Bursa Malaysia Daily Market Report - 2 January

Transcription

1. Tuesday , 02 January, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only News 1. 2. 3. Daily Market Commentary Weekly Strategy Weekly Technical Outlook Fundamental Reports 1. Banking Sector: Softer-than-Expected Loan Growth in November Technical Reports 1. 2. 3. 4. 5. Weekly Technical Stock Picks Daily Money Flow FBMKLCI Weekly Ace Market Stock Watch Weekly Small Cap Stock Watch Weekly Stock Screen Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ 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. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
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Daily Market Commentary Tuesday , 02 January 2018 For Internal Circulation Only TA Research, e-mail : taresearch@ta.com.my KLSE Market Statistics (29.12.2017) (mil) Main Market 1,889.9 Warrants 307.7 ACE Market 929.7 Bond 9.9 ETF 1.8 LEAP 0.0 Total 3,138.9 Off Market 102.4 Volume +/-chg (RMmn) 591.7 2,493.1 33.0 103.2 -123.3 165.7 -5.9 2.3 1.03 2.2 0.0 0.0 2,766.4 55.3 121.0 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP January 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 STERPRO DBE MAXWELL MMAG BARAKAH MAYBANK YNHPROP GTRONIC TENAGA 28.6 20.0 16.0 12.0 10.0 5.8 4.0 2.0 1.9 % YTD chg 17.71 151.16 85.41 2.50 1.00 1.18 0.50 0.14 9.45 12.87 15.87 9.14 24,719.22 6,903.39 7,687.77 22,764.94 2,467.49 29,919.15 3,402.92 1,753.71 6,355.65 3,307.17 1,899.34 6,065.13 -118.29 -46.77 64.89 -19.04 0.00 55.44 3.82 10.42 41.61 10.79 12.00 -23.01 -0.48 -0.67 0.85 -0.08 0.00 0.19 0.11 0.60 0.66 0.33 0.64 -0.38 25.08 28.24 7.63 19.10 21.76 35.99 18.13 13.66 19.99 6.56 -3.54 7.05 Given last Friday's robust last-minute window-dressing rally, the key bluechip benchmark should encounter strong profit-taking and selling interest at the start of this new year week. Nonetheless, a healthy profit-taking correction is a welcomed respite, as overbought momentum need to be adequately neutralized for the uptrend to stick in this new year. As such, a profit-taking pullback is very likely this week, with 1,782 and 1,765 acting as key resistance-turn-support levels, followed by 1,757 and 1,754, the 200 and 100-day moving average levels, and stronger supports from 1,737 and 1,735, the respective 50 and 30-day moving averages. On the flipside, the 1,796 and 1,800 psychological level will be formidable upside hurdles. Sector-wise, in the first trading week of the new year, expect key heavyweight oil & gas, plantation and utility blue chips to see profit-taking pressure post window-dressing, while buying momentum switch to oil & gas and construction related shares like Bumi Armada, Dialog,Wah Seong, Gadang, Sunway Construction, UEM Sunrise and WCT Holdings to highlight on active rotational buying interest. News Bites • • • • • • Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ @ @ @ @ % chg 1,796.81 12,942.57 17,050.87 1,785.00 Off Market (mn) Review & Outlook Value Value/ +/-chg Volume Up Down 682.6 1.32 328 293 36.1 0.34 96 117 -54.1 0.18 58 52 -1.2 0.23 5 4 1.21 1.24 2 2 0.00 0.00 0 0 0.88 489 468 -25.3 1.18 0.35 0.03 0.02 0.20 0.30 9.58 1.42 6.46 15.30 Counter Mkt Cap. Chg (RM’mn) (RM) MAYBANK 105,528 AXIATA 49,673 MAXIS 46,941 SIMEPLT 40,805 DIGI 39,653 PETGAS 34,588 MISC 33,121 GENM 31,913 IOICORP 28,529 KLK 26,624 0.24 0.09 0.02 0.52 0.26 0.10 0.13 0.05 0.04 0.34 Important Dates MENANG - 4:5 Bonus Issue - BI of up to 320.5m shares. 4 bonus shares for every 5 existing shares held. Ex-Date: 05/01/2018. Entitlement Date: 09/01/2018. LISTING ON: 10/01/2018. XDL - 1:1 Bonus Issue - BI of up to 894.2m shares. 1 bonus share for every 1 existing share held. Ex-Date: 08/01/2018. Entitlement Date: 10/01/2018. LISTING ON: 11/01/2018. Vol. (mn) 10.70 9.85 2.47 18.30 3.56 0.60 1.51 2.22 1.01 0.22 • • • • • • AirAsia Bhd has completed the listing of its Indonesian arm, Indonesia AirAsia following PT AirAsia Indonesia Tbk's acquisition of a 57.25% stake in IAA. MMC Corp Bhd has been slapped by Inland Revenue Board with RM45.9mn in additional income tax with penalties for the years of assessment of 2011 to 2013. Advancecon Holdings Bhd has bagged a RM45.8mn contract to provide earthworks and ancillary works for a development on a piece of 439acre land in Ijok, Selangor. SC Estate Builder Bhd has bagged a contract worth RM22mn from Visi Sempena Sdn Bhd to undertake project management services and turnkey contract works. UMW Holdings Bhd is divesting its controlling stake in its Taiwan pipes and related product trading subsidiary for NT$20mn. Genetec Technology Bhd has proposed a private placement of 3.8mn new ordinary shares to raise as much as RM3.9mn for additional working capital. Destini Bhd is disposing of its entire 51.9% interest in its waste tyre extrusion and recycling subsidiary Green Pluslink Sdn Bhd for RM4.4mn. Cahya Mata Sarawak Bhd has announced the retirement of its Group Managing Director, Datuk Richard Curtis effective Dec 31, but will remain as a Non-Independent Non-Executive Director until Dec 31 next year. Cypark Resources Bhd's FY17 net profit increased 11.4% to RM57.6mn from RM51.7mn a year ago. Binasat Communications Bhd, which is en route for a listing on the Ace Market of Bursa Malaysia on Jan 8, 2018, posted a net profit of RM1.5mn for 1QFY18. China's official Purchasing Managers' Index dipped to 51.6 in December, compared with 51.8 in November. Singapore's economy expanded 3.5% in 2017, more than double the initial government forecast as the country benefited from the global economic upswing. Exchange Rate USD/MYR 4.0614 -0.0038 USD/JPY 112.64 -0.2500 EUR/USD 1.201 0.0070 Commodities Futures Palm Oil (RM/mt) 2,498.00 -22.00 Crude Oil ($/Barrel) 60.10 0.21 Gold ($/tr.oz.) 1,305.10 7.90 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. Kaladher Govindan, Head of Research MENARA TA ONE, 22 JALAN for TA SECURITIES HOLDINGS BERHAD (14948-M) A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BHD P RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL : 603 - 2072 1277. FAX : 603 - 2032 5048 www.ta.com.my
3. Tuesday , January 02, 2018 FBMKLCI: 1,796.81 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Weekly Strategy Market View, News In Brief: Corporate, Economy, and Share Buybacks Kaladher Govindan Tel: +603-2167 9609 kaladher@ta.com.my www.taonline.com.my M a r k e t V i e w Correction Likely Post End-2017 Window Dressing Despite most investors being away for the extended Christmas and year-end holidays, persistent window-dressing activity in oil & gas, consumer and utility heavyweights during the final week of 2017 helped shore up the blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) to end the year at the highest in more than three months. For the final week of 2017, the blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) rallied 36.57 points, or 2.1 percent to close last year at 1,796.81, with Nestle, Petronas Gas, HLFG, KLCC, KLK and Sime Darby Plantation contributing to most of the index’s rise. Daily traded volume and value improved mildly to 2.54 billion shares worth RM2.11 billion, compared to the 2.44 billion shares and RM2.19 billion respectively the previous week. Last week’s rally was within expectations. Although the 1,800-psychological level proved to be a tough nut to crack again it should be within reach in the first quarter of this New Year. Post year-end window dressing rally that actually started in early December and ended the month on a very high note, we can anticipate some profit taking corrections in this first trading week of this New Year as investors return from year-end holidays. Besides, the strength of the ringgit, which hit RM4.04 against the US dollar last week, could prompt some foreign funds to lock in their profits at current attractive levels. Expectations for a pullback in last week’s crude oil price rally could also contribute to that. To recap, Brent crude oil price almost hit USD67/barrel last week after an explosion at a Libyan pipeline carrying crude to Es Sider terminal disrupted supply. As the disruption is expected to be rectified later this week, the pullback in crude oil price may have an implication on the ringgit’s strength as well in the immediate term. Anticipation of a hawkish tone in the December FOMC meeting minutes and the still strong US non-farm payroll data that will be released later this week could also underscore the weakness in FBMKLCI as the first week of 2018 progresses. As such, profit-taking is likely to surface to stall gains in this first four-day trading week of the New Year, but trading momentum should stage a comeback as investors return to participate after the year-end holiday break. The upside momentum should remain intact in the run-up to 14th general election (GE), supported by strong economic fundamentals, recovery in corporate earnings and stable outlook for crude oil and ringgit. In the immediate-term, Malaysia’s exports for November that will be released this Friday may not disappoint judging from the still robust trade data from its major trading partners. Any setbacks in crude oil prices could be supported by expectations of a cold winter as we march into January and clear signs that US drillers are not rushing to beef up their drilling activities after the recent rally in crude oil prices. The Baker Hughes rig data suggested the Page 1 of 7
4. 2-Jan-18 number of oil rigs held steady for a second straight week at 747 in the week to 29th December and remained unchanged for the month after rising by 10 rigs in November . In fact, it declined by 3 in the fourth quarter after falling by 6 rigs in the third quarter. To add, the increase in drilled but uncompleted wells will have no significance on shale output in the short-term if the hydraulic fracking and other procedures can’t be completed. The US shale industry is currently facing constrains from the shortage of fracking crew and pressure pumping equipment have that have led to a decline in growth of completed wells. It may take another three or four quarters for these issues to be rectified. Thus, do not discount off totally the possibility of a continuity in crude oil price rally after some initial corrections. No doubt market undercurrent will turn cautious upon the dissolution of parliament to pave way for the 14th GE (potentially in March or April) but the magnitude of correction in the benchmark index will be highly dependent on the election strategies pursued by the political parties, especially the level of cooperation among them and choice of candidates. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ 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. As of Tuesday, January 02, 2018, the HOD, Kaladher Govindan, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 7
5. 2-Jan-18 N e w s I n B r i e f Corporate AirAsia Bhd has completed the listing of its Indonesian arm , Indonesia AirAsia (IAA) following PT AirAsia Indonesia Tbk’s (AAID’s) acquisition of a 57.25% stake in IAA. Separately, AirAsia group chief executive Tan Sri Tony Fernandes reiterated the plan to combine all its airline businesses under one listed vehicle, with its operations in the Philippines next in the growth pipeline after AirAsia Indonesia. (Bursa Malaysia/ The Edge) Cahya Mata Sarawak Bhd has announced the retirement of its Group Managing Director, Datuk Richard Curtis effective Dec 31, but will remain as a Non-Independent Non-Executive Director until Dec 31 next year. The company also announced the redesignation of Dato Isaac Lugun to Group CEO -- Corporate and the re-designation of Goh Chii Bing to Group CEO -- Operations, who were both appointed to their current positions. (Bursa Malaysia/ Bernama) Cypark Resources Bhd's net profit jumped 40.4% to RM18.2mn in 4QFY17, from RM12.9mn in the previous corresponding quarter, mainly due to better margin generated from new projects. Cypark's full-year net profit increased 11.4% to RM57.6mn from RM51.7mn a year ago. (Bursa Malaysia/ The Sun) MMC Corp Bhd has been slapped by Inland Revenue Board (IRB) with RM45.9mn in additional income tax with penalties for the years of assessment of 2011 to 2013. MMC, however, said there are reasonable grounds to challenge the notices of assessment raised by the IRB, and voiced intention to file notices of appeal and challenge the notices of assessment by IRB. (Bursa Malaysia/ The Edge) Binasat Communications Bhd, which is en route for a listing on the Ace Market of Bursa Malaysia on Jan 8, 2018, posted a net profit of RM1.5mn for 1QFY18. Its first-quarter revenue stood at RM10.2mn. (Bursa Malaysia/ The Sun) The Malaysia Competition Commission revealed it penalised MY E.G. Services Bhd (MyEG) for infringing the Competition Act 2010 because MyEG had imposed additional steps to any customers that want to purchase mandatory insurances for the renewal of temporary employment permits for foreign workers without going through its agent, RHB Insurance Bhd. It also said that MyEG’s penalties totalled RM6.1mn. (Bursa Malaysia/ The Edge) Advancecon Holdings Bhd has bagged a RM45.8mn contract to provide earthworks and ancillary works for a development on a piece of 439-acre land in Ijok, Selangor. The contract, awarded by Worldwide Property Management Sdn Bhd, spans 18 months from Jan 15, 2018 to July 14, 2019. (Bursa Malaysia/ The Edge) Datuk Fakhri Yassin Mahiaddin will relinquish his board position as non-independent and non-executive director of Eden Inc Bhd on Dec 31. Fakhri, 42, who is the son of former deputy prime minister Tan Sri Muhyiddin Yassin, has resigned, citing to focus on other business commitments. (Bursa Malaysia/ The Edge) Lingkaran Trans Kota Holdings Bhd (Litrak) COO Richard Lim is retiring from his position on Dec 31. Separately, Stephen Low Chee Weng has been appointed as CFO of Litrak effective Jan 1, 2018. (Bursa Malaysia/ The Edge) SC Estate Builder Bhd has bagged a contract worth RM22mn from Visi Sempena Sdn Bhd to undertake project management services and turnkey contract works. The contract work is to complete the 18-storey proposed development of 357 apartment units and 14 shoplot units in Alor Setar, Kedah. (Bursa Malaysia/ The Sun) Page 3 of 7
6. 2-Jan-18 UMW Holdings Bhd is divesting its controlling stake in its Taiwan pipes and related product trading subsidiary for NT $20mn (RM2.7mn). The disposal is in line with its strategic plan to exit from the oil and gas sector. (Bursa Malaysia/ The Edge) KomarkCorp Bhd saw its net loss for 2QFY18 widen to RM3.7mn from RM2.3mn a year ago, owing to factors such as its reliance on a single large customer, severe competition and forex losses. For the cumulative period of 6 months, its net loss narrowed from RM9.6mn in the past financial year to RM3.7mn. (Bursa Malaysia/ The Sun) Nexgram Holdings Bhd remained in the red in 1QFY18, with its net loss widening to RM2.9mn from RM2.3mn a year ago as a result of increased losses mainly from the ICT division. Its revenue for the period under review declined 21.2% to RM10.6mn from RM13.4mn due to lower contribution from its property division and a subsidiary involved in dealing with a wide-ranging choice of security and video surveillance equipment. (Bursa Malaysia/ The Sun) Genetec Technology Bhd has proposed a private placement of 3.8mn new ordinary shares to raise as much as RM3.9mn for additional working capital. (Bursa Malaysia/ The Edge) Destini Bhd is disposing of its entire 51.9% interest in its waste tyre extrusion and recycling subsidiary Green Pluslink Sdn Bhd for RM4.4mn. The proceeds from the disposal and long-term loan will be used by Destini as working capital. (Bursa Malaysia/ The Sun) Page 4 of 7
7. 2-Jan-18 N e w s I n B r i e f Economy Asia Ringgit Ends Year on a High A strong rally by the ringgit against the US dollar pushed the local unit to end the year at a high , alongside the bullish sentiment for it, and amid a broadly weaker greenback. With a persistent upward momentum, the ringgit finished the last trading day at 4.0440/0500 versus the US dollar against 4.0650/0680. The buoyant ringgit was fuelled by recovery in commodities, especially crude oil, crude palm oil and copper. The upbeat performance was also influenced by the numerous positive local developments, including bullish foreign fund inflows into Malaysia, a strong equity market performance alongside upbeat economic data as well as prospects of a higher overnight policy rate. The central bank’s international reserves amounted to US$102.2bil (RM431.6bil) as at Dec 15 compared with US$101.9bil (RM430.4bil) as at Nov 30. (The Star) China Official Factory PMI Dips to 51.6, Hits Forecasts Growth in China’s manufacturing sector slowed slightly in December as a crackdown on air pollution and a cooling property market weigh on the world’s second-largest economy. The official Purchasing Managers’ Index (PMI) dipped to 51.6 in December, compared with 51.8 in November. But it remained comfortably above the 50-point mark that separates growth from contraction on a monthly basis. Analysts surveyed by Reuters had forecast the reading would ease to 51.6 after unexpectedly picking up last month. Boosted by government infrastructure spending, a resilient property market and unexpected strength in exports, China’s manufacturing and industrial firms helped the economy post betterthan-expected growth of 6.9% through the first nine months of this year. But November economic data disappointed analysts, with industrial output, investment and the property market all backing expectations that growth momentum is starting to moderate. (Reuters) China Central Bank Promises to Maintain Prudent and Neutral Policy China's central bank pledged to maintain its "prudent and neutral" monetary policy and to use multiple policy tools to keep liquidity reasonably stable. Analysts expect the People's Bank of China to keep policy slightly tight in 2018 - even as that has lifted market rates to multi-year highs - to support a broader deleveraging drive to contain risks in the world’s second-largest economy. The PBOC will seek reasonable growth in credit and social financing while effectively controlling the "macro leverage ratio", it said on its website following a quarterly meeting of its monetary policy committee. The central bank will "earnestly control the total floodgate of money supply", it said, echoing top leaders at an annual economic work conference earlier this month. In November, China's broad M2 money supply grew 9.1% from a year earlier, picking up from 8.8% in October, and the slowest pace since records began in 1996. Central bank officials have said a slowdown in M2 growth was caused by the financial-sector deleveraging campaign, which has cooled banks' shadow financing activities. Still, China's total new loans hit a record 12.94 trillion Yuan ($1.99 trillion) in January-November as a crackdown on shadow lending forced banks to issue more loans for the real economy. The central bank will also continue with interest rate and exchange rate reform, according to the statement. (Reuters) Singapore GDP Grew 3.5% in 2017 Singapore’s economy expanded 3.5% in 2017, more than double the initial government forecast as the country benefited from the global economic upswing, Prime Minister Lee Hsien Loong said in his New Year message. Lee said the city-state would press on with economic restructuring and infrastructure projects such its fifth airport terminal as well as review healthcare policies to prepare for an aging population. “All these are essential investments in our future. They require time and resources, and will stretch way beyond this term of government. We have to plan well ahead for them,” Lee said in a statement released by his office. Singapore’s 2017 growth comes at the top end of the most recent trade ministry prediction of 3% to 3.5% and compares with the median 3.3% forecast in a Page 5 of 7
8. 2-Jan-18 Bloomberg survey . Steady growth in the export-reliant economy has raised the possibility of fiscal and monetary policy tightening in the coming year. The Monetary Authority of Singapore is forecasting growth of 1.5% to 3.5% in 2018. (The Star) Singapore PPI Inflation Rises on Oil Prices in November Singapore's producer price inflation accelerated on oil prices in November, Statistics Singapore reported. Producer price inflation rose to 2.8% in November from 2.1% in October. The oil index surged 23.6%, while non-oil prices fell 0.6%. Month-on-month, producer prices advanced 1 percent, following October's 0.1% rise. Another report from the statistical office showed that import price inflation increased to 4% in November from 3.4% in October. Import prices logged a monthly growth of 1.4% versus 1.3% increase in October. Meanwhile, export price inflation eased to 0.8% in November from 1.1% in the previous month. The oil index grew sharply by 25% on year. On the other hand, the nonoil index slid 3.5%. On a monthly basis, export prices gained 0.6%, slower than the 1.2% increase seen in October. (RTT News) Australia's Private Sector Credit Rises More than Forecast Australia's private sector credit grew more than expected in November, figures from the Reserve Bank of Australia revealed. Private sector credit climbed 5.4% year-on-year in November, slightly faster than the 5.3% increase posted in October and the expected growth of 5.2%. On a monthly basis, growth in private sector credit improved to 0.5% from 0.4% in October. Credit for housing advanced 6.4% annually and that for business grew 4.7%. Meanwhile, personal credit fell 1.2%. Broad money supply rose 6% year-on-year in November compared to the 6.3% increase in the same period of 2016. (RTT News) South Korea’s Monetary Policy to Remain Accommodative South Korea’s central bank chief said monetary policy should remain accommodative in 2018 because inflationary pressure is weak even as the economy is expected to post solid growth in the coming year. “Inflationary pressure from the demand side isn’t forecast to be big and so monetary policies should remain accommodative for the time being,” Bank of Korea (BoK) governor Lee Ju-yeol (pic) said in his New Year’s speech, according to a bank statement. Any further interest rate adjustment will come only after carefully considering the stability of financial markets, inflation and growth path, Lee added. The Bank of Korea raised interest rates in November for the first time in more than six years to 1.5%, yet tempered market expectations for further hikes by raising concerns about the job market and other uncertainties. Market participants have been expecting the bank to tighten policies gradually in the coming year as weak inflation and uneven recovery in industrial production are risks to growth. Lee added the BoK should review the new inflation target to be applied starting in 2019, as the current inflation target of 2% will expire by the end of 2018. December’s core inflation, which strips out volatile food and fuel prices, rose 1.5% from a year ago, accelerating from 1.2% in November. The core inflation rate of 1.5% marked the fastest gain since September when it rose 1.6%. (The Star) Europe and Uni ted Kingdom German Inflation Slows Less than Expected; Annual Average at 5-year High Germany's inflation slowed less-than-expected in December and the annual average for 2017 was the highest in five years, preliminary data from the statistical office Destatis showed. The consumer price index rose 1.7% year-on-year following 1.8% increase in November. Economists had forecast 1.5% inflation. Energy inflation eased sharply to 1.3% from 3.7%. Food price growth slowed to 3% from 3.2%. On a month-on-month basis, the CPI rose 0.6% in December, which was slightly faster than the 0.5% increase economists had predicted. The EU measure of inflation, the harmonized index of consumer prices or HICP, climbed 1.6% year-on-year in December after a 1.8% rise in the previous month. Economists had predicted 1.4% inflation. Compared to the previous month, the HICP increased 0.8% in December, faster than the 0.6% economists had expected. In 2017, the annual average inflation jumped to 1.8% from 0.5% in 2016. The corresponding HICP figure surged to 1.7% from 0.4%. Both figure were the highest in five years. (RTT News) Page 6 of 7
9. 2-Jan-18 Eurozone M3 Growth Slows in November Eurozone money supply grew at a slightly slower pace in November , the European Central Bank said. The broad monetary aggregate M3 grew 4.9% year-on-year in November, slower than the 5% increase seen in October. Economists had forecast a 4.9% rise. The narrow measure M1, which includes currency in circulation and overnight deposits, climbed 9.1% in November, but slower than the 9.4% rise in October. The annual growth rate of credit to the private sector held steady at 2.8% in November. Loans to the private sector grew by adjusted 2.9% compared to 2.8% in October. Meanwhile, loans to households grew at a faster pace of 2.8% after rising 2.7% in October. Likewise, the increase in loans to non-financial corporations rose to 3.1% from 2.9%. (RTT News) Share Buy-Back: 29 December 2017 Company AJIYA E&O GRANFLO GLOMAC SCGM SUNWAY UNIMECH Bought Back Price (RM) Hi/Lo (RM) 900,000 100,000 60,000 10,000 3,000 322,900 25,400 0.61 1.43 0.24 0.61/0.605 2.63 1.64/1.63 1.02/1.01 0.605/0.595 1.43/1.42 0.24/0.225 0.61/0.605 2.64/2.62 1.69/1.63 1.02/1.01 Total Treasury Shares 4,454,100 22,743,747 8,050,000 5,107,400 337,900 22,281,262 6,385,810 Source: Bursa Malaysia Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ 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. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 7 of 7
10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) Recom Market Cap. (RMm) BETA EPS (sen) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 29-Dec-17 AUTOMOBILE BAUTO 2.20 2.50 Buy 2,540 0.77 14.3 19.9 15.4 11.0 5.2 5.5 2.24 -1.8 1.84 19.6 MBMR 2.20 2.32 Hold 860 0.93 23.2 23.9 9.5 9.2 2.1 2.2 2.60 -15.4 2.01 9.5 3.3 2.8 PECCA 1.55 1.69 Buy 287 na 11.1 12.5 13.9 12.4 3.6 3.9 1.70 -8.8 1.28 21.1 -2.5 SIME 2.21 1.97 Hold 15,030 1.40 12.0 12.7 18.5 17.5 1.4 1.4 2.55 -13.3 1.85 19.6 19.6 UMW 5.20 4.37 Sell 6,075 1.32 19.2 35.3 27.0 14.7 1.9 3.5 6.08 -14.5 4.09 27.0 23.1 BANKS & FINANCIAL SERVICES ABMB 4.08 4.20 Buy 6,316 1.38 30.6 35.6 13.3 11.5 3.9 3.9 4.49 -9.1 3.62 12.7 9.7 AFFIN 2.31 2.50 Hold 4,488 0.84 24.2 28.1 9.5 8.2 3.5 3.5 2.98 -22.3 2.22 4.0 -2.5 AMBANK 4.41 5.10 Buy 13,293 1.23 48.6 52.0 9.1 8.5 4.1 4.1 5.70 -22.6 4.06 8.6 2.3 CIMB 6.54 7.00 Buy 60,335 1.56 50.9 56.0 12.8 11.7 3.9 4.3 7.08 -7.6 4.51 45.0 45.0 HLBANK 17.00 17.50 Buy 34,775 0.70 114.2 120.9 14.9 14.1 2.6 2.6 17.10 -0.6 13.06 30.2 25.9 MAYBANK 9.80 9.70 Hold 105,528 1.02 70.9 77.7 13.8 12.6 5.1 5.1 9.86 -0.6 7.97 23.0 19.5 PBBANK 20.78 23.60 Buy 80,242 0.63 142.4 149.8 14.6 13.9 2.8 2.9 21.08 -1.4 19.66 5.7 5.4 RHBBANK 5.00 5.20 Hold 20,050 1.62 52.2 53.8 9.6 9.3 3.0 3.0 5.59 -10.6 4.66 7.3 6.2 BURSA 10.12 11.10 Buy 5,440 0.84 39.0 41.5 26.0 24.4 3.4 3.4 10.98 -7.8 8.08 25.2 16.0 Note: BURSA proposed bonus issue of shares on the basis of 1 for 2. Ex-Target price RM7.04 CONSTRUCTION GADANG 1.11 1.73 Buy 731 0.71 14.3 18.2 7.8 6.1 2.7 2.7 1.37 -19.0 1.01 9.9 5.7 GAMUDA 4.96 6.00 Buy 12,180 0.88 34.5 35.7 14.4 13.9 2.4 2.4 5.52 -10.1 4.58 8.3 3.8 IJM 3.05 2.89 Sell 11,067 0.83 13.7 18.2 22.2 16.8 3.1 3.1 3.61 -15.5 2.71 12.5 -4.7 PESONA 0.45 0.55 Buy 313 0.86 5.8 4.8 7.8 9.4 3.3 3.3 0.74 -38.8 0.44 3.4 -25.6 SENDAI 0.87 0.58 Sell 676 1.25 9.6 9.0 9.1 9.6 1.2 1.2 1.39 -37.8 0.51 71.3 50.4 SUNCON 2.51 2.65 Buy 3,244 0.56 14.7 16.4 17.1 15.3 2.2 2.4 2.53 -0.8 1.67 50.3 47.6 WCT 1.62 1.64 Hold 2,279 0.95 12.6 11.2 12.8 14.5 1.9 1.9 2.48 -34.5 1.46 11.0 -5.8 LITRAK 5.55 6.26 Hold 2,929 0.30 45.6 47.1 12.2 11.8 4.5 4.5 6.15 -9.8 5.50 0.9 -5.6 ANNJOO 3.86 4.40 Buy 1,988 1.32 45.3 49.2 8.5 7.8 5.7 6.7 3.98 -3.0 2.14 80.4 77.9 CHINHIN 1.21 1.49 Buy 673 1.13 12.4 12.0 9.7 10.0 4.1 5.0 1.49 -18.8 0.86 40.7 39.1 ENGTEX 1.10 1.38 Buy 468 0.60 14.2 16.1 7.8 6.8 3.8 5.0 1.52 -27.6 1.07 2.8 -9.1 CARLSBG 15.30 18.06 Buy 4,707 0.74 86.2 88.7 17.7 17.2 5.6 5.8 16.00 -4.4 13.90 10.1 9.9 HEIM 18.90 19.14 Buy 5,710 0.46 84.0 88.3 22.5 21.4 4.0 4.2 19.58 -3.5 15.78 19.8 15.4 AEON 1.76 1.97 Sell 2,471 0.43 6.7 7.7 26.3 22.9 2.3 2.6 2.70 -34.8 1.64 7.3 -31.5 AMWAY 7.38 8.18 Buy 1,213 0.39 43.9 45.2 16.8 16.3 5.1 5.4 8.18 -9.8 7.04 4.8 0.7 F&N 27.00 27.41 Hold 9,897 0.22 155.7 182.7 17.3 14.8 2.2 2.4 27.00 0.0 22.64 19.3 15.0 Building Materials CONSUMER Brewery Retail HUPSENG 1.09 1.25 Hold 872 0.40 5.4 5.6 20.1 19.6 4.1 4.6 1.28 -14.8 1.08 0.9 -5.3 JOHOTIN 1.21 1.48 Buy 376 0.72 12.5 12.6 9.7 9.6 4.1 4.5 1.76 -31.3 1.16 4.3 -2.4 NESTLE 103.20 120.50 Buy 24,200 0.41 330.1 373.8 31.3 27.6 2.9 3.2 103.20 0.0 74.12 39.2 32.0 PADINI 5.28 4.67 Sell 3,474 0.75 27.0 30.0 19.6 17.6 2.4 2.5 5.50 -4.0 2.26 133.6 107.9 POHUAT 1.79 2.35 Buy 393 0.68 25.3 25.5 7.1 7.0 4.5 4.5 2.07 -13.5 1.65 8.4 4.0 QL 4.35 3.26 Sell 7,058 0.28 12.8 14.7 33.9 29.5 1.0 1.1 4.39 -0.9 3.26 33.6 30.6 SIGN 0.71 0.92 Buy 162 1.00 6.9 9.2 10.2 7.7 3.5 5.0 1.07 -34.1 0.69 2.2 -11.3 40.00 52.08 Buy 11,421 1.39 187.4 175.4 21.3 22.8 5.0 5.0 51.04 -21.6 34.06 17.4 -9.4 GENTING 9.20 11.53 Buy 35,194 1.47 54.4 59.8 16.9 15.4 1.7 1.7 10.00 -8.0 7.85 17.3 15.8 GENM 5.63 6.51 Buy 31,913 1.56 27.0 30.6 20.8 18.4 1.6 1.8 6.38 -11.8 4.50 25.1 24.6 2.24 3.34 Buy 3,017 0.76 21.5 26.0 10.4 8.6 7.1 8.0 3.00 -25.3 2.23 0.4 -24.3 CCMDBIO 2.53 2.70 Buy 706 0.73 15.0 16.1 16.8 15.8 3.9 4.1 2.65 -4.5 1.90 33.2 27.8 IHH 5.86 6.40 Buy 48,281 0.72 11.9 15.0 49.3 39.2 0.5 0.6 6.45 -9.1 5.42 8.1 -7.7 KPJ 0.97 1.12 Buy 4,137 0.40 3.8 4.2 25.6 23.0 2.2 2.4 1.14 -14.9 0.90 7.8 -7.2 HARTA 10.68 7.30 Sell 17,645 0.84 25.8 30.5 41.4 35.0 1.1 1.3 11.40 -6.3 4.53 135.8 121.1 KOSSAN 8.11 8.80 Buy 5,186 0.17 38.3 43.0 21.2 18.9 2.4 2.7 8.50 -4.6 5.62 44.3 23.1 SUPERMX 2.00 1.80 Sell 1,311 0.34 15.3 17.9 13.1 11.2 2.6 3.1 2.18 -8.3 1.69 18.3 -5.2 TOPGLOV 7.99 7.00 Sell 10,029 0.01 33.7 36.4 23.7 21.9 2.1 2.3 8.19 -2.4 4.56 75.2 49.3 KAREX 1.30 1.00 Sell 1,303 0.43 2.8 5.2 47.0 25.0 0.5 1.0 2.52 -48.4 1.20 8.3 -44.9 SCIENTX 8.66 9.84 Buy 4,189 0.37 68.2 74.9 12.7 11.6 2.4 3.0 9.85 -12.1 6.68 29.6 29.3 SKPRES 2.28 2.20 Hold 2,850 0.57 10.4 14.8 22.0 15.4 2.3 3.2 2.32 -1.7 1.24 83.9 76.7 ASTRO 2.65 3.10 Buy 13,817 1.14 14.0 13.7 19.0 19.4 4.9 5.1 2.94 -9.9 2.45 8.2 1.9 MEDIA PRIMA 0.76 0.45 Sell 843 0.99 -3.8 -1.7 na na 0.0 0.0 1.28 -40.6 0.58 31.0 -33.9 STAR 1.65 1.25 Sell 1,217 1.12 6.7 6.7 24.5 24.5 7.3 7.3 2.22 -25.6 1.31 26.0 -15.3 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical Rubber Gloves INDUSTRIAL MEDIA
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) Recom Market Cap. (RMm) BETA EPS (sen) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.49 0.72 Buy 851 1.31 4.2 4.5 11.6 10.7 2.1 2.1 0.69 -29.7 0.25 94.0 90.2 LCTITAN 4.70 6.66 Buy 10,683 na 63.4 68.2 7.4 6.9 5.3 5.7 6.53 -28.0 4.14 13.5 -27.7 MHB 0.83 0.78 Sell 1,320 1.76 -0.5 0.3 na 243.1 0.0 0.0 1.16 -28.9 0.63 32.0 -9.8 MISC 7.42 6.56 Sell 33,121 1.11 46.8 52.3 15.8 14.2 4.0 4.0 7.90 -6.1 6.89 7.7 1.0 PANTECH 0.65 0.69 Sell 480 1.19 6.1 6.8 10.5 9.4 4.3 4.8 0.74 -12.8 0.45 44.9 44.9 PCHEM 7.70 8.05 Hold 61,600 0.97 49.8 52.6 15.5 14.7 2.9 3.0 7.85 -1.9 6.80 13.2 10.3 SAPNRG 0.71 1.25 Buy 4,254 2.40 -6.5 -4.9 na na 0.0 0.0 2.10 -66.2 0.70 1.4 -56.2 SERBADK 3.24 3.40 Hold 4,325 na 25.7 27.8 12.6 11.6 2.4 2.6 3.29 -1.5 1.51 114.6 116.0 UMWOG 0.31 0.51 Buy 2,506 1.68 0.4 1.2 75.5 24.6 0.0 0.0 0.92 -66.9 0.27 13.0 -64.3 UZMA 1.28 1.56 Hold 410 0.99 13.2 14.4 9.7 8.9 0.0 0.0 1.98 -35.4 1.27 0.8 -24.7 FGV 1.69 2.01 Hold 6,165 1.67 3.7 4.5 45.6 37.2 3.0 3.0 2.18 -22.5 1.51 11.9 9.0 IJMPLNT 2.74 2.69 Sell 2,413 0.22 9.1 12.5 30.0 21.9 2.9 3.3 3.60 -23.9 2.70 1.5 -19.4 IOICORP 4.54 4.12 Sell 28,529 1.13 21.0 21.8 21.6 20.8 3.5 3.7 4.81 -5.6 4.31 5.3 3.2 KFIMA 1.57 1.89 Buy 443 0.50 13.3 14.5 11.8 10.8 5.7 5.7 1.96 -19.9 1.56 0.6 -7.6 KLK 25.00 26.18 Hold 26,624 0.78 120.7 126.3 20.7 19.8 2.4 2.5 25.50 -2.0 23.00 8.7 4.2 SIMEPLT 6.00 6.25 Buy 40,805 na 21.0 22.1 28.5 27.2 2.3 2.5 6.00 0.0 4.58 31.0 7.3 TSH 1.65 2.10 Buy 2,278 0.64 9.3 9.6 17.7 17.2 1.4 1.5 1.94 -14.9 1.56 5.8 -11.3 UMCCA 6.51 6.73 Sell 1,364 0.40 22.8 34.8 28.6 18.7 2.6 2.8 7.08 -8.1 5.76 13.0 9.0 GLOMAC 0.61 0.50 Sell 441 0.68 3.0 4.4 20.6 13.8 3.3 3.3 0.75 -18.1 0.58 5.2 -12.2 HUAYANG 0.61 0.59 Sell 215 0.78 1.8 3.4 33.3 17.9 0.8 0.8 1.21 -49.6 0.60 2.5 -46.0 IBRACO 0.82 0.92 Hold 405 na 9.1 12.4 8.9 6.5 4.9 6.1 1.02 -20.1 0.76 7.9 -18.5 IOIPG 1.85 2.02 Hold 10,186 0.68 16.5 16.3 11.2 11.4 3.2 3.2 2.22 -16.7 1.79 3.4 -5.1 MAHSING 1.45 1.69 Buy 3,518 0.95 13.0 12.6 11.1 11.5 4.5 4.5 1.64 -11.6 1.38 5.1 1.4 SIMEPROP 1.78 1.54 Buy 12,105 na 9.2 9.1 19.3 19.5 1.1 1.1 1.78 0.0 1.04 71.2 0.0 SNTORIA 0.70 0.85 Buy 393 0.35 8.3 8.6 8.4 8.1 1.4 1.4 0.91 -23.6 0.60 15.8 -4.4 PLANTATIONS PROPERTY Note: SNTORIA proposed bonus issue of warrants & right issue of shares. For more details please refer to SPB 4.90 5.28 Hold 1,684 0.69 21.2 26.1 23.2 18.7 2.4 2.4 5.50 -10.9 4.32 13.4 10.8 SPSETIA 4.00 3.77 Buy 12,098 1.08 21.3 21.9 18.8 18.3 3.0 3.0 4.38 -8.7 3.04 31.6 31.2 SUNWAY 1.63 1.74 Hold 7,981 0.72 11.9 12.6 13.7 12.9 3.1 3.7 1.96 -16.8 1.27 28.5 26.8 SUNREIT 1.90 1.87 Hold 5,596 0.87 10.0 10.7 18.9 17.8 5.3 5.6 1.90 0.0 1.64 15.9 10.5 CMMT 1.83 1.72 Buy 3,729 0.82 8.6 8.9 21.2 20.5 4.9 5.0 1.83 0.0 1.39 31.7 19.6 -28.5 REIT POWER & UTILITIES MALAKOF 0.98 1.16 Buy 4,898 0.79 6.0 6.8 16.4 14.4 7.1 7.1 1.39 -29.5 0.86 14.0 PETDAG 24.26 22.08 Sell 24,101 0.49 105.1 105.7 23.1 22.9 3.2 3.3 25.70 -5.6 21.00 15.5 1.9 PETGAS 17.48 19.10 Buy 34,588 0.96 98.8 99.5 17.7 17.6 3.9 4.0 21.76 -19.7 15.82 10.5 -17.9 TENAGA 15.26 17.38 Buy 86,463 0.70 129.9 127.9 11.7 11.9 3.0 3.0 15.68 -2.7 13.00 17.4 9.8 YTLPOWR 1.29 1.17 Sell 10,226 0.84 9.7 10.1 13.4 12.8 3.9 3.9 1.50 -14.0 1.11 16.2 -11.7 TELECOMMUNICATIONS AXIATA 5.49 5.75 Hold 49,673 1.31 16.0 19.5 34.3 28.1 1.5 2.9 5.49 0.0 4.24 29.5 16.3 DIGI 5.10 5.20 Buy 39,653 0.86 20.0 20.6 25.5 24.7 3.9 4.0 5.19 -1.7 4.36 17.0 5.6 MAXIS 6.01 6.10 Hold 46,941 0.72 26.2 25.7 22.9 23.4 3.3 3.3 6.60 -8.9 5.48 9.7 0.5 TM 6.30 7.20 Buy 23,675 0.56 23.2 24.9 27.2 25.3 3.3 3.6 6.69 -5.8 5.85 7.7 5.9 ELSOFT 2.70 2.70 Hold 743 0.57 15.0 15.7 18.0 17.2 3.9 4.1 2.95 -8.5 1.36 97.9 92.3 IRIS 0.19 0.25 Buy 457 1.90 0.6 0.7 33.4 27.7 0.0 0.0 0.22 -15.9 0.11 68.2 68.2 INARI 3.40 3.05 Hold 6,976 0.92 14.2 15.9 24.0 21.4 3.0 3.3 3.48 -2.3 1.63 109.0 105.2 MPI 12.62 15.40 Hold 2,510 0.48 105.5 121.2 12.0 10.4 2.5 2.5 14.52 -13.1 7.38 71.0 70.3 UNISEM 3.65 3.85 Sell 2,678 1.08 27.1 28.7 13.5 12.7 3.3 3.3 4.25 -14.1 2.34 56.0 54.7 TECHNOLOGY Semiconductor & Electronics TRANSPORTATION Airlines AIRASIA 3.35 3.83 Buy 11,195 1.06 38.3 39.8 8.8 8.4 1.5 1.8 3.59 -6.7 2.16 55.1 46.3 AIRPORT 8.79 8.47 Sell 14,584 1.30 19.7 20.1 44.5 43.6 1.1 1.4 9.45 -7.0 5.98 47.0 45.0 Freight & Tankers PTRANS 0.28 0.44 Buy 352 na 2.3 3.6 12.3 7.9 2.5 3.8 0.38 -26.7 0.14 98.7 92.5 TNLOGIS 1.34 1.80 Buy 612 1.18 13.6 14.0 9.8 9.5 3.7 3.7 1.83 -26.9 1.29 3.9 -14.0 WPRTS 3.70 4.06 Buy 12,617 0.84 16.8 19.4 22.0 19.1 3.4 3.9 4.35 -14.9 3.34 10.8 -14.0 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) Recom Market Cap. (S$m) Beta EPS (cent) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 24.85 23.30 Sell 63,557 1.25 189.1 214.6 13.1 11.6 2.4 2.4 25.4 -2.0 17.15 44.9 43.3 OCBC 12.39 13.50 Buy 51,873 1.20 104.1 110.6 11.9 11.2 6.7 7.7 12.6 -1.6 8.85 40.0 38.9 UOB 26.45 26.90 Hold 43,987 1.08 215.4 229.3 12.3 12.3 2.6 2.6 26.9 -1.5 20.05 31.9 29.7 PLANTATIONS WILMAR 3.09 3.63 Hold 19,771 0.85 29.9 31.8 10.3 9.7 2.6 2.9 4.0 -22.8 3.06 1.0 -13.9 IFAR 0.39 0.53 Hold 559 0.98 5.2 5.7 7.5 6.8 3.3 3.6 0.6 -32.8 0.37 6.8 -25.7 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
12. Technical View Tuesday , January 02, 2018 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Weekly Technical Outlook FBM KLCI: 1,796.81 (+36.57, +2.08%) Chartist : Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my Expect Post Window-Dressing Pullback in First Week of 2018 Despite most investors being away for the extended Christmas and year-end holidays, persistent window-dressing activity in oil & gas, consumer and utility heavyweights during the final week of 2017 helped shore up the blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) to end the year at the highest in more than three months. For the final week of 2017, the blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) rallied 36.57 points, or 2.1 percent to close last year at 1,76.81, with Nestle, Petronas Gas, HLFG, KLCC, KLK and Sime Darby Plantation contributing to most of the index’s rise. Daily traded volume and value improved mildly to 2.54 billion shares worth RM2.11 billion, compared to the 2.44 billion shares and RM2.19 billion respectively the previous week. The local market stayed in profit-taking consolidation mode on Tuesday, in tandem with the subdued regional front as many markets remain closed for the extended Christmas holiday. The KLCI inched down by 0.25 points to end at 1,759.99, off an early low of 1,753.25 and high of 1,760.45, as losers edged gainers 489 to 387 on slower turnover of 2.06bn shares worth RM1.6bn. Strong gains in key oil & gas heavyweights lifted the benchmark index to a fresh three-month high the next day, spilling over to lower liner peers and mend sentiment on the broader market. The KLCI surged 11.77 points to close at the day’s high of 1,771.76, off the opening low of 1,760.69, as gainers led losers 578 to 334 on higher turnover of 2.31bn shares worth RM1.99bn. Sustained strength in oil & gas, consumer and utility heavyweights shored up the blue-chip benchmark to the highest in more than three months on Thursday, and encouraged rotational plays on lower liners. The KLCI added 7.34 points to close at 1,779.10, off an early low of 1,769.60 and high of 1,781.84, as gainers edged losers 467 to 444 on improved turnover of 2.64bn shares worth RM2.1bn. After staying range bound for most of Friday’s session, late window-dressing activity propped up the index to re-test the year high ahead of the New Year weekend break, while profit-taking and selling were well-absorbed. The index climbed 17.71 points, to close at 1,796.81, the highest since May 2015, as gainers led losers 489 to 468 on strong turnover totaling 3.13bn shares worth RM2.76bn. Trading range for the local blue-chip benchmark index last week grossly expanded to 43.56 points, compared to the 27.31 points range the previous week, as key heavyweight blue chips rallied to lift it for a close at a fresh two-and-a-half year high. For the week, the FBMEMAS Index climbed up 280.82 points, or 2.2 percent to 12,942.57, while the FBM-Small Cap Index rose 262.17 points, or 1.5 percent to close the week at 17,050.87. The daily slow stochastic momentum indicator for the FBM KLCI climbed deeper into overbought territory following last week’s late window-dressing rally (Chart 1), which pushed up the weekly indicator’s signal line sharply above the neutral region. The 14-day Page 1 of 3
13. 2-Jan-18 Relative Strength Index (RSI) indicator is officially in overbought territory as of last Friday with a high reading of 75.64, while the 14-week RSI rose to a reading of 65.61. Chart 1 As for trend indicators, the daily Moving Average Convergence Divergence (MACD) registered more bullish expansion, which triggered a buy signal on the weekly MACD indicator (Chart 2). The +DI and –DI lines on the 14-day Directional Movement Index (DMI) trend indicator also expanded bullishly backed by a rising ADX line, suggesting a strengthening up-trend. Chart 2 Conclusion Given last Friday’s robust last-minute window-dressing rally, the key blue-chip benchmark should encounter strong profit-taking and selling interest at the start of this new year week. Nonetheless, a healthy profit-taking correction is a welcomed respite, as overbought momentum need to be adequately neutralized for the uptrend to stick in this new year. As such, a profit-taking pullback is very likely this week, with 1,782 and 1,765 acting as key resistance-turn-support levels, followed by 1,757 and 1,754, the 200 and 100-day moving average levels, and stronger supports from 1,737 and 1,735, the respective 50 and 30-day moving averages. On the flipside, the 1,796 and 1,800 psychological level will be formidable upside hurdles. Page 2 of 3
14. 2-Jan-18 Sector-wise , in the first trading week of the new year, expect key heavyweight oil & gas, plantation and utility blue chips to see profit-taking pressure post window-dressing, while buying momentum switch to oil & gas and construction related shares like Bumi Armada, Dialog, Wah Seong, Gadang, Sunway Construction, UEM Sunrise and WCT Holdings to highlight on active rotational buying interest. Chart 3 Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ 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. As of Tuesday, January 02, 2018, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
15. SECTOR UPDATE Tuesday , January 02, 2018 FBMKLCI: 1,796.81 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Banking Sector Overweight Softer-than-Expected Loan Growth in November Li Hsia Wong Tel: +603-2167 9610 liwong@ta.com.my (Maintained) www.taonline.com.my More Easing in November Loan growth appears to be easing at a faster pace than expected. Despite broadbased strength in the economy, loan growth has remained unexpectedly weak and should fall short of our assumption of 5.6%. We also believe 2017 loan growth targets for most of the banking groups under our coverage may not be met. In November, total loans and advances broadened by 3.9% (+0.3% MoM). We note that while consumer loans remained resilient, business loans continued to disappoint. By segment, consumer loans accelerated by 5.6% YoY (+0.7% MoM) while business loans broadened by only 2.0% YoY (-0.2% MoM). We estimate that SME loans widened at an even softer pace of 1.9% YoY (vs. +3.9% YoY in October) while other business loans contracted for the third straight month (-0.1% MoM, +2.1% YoY). By sub-segment, we note yearly demand for working capital decelerated to 2.2% YoY (vs. +4.3% YoY in October). By sector, sustained contractions in mining and quarrying (-23.4% YoY, -12.2% MoM) as well as softer loans to the manufacturing, wholesale and retail trade, construction, and finance, insurance and business activities underpinned softer business loans. YoY loans to transport, storage and communications was also easier during the month (+1.4% YoY, +0.8% MoM). Consumer loans continued to broaden on the back of stronger drawdowns for residential mortgages (+8.9% YoY, +0.8% MoM). Advances for credit cards also widened at a healthier pace of 2.8% YoY (+1.8% MoM). Loans for the purchase of passenger cars resumed its downward momentum, contracting 1.0% YoY (unchanged MoM). Meanwhile, loans taken for the purchase of securities rose at a softer pace of 1.0% YoY (+1.0% MoM) vs. growth of 2.4% YoY (+0.9% MoM) in October. Encouraging Increases in Applications and Approvals Loan applications surged again in November (+15.8% YoY, +6.0% MoM). Supporting growth, application for business loans accelerated by 16.3% YoY (+8.3% MoM). Applications in the consumer segment climbed at a stronger pace of 15.4% YoY (+3.9%% MoM). Compared to a year ago, application for the purchase of securities ballooned by 49.4% YoY (+41.0% MoM). Application for credit cards and loan to buy passenger cars however, slipped YoY, falling 1.1% and 6.5% respectively. Meanwhile, applications for the purchase of residential mortgages remained healthy, widening 18.3% YoY (-1.4% MoM). The growth momentum for loan approvals rebounded after contracting for 2 straight months. Total loans approved in November surged 22.3% YoY. MoM, growth was encouraging, up another 10.5% following a healthy 13.6% MoM increase in October. Better loan approvals were underpinned by increases in both the business (+25.7% YoY, +8.5% MoM) and consumer segments. Consumer approvals resumed its upward momentum, rising 19.5% YoY (+12.3% MoM). On the back of the stronger increase in applications and approvals, overall approval rate widened to 44.3% from 42.0% a year ago. Both the business and consumer loans approval rate increased to 42.1% and 46.4% from 38.9% and 44.8% a year ago. By major sub-segments, approval for the purchase of residential properties and non-residential properties stood at 44.2% and 29.6% vs. 42.7% and 38.2% in October. Page 1 of 3
16. 2-Jan-18 Healthy Momentum in Repayment of Loans Maintaining a healthy momentum , yearly repayments climbed for the 10th consecutive month in November, up 9.9% YoY (-4.5% MoM). The banking system’s net impaired loans ratio stood unchanged at 1.2% while loan loss provisions climbed to 84.0% from 82.1% in October. During the month, the gross impaired loans (GIL) ratios for residential properties, purchase of passenger cars, credit cards and personal loans stood unchanged at 1.1%, 0.8%, 1.2% and 2.2%. Meanwhile, the impairment ratio for non-residential properties improved 10 bps to 1.1%. By segment, the GIL ratio for manufacturing strengthened to 4.1% (October 2017: 4.2%) while the ratio deteriorated by 20 bps to 2.2% for the construction segment. The GIL ratio for wholesale, retail and trade stood unchanged at 2.1%. By purpose, the GIL ratio for loans taken for working capital also stayed pat at 2.4% in November. Deposits Strengthened on Higher CASA, Stable Average Lending Rates Total deposits (excl. Repo) advanced by 4.7% YoY (+0.3% MoM). CASA balances in commercial banks maintained its upward momentum for the 14th month, increasing 8.1% YoY (-0.3% MoM). The CASA ratio climbed to 27.0% from 26.2% a year ago. The loan to deposit (LD) ratio stood at 89.6% (November 2016: 90.3%) while the liquidity coverage ratio (LCR) strengthened to 139% from 116% a year ago. Elsewhere, the average 1 and 12 months fixed deposit rates stood little changed at 2.89% and 3.10%. The average lending rate broadened 2 bps MoM to 5.23%. Elsewhere, the banking system’s capital buffers remained ample with CET1 and Total Capital Ratio of 13.3% and 17.0%. Maintain OVERWEIGHT We reiterate our overweight stance on the sector. As 2017 comes to a close, the sector continues to surprise us on several fronts: 1) loan growth has not risen as strongly in tandem with GDP, 2) business loans remain soft despite the improvement in optimism, and 3) consumer asset quality remains resilient, defying expectations of some deterioration. While consumer loans registered decent growth, weaker-than-expected loan growth was underpinned by softer business loans, which we believe were likely driven by repayments. In the meantime, the banking system’s asset quality remains intact, backed by unchanged gross impaired loans ratio of 1.2% and LCR in excess of 100%. We believe the overall debt profile for the country remains healthy. Other drivers for earnings growth include potential hikes in the overnight policy rate (OPR) in 2018, which would lead to margin expansion. We expect the increase in rate to augur well for the banking sector as margins are compressed by competitive pressures. Peers Comparison Price TP Capital upside Mkt Cap FY17 (RM) (RM) (%) RM mil (%) (%) 9.80 6.54 9.70 7.00 -1.0% 7.0% HOLD BUY 105,493 60,335 9.2 26.1 Public Bank 20.78 23.60 13.6% BUY 80,242 Hong Leong AMMB 17.00 4.41 17.50 5.10 2.9% 15.6% BUY BUY 34,774 13,293 Maybank CIMB Profit growth FY18 FY19 FY17 PER FY18 FY19 (%) (x) (x) (x) 3.6 4.6 9.7 9.9 14.3 13.4 13.8 12.8 12.6 11.7 1.8 3.8 5.2 15.1 14.6 13.9 12.7 1.7 8.9 10.5 5.9 7.1 16.2 10.0 14.9 9.1 14.1 8.5 RHB Bank 5.00 5.20 4.0% HOLD 20,050 20.7 3.1 3.1 9.9 9.6 9.3 Alliance 4.08 4.20 2.9% BUY 6,316 (1.9) (7.6) 16.5 12.3 13.3 11.5 Affin 2.31 2.50 8.2% HOLD 4,488 (19.2) 3.3 15.9 9.8 9.5 8.2 40,624 9.9 4.4 7.9 12.7 12.2 11.2 Simple average Page 2 of 3
17. 2-Jan-18 FY17 P /BV FY18 FY19 FY17 ROE FY18 FY19 FY17 ROA FY18 FY19 FY17 Div yield FY18 (x) (x) (x) (%) (%) (%) (%) (%) (%) (%) (%) (%) Maybank CIMB 1.3 1.2 1.3 1.2 1.3 1.1 10.3 9.5 10.0 9.3 10.5 9.7 1.0 0.9 1.0 0.9 1.0 0.9 5.1% 3.8% 5.1% 3.9% 5.1% 4.3% Public Bank 2.2 2.0 1.8 14.8 14.1 13.7 1.4 1.4 1.3 2.7% 2.8% 2.9% Hong Leong AMMB 1.5 0.8 1.5 0.8 1.5 0.7 10.2 8.5 11.2 8.8 11.5 8.9 1.1 1.0 1.2 1.1 1.2 1.1 2.6% 4.0% 2.6% 4.1% 2.6% 4.1% FY19 RHB Cap 0.9 0.8 0.8 9.0 8.6 8.3 0.8 0.8 0.8 3.0% 3.0% 3.0% Alliance 1.2 1.2 1.1 10.8 9.4 10.5 0.9 0.9 0.9 3.9% 3.9% 3.9% Affin 0.5 0.5 0.5 5.2 5.2 5.8 0.7 0.7 0.7 3.5% 3.5% 3.5% Simple average 1.2 1.1 1.1 Source: TA Research, Bursa Malaysia, Bloomberg 9.8 9.6 9.9 1.0 1.0 1.0 3.6% 3.6% 3.7% [ TH E RE M A ININ G OF T H IS P A GE IS IN TE N TI O NA L L Y L E F T BL AN K] Sector Recommendation Guideline OVERWEIGHT: The industry, as per our coverage universe, is expected to outperform the FBMKLCI over the next 12 months. NEUTRAL: The industry, as per our coverage universe, is expected to perform in line with the FBMKLCI over the next 12 months. UNDERWEIGHT: The industry, as per our coverage universe, is expected to underperform the FBMKLCI over the next 12 months. Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ 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. As of Tuesday, January 02, 2018, the analyst, Wong Li Hsia, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
18. Tuesday , 02 January, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only L oc al Te ch n ic al R ep o r ts 1. Weekly Technical Stock Picks 2. Daily Money Flow 3. Technical Stock Picks a. FBMKLCI b. Stocks Under Coverage 4. Weekly Ace Market Stock Watch 5. Weekly Small Cap Stock Watch 6. Weekly Stock Screen Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ 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. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
19. Technical View Tuesday , January 02, 2018 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Weekly Technical Stock Picks Malaysia Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my TM RM6.13 BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 6.35 6.11 5.87 10-day 30-day 50-day RM RM RM DAILY MACD BUY Recent Signal Signal Change DMI Recent Signal Signal Change WESTPORTS RM RM RM BUY SIMPLE MOVING AVERAGES 3.76 3.55 3.34 10-day 30-day 50-day BUY Recent Signal Signal Change DMI Recent Signal Signal Change 6.15 6.08 6.10 RM3.70 BOLLINGER BANDS Upper Middle Lower www.taonline.com.my RM RM RM DAILY MACD 3.61 3.56 3.62 BUY Page 1 of 7
20. 2-Jan-18 BUMI ARMADA RM0 .765 BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 0.76 0.74 0.73 10-day 30-day 50-day RM RM RM DAILY MACD DMI Recent Signal Signal Change SELL Recent Signal Signal Change DIALOG RM RM RM SIMPLE MOVING AVERAGES 2.52 2.46 2.39 10-day 30-day 50-day BUY Recent Signal Signal Change DMI Recent Signal Signal Change BUY RM2.51 BOLLINGER BANDS Upper Middle Lower 0.74 0.75 0.75 RM RM RM DAILY MACD 2.47 2.43 2.36 SELL Page 2 of 7