses Within 3 months Total 53 2.0 2,584 100.0 Source: Prospectus, TA Securities Investment Case 1. Experienced key management team with extensive track record EWI’s key management has over 20 years of relevant experience in the real estate industry both in Malaysia and internationally. The majority of EWI’s management team worked closely together in SP Setia for a number of years prior to joining EWI. In addition, the management team has a proven track record in completing the acquisition of prime development sites, such as the acquisition of Battersea Power Station site in Central London (while in SP Setia), and partnership with Ballymore Group to jointly develop three large scale residential projects in London. We believe such track record will provide EWI with a competitive advantage when prime sites are available to be acquired. 2. Backed by established property developers EWI is set to benefit from its partnership with its strategic investors (EW Bhd and GuocoLand). EW Bhd is a fast growing property developer in Malaysia with 8,052.7 acres of landbank across Klang Valley, Iskandar and Pulau Pinang and a combined total GDV of RM87.5bn. We believe the “ECOWORLD” brand is a highly sought after property name in Malaysia, which is evidenced by the total cumulative sales of RM6.8bn recorded by EW Bhd over its last two financial years. Through EW Bhd’s extensive network with 14 sales galleries spread across Malaysia as well as in Singapore, it will provide cross selling opportunities of “ECOWORLD” products. We understand that about 3.3% of the total EWI’s sales were attributable to cross-selling by EW Bhd. Meanwhile, we believe EWI could leverage on Guocoland’s track record in developing projects in Asia. We see potential ample co-investment opportunities with GuocoLand in property development, by pooling equity for acquisitions and/ or joint development, particularly in Singapore, China and the UK. As such, we are positive on the collaboration, as it will enable EWI to extend its development footprint without straining its financial resources. Page 4 of 9
  16. TA Securities 16-Mar-17 A Member of the TA Group 3 . Benefit from sustained demand for property in London and Australia EWI is expected to benefit from the projected shortfall in supply of residential properties in London and Parramatta, supported by sustained demand for residential properties in both cities resulting from growth in population and employment level as well as ongoing infrastructure development initiatives. According the Independent Market Research (IMR) Report, the supply of new homes in London has fallen drastically short of demand since the early 2000s. There were only 28,000 homes added to London’s housing stock in 2014/2015, which leaves a significant shortfall of 14,000 homes when compared to the London Plan’s revised minimum target of 42,000 additional homes per year from 2015 to 2025. Over to Australia, the record low interest rates and ongoing population growth are expected to continue to support growth in demand for dwellings. Future Plan - Achieving sustainable earnings growth The group intends to seek sustainable earnings growth by continually replenishing and growing its pipeline of projects through the acquisition of development sites or by entering into joint ventures with suitable partners. In terms of geographical preference, the group plans to grow its pipeline development in mature and economically vibrant markets, particularly in the UK and Australia market. In addition, EWI intends to have a spread of property projects at various stages of development and of varying construction duration, phasing and anticipated completion to ensure business sustainability and continuous revenue. To mitigate project execution risk, the group prefers to acquire projects which already have the relevant planning and development consents in place. Thus, this will provide the group with greater certainty and a quicker turnaround time from acquisition to launch. Risks 1. Project concentration risk One of the major risks to EWI relates to the group’s existing property development portfolio, which is relatively concentrated in London. The group’s property development in London accounts for roughly (i) 13.01 acres out of 14.19 acres (c.91.7%) of the total land area of all EWI’s property development projects and (ii) RM11.9bn out of RM13.0bn (c.92%) of the total estimated GDV of all EWI’s development projects. As such, EWI’s earnings will be severely affected by unforeseen events that will lead to deterioration in economic condition in the UK. Notably, London’s prime residential market is exposed to fluctuations in buyer sentiment and general economic pressures resulting from the Brexit Referendum. 2. Foreign currency risk EWI’s reporting currency is in RM whilst the functional and reporting currency of its subsidiaries and JVs are in foreign currencies, currently GBP, AUD and USD. As such, the group’s financial performance will be affected by fluctuations in the foreign currency exchange rates. Based on our sensitivity analysis, every 5% depreciation of the British pound would reduce EWI’s FY18-19 earnings by 56%. Financial Highlights From accounting perspective, revenue from the sale of property in UK and Australia can only be recognised upon physical completion and handover of vacant possession of the property. As such, the group’s FY15-16 pro forma revenue consisted of sales commissions derived from marketing services rendered by EW International to its EW-Ballymore JVs. Page 5 of 9
  17. TA Securities 16-Mar-17 A Member of the TA Group Based on the contractual agreement , EWI requires unanimous consent for all significant decisions over the relevant activities of EW-Ballymore Holdings Group (EW-Ballymore). As such, EWI’s 75% interest in the EW-Ballymore is accounted for not as a subsidiary but as a JV using the equity method of accounting. As a result, the group’s 75% interest in the results of the EWBallymore Holding Group is reflected in the line item “share of profit/(loss) in a JV”. Similarly, the assets and liabilities of the EW-Ballymore are not directly reflected in the group’s consolidated statement of financial position. However, its investment in the EW-Ballymore Holdings Group is accounted for in its asset line item, “investment in a JV”. EWI recorded RM41.7mn and RM59.7mn share of loss in a JV in FY15 and FY16 respectively. The losses related mainly to marketing related expenses, including sales commission fees and marketing costs related to the launching of the property development projects in London. Earnings Forecasts EWI is poised to remain in the red in FY17, largely derived from share of losses from JVs arising from mismatch between initial expenses incurred and revenue recognition for projects in UK, which are based on completed method. Nevertheless, we expect EWI to enjoy bumper earnings in FY18 and FY19, driven by lumpy revenue recognition of its London projects. Note that, EWI is expected to handover 2 Blocks out of 6 Blocks of London City Island Phase 2 and 1 Block of Embassy Gardens Phase 2 in 1H2018. Meanwhile, we expect earnings to grow 58% YoY in FY19, driven by completion of the remaining 4 blocks of London City Island Phase 2 and 1 Block of Embassy Gardens Phase 2 in 1H2019. Beyond our forecast horizon, Wardian London, and West Village, Parramatta are scheduled for completion in 1H2020. Our earnings projections are premised on the followings: 1) Overall take up rate of 90% during completion; 2) PBT margin of 20%; 3) Exchange rate of GBP1: RM5.44 and AUD1: RM3.33. Dividend Policy The group does not have a dividend policy at the moment. Nevertheless, we assume a dividend payout ratio of 25% in FY19, given bulk of the projects are targeted for completion in FY19/20. Valuation We arrive at a fair value of RM1.34/share for EWI, based on 1.1x FY18 P/B after ascribing a 22% premium to the Malaysia developers’ average P/B. We think this is justifiable considering EWI’s favorable prospect driven by strong management team and established branding. Meanwhile, our target price implies a FY18 P/E of 13x, which is at a 23% discount to the Malaysia developers’ average P/E of 15.8x. Page 6 of 9
  18. TA Securities 16-Mar-17 A Member of the TA Group Earnings Summary (RM mn) YE Oct 31 Revenue EBITDA EBITDA Margins Pretax profit Net profit Net profit -adj EPS -Adj EPS Growth PER Gross Div - adj Div Yield ROE (%) (sen) (%) (x) (sen) (%) (%) 2015# 7.5 (78.8) (1,057.2) (101.5) (99.3) (99.3) (40.3) nm nm nm 2016# 1.0 (191.8) (19,772.1) (236.9) (238.3) (238.3) (96.7) nm nm nm 2017F 1.1 (29.5) (2,764.8) (149.7) (117.2) (117.2) (4.9) nm nm nm 2018F 1.2 (32.5) (2,772.1) 330.0 247.3 247.3 10.3 >100 11.6 9.0 2019F 1.3 (35.8) (2,772.5) 521.2 392.5 392.5 16.4 58.7 7.3 4.1 3.4 13.0 #-: Proforma * EWI’s 75% interest in the EW-Ballymore is accounted as a JV using the equity method of accounting. Its contribution is reflected in the line item” Share of profit/(loss) in JV” Source: Prospectus, TA Securities Peers Comparison Company Price TP Malaysia SP Setia IOIPG Sunway UEM Sunrise Eco World Group Bhd (RM) 3.40 1.90 3.15 1.24 1.49 (RM) 3.82 2.10 3.40 NR NR UK Land Securities Group PLC British Land Co PLC Hammerson PLC Intu Properties PLC Segro PLC Australia Scentre Group Westfield Corp Goodman Group Stockland Vicinity Centres (GBP) 1.04 0.60 0.58 0.28 0.45 (AUD) 4.11 8.42 7.37 4.46 2.73 (GBP) NR NR NR NR NR (AUD) NR NR NR NR NR Call Buy Hold Hold NR NR NR NR NR NR NR NR NR NR NR NR Market Cap Eco World International Source: Bloomberg, TA Securities (RM) 1.40 P/B (x) ROE (%) Divi Yield (%) FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 13.3 12.6 11.6 25.6 25.0 15.0 12.0 10.9 23.7 17.4 1.1 0.6 0.8 0.8 1.1 1.0 0.6 0.8 0.8 1.0 7.6 4.8 7.4 3.1 4.5 6.6 4.6 7.5 3.6 6.0 4.1 3.7 3.8 1.3 0.1 4.1 4.0 3.8 1.5 0.3 17.6 15.8 0.9 0.9 5.5 5.7 2.6 2.7 21.9 16.6 18.8 18.7 23.0 20.7 16.9 18.2 18.2 20.9 0.7 0.7 0.8 0.8 0.9 0.8 0.8 0.8 0.8 0.9 3.3 4.2 4.3 4.3 4.0 3.6 4.3 4.4 4.5 4.1 3.5 4.8 4.4 5.0 3.6 3.7 5.0 4.6 5.1 3.7 19.8 19.0 0.8 0.8 4.0 4.2 4.3 4.4 17.2 19.3 17.2 14.2 14.9 16.3 17.7 16.2 13.5 14.4 1.1 1.7 1.5 1.1 1.0 1.1 1.5 1.5 1.1 0.9 7.1 6.9 9.1 7.7 7.2 7.4 7.1 9.2 7.6 7.0 5.3 3.0 3.5 5.8 6.4 5.5 3.1 3.7 6.0 6.6 16.6 15.6 1.3 1.2 7.6 7.6 4.8 5.0 18.0 16.8 1.0 1.0 5.7 5.8 3.9 4.1 nm 11.6 1.1 1.0 nm 9.0 0.0 0.0 (RM mn) 9702.4 8971.4 6401.2 5581.0 4416.6 (GBP mn) 8192.2 6214.6 4588.6 3772.4 3923.8 (AUD mn) 21882.9 17497.5 13185.8 10786.1 10807.1 Average (RM) 1.20 PE (x) (RM mn) 2880.0 Page 7 of 9
  19. TA Securities 16-Mar-17 A Member of the TA Group Appendix 1 : EWI On-going Property Development Projects (as at 31 Jan 2017) Source: Prospectus, TA Securities Appendix 2: EWI Riverside Development in London, UK Source: Prospectus, TA Securities Page 8 of 9
  20. TA Securities 16-Mar-17 A Member of the TA Group ( T HI S P AGE I S I NT E N T I ON AL L Y L E FT B L ANK) 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. 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 9 of 9
  21. COMPANY UPDATE TA Securities Thursday , March 16, 2017 FBM KLCI: 1,717.36 Sector: Manufacturing A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Karex Berhad TP: RM2.55 (+23.2%) Last traded: RM2.07 Opportunity Emerges from Recent Sell Down BUY THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Wilson Loo Tel: +603-2167 9606 wilsonloo@ta.com.my Looking beyond Karex’s muted financial performance in recent quarters, we anticipate improvements in subsequent quarters on the back of a recovering tender market and sustained traction from its own brand manufacturing (OBM) segment. Alleviating concerns of the continued ascend in natural latex prices in 1QCY17, management alluded that it will renegotiate higher average selling prices (ASPs) for long term contracts if their high prices persist. Nonetheless, we note that natural latex still represents less than 20% of the group’s cost. In view of the compelling upside from the stock’s recent decline since its 1HFY17 results release, we are upgrading our recommendation on the stock to Buy with an unchanged TP of RM2.55/share, pegged to a PE multiple of 30.0x against its CY18 EPS. Sight of a Recovering Tender Market To recap, Karex’s muted financial performance in recent quarters was partly due to sluggish demand from the tender market caused by governments and non-governmental organisations (NGOs) holding minimal inventory of condoms in view of the weakened purchasing power of their local currencies alongside the USD’s strengthening, as well as the surge in the refugee crisis which disrupted funding initiatives. A lull tender market is undesirable for the group as it represents an important distribution channel with government and NGOs procuring half of the world’s condoms. Positively for the group, better days are in sight with its tender segment contribution to overall revenue having improved by 8%-points QoQ to 37% in 2QFY17 on the back of the successful capture of tender awards. Going forward, management expects the recovery momentum to persist on expectations of governments and NGOs depleting inventory of condoms. As it is, the group has already started to see new emergency orders with shorter delivery times and we opine that capitalizing on these opportunities would not be an issue with plant utilization rates only at 60% in 2QFY17. Furthermore, it would be positive for achieving greater economies of scale. Figure 1: Karex’s Revenue Breakdown by Segment 59% 47% 53% 60% 58% 48% 2QFY17 58% 1QFY17 55% 13% 29% 15% 40% 11% 29% 4QFY16 59% 9% 3QFY16 46% 8% 33% Share Information Bloomberg Code KAREX MK Stock Code 5247 Listing Main Market 1002.4 Share Cap (mn) Market Cap (RMmn) 2,074.9 Par Value 0.25 52-wk Hi/Lo (RM) 2.74/1.96 12-mth Avg Daily Vol ('000 shrs) 1157.8 Estimated Free Float (%) 39.1 Beta 0.3 Major Shareholders (%) Karex One Ltd - 31.8 Lam Yiu Pang Albert - 6.4 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY16 FY17 0.0 43.0 70.8 58.2 82.8 73.8 85.5 Hold (Upgraded) Financial Indicators Net gearing (x) CFPS (RM) P/CFPS ROAA (%) ROAE (%) NTA/Share (RM) Price/ NTA (x) Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth FY16 Net cash 0.1 23.8 7.4 8.7 0.5 4.3 FY17 Net cash 0.0 57.3 11.2 13.1 0.5 3.9 KAREX -12.7 -16.2 -13.8 -20.0 FBM KLCI 0.6 4.9 3.9 1.4 (12-Mth) Share Price relative to the FBM KLCI 2QFY16 7% 1QFY16 37% 9% 32% 7% 36% 8% 34% 4QFY15 59% OBM 3QFY15 4% 1QFY15 100% 80% 60% 40% 20% 0% Tender 2QFY15 Commercial www.taonline.com.my Source: Companies, TA Securities 37% Source: Bloomberg Page 1 of 3
  22. TA Securities 16-Mar-17 A Member of the TA Group Sustained Traction at the OBM Segment To date , the group’s efforts to bolster its OBM segment is evidently taking shape. While the segment remains the smallest contributor to overall revenue, note that its contributions have almost quadrupled from 4% in FY14 to 14% in 1HFY17, moving the group a step closer towards its target of 20% by 2020. Among others, this was the result of the group’s continuous marketing efforts for its ‘ONE’ brand in existing and newer markets (Malaysia) as well as the consolidation of acquisitions made in 2016. These acquisitions not only expanded the group’s brand portfolio but also presented synergistic opportunities for cross selling via new markets and distribution channels. For instance, with the acquisition of Pasante, it has facilitated the group’s imminent launch of the ‘ONE’ brand into UK via Superdrug, which is UK’s 2nd largest beauty and health retailer and among Pasante’s key customers. Looking ahead, we gathered that management does not discount the possibility of further strategic acquisitions and the group is in a comfortable to do so with its strong financial capacity. As at 2QFY17, the group’s net cash pile stood at RM74.2mn or 7.4sen/share. Table 1: Karex’s Acquisitions in 2016 Date Jan-16 Jun-16 Aug-16 Company TheyFit, LLC Pasante Line One Key Brands TheyFit® Pasante Trustex Key Markets UK & Europe UK USA Unique Value Proposition Sale of custom fit condoms (95 sizes) via online channel. Leverage on established distribution network of Tesco, Costco, Superdrug, Boots. Opportunity for increased cross selling in USA’s health segment. Source: Companies, TA Securities Renegotiations for Higher ASPs if High Prices of Natural Latex Persists Acknowledging the continued ascend in natural latex prices in 1QCY17, management alluded that it will renegotiate higher average selling prices (ASPs) for long term contracts if their high prices persist. Nonetheless, we note that natural latex still represents less than 20% of the group’s cost. Thus far in 1QCY17, natural latex prices have increased by 13.3% QoQ to RM7.31/kg. Based on a conservative assumption of natural latex accounting for 20% of the group’s cost and no revision to ASPs, our sensitivity analysis suggests that net margins will be squeezed by about 1%-point for every 10% increase in natural latex prices. Notwithstanding this, we expect the impact to be cushioned as most of the group’s orders are short term in nature whereby ASPs are revised accordingly from order to order. Figure 2: Natural Latex Price Trend RM/kg 12.00 10.00 8.00 6.00 4.00 2.00 Dec-16 Apr-16 Aug-16 Dec-15 Apr-15 Aug-15 Dec-14 Apr-14 Aug-14 Dec-13 Apr-13 Aug-13 Dec-12 Apr-12 Aug-12 Dec-11 Apr-11 Aug-11 Dec-10 Apr-10 Aug-10 Dec-09 0.00 Source: Bloomberg, TA Securities Estimates We make no changes to our earnings estimates. Valuation & Recommendation With the recent decline in Karex’s share price by 11.5% to RM2.07/share post release of its 1HFY17 results, we opine that buying opportunity has emerged. Hence, are upgrading our recommendation on the stock to Buy with an unchanged TP of RM2.55/share, pegged to a PE multiple of 30.0x against its CY18 EPS. Above all, we continue to like Karex for its manufacturing capabilities, growing OBM segment and healthy balance sheet. Page 2 of 3
  23. TA Securities 16-Mar-17 A Member of the TA Group P &L YE Jun 30 (RMmn) Revenue EBITDA Dep. & amor. EBIT Net finance cost PBT Taxation MI Net profit EPS (sen) DPS (sen) FY15 298.1 78.8 -7.7 71.1 2.2 73.3 -13.6 -0.2 59.6 5.9 1.7 Ratios YE Jun 30 (RMmn) Valuations PER Dividend yield PBV Profitability ratios ROAE ROAA EBITDA margin PBT margin PAT margin Liquidity ratios Current ratio Quick ratio Leverage ratios Total liabilities/equity Net debt/equity Int. coverage ratio Growth ratios Sales Pretax Earnings Total assets FY16 343.6 83.6 -9.2 74.5 4.9 79.4 -12.9 0.3 66.7 6.7 1.7 FY17F 408.6 64.7 -13.1 51.6 2.3 53.9 -10.8 -0.1 43.0 4.3 1.1 FY18F 561.0 99.4 -13.5 85.9 2.9 88.8 -17.8 -0.2 70.8 7.1 1.8 FY19F 701.3 135.0 -13.9 121.0 3.3 124.3 -24.9 -0.3 99.1 9.9 2.5 FY15 FY16 FY17F FY18F FY19F 34.8 0.8 5.1 31.1 0.8 4.6 48.3 0.5 4.3 29.3 0.9 3.9 20.9 1.2 3.4 18.2 15.1 26.4 24.6 20.0 14.6 12.6 24.3 23.1 19.4 8.7 7.4 15.8 13.2 10.5 13.1 11.2 17.7 15.8 12.6 16.4 13.9 19.2 17.7 14.1 6.7 5.7 6.4 5.2 6.3 5.1 5.6 4.4 5.5 4.3 0.1 -0.4 -33.0 0.1 -0.2 -15.2 0.0 -0.3 -22.5 0.0 -0.3 -29.2 0.0 -0.3 -37.1 4.5 34.6 31.8 71.9 15.3 8.3 12.0 12.2 18.9 -32.1 -35.6 6.9 37.3 64.8 64.8 11.8 25.0 40.0 40.0 13.6 Balance Sheet YE Jun 30 (RMmn) Fixed assets Goodwill Others LT assets FY15 129.3 25.1 0.1 154.5 FY16 181.1 32.6 0.2 213.9 FY17F 188.1 32.6 0.2 220.8 FY18F 194.5 32.6 0.2 227.3 FY19F 200.6 32.6 0.2 233.4 Inventories Trade receivables Cash Others Current assets 51.0 85.1 207.7 0.0 343.9 64.4 133.5 144.4 0.0 345.2 68.1 104.8 201.3 0.0 377.0 93.5 143.8 201.1 0.0 441.3 116.9 179.8 226.3 0.0 525.8 Total assets 498.4 559.1 597.9 668.6 759.2 Trade payables ST borrowings Others Current liabilities 35.9 13.5 1.9 51.2 42.8 9.2 1.9 53.9 51.1 7.2 1.9 60.2 70.1 6.7 1.9 78.7 87.7 6.2 1.9 95.8 LT borrowings Others LT liabilities 9.4 5.4 14.7 16.7 7.8 24.5 16.9 7.8 24.6 15.7 7.8 23.5 14.6 7.8 22.4 Share capital Reserves Minority Interest Shareholders' funds 167.1 264.5 0.0 432.4 250.6 229.3 0.0 480.7 250.6 261.6 0.0 513.0 250.6 314.7 0.0 566.4 250.6 389.1 0.0 641.0 Total liabilities + equity 498.4 559.1 597.9 668.6 759.2 Cash Flow YE Jun 30 (RMmn) PBT Dep. & amor. Others Operational cash flow FY15 73.3 7.7 -35.7 45.3 FY16 79.4 9.2 -44.8 43.7 FY17F 53.9 13.1 20.2 87.1 FY18F 88.8 13.5 -66.1 36.2 FY19F 124.3 13.9 -70.0 68.3 Capex Others Investing cash flow -46.3 -17.4 -63.7 -44.1 -46.9 -91.0 -20.0 3.5 -16.5 -20.0 4.0 -16.0 -20.0 4.3 -15.7 Net share issue Dividend paid Others Financial cash flow 158.0 -10.1 1.1 148.9 0.0 -16.7 0.0 -16.7 0.0 -10.7 -3.0 -13.7 0.0 -17.7 -2.8 -20.5 0.0 -24.8 -2.6 -27.4 Net cash flow Opening cash flow Forex Closing cash flow 122.2 85.6 -0.1 207.7 -63.1 207.7 -0.2 144.4 56.9 144.4 0.0 201.3 -0.2 201.3 0.0 201.1 25.2 201.1 0.0 226.3 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. 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 3 of 3
  24. TA Securities ECONOMIC REPORT A Member of the TA Group Thursday , March 16, 2017 FBMKLCI: 1,717.36 MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 US Economy Fed Raises Rates for Second Time in 3 Months; Signaling for 2 More Hikes in 2017 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Shazma Juliana Abu Bakar Tel: +603-2617 9608 shazma@ta.com.my The Decision: • The US Federal Reserve raised its benchmark interest rate by 25 basis points in its March 2017 FOMC meeting and continued to project two more increases this year, signaling more vigilance as inflation approaches its target. That move brings the target for the federal funds rate – the overnight lending rate between banks – to a range of 0.75% to 1.00%. Minneapolis Fed President Neel Kashkari cast the only dissenting vote, saying he preferred to stand pat. The previous rate increase was in December 2016, a month after Mr. Trump’s election. • The move was widely anticipated in financial markets with futures traders putting the probability at 100% recently. Expectations have climbed dramatically from 50% in early of the month. That followed robust economics and inflation data as well as hawkish comments from several Fed officials recently, including Vice Chairman Stanley Fischer and New York Fed chief William Dudley, who called the case for a March move “a lot more compelling.” Economic Performance and Outlook: • In a press conference, Ms Yellen suggested that the Fed’s economic and policy outlook had not changed substantially since December and emphasized that she was not going to rush to judgment about the impact of changes to tax and spending policy by Congress. • According to the accompanied statement, the Fed said that the US economy continued to chug along, expanding at a “moderate pace.” Real GDP is expected to grow by 2.2% in 1Q17 after expanding by 1.9% in 4Q16. Employers are also continue hiring, as evidenced in non-farm payroll data; consumers are spending; and businesses — the laggards in recent months — are starting to spend a little more, too. • The Fed also highlighted a recent increase in inflation after a long period of sluggishness. Prices are now rising at roughly the 2.0% annual pace that the Fed regards as optimal. The Fed, which had made faster inflation a central objective, said that it was now focused on stabilizing inflation. “The committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal,” the Fed said in the statement. “The committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate.” • Officials also remained confident that the US economy would evolve as they expected. Economic projections only changed a little since they last made December 2016, indicating that nothing has happened in the past three months to knock them off their outlook. Fed left unchanged their forecast for 2017 GDP growth at 2.1%. The median estimate showed the economy expanding 2.1% in 2018 and 1.9% in 2019, compared to 2.0% and 1.9% in the December forecast. - Inflation is expected to increase slightly faster in 2017, with core PCE to reach 1.9% in the fourth quarter of this year and 2.0% in both 2018 and 2019. The Fed’s preferred measure of inflation rose 1.9% YoY in January 2017, just shy of its target. Page 1 of 3 www.taonline.com.my
  25. TA Securities 16-Mar-17 A Member of the TA Group - Officials projected unemployment to finish this year at 4 .5%, unchanged from the December forecast. That’s a sign that they expect to overshoot their estimate for maximum use of labor resources, which they put at 4.7%, down from 4.8% in December. Unemployment was forecast to end 2018 and 2019 at 4.5%. The jobless rate was 4.7% in February 2017. 235,000 non-farm payroll positions were added during the month. Figure 1: Latest Macroeconomic Projections (2017 – 2019) Source: Federal Reserve Note: 1. For each period, the median is the middle projection when the projections are arranged from lowest to highest. When the number of projections is even, the median is the average of the two middle projections. 2. The central tendency excludes the three highest and three lowest projections for each variable in each year. 3. The range for a variable in a given year includes all participants’ projection, from lowest to highest, for that variable in that year. Fed Still See Two More Rate Increases This Year; Three More in 2019 • An increased number of Fed officials are expecting to raise rates at least twice more this year, bringing the fed fund rate to 1.25% to 1.50% by year end. Only three of the 17 officials who submitted forecasts now expect the central bank to move more slowly. • The projections also put short-term rates between 2.0% and 2.25% at the end of 2018, implying three more quarter-point increases next year. Projections for rate increases edged up slightly after that, with the median expectation showing rates at 3.00% by the end of 2019. Figure 2: Midpoint of Target Range or Target Level for The Federal Funds Rate Source: Federal Reserve Page 2 of 3 d o m e s
  26. TA Securities 16-Mar-17 A Member of the TA Group Fed ’s Next Move • The next FOMC meeting is 2-3 May 2017. At the point of writing, the probability of an interest rate hike that month is low at 13.3%. The probability is higher for June FOMC meeting and onwards. Figure 3: US Interest Rate Probability Source: Bloomberg No Change in US Balance Sheet • The Fed also repeated their commitment to maintain their balance-sheet reinvestment policy until rate increases were well under way. Ms. Yellen said officials had discussed the process of reducing the balance sheet gradually, but had made no decisions and would continue to debate the topic. • The Fed boosted its portfolio, or balance sheet, after the 2008 crisis with several rounds of asset purchases aimed at stimulating the economy by lowering long-term rates. The central bank maintains the portfolio’s size—now at USD4.5 trillion—by reinvesting the proceeds of maturing Treasury bonds and mortgage-backed securities. Once it decides to shrink the balance sheet, the Fed plans to scale back those reinvestments to allow the maturing assets to run off. Our View • We do not foresee the increase in fed fund rate may slow down the US economic performance, judging from robust economic data to date. Setting aside concerns about Brexit and a string of potentially destabilising elections on the continent, Fed policymakers have judged that the strength of the economy is enough to override a series of rate rises. • Turbulence may come from the foreign exchange markets if the US dollar rises especially in the emerging markets including the Malaysia. However, we do not foresee Ringgit to deteriorate significantly as markets have factored in 25 bps increase in fed fund target rate. Future weakness from the potential additional hike in the fed fund rate could be shielded by improving economic fundamentals, especially exports. More details will be forthcoming from the Bank Negara Annual Report due next week. • We currently maintain our Ringgit forecast at 4.25. YTD, Ringgit has averaged 4.45 against the US dollar. 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 3 of 3
  27. Thursday , 16 March, 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
  28. T e c h n i c a l TA Securities V i e w Thursday , March 16, 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: 1,717.36 (-5.11, -0.30%) 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 GADANG HSL ISKANDAR KIMLUN KKBE MUDAJAYA MRCB NAIM SKPETRO SUNCON UEMS WASEONG WCT Close 15-Mar 1717.36 2.86 4.00 4.81 4.67 5.36 5.12 5.00 9.62 5.35 5.94 4.66 1.19 6.37 8.75 1.16 5.18 9.13 13.68 6.31 3.83 2.86 0.40 0.71 0.45 4.14 1.64 1.49 1.27 1.70 2.75 2.21 1.22 0.90 1.52 1.52 1.80 1.72 1.24 0.86 1.86 Change (5.11) 0.00 0.01 -0.04 0.00 -0.06 -0.01 0.01 0.02 0.00 0.07 -0.03 0.01 -0.06 -0.10 -0.01 0.00 0.00 -0.06 -0.04 -0.04 -0.04 0.00 0.01 0.00 -0.03 -0.02 -0.01 -0.01 0.00 -0.05 0.01 -0.02 -0.01 0.00 -0.01 -0.02 0.01 0.01 -0.01 0.03 Tel: +603-2167-9607 High Low 1,719.27 1,713.92 2.87 4.00 4.85 4.70 5.40 5.14 5.01 9.62 5.39 5.94 4.68 1.20 6.44 8.85 1.18 5.19 9.14 13.74 6.34 3.88 2.90 0.41 0.71 0.46 4.20 1.67 1.51 1.29 1.72 2.87 2.21 1.25 0.93 1.53 1.53 1.84 1.74 1.24 0.87 1.87 2.83 3.99 4.78 4.63 5.35 5.09 4.94 9.50 5.35 5.84 4.60 1.17 6.34 8.73 1.15 5.16 9.04 13.44 6.28 3.81 2.85 0.40 0.69 0.44 4.13 1.63 1.47 1.26 1.70 2.70 2.17 1.22 0.90 1.51 1.51 1.79 1.72 1.21 0.86 1.82 Bollinger Bands Lower Mid Upper 1,690.62 1,711.65 1,732.68 2.34 3.82 4.46 4.34 4.88 4.99 4.86 8.66 5.07 5.73 4.55 1.12 6.28 8.31 1.13 4.85 9.02 13.42 6.07 3.83 2.54 0.39 0.67 0.43 4.08 1.58 1.45 1.02 1.65 0.45 2.07 1.19 0.81 1.39 1.47 1.77 1.68 1.11 0.84 1.82 2.67 3.96 4.76 4.67 5.21 5.07 4.96 9.16 5.27 6.00 4.67 1.21 6.39 8.64 1.16 5.08 9.12 13.61 6.22 3.99 2.74 0.40 0.73 0.45 4.19 1.65 1.51 1.16 1.70 1.56 2.20 1.29 0.89 1.47 1.58 1.91 1.74 1.18 0.88 1.88 3.00 4.09 5.06 4.99 5.55 5.15 5.05 9.67 5.48 6.28 4.80 1.29 6.49 8.96 1.19 5.30 9.23 13.80 6.37 4.15 2.94 0.42 0.78 0.47 4.29 1.71 1.57 1.30 1.74 2.66 2.34 1.38 0.97 1.55 1.69 2.04 1.79 1.24 0.92 1.93 stsoo@ta.com.my RSI Moving Averages 14d 10d 30d 50d 57.93 1,720.24 1,705.32 1,690.35 DMI DI + DI - ADX 34.69 19.11 37.41 Diff 15.58 78.86 56.37 57.87 47.90 63.74 61.35 56.80 73.52 58.78 42.38 50.75 40.24 54.57 61.42 55.61 61.63 57.54 52.72 63.44 27.73 60.72 48.80 50.52 48.49 46.58 53.58 50.51 73.26 53.01 91.52 51.61 39.08 51.73 61.79 38.68 42.42 49.14 67.88 46.33 49.55 36.88 23.15 28.43 17.55 32.05 21.70 13.91 33.92 25.76 13.66 25.24 13.65 20.41 31.76 23.47 25.69 18.39 15.02 22.81 5.83 26.43 14.40 20.75 23.32 19.23 25.04 21.26 37.14 33.25 55.60 25.03 21.88 31.91 28.04 15.31 19.20 18.11 29.38 16.65 15.95 27.13 9.19 10.37 (7.70) 16.81 6.34 (6.66) 27.31 13.34 (15.09) 5.40 (8.63) 6.51 12.52 8.64 7.13 (2.64) (12.62) 8.41 (32.39) 12.30 1.63 7.35 0.70 9.35 9.35 6.65 29.86 7.34 44.89 5.61 (10.15) 11.36 18.67 (12.87) (12.27) 5.65 19.26 (1.02) (13.99) 2.83 4.01 4.91 4.69 5.36 5.08 4.99 9.37 5.33 5.92 4.71 1.19 6.39 8.78 1.16 5.16 9.12 13.69 6.29 3.95 2.79 0.40 0.72 0.45 4.19 1.66 1.50 1.22 1.70 1.89 2.25 1.25 0.89 1.50 1.54 1.92 1.72 1.20 0.87 1.86 2.60 3.91 4.69 4.77 5.15 5.06 4.95 8.92 5.18 6.09 4.65 1.23 6.35 8.51 1.15 5.06 9.09 13.56 6.17 4.05 2.70 0.41 0.70 0.45 4.20 1.61 1.50 1.14 1.69 1.35 2.19 1.31 0.88 1.48 1.60 1.88 1.73 1.16 0.88 1.87 2.53 3.86 4.59 4.75 5.01 5.00 4.93 8.63 5.00 6.19 4.58 1.27 6.23 8.40 1.10 4.99 8.87 13.68 6.13 4.14 2.58 0.40 0.67 0.44 4.12 1.59 1.44 1.10 1.67 1.16 2.16 1.30 0.88 1.45 1.62 1.81 1.72 1.14 0.86 1.85 9.74 13.95 18.06 25.25 15.24 15.36 20.58 6.61 12.43 28.75 19.84 22.28 13.90 19.23 14.83 18.56 21.04 27.64 14.40 38.22 14.13 12.78 25.49 15.97 18.53 15.69 14.61 7.28 25.90 10.71 19.42 32.03 20.56 9.37 28.18 31.47 12.46 10.13 17.66 29.94 47.78 30.72 37.83 22.25 33.39 17.72 17.38 61.16 43.39 23.88 20.77 24.73 19.95 37.07 33.29 22.18 23.41 16.29 19.07 62.17 24.71 18.69 24.21 22.10 16.90 47.28 34.35 43.77 17.14 61.89 29.90 18.14 22.19 37.21 31.13 34.75 23.80 35.01 16.99 19.27 www.taonline.com.my Line 9.12 0.11 0.04 0.09 -0.03 0.12 0.03 0.02 0.27 0.10 -0.09 0.03 0.01 0.05 0.13 0.02 0.06 0.07 0.03 0.06 -0.07 0.08 0.00 0.01 0.00 0.01 0.02 0.01 0.05 0.01 0.40 0.02 -0.02 0.01 0.02 -0.02 0.02 0.00 0.03 0.00 0.00 MACD Signal Diff 9.71 (0.597) 0.09 0.04 0.10 -0.03 0.11 0.02 0.02 0.25 0.11 -0.09 0.04 0.02 0.05 0.13 0.02 0.05 0.08 0.00 0.05 -0.06 0.06 0.00 0.02 0.00 0.02 0.03 0.02 0.04 0.01 0.24 0.02 -0.02 0.00 0.02 -0.02 0.04 0.00 0.02 0.00 0.00 0.018 0.000 (0.005) 0.009 0.010 0.006 0.004 0.018 (0.012) 0.002 (0.010) (0.007) (0.007) (0.001) (0.004) 0.010 (0.019) 0.023 0.012 (0.010) 0.013 (0.001) (0.008) (0.000) (0.011) (0.004) (0.007) 0.013 (0.001) 0.160 (0.007) (0.005) 0.003 0.006 (0.006) (0.025) (0.003) 0.006 (0.004) (0.007) DMI MACD Recent Signal BUY SELL DMI MACD Signal Change - BUY BUY BUY SELL BUY BUY SELL BUY BUY SELL BUY SELL BUY BUY BUY BUY SELL SELL BUY SELL BUY BUY BUY BUY BUY BUY BUY BUY BUY BUY BUY SELL BUY BUY SELL SELL BUY BUY SELL SELL SELL SELL - BUY BUY SELL BUY BUY BUY BUY BUY SELL BUY SELL SELL SELL SELL SELL BUY SELL BUY BUY SELL BUY SELL SELL SELL SELL SELL SELL BUY SELL BUY SELL SELL BUY BUY SELL SELL SELL BUY SELL SELL SELL 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
  29. Technical Comments : Any price weakness on Hock Seng Lee shares towards the low of 12/08/16 (RM1.58), matching the lower Bollinger band, would be good buying opportunity for rebound towards 38.2% FR (RM1.79), and FR 50%FR (RM1.86) with stronger resistance coming at 61.8% FR (RM1.93).Similarly, further dip on Sunway Construction shares towards the 76.4%FR (RM1.61), would be attractive to buy towards the peak of 02/21/17 100%FR (RM1.81) with confirmed breakout to target the 123.6%FR (RM2.01) and 138.2% (RM2.13), going forward. HOCK SENG LEE Upper Middle RM1.70 (UNCH) BOLLINGER BANDS RM RM 1.74 1.70 10-day 30-day RM 1.65 50-day Lower DMI Recent Signal BUY 1.67 Recent Signal SELL Signal Change SUNWAY CONSTRUCTION Recent Signal Signal Change RM DAILY MACD Signal Change Upper Middle Lower SIMPLE MOVING AVERAGES RM 1.70 RM 1.69 BOLLINGER BANDS RM RM RM DMI 1.79 1.74 1.68 BUY RM1.72 (+0.01) SIMPLE MOVING AVERAGES RM 1.72 RM 1.73 RM 1.72 DAILY MACD Recent Signal SELL Signal Change 10-day 30-day 50-day Page 2 of 4
  30. T e c h n i c a l TA Securities V i e w Thursday , March 16, 2017 FBMKLCI: 1,717.36 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 15.03.2017 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my 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 DAGANG NEXCHANGE TALAM TRANSFORM KARAMBUNAI CORP COMPUGATES HOLDI BERJAYA CORP BHD STERLING PROGRES PRESS METAL BHD MALAYSIA BUILDNG APFT MQ TECHNOLOGY BH AT SYSTEMATIZATI IJM CORP BHD SKH CONSORTIUM B KONSORTIUM TRANS IGB REIT HO WAH GENTING SCOMI GROUP BHD SP SETIA BHD TANCO HLDGS BHD SALCON BHD DBE GURNEY RESOU ABLEGROUP BHD LION DIVERSIFIED SIME DARBY SKP RESOURCES BH AXIATA GROUP BER TRIVE PROPERTY B YONG TAI BHD PROGRESSIVE IMPA ZELAN BHD 0.40 0.05 0.07 0.04 0.39 0.22 2.49 1.16 0.05 0.05 0.05 3.40 0.07 0.15 1.69 0.06 0.18 3.40 0.09 0.62 0.04 0.10 0.05 9.13 1.37 4.67 0.11 1.41 0.19 0.14 RSI Bollinger Band Moving Average Lower Middle Upper 14-day 10-day 30-day 50-day 0.34 0.03 0.05 0.03 0.37 0.20 2.27 1.13 0.04 0.04 0.03 3.33 0.06 0.13 1.62 0.05 0.16 3.38 0.08 0.59 0.03 0.09 0.04 9.02 1.35 4.34 0.08 1.34 0.16 0.12 0.39 0.04 0.07 0.04 0.38 0.21 2.49 1.16 0.04 0.04 0.04 3.40 0.07 0.15 1.69 0.06 0.18 3.40 0.08 0.62 0.04 0.09 0.05 9.12 1.37 4.67 0.10 1.41 0.18 0.14 0.45 0.05 0.08 0.04 0.40 0.23 2.71 1.19 0.05 0.05 0.05 3.46 0.07 0.16 1.76 0.06 0.19 3.41 0.09 0.64 0.04 0.10 0.06 9.23 1.39 4.99 0.11 1.47 0.21 0.15 58.09 63.30 57.91 57.54 55.55 61.13 57.31 55.61 57.42 56.94 59.25 51.86 53.87 54.38 48.83 53.34 55.63 55.79 55.64 56.84 52.63 68.66 53.08 57.54 56.17 47.90 57.21 57.95 55.08 50.84 0.41 0.04 0.07 0.03 0.39 0.22 2.59 1.16 0.04 0.04 0.04 3.39 0.07 0.14 1.71 0.06 0.17 3.40 0.08 0.61 0.04 0.09 0.05 9.11 1.36 4.67 0.10 1.41 0.17 0.14 0.36 0.04 0.06 0.04 0.39 0.20 2.39 1.15 0.04 0.04 0.04 3.40 0.07 0.15 1.70 0.06 0.17 3.40 0.08 0.61 0.04 0.09 0.04 9.09 1.36 4.77 0.09 1.36 0.18 0.14 0.32 0.04 0.06 0.04 0.37 0.17 2.16 1.09 0.04 0.05 0.04 3.37 0.07 0.14 1.69 0.06 0.16 3.33 0.07 0.60 0.04 0.09 0.04 8.85 1.34 4.75 0.09 1.31 0.17 0.14 Vol 93,560,500 83,836,000 36,812,600 11,363,100 11,042,800 10,665,400 10,226,400 9,536,400 8,610,500 7,042,800 6,977,200 5,970,000 5,907,100 5,479,700 5,059,000 5,034,000 4,604,700 4,229,400 3,966,100 3,658,200 3,452,700 3,330,800 3,221,200 2,907,200 2,694,100 2,562,800 2,516,100 2,448,200 2,374,300 2,368,300 20-day avg vol 99,815,910 4,590,940 9,041,665 4,253,180 18,989,510 27,271,180 8,759,035 11,206,330 1,698,650 2,614,540 23,756,840 4,717,305 1,868,805 554,080 4,714,965 1,870,350 4,620,480 3,052,855 4,458,425 2,102,440 17,210,330 205,885 5,486,765 9,697,925 3,214,785 9,772,565 7,242,695 1,376,785 651,300 2,906,195 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
  31. 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 TATT GIAP ANCOM LOGISTICS GROMUTUAL BHD SINOTOP HOLDING TALAM TRANSFORM CAREPLUS GROUP SILK HOLDINGS BH EWEIN BHD DIGISTAR CORP EDARAN BHD EURO HOLDINGS BH NWP HLDGS BHD PERAK CORP BHD EKA NOODLES BHD TECHNODEX BHD BIO OSMO BHD D'NONCE TECH BHD WELLCALL HLDGS SAPURA RESOURCES 0.14 0.11 0.50 0.13 0.05 0.31 0.49 0.85 0.20 0.34 0.26 0.24 2.04 0.09 0.17 0.09 0.27 2.08 1.25 1.58 TALIWORKS CORP Raw data sourced from Bloomberg 20 Bollinger Band RSI Moving Average Lower Middle Upper 14-day 10-day 30-day 50-day 0.11 0.08 0.39 0.11 0.03 0.26 0.42 0.69 0.17 0.17 0.22 0.18 1.86 0.07 0.14 0.04 0.24 1.83 0.92 1.49 0.12 0.09 0.43 0.12 0.04 0.28 0.45 0.76 0.18 0.25 0.24 0.21 1.95 0.08 0.15 0.06 0.25 1.93 1.06 1.53 0.14 0.10 0.47 0.13 0.05 0.29 0.48 0.83 0.20 0.33 0.25 0.23 2.03 0.09 0.16 0.08 0.26 2.04 1.19 1.57 67.46 74.86 77.88 60.59 63.30 72.52 66.74 71.21 67.89 67.84 65.43 71.09 65.68 61.89 66.46 62.89 64.70 72.51 80.81 65.54 0.12 0.09 0.43 0.12 0.04 0.27 0.46 0.77 0.18 0.27 0.24 0.20 1.95 0.07 0.15 0.06 0.25 1.95 1.07 1.54 0.12 0.09 0.42 0.12 0.04 0.27 0.45 0.76 0.18 0.26 0.23 0.21 1.90 0.08 0.15 0.06 0.25 1.93 1.02 1.52 0.12 0.08 0.41 0.12 0.04 0.27 0.43 0.73 0.17 0.26 0.23 0.21 1.82 0.08 0.15 0.06 0.25 1.90 0.99 1.50 Vol 9,810,600 3,747,200 8,228,000 14,369,100 83,836,000 11,416,700 11,592,300 2,925,100 115,777,200 70,000 9,383,900 13,685,300 57,700 29,991,600 7,551,600 49,959,900 2,981,700 2,125,200 1,437,900 2,833,600 20-day avg vol 102,630 120,785 328,635 765,390 4,590,940 638,965 746,985 201,890 8,091,155 5,750 931,965 1,366,945 6,210 3,348,410 983,395 7,199,845 436,600 376,290 258,310 587,050 p *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. p [LOWER BOLLINGER BREAKDOWN] Top 20P 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 DKSH HOLDINGS M PETRONAS DAGANGA LATITUDE TREE HL YEE LEE CORP BRIT AMER TOBACC COASTAL CONTRACT YTL CORP BHD BOUSTEAD HLDGS XIAN LENG HLDGS BERJAYA ASSETS B SUPERMAX CORP JKG LAND BHD MAGNUM BHD MEDA INC BHD GOH BAN HUAT PAC & ORIENT BHD MTOUCHE TECH COMPUTER FORMS ATRIUM REIT WESTPORTS HOLDIN 4.60 23.50 5.47 2.47 46.60 1.33 1.46 2.75 0.38 0.85 1.98 0.16 2.13 0.49 1.37 1.26 0.08 1.06 1.11 3.83 Bollinger Band RSI Moving Average Lower Middle Upper 14-day 10-day 30-day 50-day 4.71 23.58 5.53 2.50 46.63 1.34 1.47 2.76 0.38 0.85 1.98 0.16 2.13 0.49 1.37 1.26 0.08 1.06 1.11 3.83 5.04 24.34 5.69 2.57 48.31 1.43 1.52 2.81 0.40 0.87 2.04 0.17 2.17 0.49 1.39 1.28 0.09 1.11 1.12 3.99 5.37 25.11 5.86 2.64 49.98 1.52 1.58 2.86 0.42 0.88 2.10 0.18 2.21 0.50 1.41 1.30 0.09 1.16 1.14 4.15 32.73 33.83 40.23 27.98 44.73 27.58 29.15 45.97 37.68 39.78 29.58 36.43 37.89 35.33 25.69 38.63 44.51 32.25 43.46 27.73 5.00 24.52 5.73 2.57 48.02 1.41 1.51 2.80 0.40 0.87 2.04 0.17 2.16 0.49 1.39 1.29 0.09 1.09 1.12 3.96 4.94 24.15 5.60 2.59 47.40 1.45 1.53 2.78 0.40 0.87 2.06 0.17 2.18 0.49 1.40 1.28 0.08 1.12 1.12 4.06 4.77 23.94 5.46 2.56 46.40 1.45 1.53 2.69 0.41 0.88 2.08 0.17 2.16 0.49 1.40 1.28 0.08 1.18 1.11 4.15 Vol 159,600 512,500 174,100 699,100 157,600 1,547,100 9,217,200 72,900 1,500 130,400 2,881,700 1,683,600 340,000 124,000 3,000 296,500 154,700 10,000 600 6,951,900 20-day avg vol 114,180 481,435 122,640 259,565 273,580 452,745 4,697,225 312,460 2,570 9,340 1,415,630 1,456,390 483,165 94,805 3,005 109,320 270,795 750 75,580 3,864,755 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
  32. Thursday , 16 March, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED FOREIGN TECHNICAL REPORTS’ Asian Technical Reports 1. Foreign Technical Stock Watch (AUS) 2. Foreign Technical Stock Watch (HK) 3. Foreign Technical Stock Watch (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
  33. T e c h n i c a l TA Securities V i e w Thursday , March 16, 2017 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Foreign Technical Stock Watch Australia ASX: 5,774.00 (+14.86, +0.26%) THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Chartist: Stephen Soo Name ASX 200 BHP BILLITON RIO TINTO COMMONW BK AUSTR WESTPAC BANKING AUST AND NZ BANK NATL AUST BANK WESFARMERS WOODSIDE PETRO NEWCREST MINING WESTFIELD GROUP FORTESCUE METALS QBE INSURANCE ORIGIN ENERGY AMP SANTOS MACQUARIE GROUP SUNCORP GROUP ORICA OIL SEARCH COCA-COLA AMATIL AMCOR STOCKLAND ALUMINA COMPUTERSHARE QANTAS AIRWAYS SIMS METAL MGMT Tel: +603-2167 9607 stsoo@ta.com.my Close Bollinger Bands RSI Moving Averages DMI Change High Low 15-Mar Lower Mid Upper 14d 10d 30d 50d DI + DI - ADX Diff 5774.00 14.86 5774.40 5727.70 5701.04 5762.96 5824.88 55.78 5758.10 5737.51 5725.08 24.28 17.30 19.00 6.99 24.22 60.83 84.82 34.80 32.05 32.75 43.88 30.91 21.72 8.53 6.54 12.99 6.57 5.02 3.55 89.20 13.32 17.57 6.86 10.37 14.39 4.47 1.82 13.97 3.80 12.26 0.35 1.33 0.33 -0.08 0.16 -0.16 -0.47 -0.03 -0.21 0.11 0.35 0.21 0.03 0.02 -0.02 0.20 0.05 -0.20 0.08 -0.05 0.01 0.01 0.00 -0.04 -0.04 -0.09 24.26 60.93 84.88 34.85 32.05 32.80 44.16 31.04 21.84 8.53 6.59 13.09 6.58 5.02 3.59 89.20 13.37 17.67 6.86 10.42 14.42 4.49 1.82 14.06 3.82 12.45 23.90 60.12 84.07 34.42 31.56 32.45 43.46 30.69 21.47 8.37 6.30 12.80 6.50 4.95 3.52 88.30 13.17 17.32 6.76 10.30 14.16 4.46 1.79 13.90 3.74 12.22 23.25 56.42 81.83 33.38 30.25 31.41 42.02 30.49 20.41 8.39 6.00 12.17 6.11 4.77 3.43 85.74 13.08 17.53 6.74 9.93 13.93 4.45 1.78 13.33 3.44 12.14 25.30 63.28 83.94 34.31 31.22 32.31 43.23 31.23 22.13 8.78 6.60 12.64 6.59 4.99 3.76 87.56 13.37 18.51 7.02 10.33 14.35 4.63 1.90 13.75 3.69 12.65 27.35 70.14 86.05 35.23 32.19 33.21 44.43 31.96 23.85 9.16 7.20 13.11 7.06 5.21 4.10 89.37 13.65 19.49 7.29 10.72 14.78 4.81 2.03 14.18 3.94 13.15 39.29 42.76 59.75 65.16 72.74 64.40 60.50 43.79 47.78 35.21 51.25 58.94 46.54 50.39 34.44 65.05 48.91 33.96 43.20 54.28 49.76 39.60 41.30 62.77 63.69 45.61 24.69 60.82 83.90 34.64 31.62 32.67 43.64 30.94 21.39 8.63 6.37 12.78 6.41 5.00 3.62 88.14 13.39 18.53 6.95 10.41 14.29 4.62 1.88 13.90 3.78 12.67 25.58 64.32 83.45 33.67 30.59 31.79 42.59 31.39 22.36 8.84 6.61 12.59 6.77 5.04 3.81 86.55 13.33 18.53 7.01 10.18 14.43 4.57 1.91 13.49 3.58 12.30 25.93 63.92 83.35 33.27 30.49 31.42 42.17 31.60 21.96 8.97 6.48 12.51 6.89 5.08 3.93 86.26 13.37 18.49 7.08 10.10 14.56 4.51 1.89 13.13 3.52 12.33 25.95 23.42 26.67 31.01 30.59 29.01 27.30 13.92 25.40 7.93 22.96 37.33 27.46 20.00 13.46 27.46 21.28 15.85 13.14 29.10 19.72 12.79 21.94 26.86 28.64 22.84 41.08 37.71 19.20 21.45 15.35 19.84 17.02 26.34 27.83 25.39 26.85 22.22 28.75 23.28 33.27 17.04 25.39 37.98 28.00 21.61 27.11 24.40 26.21 11.28 18.10 19.32 18.51 26.90 12.21 28.15 30.06 35.79 29.89 22.95 16.54 30.80 17.98 16.15 20.28 17.72 31.50 15.66 11.51 20.07 18.48 19.07 16.84 23.05 18.04 29.35 30.35 23.68 (15.13) (14.29) 7.47 9.56 15.24 9.17 10.28 (12.42) (2.43) (17.46) (3.89) 15.11 (1.29) (3.29) (19.81) 10.42 (4.12) (22.12) (14.86) 7.49 (7.40) (11.61) (4.27) 15.59 10.53 3.52 www.taonline.com.my MACD DMI MACD DMI MACD Line Signal Diff Recent Signal Signal Change 14.37 16.17 (1.797) BUY SELL -0.58 -0.42 (0.159) SELL SELL -1.46 -1.05 (0.405) SELL SELL 0.36 0.26 0.098 BUY BUY 0.54 0.51 0.032 BUY BUY 0.50 0.43 0.067 BUY BUY 0.50 0.47 0.026 BUY BUY 0.59 0.51 0.078 BUY BUY -0.20 -0.18 (0.025) SELL SELL -0.18 -0.11 (0.073) SELL SELL -0.13 -0.10 (0.031) SELL SELL -0.08 -0.04 (0.044) SELL SELL 0.10 0.08 0.023 BUY BUY -0.14 -0.15 0.009 SELL BUY - BUY -0.02 -0.03 0.007 SELL BUY -0.11 -0.09 (0.018) SELL SELL 0.83 0.65 0.183 BUY BUY 0.01 0.02 (0.009) SELL SELL -0.15 0.01 (0.154) SELL SELL -0.06 -0.03 (0.026) SELL SELL 0.11 0.12 (0.003) BUY SELL - SELL -0.06 -0.09 0.025 SELL BUY 0.01 0.04 (0.034) SELL SELL -0.02 0.00 (0.014) SELL SELL 0.26 0.26 (0.001) BUY SELL - SELL 0.10 0.09 0.005 BUY BUY 0.05 0.12 (0.075) BUY SELL - The table below consists of the top 30 ASX 200 Index component stocks, weighted by market capitalization in descending order, with some popular technical indicators. Some other popularly traded stocks are included at the bottom section. 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. Stock names and technical statistics in bold highlight stocks that have changes in BUY/SELL signals on the DMI and MACD on the given date. Page 1 of 2
  34. TA Securities A Member of the TA Group 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 30day 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. Fundamentals of Foreign Technical Picks Bloomberg Ticker Stock Name BHP AU BHP BILLITON LTD RIO AU RIO TINTO LTD CBA AU COMMONW BK AUSTR WBC AU WESTPAC BANKING ANZ AU AUST AND NZ BANK NAB AU NATL AUST BANK WES AU WESFARMERS LTD WPL AU WOODSIDE PETRO NCM AU NEWCREST MINING WFD AU WESTFIELD GROUP FMG AU FORTESCUE METALS QBE AU QBE INSURANCE ORG AU ORIGIN ENERGY AMP AU AMP LTD STO AU SANTOS LTD MQG AU MACQUARIE GROUP SUN AU SUNCORP GROUP LT ORI AU ORICA LTD OSH AU OIL SEARCH LTD CCL AU COCA-COLA AMATIL AMC AU AMCOR LTD SGP AU STOCKLAND AWC AU ALUMINA LTD CPU AU COMPUTERSHARE LT QAN AU QANTAS AIRWAYS SGM AU SIMS METAL MGMT EPS ($) Div Yield(%) PER(x) 52week Price % Chg Close Target Price % upside 24.22 28.29 14% 60.83 71.42 15% 4.33 3.15 10.7 14.6 4.087 3.123 69.80 41.51 1.55 84.82 83.80 -1% 5.64 5.80 15.0 14.6 4.994 5.094 86.09 69.22 2.92 34.80 33.98 -2% 2.41 2.49 14.4 14.0 5.353 5.336 35.26 27.57 6.75 32.05 30.97 -3% 2.39 2.42 13.4 13.2 5.036 5.098 32.05 22.06 5.36 32.75 32.01 -2% 2.40 2.44 13.7 13.4 5.924 5.805 33.28 23.90 6.78 43.88 43.28 -1% 2.61 2.64 16.8 16.6 5.032 5.105 46.06 38.62 4.13 30.91 33.22 7% 1.31 1.48 18.0 15.8 3.258 3.714 32.59 23.82 -0.80 21.72 22.82 5% 0.74 0.93 22.3 17.7 0.787 1.156 27.20 15.88 7.26 8.53 9.65 12% 0.33 0.36 19.6 18.0 3.001 3.060 11.14 8.21 -9.06 11.04 2017 2018 2017 2018 2017 2018 High Low YTD 1.50 1.28 12.2 14.4 3.386 2.907 27.96 15.85 -3.35 6.54 6.68 2% 0.82 0.48 6.0 10.3 4.954 2.966 7.27 2.40 12.99 13.66 5% 0.64 0.80 15.5 12.3 3.195 3.826 13.28 9.22 4.59 6.57 7.35 11% 0.32 0.55 20.4 11.9 0.000 1.339 7.47 4.42 -0.30 5.02 5.31 5% 0.36 0.37 14.1 13.5 5.777 6.036 5.96 4.39 -0.40 3.55 4.42 20% 0.14 0.20 19.0 13.8 1.014 2.169 5.07 3.30 -11.69 89.20 88.37 -1% 6.12 6.36 14.6 14.0 4.763 4.972 89.88 61.05 2.39 13.32 13.90 4% 0.91 0.98 14.6 13.6 5.495 5.893 13.95 11.27 -1.48 17.57 18.21 4% 1.05 1.13 16.8 15.5 3.028 3.290 19.49 12.04 -0.62 6.86 7.98 14% 0.21 0.26 24.9 20.2 1.224 1.545 7.75 5.98 -4.32 10.37 9.92 -4% 0.57 0.59 18.1 17.5 4.629 4.754 10.70 7.94 2.47 14.39 15.90 9% 0.61 0.65 18.0 16.8 2.967 3.322 16.66 13.62 -3.75 4.47 4.82 7% 0.31 0.33 14.2 13.5 5.749 5.973 5.11 4.03 -2.40 1.82 1.88 3% 0.11 0.09 12.9 14.7 5.604 5.549 2.04 1.19 -0.55 13.97 13.19 -6% 0.55 0.60 19.4 17.5 1.897 2.019 14.28 8.63 12.12 3.80 4.34 12% 0.53 0.53 7.22 7.14 3.842 4.684 4.22 2.58 14.11 12.26 12.54 2% 0.62 0.71 19.7 17.2 3.116 3.214 13.62 7.40 -4.44 Note : The above data is based on Bloomberg consensus. 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
  35. T e c h n i c a l TA Securities V i e w Thursday , March 16, 2017 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Foreign Technical Stock Watch Hong Kong HSI: 23,792.85 (-35.10, -0.15%) THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Chartist: Stephen Soo Stock Close Name 15-Mar HANG SENG 23,792.85 HSBC CH MOBILE CCONB ICBC CNOOC CH LIFE BOC SHK PROP PETRO CH TENCENT HKSE CK HUTCHISON PING AN SINOPEC CORP CH SHENHUA CLP LI & FUNG BOC HK HS BANK HK&CH GAS SWIRE HL PROP WHARF CH OV LAND POWER ASSETS BELLE HENDERSON BOCOMM CH COAL CH UNICOM BK EASIA ESPRIT MTR SINO LAND CH RES NEW WORLD CH RES LAND CH MERCHANT CH RES POWER ALCORP CATHAY CITIC COSCO FIH MOBILE LTD GENHK AIA SANDS CHINA GALAXY 63.70 83.55 6.30 5.06 8.81 23.90 3.89 112.00 5.66 214.60 194.70 96.90 42.00 5.81 15.76 78.00 3.69 31.70 157.40 14.98 79.50 20.05 68.70 24.90 67.40 5.28 45.55 6.03 3.89 9.56 31.60 6.89 41.90 13.04 17.70 9.77 21.90 21.50 14.16 3.94 11.44 11.00 8.40 3.17 2.42 48.45 34.50 39.40 Change Tel: +603-2167 9607 High Lower (35.10) 0.20 (0.55) (0.05) (0.03) (0.10) (0.10) (0.04) (0.10) (0.03) 0.00 2.70 0.75 0.05 (0.04) (0.12) 0.95 0.11 0.05 (1.40) 0.04 (0.70) (0.10) 1.05 0.10 (0.15) (0.08) (0.25) (0.04) (0.07) 0.01 (0.15) (0.02) 0.05 (0.06) 0.20 (0.03) 0.25 (0.05) (0.04) (0.01) (0.16) (0.04) (0.06) 0.01 0.00 0.00 0.05 (0.10) 23,842.81 23,645.51 64.00 84.10 6.35 5.07 8.85 24.10 3.91 113.20 5.67 215.60 197.10 97.40 42.10 5.84 15.86 78.05 3.71 31.70 158.80 15.00 80.35 20.15 68.95 24.95 67.65 5.36 45.85 6.06 3.97 9.59 31.75 6.92 42.00 13.14 17.86 9.82 22.10 21.70 14.36 3.98 11.86 11.06 8.48 3.24 2.42 48.60 35.15 40.15 63.15 83.30 6.26 5.02 8.76 23.85 3.86 111.00 5.61 213.00 190.50 95.00 41.75 5.75 15.52 77.15 3.53 31.30 156.60 14.86 79.10 19.70 66.85 24.50 67.25 5.26 45.10 6.01 3.86 9.50 31.30 6.85 41.60 12.90 17.26 9.61 21.30 21.25 14.06 3.91 10.80 10.92 8.38 3.13 2.42 48.05 34.15 39.10 RSI Bollinger Bands Low 23,433.13 60.45 83.34 6.05 4.89 8.72 23.17 3.74 108.49 5.59 205.68 187.05 92.15 41.00 5.76 15.56 76.44 3.38 30.65 155.51 14.81 78.61 19.33 57.48 23.12 67.15 5.02 43.95 5.92 3.82 9.23 31.04 5.96 40.34 12.50 17.26 9.30 20.30 21.16 14.04 3.84 11.01 10.73 8.35 2.88 2.29 47.89 31.33 35.66 Mid stsoo@ta.com.my Upper 14d 23,841.85 24,250.57 54.79 64.32 85.67 6.29 5.05 9.18 23.94 3.91 112.53 5.92 211.39 195.03 95.01 41.82 6.01 16.18 78.35 3.54 31.25 160.26 14.97 80.06 19.79 62.86 24.02 68.94 5.29 45.05 6.15 4.08 9.44 32.44 6.83 41.36 13.20 17.69 9.88 21.16 21.55 14.28 4.08 11.44 11.23 8.50 3.10 2.37 49.08 33.03 37.90 68.18 88.01 6.53 5.21 9.64 24.70 4.07 116.57 6.25 217.10 203.00 97.88 42.64 6.25 16.80 80.25 3.71 31.86 165.01 15.13 81.50 20.25 68.24 24.92 70.72 5.56 46.15 6.38 4.34 9.65 33.84 7.70 42.38 13.90 18.12 10.45 22.03 21.94 14.51 4.32 11.87 11.73 8.64 3.32 2.45 50.27 34.73 40.13 45.90 32.61 57.33 56.16 26.01 56.74 56.27 53.18 31.73 62.22 54.65 66.30 58.75 38.34 44.02 50.90 63.46 61.19 45.23 54.71 49.63 59.51 79.97 65.08 34.87 54.29 62.58 49.09 41.21 59.23 39.99 57.97 62.76 47.57 58.46 52.65 63.10 52.57 52.93 46.16 54.01 38.81 50.54 62.79 60.36 48.24 63.80 65.39 Moving Averages 10d 23,686.11 63.38 84.68 6.20 4.99 8.99 23.68 3.84 112.88 5.79 211.36 191.81 95.95 41.60 5.92 15.98 78.64 3.59 31.22 158.56 14.99 79.62 19.84 64.41 24.09 68.18 5.26 45.32 6.05 3.98 9.48 31.89 6.99 41.68 13.35 17.65 9.95 21.05 21.44 14.29 4.05 11.59 11.04 8.46 3.19 2.40 49.18 33.72 38.79 30d www.taonline.com.my DMI 50d DI + DMI MACD DI - ADX Diff Line Signal Diff MACD Recent Signal DMI MACD Signal Change 23,727.49 23,372.38 27.79 18.88 26.50 8.91 80.69 118.52 (37.833) BUY SELL - - 65.08 86.46 6.16 4.98 9.33 23.74 3.83 111.12 5.97 209.15 194.45 93.98 41.61 6.05 16.18 78.03 3.49 31.18 160.50 14.92 79.78 19.70 61.23 23.92 69.55 5.23 44.51 6.05 4.08 9.42 32.77 6.56 40.95 13.08 17.39 9.65 20.97 21.52 14.05 4.10 11.25 11.35 8.42 2.98 2.36 48.52 32.85 37.15 64.82 86.06 6.03 4.88 9.53 22.76 3.71 108.72 6.04 204.76 191.16 92.94 40.97 6.03 16.07 76.78 3.48 30.58 156.98 14.69 78.98 19.03 59.63 23.26 68.44 5.00 43.77 5.92 4.01 9.26 32.37 6.38 40.08 12.87 16.53 9.32 20.07 21.07 13.66 3.88 10.97 11.36 8.16 2.79 2.34 47.71 33.55 36.47 28.75 22.91 17.27 16.59 32.95 16.29 17.22 16.92 35.28 19.61 17.83 16.73 15.64 25.80 19.34 21.95 15.52 16.30 25.02 14.74 16.57 15.57 9.17 13.65 22.84 15.53 15.46 20.08 24.88 12.29 19.28 13.82 7.26 22.37 19.16 21.08 14.82 19.47 12.90 23.10 27.58 18.05 14.86 9.31 17.62 18.56 13.25 12.35 18.75 32.79 20.43 21.65 34.14 26.33 27.73 37.99 27.06 13.74 16.33 27.99 22.21 14.55 16.58 38.38 13.18 15.82 23.52 20.48 19.50 27.84 38.12 31.21 24.85 33.08 30.47 14.37 14.64 24.45 16.09 40.52 50.35 30.77 23.89 37.47 26.80 13.65 31.57 22.36 32.50 27.28 17.83 55.24 44.03 27.58 22.81 27.03 0.55 (14.90) 7.70 11.07 (21.70) 12.10 7.67 7.23 (23.07) 6.16 11.30 12.68 10.50 (8.38) (3.51) 2.81 10.25 5.60 (3.13) 3.16 0.56 10.73 34.25 16.77 (8.33) 10.89 6.08 (0.72) (5.93) 13.30 (6.25) 12.76 15.93 (2.37) (0.01) (0.56) 13.46 (1.86) 4.55 4.20 (6.56) (8.23) 2.48 13.39 34.00 2.01 18.72 19.57 -0.53 -0.69 0.05 0.03 -0.20 0.23 0.04 1.17 -0.10 2.53 -0.29 1.03 0.17 -0.06 -0.10 0.30 0.05 0.21 0.00 0.07 0.11 0.27 2.26 0.34 -0.41 0.07 0.52 0.02 -0.04 0.08 -0.28 0.18 0.50 0.11 0.27 0.16 0.33 0.07 0.16 0.01 0.18 -0.13 0.07 0.12 0.03 0.36 0.27 0.82 -0.53 -0.43 0.07 0.04 -0.18 0.31 0.05 1.58 -0.07 2.39 0.12 1.00 0.19 -0.03 -0.02 0.61 0.04 0.21 0.55 0.10 0.27 0.27 1.68 0.28 -0.12 0.09 0.54 0.05 -0.01 0.07 -0.16 0.22 0.53 0.17 0.36 0.23 0.33 0.14 0.21 0.05 0.21 -0.11 0.10 0.13 0.02 0.53 0.04 0.74 (0.007) (0.256) (0.016) (0.009) (0.022) (0.084) (0.013) (0.404) (0.032) 0.133 (0.405) 0.029 (0.027) (0.030) (0.076) (0.307) 0.012 0.003 (0.547) (0.028) (0.165) (0.007) 0.580 0.060 (0.294) (0.026) (0.022) (0.029) (0.030) 0.006 (0.127) (0.039) (0.031) (0.066) (0.090) (0.063) (0.004) (0.063) (0.056) (0.038) (0.032) (0.017) (0.034) (0.011) 0.006 (0.170) 0.239 0.074 BUY SELL BUY BUY SELL BUY BUY BUY SELL BUY BUY BUY BUY SELL SELL BUY BUY BUY SELL BUY BUY BUY BUY BUY SELL BUY BUY SELL SELL BUY SELL BUY BUY SELL SELL SELL BUY SELL BUY BUY SELL SELL BUY BUY BUY BUY BUY BUY SELL SELL SELL SELL SELL SELL SELL SELL SELL BUY SELL BUY SELL SELL SELL SELL BUY BUY SELL SELL SELL SELL BUY BUY SELL SELL SELL SELL SELL BUY SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL BUY SELL BUY BUY BUY SELL SELL SELL SELL SELL SELL - BUY BUY - 29.30 8.00 24.97 27.66 11.25 28.39 24.89 24.15 12.21 25.76 29.13 29.41 26.14 17.42 15.83 24.76 25.78 21.91 21.89 17.89 17.14 26.30 43.42 30.42 14.51 26.43 21.54 19.35 18.95 25.59 13.03 26.58 23.20 19.99 19.15 20.52 28.28 17.61 17.46 27.30 21.01 9.81 17.34 22.70 51.62 20.57 31.97 31.93 The table above consists of the 45 HKSE Hang Seng Index component stocks, sorted by market capitalization in descending order, with some popular technical indicators. Some other popularly traded stocks are included at the bottom section. 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. Stock names and technical statistics in bold highlight stocks that have changes in BUY/SELL signals on the DMI and MACD on the given date. Page 1 of 2
  36. TA Securities A Member of the TA Group 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 30day 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. Fundamentals of Foreign Technical Picks Bloomberg Ticker 5 941 939 1398 883 2628 3988 16 857 700 388 1 2318 386 1088 2 494 2388 11 3 19 101 4 688 6 1880 12 3328 1898 762 23 330 66 83 291 17 1109 144 836 2600 293 267 1199 2038 678 1299 1928 27 HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK HK EPS ($) PER(x) Div Yield(%) 52week Price % Chg Stock Name Close Target Price % upside 2017 2018 2017 2018 2017 2018 High Low YTD HSBC CH MOBILE CCONB ICBC CNOOC CH LIFE BOC SHK PROP PETRO CH TENCENT HKSE CK HUTCHISON PING AN SINOPEC CORP CH SHENHUA CLP LI & FUNG BOC HK HS BANK HK&CH GAS SWIRE HL PROP WHARF CH OV LAND POWER ASSETS BELLE HENDERSON BOCOMM CH COAL CH UNICOM BK EASIA ESPRIT MTR SINO LAND CH RES NEW WORLD CH RES LAND CH MERCHANT CH RES POWER ALCORP CATHAY CITIC COSCO FIH MOBILE LTD GENHK AIA SANDS CHINA LTD GALAXY 63.70 64.32 1% 0.6 0.7 13.7 12.5 0.8 0.8 69.10 44.50 2.33 83.55 109.33 24% 5.3 5.7 14.0 12.9 2.8 3.1 99.30 80.30 1.64 6.30 7.32 14% 0.9 0.9 6.1 6.0 4.3 4.4 6.47 4.50 5.53 5.06 5.87 14% 0.8 0.8 5.8 5.7 4.5 4.6 5.20 3.82 8.81 11.21 21% 0.0 0.6 N/A 13.1 3.0 3.7 10.88 8.46 -9.18 23.90 27.30 12% 0.7 0.9 32.2 23.7 1.0 1.3 24.95 16.00 18.32 3.89 4.37 11% 0.6 0.6 6.1 6.0 4.4 4.4 4.08 2.90 13.08 112.00 129.07 13% 8.8 9.5 12.8 11.8 3.6 3.7 123.30 85.40 14.29 8.82 5.66 7.22 22% 0.0 0.3 102.6 17.2 0.7 2.3 6.38 4.76 -2.08 214.60 241.10 11% 4.8 6.1 39.7 31.3 0.2 0.3 220.80 149.20 13.13 194.70 193.25 -1% 5.6 6.1 34.9 31.7 2.6 2.9 213.20 172.10 6.28 96.90 113.86 15% 8.2 8.9 11.8 10.9 2.8 3.0 103.90 80.60 10.24 42.00 55.53 24% 3.4 3.5 10.9 10.7 1.3 1.4 32.50 8.25 5.81 7.15 19% 0.3 0.4 15.0 12.1 3.1 3.8 6.34 4.66 5.64 15.76 18.08 13% 1.3 1.4 11.1 9.7 3.0 3.5 17.70 44.15 11.40 7.95 78.00 79.00 1% 5.0 5.2 15.5 15.1 3.7 3.8 84.35 68.45 9.47 3.69 3.49 -6% 0.0 0.0 13.6 13.2 0.8 0.8 5.15 3.24 8.21 8% 14.3 12.6 5.6 14.23 31.70 34.37 2.2 2.5 4.0 31.75 20.92 157.40 155.88 -1% 9.3 10.2 17.0 15.5 4.0 4.3 164.40 127.60 9.08 14.98 13.05 -15% 0.6 0.6 25.2 24.8 2.4 2.5 15.50 12.67 9.02 79.50 76.30 -4% 4.2 5.3 18.7 14.9 4.0 4.1 94.40 72.20 7.36 20.05 19.28 -4% 1.2 1.1 16.8 18.5 3.8 3.7 20.70 13.64 21.96 68.70 64.32 -7% 4.6 4.8 14.9 14.3 3.1 3.3 68.95 39.00 33.27 24.90 28.98 14% 3.1 3.5 7.9 7.2 3.0 3.4 27.85 20.15 21.17 67.40 76.42 12% 3.6 3.5 18.8 19.1 5.7 4.1 75.73 62.78 5.48 5.28 5.14 -3% 0.4 0.4 11.3 11.6 4.8 4.7 5.79 4.07 21.10 45.55 46.33 2% 3.8 3.1 14.8 3.2 3.3 48.20 39.64 10.42 6.03 5.81 -4% 0.9 0.9 6.0 6.1 4.3 4.3 6.44 4.46 7.49 3.89 4.37 11% 0.1 0.2 26.6 13.9 0.5 1.6 4.88 2.92 5.71 9.56 11.11 14% 0.0 0.2 292.8 34.8 0.6 1.2 10.26 7.70 31.60 25.31 -25% 2.1 1.7 15.4 18.1 2.9 2.6 34.75 26.35 6.40 6.89 6.11 -13% 0.0 0.2 N/A 42.8 0.0 1.1 7.62 5.34 13.14 41.90 39.33 -7% 1.6 1.6 26.5 25.7 7.9 2.7 44.50 34.92 11.14 13.04 13.52 4% 0.8 0.8 15.6 15.8 3.9 3.9 14.48 10.96 12.22 17.70 18.83 6% 0.4 0.7 48.0 26.5 0.5 1.0 18.34 12.85 14.94 11.9 5.87 9.77 11.27 13% 0.8 0.8 12.6 11.8 4.5 4.5 10.46 6.91 19.15 21.90 27.47 20% 2.4 2.8 9.2 7.9 3.0 3.5 23.85 16.50 25.57 21.50 23.42 8% 1.4 1.6 15.3 13.4 3.1 3.4 24.95 18.80 11.75 14.16 14.17 0% 1.9 1.5 7.6 9.6 5.7 5.5 15.50 10.70 14.94 4.40 10% 0.0 0.2 125.0 19.7 2.25 23.13 11.44 9.24 -24% 0.0 0.2 1271.1 55.8 0.6 0.9 13.96 10.00 12.16 11.00 3.94 12.25 10% 1.5 1.5 7.2 7.1 3.1 0.0 3.1 0.2 12.78 4.45 10.54 -0.90 8.40 8.89 6% 0.1 0.1 14.0 13.3 1.2 0.4 9.48 7.28 7.83 3.17 3.14 -1% 0.0 0.0 22.7 19.4 0.4 0.4 3.38 2.31 29.39 2.42 2.79 13% 0.0 0.0 N/A N/A 0.0 0.0 3.00 2.00 7.08 48.45 56.69 15% 0.4 0.4 16.9 15.3 0.3 0.3 54.15 41.50 10.74 34.50 37.32 8% 0.2 0.2 22.3 20.4 0.7 0.7 39.30 24.60 2.37 39.40 41.74 6% 1.6 1.7 24.8 23.0 1.2 1.4 40.15 21.87 16.57 Note : The above data based on Bloomberg consensus. 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
  37. T e c h n i c a l TA Securities V i e w Thursday , March 16, 2017 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 • Foreign Technical Stock Watch FSSTI: 3,137.43 (-5.97, -0.19%) Singapore THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Chartist: Stephen Soo Stock Name FSSTI SINGTEL DBS OCBC UOB JARDINE M. WILMAR HK LAND CAPLAND GENSP KEPPEL SGX SIA FNN NOBLE CITY DEV JARDINE S. SG PRESS JARDINE C&C GOLDEN AGRI SG TECH OLAM INT CAP TRUST SEMBCORP SEMCORP M. CMFT DELGRO STARHUB SIA ENG IFOOD AGRI YZJ Close Change 15-Mar 3,137.43 (5.97) 3.96 19.13 9.65 21.51 64.60 3.62 7.03 3.65 0.99 6.63 7.54 9.93 2.10 0.21 10.23 39.50 3.52 44.00 0.38 3.63 1.90 1.94 3.16 1.85 2.53 2.83 3.68 0.52 1.10 0.00 (0.06) 0.03 (0.03) (0.73) 0.06 (0.03) (0.01) 0.00 0.03 0.01 (0.08) 0.01 0.00 (0.08) (0.15) 0.04 (0.40) 0.01 (0.04) (0.04) 0.01 0.01 (0.02) 0.02 (0.02) (0.02) 0.00 (0.01) Tel: +603-2167 9607 stsoo@ta.com.my High Low Bollinger Bands RSI Lower Mid Upper 14d 3,142.50 3,116.34 3,088.22 3,121.81 3,155.41 58.92 Moving Averages 10d 30d 50d DI + 3,133.62 3,105.68 3,067.97 28.49 DI 19.82 ADX 30.51 Diff 8.68 MACD DMI MACD Line Signal Diff Recent Signal 21.39 23.52 (2.130) BUY SELL 3.98 19.18 9.66 21.60 64.95 3.63 7.03 3.68 1.00 6.67 7.56 10.04 2.12 0.21 10.29 39.85 3.52 44.37 0.39 3.65 1.94 1.94 3.17 1.87 2.54 2.84 3.70 0.53 1.11 3.93 19.01 9.53 21.36 63.78 3.55 6.91 3.61 0.99 6.54 7.50 9.93 2.10 0.21 10.07 38.91 3.47 43.55 0.38 3.62 1.89 1.92 3.13 1.84 2.51 2.79 3.68 0.52 1.08 3.93 19.08 9.54 21.52 65.56 3.61 6.98 3.63 0.99 6.92 7.50 9.95 2.08 0.22 9.91 39.65 3.48 44.06 0.38 3.66 1.97 1.94 3.24 1.94 2.51 2.87 3.69 0.52 1.11 17.66 18.88 18.88 16.01 18.84 22.97 12.81 16.58 15.84 27.62 15.94 12.97 15.91 22.16 12.08 14.50 10.52 21.92 22.85 16.51 29.74 18.07 19.51 17.74 16.03 28.56 7.15 23.23 15.42 17.00 18.15 11.63 21.23 33.79 30.99 25.44 43.03 21.99 37.94 12.20 16.15 14.26 23.72 42.46 29.15 20.44 13.51 30.13 24.19 30.16 18.70 29.30 42.41 13.13 15.05 37.03 16.40 46.92 5.21 8.50 6.38 7.86 4.90 (9.24) 9.86 14.49 7.48 (3.28) 6.19 4.46 (0.98) (0.58) 22.65 10.21 8.48 1.67 (9.94) 2.84 (20.69) (9.86) 2.19 17.27 2.79 (10.37) 8.35 (6.80) 18.34 0.02 0.16 0.04 0.14 0.89 -0.06 0.07 0.07 0.01 0.09 0.01 0.02 -0.01 0.00 0.27 0.53 0.00 0.63 -0.01 0.06 -0.03 -0.01 0.01 0.09 0.02 0.00 0.03 -0.01 0.06 3.89 18.43 9.41 21.02 61.95 3.46 6.70 3.46 0.96 6.43 7.41 9.82 2.06 0.19 8.91 37.12 3.44 40.23 0.35 3.52 1.90 1.92 3.12 1.46 2.39 2.77 3.65 0.50 0.84 3.95 18.89 9.54 21.48 64.51 3.68 6.91 3.60 0.99 6.85 7.54 9.92 2.10 0.23 9.65 38.92 3.48 42.95 0.39 3.65 2.02 1.95 3.23 1.80 2.47 2.85 3.68 0.53 1.02 4.02 19.35 9.68 21.94 67.08 3.91 7.12 3.74 1.02 7.27 7.66 10.02 2.14 0.26 10.39 40.72 3.51 45.67 0.43 3.78 2.15 1.98 3.34 2.15 2.56 2.92 3.72 0.56 1.20 56.68 58.67 59.78 56.31 54.50 41.18 58.29 59.94 52.69 46.27 52.11 50.82 50.15 48.62 65.81 58.05 55.85 57.47 40.42 56.27 26.76 44.03 45.05 58.42 60.08 44.26 55.36 42.67 65.04 3.93 18.83 9.55 21.23 64.03 3.76 6.87 3.55 0.98 6.67 7.55 9.90 2.10 0.21 9.58 38.67 3.48 42.68 0.40 3.56 2.03 1.96 3.20 1.70 2.46 2.84 3.66 0.53 0.97 3.88 18.63 9.46 21.10 62.43 3.78 6.83 3.40 0.97 6.46 7.48 9.90 2.11 0.20 9.29 37.89 3.51 42.11 0.41 3.46 2.02 1.96 3.16 1.62 2.47 2.90 3.58 0.54 0.91 22.87 27.39 25.25 23.87 23.75 13.73 22.67 31.08 23.32 24.33 22.13 17.42 14.93 21.58 34.73 24.71 19.00 23.59 12.91 19.35 9.05 8.21 21.70 35.01 18.82 18.19 15.50 16.43 33.77 DMI www.taonline.com.my 0.02 0.15 0.03 0.17 1.03 -0.06 0.06 0.08 0.01 0.16 0.01 0.02 -0.01 0.01 0.20 0.57 -0.01 0.56 -0.01 0.07 -0.01 -0.01 0.03 0.11 0.01 -0.01 0.04 -0.01 0.06 (0.003) 0.005 0.004 (0.030) (0.137) (0.006) 0.008 (0.007) (0.002) (0.070) (0.003) 0.004 0.000 (0.004) 0.064 (0.037) 0.006 0.069 0.000 (0.014) (0.015) (0.002) (0.019) (0.011) 0.005 0.003 (0.008) (0.000) 0.003 BUY BUY BUY BUY BUY SELL BUY BUY BUY SELL BUY BUY SELL SELL BUY BUY BUY BUY SELL BUY SELL SELL BUY BUY BUY SELL BUY SELL BUY SELL BUY BUY SELL SELL SELL BUY SELL SELL SELL SELL BUY BUY SELL BUY SELL BUY BUY BUY SELL SELL SELL SELL SELL BUY BUY SELL SELL BUY DMI MACD Signal Change - BUY BUY BUY - The table above consists of the revamped 30 SGX FTSE Straits Times Index component stocks, sorted by market capitalization in descending order, with some popular technical indicators. Some other popularly traded stocks are included at the bottom section. 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. Stock names and technical statistics in bold highlight stocks that have changes in BUY/SELL signals on the DMI and MACD on the given date. Page 1 of 2
  38. 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 30day 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. Fundamentals of Foreign Technical Picks Bloomberg Ticker ST DBS OCBC UOB JM WIL HKL CAPL GENS KEP SGX SIA FNN NOBL CIT JS SPH JCNC GGR STE OLAM CT SCI SMM CD STH SIE IFAR SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP SP Stock Name Close Target Price SINGTEL DBS OCBC UOB JARDINE M. WILMAR HK LAND CAPLAND GENSP KEPPEL SGX SIA FNN NOBLE CITY DEV JARDINE S. SG PRESS JARDINE C&C GOLDEN AGRI SG TECH OLAM INT CAP TRUST SEMBCORP SEMCORP M. CMFT DELGRO STARHUB SIA ENG IFOOD AGRI 3.96 4.25 19.13 9.65 YZJSGD SP YZJ % upside EPS ($) PER(x) Div Yield(%) 52week Price % Chg 2017 2018 2017 2018 2017 2018 High Low YTD 7% 0.2 0.3 16.0 15.3 4.5 4.7 4.36 3.59 8.49 19.44 2% 1.791 1.962 10.7 9.8 3.2 3.3 19.37 14.63 10.32 9.56 -1% 0.9 0.9 11.2 10.3 3.8 4.0 9.78 8.21 8.18 21.51 21.18 -2% 1.9 2.1 11.1 10.4 3.4 3.5 21.95 17.41 5.44 64.60 63.80 -0.01 4.0 4.3 16.0 14.9 2.4 2.5 67.27 52.42 16.92 3.62 3.80 5% 0.2 0.2 12.9 12.0 2.0 2.2 4.00 2.96 0.84 7.03 7.38 5% 0.4 0.4 17.8 17.4 2.7 2.8 7.35 5.77 11.06 3.65 4.01 9% 0.2 0.2 17.7 18.3 2.8 2.8 3.79 2.85 20.86 0.99 1.06 6% 0.0 0.0 28.3 25.4 2.9 3.0 1.04 0.69 9.39 6.63 6.56 -1% 0.5 0.6 12.9 12.0 3.4 3.6 7.23 5.10 14.51 7.54 7.81 3% 0.3 0.4 22.6 20.8 3.9 4.2 8.05 6.96 5.31 9.93 9.71 -2% 0.4 0.4 22.3 22.8 3.5 2.7 11.67 9.60 2.69 2.10 2.03 -3% 0.1 0.1 28.4 28.0 2.0 2.1 2.23 1.92 0.48 0.21 0.22 0.05 0.0 0.0 9.9 6.8 0.0 1.0 0.37 0.11 23.53 10.23 10.70 4% 0.6 0.7 15.9 14.8 1.4 1.4 10.59 7.41 23.55 39.50 38.80 -2% 2.7 2.9 14.7 13.7 0.8 0.8 40.56 27.35 18.98 3.52 3.19 -10% 0.2 0.2 23.0 22.9 4.8 4.7 4.13 3.45 -0.28 44.00 53.00 17% 2.1 2.4 14.8 13.2 1.8 2.0 45.20 31.60 6.72 0.38 0.39 2% 0.0 0.0 16.8 14.9 1.8 1.8 0.45 0.33 -11.63 3.63 3.62 0% 0.2 0.2 21.0 20.1 4.2 4.4 3.70 3.01 12.38 1.90 1.99 5% 0.1 0.1 14.2 14.2 2.4 2.4 2.17 1.58 -3.81 1.94 2.13 9% 0.1 0.1 17.0 16.5 5.7 5.7 2.25 1.87 2.65 3.16 3.45 8% 0.2 0.3 13.1 11.0 2.9 3.3 3.38 2.44 10.88 1.85 1.57 -18% 0.1 0.1 34.3 26.1 1.4 1.7 2.09 1.22 34.06 2.53 2.94 14% 0.2 0.2 16.1 15.5 4.3 4.7 3.02 2.37 2.43 2.83 2.65 -7% 0.2 0.2 17.4 18.3 5.7 5.6 3.97 2.73 0.71 3.68 3.55 -4% 0.2 0.2 23.9 23.7 4.2 4.0 3.91 3.35 9.20 0.52 0.58 10% 436 583 11.3 8.4 12418 18132 0.63 0.44 -0.95 1.10 1.07 -2% 0.5 0.5 11.1 11.6 17.7 17.7 1.19 0.71 34.97 Note : The above data based on Bloomberg consensus. 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