Bursa Malaysia Daily Market Report - 20 October

Transcription

1. Friday , 20 October, 2017 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only N ew s 1. D ai l y M arke t C om men t a ry 2. D ai l y B ri ef Fu nd a me n tal Rep o r ts 1 . Be r m a z A u t o Be r h a d : Sh if t in g Ge a r s w i th th e C X - 5 Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck Pi cks 2. D ai l y St o ck S cr een 3. Fore i gn Te ch n i ca l St o c k W at ch ( A US , H K & F SS TI) 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 – 2031 6608 www.ta.com.my
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Daily Market Commentary Friday , 20 October 2017 For Internal Circulation Only TA Research, e-mail : taresearch@ta.com.my KLSE Market Statistics (19.10.2017) (mil) Main Market 1,688.9 Warrants 191.3 ACE Market 1,268.3 Bond 14.5 ETF 0.1 LEAP 0.1 Total 3,163.3 Off Market 42.4 Volume +/-chg (RMmn) 156.3 2,254.2 58.7 19.7 65.6 234.4 -4.3 2.9 -0.20 0.2 -0.22 0.0 2,511.4 -160.4 211.2 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP October 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 (mn) 14.4 7.5 5.0 3.8 3.5 3.0 2.0 1.8 % YTD chg -5.00 -27.17 -17.29 -7.50 -0.29 -0.22 -0.10 -0.43 6.23 9.25 16.83 6.48 23,163.04 6,605.07 7,523.04 21,448.52 2,473.06 28,159.09 3,334.91 1,683.43 5,910.53 3,370.17 1,983.72 5,896.13 5.44 -19.15 -19.83 85.47 -9.85 -552.67 5.88 -24.10 -18.67 -11.62 -16.39 5.65 0.02 -0.29 -0.26 0.40 -0.40 -1.92 0.18 -1.41 -0.31 -0.34 -0.82 0.10 17.21 22.70 5.32 12.21 22.04 27.99 15.76 9.11 11.59 8.59 0.74 4.07 0.25 7.50 24.00 0.25 4.32 1.30 1.14 4.50 Exchange Rate USD/MYR 4.2225 0.0012 USD/JPY 112.52 -0.2500 EUR/USD 1.182 0.0072 Counter MAYBANK SIME AXIATA DIGI GENTING PETGAS MISC GENM HLBANK PETDAG Mkt Cap. Chg (RM’mn) (RM) 98,943 61,480 44,832 37,087 36,717 35,578 31,916 29,703 28,215 24,042 -0.07 -0.03 -0.02 -0.12 -0.05 -0.52 -0.04 -0.08 -0.05 -0.08 The local benchmark slid to a six-month low Thursday as foreign selling on index heavyweights returned after the Deepavali break, but rotational interest on small caps and ACE Market stocks continued to highlight.The KLCI shed another 5 points to settle at 1,743.99, off an early high of 1,750.59 and low of 1,741.62, as losers beat gainers 544 to 365 on higher turnover of 3.16bn shares worth RM2.51bn. Blue chips should extend losses ahead of the weekend given the bearish momentum from persistent foreign selling pressure, while rotational buying interest highlight small caps and ACE Market stocks. On the index, the crucial 200-day ma uptrend support at 1,743 must hold to prevent breakdown for a test of stronger support from the April low of 1,729, and subsequently 1,700. Overhead resistance stays at 1,769, the 50 and 100day moving averages, followed by the 8 Aug peak of 1,782, and then the double-top peak of 1,793 of 13 Sept and 1,796 of 16 June. Bearish technical momentum on DiGi.com point to potential break below the 50%FR (RM4.75) to test better retracement supports at the 38.2%FR (RM4.65) or 23.6%FR (RM4.52) before stabilizing, while strong overhead resistance from the 76.4%FR (RM4.98) is reinforced by the 200-day ma. Likewise,TM may break below the 23.6%FR (RM6.06) to test better chart supports at RM5.97/5.90, with crucial support from the 30/12/16 low (RM5.81), while immediate overhead resistance is from the 50%FR (RM6.36) and then 61.8%FR (RM6.48). News Bites • • • • Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ @ @ @ % chg 1,743.99 12,527.16 17,192.68 1,741.50 Off Market MMAG HARTA KLK APPASIA BIMB TAWIN VOIR LATITUD Review & Outlook Value Value/ +/-chg Volume Up Down 255.1 1.33 227 375 6.0 0.10 85 104 -31.1 0.18 48 61 0.1 0.20 5 1 -0.17 1.77 0 2 -0.04 0.19 0 1 0.79 365 544 -1,084.4 4.98 Vol. (mn) 9.31 3.36 3.20 8.13 3.64 0.45 1.43 4.67 2.97 0.42 Commodities Futures Palm Oil (RM/mt) 2,722.00 -19.00 Crude Oil ($/Barrel) 51.40 -0.63 Gold ($/tr.oz.) 1,291.90 9.20 • • • • • • • • • • Important Dates TECFAST - 1:3 Bonus Issue - BI of 57.0m shares. 1 bonus share for every 3 existing shares. Ex-Date: 19/10/2017. Entitlement Date: 23/10/2017. LISTING ON: 24/10/2017. • • Mah Sing Group Bhd has terminated the proposed deal to buy five parcels of adjoining freehold land, with a total net land area measuring approximately 3.6 acres fronting Titiwangsa Lake. Net profit of CIMB Thai Bank PCL - a 94.1% unit of CIMB Group Holdings Bhd - fell to THB76.5mn in 3QFY17 from THB431.1mn a year dragged by higher employee expenses, higher bad and doubtful debts and impairment losses. Bintai Kinden Corp Bhd is partnering with Vista Springs Development Sdn Bhd to jointly develop a premise in Melaka, which has an estimated GDV of RM350mn. Mitrajaya Holdings Bhd has bagged a job to be the contractor for the main building works for a condominium at Precinct 15, Putrajaya, for a contract price of RM132.5mn. Vivocom Intl Holdings Bhd is forming a 60:40 joint venture (JV) with MACfeam Sdn Bhd to tender for contracts under the East Coast Rail Line (ECRL) project in Terengganu and Pahang. Trive Property Group Bhd announced that it is in talks to be the turnkey contractor to build affordable housing projects for Syarikat Perumahan Negara Bhd worth RM1.1bn in GDV. Hubline Bhd revealed that it is in the midst of negotiating a preliminary agreement with "a large oil and gas/chemical company" for the provision of logistics services. PUC Bhd has teamed up with point-of-sale services provider Bersian Technology (M) Sdn Bhd to implement a cross-marketing collaboration. Grand-Flo Bhd has proposed to sell its 12.3% stake in Thailand-based Simat Technologies Public Company Ltd and an 80% stake in Kopacklabels (Pg) Sdn Bhd (KPSB). China reported 3Q 2017 6.8% GDP growth, a tad lower than 2Q's 6.9% expansion. Property sales in China dropped for the first time in more than twoand-half years in September and housing starts slowed sharply. Japan's export growth slowed in September for the first time in three months. Australian unemployment unexpectedly dropped in September after a burst of hiring in the two most populous states. The number of Americans filing applications for new unemployment benefits fell to the lowest level in 44 years as power outages in stormravaged Puerto Rico and the U.S.Virgin Islands disrupted the application process. Foreign companies operating in the U.S. could face major changes in their tax bills under an overhaul being planned by Republicans. U.K. retail sales fell more than forecast in September, leaving growth in the third quarter at its weakest in four years. 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. Friday , October 20, 2017 FBMKLCI: 1,743.99 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Brief Market View, News In Brief: Corporate, Economy, and Share Buybacks Chartist: Stephen Soo Tel: +603-2167-9607 stsoo@ta.com.my www.taonline.com.my M a r k e t V i e w Foreign Selling Pressure Blue Chips The local benchmark slid to a six-month low Thursday as foreign selling on index heavyweights returned after the Deepavali break, but rotational interest on small caps and ACE Market stocks continued to highlight. The KLCI shed another 5 points to settle at 1,743.99, off an early high of 1,750.59 and low of 1,741.62, as losers beat gainers 544 to 365 on higher turnover of 3.16bn shares worth RM2.51bn. Key 200-day ma Support at 1,743 Blue chips should extend losses ahead of the weekend given the bearish momentum from persistent foreign selling pressure, while rotational buying interest highlight small caps and ACE Market stocks. On the index, the crucial 200-day ma uptrend support at 1,743 must hold to prevent breakdown for a test of stronger support from the April low of 1,729, and subsequently 1,700. Overhead resistance stays at 1,769, the 50 and 100-day moving averages, followed by the 8 Aug peak of 1,782, and then the double-top peak of 1,793 of 13 Sept and 1,796 of 16 June. SELL DIGI & TM Bearish technical momentum on DiGi.com point to potential break below the 50%FR (RM4.75) to test better retracement supports at the 38.2%FR (RM4.65) or 23.6%FR (RM4.52) before stabilizing, while strong overhead resistance from the 76.4%FR (RM4.98) is reinforced by the 200-day ma. Likewise, TM may break below the 23.6%FR (RM6.06) to test better chart supports at RM5.97/5.90, with crucial support from the 30/12/16 low (RM5.81), while immediate overhead resistance is from the 50%FR (RM6.36) and then 61.8%FR (RM6.48). China Economic Data Weigh on Asian Markets Asian markets were narrowly mixed on Thursday trade as investors digested a barrage of economic data releases out of China. Data showed China’s economic growth cooled slightly to 6.8 percent in the third quarter from a year earlier, from the second quarter’s 6.9 percent, as widely predicted. Other data showed China’s industrial output rise a stronger-thanexpected 6.6 percent in September, while retail sales also outperformed, though investment growth eased more than expected and property sales fell for the first time in over two years. In Japan, the country's exports and imports came in just short of forecasts. Government data showed the country's exports increased 14.1 percent in September compared to a year ago, short of the 14.9 percent forecast in a Reuter’s poll. Japan's imports rose 12 percent in the same period, below the 15 percent median forecast. Japan’s Nikkei share average rose for the 13th straight session, establishing its longest winning streak since 1988 while scaling a fresh 21-year peak as gains in global stocks and a weaker yen cheered investors. The Nikkei ended up 0.4 percent at 21,448.52, after rising as high as 21,503.85, its loftiest level since 1996. In down under, the S&P/ASX 200 closed up 0.1 percent at 5,896.1 as losses in major miners were offset by gains in banks and information technology stocks. Across the Korean Strait, the Kospi declined 0.40 percent, as automakers gains were offsets by fall in blue-chip tech names. Meanwhile, China stocks fell on Thursday as investors digested the release of economic data earlier in the session. The blue-chip CSI300 index fell 0.3 percent, to 3,931.25 points. The Shanghai Composite Index also lost 0.3 percent, to 3,370.17 points. Page 1 of 8
4. 20-Oct-17 Dow Shake Off Ghost of 1987 Crash to Notched a Fresh Record The S &P 500 and the Dow overcame selling pressure in a rebound near the closing bell, eking out records on Thursday as Wall Street marked the 30th anniversary of the 1987 crash. Political tensions in Europe and lackluster economic reports out of China were blamed for keeping stocks in negative territory for most of the session even as robust earnings kept the market from retreating too far. However, the Dow and the S&P 500 rose slightly into the close after Politico reported that President Donald Trump was leaning toward Federal Reserve Governor Jerome Powell to be the next head of the central bank. Appointing Powell as the Fed chair would represent a continuation of the central bank's current regime. Thursday also marked the anniversary of the 1987 stock-market crash, and some investors have voiced concerns about how sharp stocks have run up since the November 2016 election, ignoring U.S. political and valuation concerns, among others. Tech shares were among the day’s biggest drags, led by Apple which fell 2.4 percent as doubts about its double 2017 iPhone release strategy weighed on investors. The Dow Jones Industrial Average rose 5.44 points, or 0.02 percent, to end at 23,163.04, the S&P 500 gained 0.84 point, or 0.03 percent, to 2,562.1 and the Nasdaq Composite dropped 19.15 points, or 0.29 percent, to 6,605.07. 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 Friday, October 20, 2017, 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 – 2031 6608 www.ta.com.my Page 2 of 8
5. 20-Oct-17 N e w s I n B r i e f Corporate Mah Sing Group Bhd has terminated the proposed deal to buy five parcels of adjoining freehold land , with a total net land area measuring approximately 3.6 acres fronting Titiwangsa Lake. The total purchase consideration of the land was up to RM60.0mn. Mah Sing announced that its wholly-owned subsidiary Mah Sing Properties Sdn Bhd has terminated the sales and purchase agreement dated May 17, 2017, due to "non-fulfilment of the conditions precedent (CP) within the CP period". Comment: We are mildly disappointed with this announcement. This is because we believe that the project would be well-received due to its strategic location and attractive pricing of RM571psf. Nevertheless, we remove Titiwangsa land’s earnings impact from our earnings model (see report dated 29 May). No change to our earnings forecasts and target price of RM1.76/share, based on 13 x CY18 EPS. Maintain Buy. Net profit of CIMB Thai Bank PCL — a 94.1% unit of CIMB Group Holdings Bhd — fell to THB76.5mn in its third quarter ended Sept 30, 2017 (3QFY17) from THB431.1mn a year dragged by higher employee expenses, higher bad and doubtful debts and impairment losses. Net profit in the nine months ended Sept 30, 2017 (9MFY17) shrank 30% to THB243.9mn from THB554.4mn in 9MFY16, as provisions grew 9.8% on-year amid an increase in nonperforming loans. (Bursa Malaysia / The Edge) Bintai Kinden Corp Bhd is partnering with Vista Springs Development Sdn Bhd to jointly develop a premise in Melaka, which has an estimated gross development value of RM350mn. Located on approximately 4.74 acres of freehold land, the development will be for hospitality, residential and/or commercial purposes, subject to proper carrying out of due diligence and feasibility studies, prior to the contractual binding arrangement between the parties. (Bursa Malaysia / The Edge) Mitrajaya Holdings Bhd has bagged a job to be the contractor for the main building works for a condominium at Precinct 15, Putrajaya, for a contract price of RM132.5mn. Mitrajaya said it accepted a letter of award from Asima Architects Sdn Bhd for the appointment to construct 363 condominium units, together with amenities and a car park. The group said the contract will commence on Aug 2, 2018, and is expected to be completed by February 2021. (Bursa Malaysia / The Edge) Vivocom Intl Holdings Bhd is forming a 60:40 joint venture (JV) with MACfeam Sdn Bhd to tender for contracts under the East Coast Rail Line (ECRL) project in Terengganu and Pahang. In particular, the JV will tender for contracts which have been called by ECRL engineering, procurement, construction commissioning contractors The China Communications Construction Company Ltd and China Communications Construction Company (M) Sdn Bhd. (Bursa Malaysia / The Edge) Trive Property Group Bhd announced that it is in talks to be the turnkey contractor to build affordable housing projects for Syarikat Perumahan Negara Bhd worth RM1.1bn in gross development value. Trive Property said the development is strategically located with neighbouring high-end reputable and matured communities like Desa Park City, Country Heights Damansara, Mont Kiara and Taman Tun Dr Ismail. (Bursa Malaysia / The Edge) In response to the regulator's unusual market activity query, Hubline Bhd revealed that it is in the midst of negotiating a preliminary agreement with "a large oil and gas/chemical company" for the provision of logistics services. However, the terms and details of the Memorandum of Understanding have not been finalised. (Bursa Malaysia / The Edge) Page 3 of 8
6. 20-Oct-17 PUC Bhd has teamed up with point-of-sale services provider Bersian Technology (M) Sdn Bhd to implement a cross-marketing collaboration. The memorandum of understanding (MoU) will come into effect on the date of signing and will remain for a period of twelve months from the date of signing the MoU. (Bursa Malaysia / The Edge) Grand-Flo Bhd has proposed to sell its 12.3% stake in Thailand-based Simat Technologies Public Company Ltd for THB132.0mn (about RM16.7mn) and an 80% stake in Kopacklabels (Pg) Sdn Bhd (KPSB) for RM700,000. (Bursa Malaysia / The Edge) Palette Multimedia Bhd recorded a second consecutive profitable quarter in its first quarter ended Aug 31, 2017 (1QFY18), with a net profit of RM3.0mn, from a net loss of RM516,000 last year, as its recent Russian venture provided a huge boost in revenue. (Bursa Malaysia / The Edge) Page 4 of 8
7. 20-Oct-17 N e w s I n B r i e f Economy Asia Malaysia Attracts Lower Approved Investments as Services Sector Slows Malaysia recorded a 28 .2% year-on-year drop in approved investments in all sectors excluding construction to RM65.4bn for the first half-year (H1) of 2017, according to the Malaysian Investment Development Authority (MIDA). In a statement, MIDA said these investments in the services, manufacturing and primary sectors involved 2,294 projects that would create 61,930 job opportunities. The agency attributed the fall in investments mainly to a 41% plunge in the number of approved investments recorded for the services sector, in line with the slowdown in the property market. MIDA said approved investments for the manufacturing sector had also fallen, which was partly due the large amount of investments that went into Pengerang, Johor, and the Refinery and Petrochemical Integrated Development (Rapid) project there. It also conceded that Malaysia was unable to compete with several countries in the region in terms of labour cost. Despite the decline, International Trade and Industry Minister Datuk Seri Mustapa Mohamed expressed confidence that investments in the manufacturing sector would recover in the next few months, given Malaysia’s established industrial ecosystems. (The Star) China's Communist Party Congress The second day of a twice-a-decade meeting of China’s Communist Party was dominated by news about the economy. Data released showed China maintaining its growth momentum, while the central bank chief played down speculation that the Yuan could soon be allowed to trade more freely. Below is the details: • As delegates settled down to discuss the party’s constitution, the statistics bureau reported that China expanded a resilient 6.8% in the third quarter and revised up the pace of growth in the first two quarters. That level of expansion will likely give President Xi Jinping room to further rein in excess capacity and curb industrycaused pollution, while sustaining a growth rate that helps underpin the global economy. (Refer next news for further details on China GDP) • People’s Bank of China Governor Zhou Xiaochuan said China would work to make the Yuan a more freely convertible currency, though widening its trading band wasn’t a focus. Zhou’s comments follow market speculation that policy makers may soon further liberalize the currency. • Xi made his crackdown on corruption a key pillar of his speech to party cadres, and data out today shows why. During Xi’s first five-year term, 1.53 million officials were punished. That’s more than double those censured in the second term of predecessor Hu Jintao, and roughly 40,000 more people than live in San Antonio, Texas. China Reports 6.8% Third-Quarter GDP Growth, Meeting Expectations China reported third-quarter growth data that met expectations, but was a tad lower than the second quarter's 6.9% expansion. The country's National Bureau of Statistics said its third-quarter GDP growth was 6.8% compared to the same period last year, a day after President Xi Jinping made big promises for the country's economic future during a pivotal leadership meeting. Economists polled by Reuters had forecast China to post a modest drop from the second quarter, with GDP to have grown 6.8% in the July-September period due to the government's efforts to cool the property market and cut debt risks. A statement from the statistics bureau painted steady but positive economic development in the first three quarters. It also highlighted challenges in a complex international environment amid structural changes domestically. Describing the data release as unsurprising, Chinese growth is now stable but with a better composition than before as the country continues to reduce borrowing in the corporate sector. China's statistics bureau said that September retail sales Page 5 of 8
8. 20-Oct-17 grew 10 .3% from a year ago, while final consumption accounts for 64.5% of GDP growth in the first three quarters. That is more optimistic than the target China had set earlier this year when premier Li Keqiang said the country was aiming to expand its economy by around 6.5% in 2017. That said many outside experts have long expressed skepticism about the veracity of China's GDP reports. Xi said that the world's second-largest economy will move from high-speed to high-quality growth as it pushes ahead with reforms. (Reuters) China Property Sales Drop for First Time Since March 2015 Property sales in China dropped for the first time in more than two-and-half years in September and housing starts slowed sharply, reinforcing expectations that robust growth in the world's second-largest economy is starting to cool. Real estate, which directly affects 40 other business sectors in China, is a crucial driver for the economy but also poses a major risk as Beijing looks to tame soaring home prices without triggering a crash or a sharp drop in construction activity. Property sales by floor area fell 1.5% in September from a year earlier, compared with a 4.3% increase in August and a 34% jump in September 2016, according to Reuters calculations based on official data released. That marked the first annual decline since March 2015. New construction starts by floor area, a volatile but telling indicator of developers' confidence, rose just 1.4% in September on-year, slowing from a 5.3% increase in August. (The Star) Japan September Export Growth Slows Slightly, Growth Trend Intact Japan's export growth slowed in September for the first time in three months, official data showed, in a sign overseas demand for goods from the world's third-largest economy may be taking a breather. The 14.1% year-on-year increase in exports was less than the median estimate for a 14.9% increase and was less than an 18.1% rise in August, which was the fastest expansion in almost four years. Economists expect Japan's exports to start growing at a faster pace as demand for goods picks up heading into the year-end shopping season and as a weak yen increases export competitiveness, which should support economic growth. Exports slowed in September due to weaker growth in shipments of cars, semiconductors, and electronic parts, data from the finance ministry showed. Exports were also hit by a decline in shipments of TVs, audio equipment, and ships, the data showed. In volume terms, Japan's exports rose 4.8% in September from a year ago, following a 10.4% annual increase in August. Imports rose 12.0% in the year to September, versus the median estimate for a 15.0% annual increase. The trade balance came to a surplus of 670.2 billion yen, versus the median estimate for a 559.8 billion Yen surplus. (Reuters) Australian Jobless Rate Unexpectedly Drops on East-Coast Hiring Australian unemployment unexpectedly dropped in September after a burst of hiring in the two most populous states. Jobless rate fell to 5.5% vs. 5.6% estimate. Economy added 19,800 jobs in September, beating forecasts for an addition of 15,000 jobs following the addition of 54,200 jobs in the previous month. The participation rate came in at 65.2%, in line with forecasts and unchanged from the previous month following a downward revision from 65.3%. Full-time employment increased 6,100 to 8,398,200 and part-time employment increased 13,700 to 3,892,000. Unemployment decreased 11,800 to 711,500. The number of unemployed persons looking for full-time work decreased 10,600 to 487,100 and the number of unemployed persons only looking for part-time work decreased 1,200 to 224,400. Monthly hours worked in all jobs increased 11.2 million hours (0.7 percent) to 1,718.2 million hours. Bloomberg, RTT News) United States U.S. Jobless Claims Fall to 44-Year Low After Hurricane Disruptions The number of Americans filing applications for new unemployment benefits fell to the lowest level in 44 years, reflecting power outages in storm-ravaged Puerto Rico and the U.S. Virgin Islands that have disrupted the application process. Initial jobless claims, a proxy for layoffs across the U.S., fell by 22,000 to a seasonally adjusted 222,000 in the week ended Oct. 14, the Labor Department said. The sharp drop obscures underlying trends in the labor market. Many applying for unemployment benefits in Puerto Rico and the U.S. Virgin Islands, Page 6 of 8
9. 20-Oct-17 which were recently devastated by Hurricanes Irma and Maria , must submit paper applications because power outages and infrastructure damage are disrupting the electronic process. This has slowed what would likely be an influx of unemployment applications to a trickle, a Labor Department economist said. Economists surveyed by The Wall Street Journal expected 239,000 new claims last week. (The Wall Street Journal) Philly Fed Index Unexpectedly Climbs to 27.9 In October Philadelphia-area manufacturing activity unexpectedly grew at a faster rate in the month of October, according to a report released by the Federal Reserve Bank of Philadelphia. The Philly Fed said its index for current manufacturing activity in the region climbed to 27.9 in October from 23.8 in September, with a positive reading indicating growth. The increase by the Philly Fed index came as a surprise to economists, who had expected the index to drop to 22.0. (RTT News) Changes in Store for Foreign Companies’ Tax Treatment in U.S. Foreign companies operating in the U.S. could face major changes in their tax bills under an overhaul being planned by Republicans. Those could include new surtaxes or limits on how much the companies can deduct on certain expenses such as rent, royalties and interest on debt. The changes would be meant to address an imbalance. Because U.S. corporate tax rates are higher than they are in many other countries, foreign companies have an incentive to book big expenses in the U.S. so that more of their global profits get taxed at low rates back home. A drop in the U.S. corporate tax rate will address part of that imbalance, but not all of it, so other steps, such as a surtax for foreign companies with headquarters or operations in the U.S., could be imposed to level the playing field. Lawmakers haven’t announced details of any plans, but the Senate Finance Committee sent a strong signal this month by inviting some of the sharpest critics of foreign companies’ tax maneuvers to pitch ideas at one of the final hearings before a bill is released. (The Wall Street Journal) Leading Economic Indicators Fall 0.2%, Miss Expectations A key economic indicator missed in September, reversing this year's momentum. Leading indicators fell by 0.2% in September, short of the 0.1% increase expected from economists polled by Reuters. This represents a 0.6% decline from August, when the index climbed by 0.4%, according to the Conference Board. The index is a closely followed indicator for how healthy the U.S. economy is. The Conference Board tracks 10 components, including manufacturers' new orders, stock prices and average weekly initial claims for unemployment insurance. (CNBC) Europe and Uni ted Kingdom U.K. Retail-Sales Growth Slumps to Weakest in Four Years U.K. retail sales fell more than forecast in September, leaving growth in the third quarter at its weakest in four years. Sales dropped 0.8% from August, far more than the 0.1% estimated in a Bloomberg survey. Over the third quarter, annual growth slowed to 1.5%, the worst performance since October 2013, according to data from the Office for National Statistics in London. In the three months through September, retail sales rose 0.6%, which means the sector probably made a minimal contribution -- just 0.03 percentage point -- to GDP. Food sales fell 0.6% on the month in September, while non-specialized stores -- largely department stores -- saw a 1.1% drop, the ONS said. There was a 6.7% fall in the category of “other stores.” Within that, the ONS cited a variety of big moves, including opticians, souvenirs, weapons and ammunition, and stamps and coins. The data adds to policy makers’ picture of the economy as the Bank of England approaches its first interest-rate increase in more than a decade. The majority of rate setters, including Governor Mark Carney, now believe policy will need to be tightened “in the coming months” as slack in the economy erodes. Still, there have been some warnings that the economy isn’t ready for higher rates just yet. While inflation has accelerated to 3%, above the BOE’s target, wage growth remains sluggish and real pay is falling, weakening household spending power. (Bloomberg) Page 7 of 8
10. 20-Oct-17 Share Buy-Back : 19 October 2017 Company Bought Back AMPROP 57,400 DAIBOCI 5,000 E&O 95,000 ENGTEX 100,000 FFHB 88,500 JCBNEXT 6,000 PECCA 300,000 TROP 55,000 UNIMECH 23,000 Source: Bursa Malaysia Price (RM) Hi/Lo (RM) 0.80 2.20 1.55/1.54 1.12/1.11 0.68/0.665 1.80 1.44/1.42 0.935/0.93 1.04/1.02 0.81/0.80 2.30/2.20 1.55/1.54 1.12/1.11 0.69/0.66 1.80/1.78 1.48/1.42 0.935/0.925 1.04/1.02 Total Treasury Shares 15,361,200 566,600 7,242,547 3,236,100 653,500 257,300 1,350,000 6,495,942 5,898,510 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 – 2031 6608 www.ta.com.my Page 8 of 8
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) BETA EPS (sen) PER (X) Div Yield (%) FY17 FY18 FY17 FY18 FY17 52weeks 52weeks % Chg FY18 High Price % Chg Low Price % Chg YTD 19-Oct-17 AUTOMOBILE BAUTO 2.10 2.50 0.96 10.2 14.3 20.6 14.7 5.5 5.5 2.32 -9.5 1.84 14.1 -1.4 MBMR 2.03 2.09 0.93 20.7 23.2 9.8 8.8 2.0 2.3 2.65 -23.4 2.02 0.5 -5.1 PECCA 1.45 1.69 na 7.8 11.1 18.6 13.1 3.4 3.8 1.94 -25.3 1.42 2.1 -8.8 UMW 5.59 5.04 1.30 19.7 30.6 28.3 18.2 2.3 3.6 6.08 -8.1 4.09 36.6 32.4 BANKS & FINANCIAL SERVICES ABMB 3.82 4.80 1.30 33.1 30.6 11.5 12.5 4.2 4.2 4.49 -14.9 3.60 6.1 2.7 AFFIN 2.57 3.00 0.89 27.6 27.9 9.3 9.2 3.1 3.1 3.00 -14.3 2.14 20.1 7.5 AMBANK 4.48 5.70 1.18 43.9 48.6 10.2 9.2 3.9 4.0 5.70 -21.4 3.90 14.9 3.9 CIMB 6.18 8.00 1.51 49.6 55.2 12.4 11.2 4.1 4.5 7.08 -12.7 4.49 37.6 37.0 HLBANK 16.02 17.50 0.60 104.9 114.2 15.3 14.0 2.8 2.8 16.30 -1.7 12.80 25.2 18.7 MAYBANK 9.35 10.20 0.98 69.6 75.9 13.4 12.3 5.3 5.3 9.86 -5.2 7.59 23.2 14.0 PBBANK 20.48 23.60 0.64 137.2 142.4 14.9 14.4 2.7 2.8 20.90 -2.0 19.40 5.6 3.9 RHBBANK 4.99 5.80 1.36 50.6 55.0 9.9 9.1 3.0 3.0 5.59 -10.7 4.58 9.0 5.9 BURSA 10.00 11.10 0.71 40.2 39.0 24.9 25.7 3.4 3.4 10.98 -8.9 8.08 23.7 14.7 CONSTRUCTION BPURI 0.37 0.38 0.66 4.7 4.6 7.8 8.0 0.0 0.0 0.51 -28.4 0.33 12.3 -16.1 GADANG 1.21 1.75 0.24 15.3 14.3 7.9 8.5 2.5 2.5 1.37 -11.7 0.89 36.7 15.2 GAMUDA 5.13 6.00 1.00 27.8 34.5 18.4 14.9 2.3 2.3 5.52 -7.1 4.65 10.3 7.3 IJM 3.23 3.50 0.87 15.3 20.2 21.2 16.0 2.3 2.9 3.61 -10.5 3.07 5.2 0.9 PESONA 0.54 0.78 0.91 4.9 5.7 10.8 9.4 4.7 4.7 0.74 -27.2 0.43 25.9 -11.6 SENDAI 0.90 0.58 1.36 8.2 9.6 10.9 9.4 1.1 1.1 1.39 -35.3 0.48 89.5 56.5 SUNCON 2.30 2.65 na 12.7 14.7 18.2 15.6 2.4 2.4 2.43 -5.3 1.56 47.4 35.3 WCT 1.62 1.61 0.92 11.5 12.5 14.1 13.0 1.9 1.9 2.48 -34.5 1.59 1.9 -5.8 LITRAK 5.76 6.26 0.35 41.9 45.7 13.7 12.6 4.3 4.3 6.15 -6.3 5.57 3.4 -2.0 ANNJOO 3.61 4.40 1.20 41.3 45.5 8.7 7.9 5.7 6.1 3.86 -6.5 1.96 84.2 66.4 CHINHIN 1.30 1.58 na 8.3 11.3 15.7 11.5 3.1 4.6 1.49 -12.8 0.85 53.8 49.4 WTHORSE 1.96 1.67 0.39 6.7 10.0 29.2 19.7 5.1 5.1 2.19 -10.5 1.92 2.1 -2.5 CARLSBG 15.08 18.06 0.56 79.3 86.2 19.0 17.5 5.2 5.7 15.30 -1.4 13.72 9.9 8.3 HEIM 18.68 19.14 0.45 79.6 84.0 23.5 22.2 3.8 4.0 19.58 -4.6 15.56 20.1 14.0 AEON 2.01 2.23 0.45 6.5 7.5 30.8 26.7 2.0 2.4 2.86 -29.7 1.95 3.1 -21.8 AMWAY 7.30 8.62 0.32 30.6 38.7 23.8 18.9 4.5 4.8 8.18 -10.7 7.05 3.5 -0.4 F&N 24.94 27.41 0.21 121.1 150.9 20.6 16.5 2.8 3.0 26.00 -4.1 22.44 11.1 6.2 HUPSENG 1.17 1.50 0.36 6.5 6.6 18.0 17.7 5.1 5.1 1.28 -8.6 1.13 3.4 1.7 NESTLE 85.98 92.76 0.41 292.7 325.4 29.4 26.4 3.2 3.3 86.22 -0.3 74.12 16.0 9.9 Building Materials CONSUMER Brewery Retail PADINI 4.59 4.67 0.46 23.5 28.0 19.6 16.4 2.5 2.7 4.80 -4.4 2.26 103.0 80.8 POHUAT 1.97 2.46 0.74 27.4 27.4 7.2 7.2 3.0 4.1 2.06 -4.4 1.53 28.8 13.9 QL 3.86 3.26 0.39 12.1 12.8 32.0 30.1 1.1 1.2 4.03 -4.2 3.26 18.6 15.9 SIGN 0.89 1.23 0.85 8.9 12.1 10.0 7.3 2.8 3.9 1.07 -16.8 0.78 14.1 11.9 42.42 52.08 1.22 198.6 187.4 21.4 22.6 4.7 4.7 51.04 -16.9 40.61 4.5 -4.0 GENTING 9.60 11.51 1.47 44.7 53.3 21.5 18.0 1.5 1.7 10.00 -4.0 7.50 28.0 20.8 GENM 5.24 6.53 1.49 22.0 28.4 23.8 18.4 1.5 1.7 6.38 -17.9 4.42 18.6 16.0 BJTOTO 2.43 3.34 0.84 18.4 21.6 13.2 11.3 5.8 6.6 3.30 -26.4 2.25 8.0 -17.9 LUSTER 0.13 0.15 2.11 0.4 0.3 35.6 35.9 0.0 0.0 0.16 -21.9 0.05 150.0 150.0 IHH 5.80 6.41 0.74 7.9 13.1 73.1 44.3 0.6 0.6 6.60 -12.1 5.54 4.7 -8.7 KPJ 1.03 1.17 0.41 3.3 4.1 31.1 25.4 6.0 7.3 1.14 -9.6 0.96 7.0 -1.4 HARTA 7.70 6.87 0.61 17.1 24.6 44.9 31.3 1.1 1.4 7.75 -0.6 4.53 70.0 59.4 KOSSAN 7.15 7.35 0.10 33.9 40.0 21.1 17.9 2.4 2.8 7.36 -2.9 5.62 27.2 8.5 SUPERMX 2.02 1.80 0.33 10.6 15.2 19.1 13.3 1.6 2.2 2.38 -15.1 1.69 19.5 -4.3 TOPGLOV 6.40 6.00 -0.29 26.4 29.4 24.3 21.7 2.3 2.3 6.47 -1.1 4.56 40.4 19.6 KAREX 1.65 1.60 0.26 2.8 4.6 59.2 35.6 1.2 0.7 2.62 -37.0 1.37 20.4 -30.1 SCIENTX 8.88 9.38 0.40 52.3 64.9 17.0 13.7 1.8 2.0 9.85 -9.8 6.50 36.6 32.5 SKPRES 1.82 1.75 0.55 8.3 10.4 22.0 17.5 2.3 2.8 1.85 -1.6 1.24 46.8 41.1 ASTRO 2.78 3.40 1.21 13.2 14.6 21.0 19.1 4.5 4.7 2.94 -5.4 2.47 12.6 6.9 MEDIA PRIMA 0.85 0.60 0.36 0.9 2.8 99.7 30.2 0.8 2.7 1.32 -35.6 0.66 29.8 -26.1 STAR 1.68 1.00 0.62 3.3 4.0 50.7 41.6 25.0 10.7 2.22 -24.2 1.63 3.1 -13.8 Tobacco BAT GAMING Casino NFO HEALTHCARE Hospitals Rubber Gloves INDUSTRIAL MEDIA
12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) BETA EPS (sen) FY17 PER (X) Div Yield (%) FY18 FY17 FY18 FY17 52weeks 52weeks % Chg FY18 High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.48 0.75 1.20 3.6 4.5 13.1 10.5 2.1 2.1 0.69 -31.2 0.23 111.1 86.3 LCTITAN 5.39 6.88 na 44.1 65.0 12.2 8.3 3.3 5.9 6.53 -17.5 4.14 30.2 -17.1 -19.7 MHB 0.74 0.78 1.65 -2.0 -0.5 na na 0.0 0.0 1.16 -36.6 0.63 17.6 MISC 7.15 6.56 1.02 56.3 46.9 12.7 15.3 4.2 4.2 7.90 -9.5 7.03 1.7 -2.7 PANTECH 0.69 0.69 1.12 4.0 6.1 17.4 11.3 2.6 4.0 0.73 -4.8 0.44 58.6 55.1 PCHEM 7.54 7.62 1.01 44.3 44.7 17.0 16.9 2.5 2.7 7.80 -3.3 6.54 15.3 8.0 SENERGY 1.47 1.66 2.68 6.6 -0.4 22.2 na 0.7 0.0 2.10 -30.0 1.33 10.5 -9.3 SERBADK 2.64 2.77 na 22.1 25.2 12.0 10.5 2.5 2.9 2.76 -4.3 1.51 74.8 76.0 UMWOG 0.29 0.80 1.61 -12.0 -3.5 na na 0.0 0.0 0.92 -68.6 0.27 6.1 -66.1 -17.6 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.40 1.55 1.23 FGV 1.83 1.52 1.85 IJMPLNT 2.84 3.58 0.37 IOICORP 4.49 4.14 1.28 KFIMA 1.68 1.89 0.50 KLK 24.38 26.18 SIME 9.04 9.80 UMCCA 6.55 GLOMAC HUAYANG 11.3 12.3 12.4 11.4 0.0 0.0 1.98 -29.3 1.28 9.4 1.0 2.5 185.1 71.9 2.7 2.7 2.36 -22.5 1.42 28.9 18.1 12.3 14.1 23.1 20.2 2.5 2.8 3.70 -23.2 2.84 0.0 -16.5 17.3 21.0 25.9 21.3 2.1 3.6 4.81 -6.7 4.30 4.4 2.0 19.9 13.3 8.4 12.6 5.4 5.4 1.96 -14.3 1.65 1.8 -1.2 0.80 103.4 120.4 23.6 20.2 2.1 2.5 25.50 -4.4 23.00 6.0 1.6 1.48 34.2 37.3 26.4 24.2 2.5 2.5 9.70 -6.8 7.85 15.2 11.6 7.52 0.42 37.5 31.8 17.5 20.6 3.5 2.6 6.83 -4.1 5.50 19.0 9.7 0.65 0.60 0.52 1.4 5.0 44.9 12.9 4.2 4.2 0.78 -16.7 0.61 6.6 -6.5 0.82 0.96 0.58 17.3 10.2 4.8 8.0 4.9 2.4 1.30 -36.9 0.80 2.5 -27.4 IBRACO 0.87 0.94 na 3.3 10.5 26.7 8.3 2.3 4.6 1.05 -17.1 0.76 15.2 -13.0 IOIPG 1.98 2.23 1.04 18.9 16.9 10.5 11.7 3.0 3.0 2.34 -15.4 1.85 7.2 1.6 MAHSING 1.57 1.76 0.95 14.3 13.5 11.0 11.6 4.1 4.1 1.65 -4.8 1.34 17.2 9.8 SNTORIA 0.78 0.98 0.27 6.2 10.3 12.6 7.5 1.3 1.3 1.00 -22.5 0.69 12.3 -3.1 PLANTATIONS PROPERTY Note: SNTORIA proposed bonus issue of warrants & right issue of shares. For more details please refer to 25.09.17 report. SPB 4.70 5.98 0.54 25.6 22.8 13.3 15.0 2.6 2.6 5.19 -9.4 4.32 8.7 6.3 SPSETIA 3.41 4.10 0.91 11.6 12.5 14.6 13.6 4.1 4.1 4.50 -24.2 3.10 10.0 8.9 SUNWAY 1.69 1.78 0.63 15.8 15.3 12.5 12.9 3.0 3.0 1.96 -13.7 1.24 36.4 31.4 SUNREIT 1.72 1.86 0.69 9.2 10.0 18.6 17.1 5.3 5.8 1.84 -6.5 1.63 5.5 0.0 CMMT 1.45 1.72 0.41 8.1 8.6 17.9 16.8 5.8 6.2 1.72 -15.7 1.40 3.6 -5.2 -26.3 REIT POWER & UTILITIES MALAKOF 1.01 1.22 0.66 6.8 6.9 14.8 14.7 6.9 6.9 1.66 -39.2 1.00 1.5 PETDAG 24.20 21.47 0.71 98.2 102.3 24.6 23.7 3.0 3.1 25.70 -5.8 23.00 5.2 1.7 PETGAS 17.98 19.37 0.86 87.6 100.1 20.5 18.0 3.5 3.9 22.28 -19.3 17.80 1.0 -15.6 TENAGA 14.32 17.38 0.77 131.8 130.4 10.9 11.0 3.0 3.2 14.80 -3.2 13.00 10.2 3.0 YTLPOWR 1.39 1.40 0.77 8.4 11.4 16.5 12.2 3.6 3.6 1.64 -15.2 1.36 2.2 -6.7 TELECOMMUNICATIONS AXIATA 5.18 5.40 1.29 15.7 16.9 33.1 30.6 1.5 1.6 5.40 -4.1 4.11 26.0 9.7 DIGI 4.77 5.20 0.84 19.5 20.0 24.4 23.9 4.1 4.2 5.19 -8.1 4.63 3.0 -1.2 MAXIS 5.74 5.85 0.72 24.5 24.7 23.4 23.2 3.5 3.5 6.60 -13.0 5.48 4.7 -4.0 TM 6.09 7.20 0.63 22.6 23.2 27.0 26.2 3.3 3.4 6.74 -9.6 5.81 4.8 2.4 TECHNOLOGY Semiconductor & Electronics ELSOFT 2.55 3.00 0.54 11.3 14.1 22.6 18.1 3.1 3.9 2.95 -13.6 1.27 101.5 81.6 IRIS 0.18 0.25 1.59 -1.3 0.6 na 31.6 0.0 0.0 0.22 -20.5 0.10 75.0 59.1 INARI 2.82 2.75 0.85 11.3 13.0 25.0 21.7 3.5 3.2 2.82 0.0 1.59 77.0 70.2 MPI 14.00 15.40 0.14 89.5 110.2 15.7 12.7 1.9 1.9 14.52 -3.6 7.20 94.4 88.9 UNISEM 4.05 4.30 0.67 26.9 32.1 15.0 12.6 3.0 3.0 4.25 -4.7 2.27 78.4 71.6 TRANSPORTATION Airlines AIRASIA 3.38 3.76 0.95 44.0 37.6 7.7 9.0 1.2 1.5 3.59 -5.8 2.16 56.5 47.6 AIRPORT 8.40 8.10 1.22 17.3 17.7 48.4 47.5 1.2 1.2 9.45 -11.1 5.91 42.1 38.6 123.4 Freight & Tankers PTRANS 0.33 0.44 na 2.1 2.3 15.8 14.3 1.9 2.1 0.38 -14.9 0.14 130.6 TNLOGIS 1.53 1.80 0.92 12.0 13.6 12.7 11.2 2.8 3.3 1.83 -16.5 1.48 3.4 -1.8 WPRTS 3.77 4.05 0.78 17.1 15.1 22.0 24.9 3.4 3.0 4.45 -15.3 3.58 5.3 -12.3 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) Beta EPS (cent) FY17 FY18 PER (X) FY17 FY18 Div Yield (%) FY17 52week 52week % Chg FY18 High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 21.70 23.30 1.23 172.9 189.2 12.6 11.5 2.8 2.8 22.3 -2.5 14.80 46.6 25.1 OCBC 11.44 12.00 1.20 87.7 92.4 13.1 12.4 5.7 6.7 11.6 -1.4 8.84 37.3 28.3 UOB 24.33 25.40 1.05 192.9 206.5 12.6 11.8 2.9 2.9 24.6 -1.1 17.98 35.3 19.3 PLANTATIONS WILMAR 3.33 3.72 0.86 28.9 31.1 11.5 10.7 2.4 2.7 4.0 -16.8 3.08 8.1 -7.2 IFAR 0.45 0.53 1.04 4.9 5.2 9.2 8.6 2.7 2.9 0.6 -25.2 0.44 2.3 -15.2 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.
13. COMPANY UPDATE Friday , October 20, 2017 FBMKLCI: 1,743.99 Sector: Automotive THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Bermaz Auto Berhad TP: RM2.50 (+19.0%) Last Traded: RM2.10 Shifting Gears with the CX-5 Abel Goon BUY Tel: +603-2072 1277 ext. 1641 abelgoon@ta.com.my After meeting with Bermaz Auto’s (BAuto) management and attending its CX-5 launch, we maintain our positive stance on the group. Our stance is underpinned by: 1) CX-5 launch boosting sales, 2) stronger Ringgit against JPY, 3) increased contributions from associates, and 4) new CX-8 launch in the Philippines. However, management noted that the 100% dividend payout is rather unsustainable and expects to moderate its payout ratio to 80% this year. Nevertheless, we maintain our BUY recommendation with slightly higher TP of RM2.50 based on 14x CY18 PER. CX-5 to Drive Sales To recap, BAuto’s quarterly sales have been lacklustre mainly due to the CX-5 runout programme. We understand that chunky sales incentives were given to dealers to clear old CX-5 inventories. Going forward, management expects to sell 600 units of the new CX-5 (launch: 11th October 2017) for the first 3 months, and 800 units thereafter. We believe the target is achievable as the CX-5 secured circa 750 bookings before the official launch. According to management, about 70% of bookings were for the premium metallic colors, i.e. Soul Red Crystal, Machine Gray and Snowflake Pearl White. Assuming sales of 600 units/month, BAuto could register Malaysian quarterly sales of 3.5k units in 3QFY18 and 4QFY18, which amounts to circa 11.9k units in FY18. This is slightly lower than management’s guidance of 12.5k units sold in FY18 (FY19: 15.5k units). Hence, we impute the lower sales forecast of 11.9k/13.7k units for FY18/19 in our model as a conservative measure. Figure 1. Historical and Forecasted CX-5 Sales www.taonline.com.my Share Information Bloomberg Code BAUTO MK Stock Code 5248 Listing Main Market Share Cap (mn) 1152.7 Market Cap (RMmn) 2420.6 52-wk Hi/Lo (RM) 2.32/1.84 12-mth Avg Daily Vol ('000 shrs) 1452 Estimated Free Float (%) 54.7 Beta 0.9 Major Shareholders (%) Dynamic Mile. - 15.1 EPF - 12.4 PNB - 9.9 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 (10.7) 10.9 165.2 230.1 173.8 215.3 95 107 Buy (Maintain) Financial Indicators Net Debt / Equity (%) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) FY18 Net Cash 19.9 10.5 12.5 0.4 4.9 FY19 Net Cash 17.5 12.0 15.6 0.5 4.5 Scorecard Price Change 1 mth 3 mth 6 mth 12 mth BAUTO FBM KLCI 2.9 (1.7) 7.1 (0.7) 0.0 0.1 (5.0) 4.6 2000 CX-5 runout programme 1800 1523 1600 1400 1334 1263 1217 1264 1150 1200 959 1000 799 800 1800 Forecasted jump in sales after new CX-5 1800 766 663 600 (12-Mth) Share Price relative to the FBMKLCI 400 200 0 Source: Company, TA Securities Source: Bloomberg Page 1 of 5
14. 20-Oct-17 Recovery in JPY /MYR Rate We understand that previously, 30% of BAuto’s costs was denominated in JPY. However, this has risen to circa 40% of costs, as CKD:CBU product mix was unfavourable due to the CX-5 runout programme. To recap, BAuto’s CKD models are not exposed to currency fluctuations as it purchases its kits from 30%-owned Mazda Malaysia Sdn Bhd (MMSB) at a fixed Ringgit rate. Nevertheless, we expect the Ringgit to strengthen versus JPY in FY18 versus FY17, which would largely benefit BAuto’s bottomline. We estimate that a 1% decrease in JPY/MYR rate will lead to circa 2.7% increase in earnings in FY18. Figure 2. JPY/USD Rate 4.2 4.0 3.8 Figure 3: Sensitivity Analysis Change in Earnings (%) 10.0 8.0 8.0 5.3 6.0 4.0 3.6 2.7 2.0 0.0 3.4 0.0 -2.0 3.2 3.0 -2.7 -4.0 -6.0 -5.3 -8.0 -8.0 -10.0 -3% Source: Company, TA Securities -2% -1% +1% +2% +3% Source: Company, TA Securities Possible CX-8 Launch to Boost Philippines Sales After the successful launch of CX-3 and CX-9 models in the Philippines and Malaysia, BAuto is setting its sights on the new CX-8 that debuted in Japan in September 2017. The three-row SUV will be priced in-between the CX-5 and CX-9 and is expected to boost sales in Philippines. Note that the similar Toyota Fortuner, sold 28.5k units (2.3k units/month) in the Philippines and was the second best-selling model in 2016. Management is looking to launch the CX-8 CBU in 2HCY18, and hopefully begin a CKD programme in December 2018. We believe achieving sales of 100 units/month in the Philippines would not be a tall order. This would translate to total Philippines sales of >6k units on top of sales derived from the new CX-5 in CY18. Given strong earnings prospects in Philippines, management may revisit the listing of the Philippines arm - opting between earnings growth or a one-off capital gain. Figure 4. Mazda CX-8 (exterior) Figure 5. Mazda CX-8 (interior) Source: paultan.org Source: paultan.org Page 2 of 5
15. 20-Oct-17 Exporting to Benefit Associates Besides boosting domestic sales , the new CX-5 will increase MMSB’s sales as it increases export activities. In turn, this will boost earnings at BAuto’s 29%owned associate Inokom which assembles the kits for export. Management forecasts plant production of 17k/25k/32k units in FY18/19/20, where it would export to all ASEAN countries except Singapore and Vietnam. We expect the increase in export activities could double yearly associates’ contribution to circa RM25-30mn p.a. (2017: RM14mn) More Conservative Dividends On a more subdued note, management believes that 100% dividend payout is rather unsustainable. Therefore, although management intends to distribute lucrative dividends, a payout of 60%-80% is more realistic. According to our estimates, this translates to a dividend yield of 5%-7% for FY18-20. Note that this does not include any special dividends arising from a potential Philippines listing. Impact We make the following changes to our earnings forecast: 1) alter sales forecast in Malaysia and Philippines for FY18/19/20 to 11.9k/14.0k/15.4k and 5.0k/5.8k/6.6k (previously Malaysia: 13.2k/13.9k/14.6k, Philippines: 4.6k/5.1k/5.6k) respectively, 2) reduce 100JPY/MYR rate to 3.8/3.8/3.8 from 4.0/3.9/3.9 previously, and 3) reduce dividend payout to 60%-80%. Thus, earnings forecast adjusted by -10.7%/10.9%/22.9% for FY18/19/20. Valuation We revise our TP upwards to RM2.50 (previous: RM2.40) based on 14x CY18 PER after the earnings adjustments. Maintain BUY. We like BAuto as we believe it is poised for immense growth following the launch of the new CX-5. Furthermore, downside risk is cushioned by decent dividend yield of 5%-6% in FY18-20. Page 3 of 5
16. 20-Oct-17 Earnings Summary Income Statement Balance Sheet FYE 30 April (RMmn) 2016 Revenue EBITDA Depreciation Net finance cost Associate Forex & EI 2017 2018E 2019F 2020F 2,095.4 1,660.0 1,992.9 2,329.3 2,590.6 267.8 166.5 224.3 317.6 377.2 (5.7) (5.6) (4.9) (5.8) (6.7) 4.7 0.2 1.4 3.0 4.8 11.4 14.0 25.2 27.8 30.6 FYE 30 April (RMmn) 2016 2017 2018E 2019F PPE 24.0 23.5 27.5 31.7 35.0 Associate 98.2 112.2 137.5 165.3 195.8 Deferred tax asset 44.4 42.9 42.9 42.9 42.9 1.2 1.3 1.3 1.3 1.3 Non-current assets 167.9 179.9 209.2 241.1 275.0 Inventories 312.3 434.7 409.5 478.6 532.3 96.0 79.0 94.8 110.8 123.3 Others 2020F 0.0 0.0 0.0 0.0 0.0 PBT 278.3 175.2 246.0 342.6 405.8 Taxation (67.9) (43.7) (61.3) (85.4) (101.2) ST investments 5.0 0.0 0.0 0.0 0.0 MI (12.7) (13.8) (19.4) (27.1) (32.1) Deposits with FI 240.0 67.5 214.9 239.5 281.8 126.5 177.2 111.0 123.7 145.5 1.2 17.4 17.4 17.4 17.4 Current assets 781.0 775.8 847.6 970.0 1,100.2 Total Assets 948.9 955.7 1,056.8 1,211.2 1,375.2 Trade receivables Net profit 197.6 117.6 165.2 230.1 272.6 Cash and Bank Balance Core net profit 197.6 117.6 165.2 230.1 272.6 Others Core EPS (sen) 17.3 10.3 14.4 20.1 23.6 Diluted EPS (sen) 17.0 10.1 14.2 19.7 23.4 DPS (sen) 16.9 11.7 11.5 12.0 14.2 Deferred revenue 67.0 56.6 56.6 56.6 56.6 Book Value (RM) 0.5 0.4 0.5 0.6 0.7 Provisions 16.9 10.1 10.1 10.1 10.1 NTA (RM) 0.5 0.4 0.5 0.6 0.7 Deferred tax 0.0 0.1 0.1 0.1 0.1 83.9 66.9 66.9 66.9 66.9 Trade payables 230.8 270.1 327.6 382.9 425.8 ST Borrowings 0.0 58.9 50.0 30.0 10.0 71.2 67.4 67.4 67.4 67.4 503.3 Non-Current liabilities Ratios FYE 30 April (RMmn) 2016 2017 2018E 2019F 2020F Valuations Others Core PER (x) 12.1 20.5 14.6 10.5 8.9 Current liabilities 302.0 396.4 445.0 480.3 Div. Yield (%) 8.0 5.5 5.5 5.7 6.7 Shareholders funds 531.2 443.4 476.5 568.5 677.5 P/BV (x) 4.3 4.9 4.4 3.7 3.0 MI 31.8 49.0 68.4 95.5 127.5 FCF Yield (%) 7.7 8.2 4.6 11.5 13.1 Total Equity 563.0 492.4 544.9 664.0 805.1 Total E&L 948.9 955.7 1,056.8 1,211.2 1,375.2 EBITDA margin (%) 12.8 10.0 11.3 13.6 14.6 EBIT margin (%) 12.5 9.7 11.0 13.4 14.3 PBT margin (%) 13.3 10.6 12.3 14.7 15.7 FYE 30 April (RMmn) 2018E 2019F 2020F Core Net Margin (%) 9.4 7.1 8.3 9.9 10.5 Pretax profit 278.3 175.2 246.0 342.6 405.8 Core ROE (%) 37.2 26.8 34.7 40.5 40.2 Depreciation 5.7 5.6 4.9 5.8 6.7 Core ROA (%) 20.8 12.5 15.6 19.0 19.8 Net interest (4.7) (0.2) (1.4) (3.0) (4.8) Associaties (11.4) (14.0) (25.2) (27.8) (30.6) 25.9 (66.0) 66.8 (29.8) (23.2) (67.9) (43.7) (61.3) (85.4) (101.2) 16.7 (34.8) Profitability ratios Liquidity ratios Cash Flow Statement Changes in WC Current ratio (x) 2.6 2.0 1.9 2.0 2.2 Tax Quick ratio (x) 1.6 0.9 1.0 1.0 1.1 Others Operational cash flow 2016 242.5 2017 22.0 0.0 0.0 0.0 229.7 202.3 252.8 Leverage ratios Equity/total liabilities (x) 1.5 1.1 1.1 1.2 1.4 Net debt / equity (x) Net Cash Net Cash Net Cash Net Cash Net Cash Capex Interest income Others Growth ratios Investing cash flow (5.8) (6.3) (9.0) (10.0) 4.9 3.2 4.2 5.0 (10.0) 5.8 10.6 11.3 0.0 0.0 0.0 9.6 8.2 (4.8) (5.0) (4.2) Revenue (%) 14.5 (20.8) 20.1 16.9 11.2 PBT (%) (6.9) (37.1) 40.5 39.2 18.5 Net share issue 4.9 2.3 0.0 0.0 0.0 Core Net Profit (%) (6.9) (40.5) 40.5 39.2 18.5 Net borrowings 0.0 58.9 (8.9) (20.0) (20.0) (147.2) (212.2) (132.2) (138.1) (163.5) Key Assumptions Interest paid Dividend paid (0.1) (2.9) (2.7) (2.0) (1.0) Malaysia Others (2.6) 2.6 0.0 0.0 Sales Volume ('000) 11.9 14.0 15.4 ('000) 5.0 5.8 6.6 Financial cash flow (143.8) (160.1) 0.0 (145.1) (151.3) (184.5) Net cash flow 107.0 (121.1) 81.1 37.3 64.1 Beginning Cash 259.5 366.6 244.8 325.9 363.2 Philippines Sales Volume 100 JPY/MYR rate 3.8 3.8 3.8 Forex & others 0.1 Ending Cash 366.6 (0.7) 244.8 0.0 0.0 0.0 325.9 363.2 427.2 Page 4 of 5
17. 20-Oct-17 ( 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. 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 Friday, October 20, 2017, the analyst, Abel Goon Chun Hoe, 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 – 2031 6608 www.ta.com.my Page 5 of 5
18. Friday , 20 October, 2017 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only L oc al Te ch n ic al R ep o r ts 1. D ai l y Te ch n ic a l St o ck s P ic ks 2. D ai l y St o ck S cr een 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 – 2031 6608 www.ta.com.my
19. Technical View Friday , October 20, 2017 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Technical Stock Picks Malaysia FBM KLCI: 1,743.99 (-5.00, -0.29%) Chartist: Stephen Soo Name FBMKLCI AFF IN ABMB AMBANK AXIATA CIMB DIGI GAMUDA GE NTING GE NM IHH IOICOR P MALAKOF F MAXIS MAYBANK MBS B R HBBANK S IME TE NAGA TM WP R TS AIR AS IA AIR AS IA X AR MADA BINAP UR I CMS B DIALOG E CO WOR LD E KOVE S T GADANG HS L IS KANDAR KIMLUN KKBE MUDAJ AYA MR CB NAIM S AP UR A E NE R GY S UNCON UE MS WAS E ONG WCT Tel: +603-2167-9607 stsoo@ta.com.my www.taonline.com.my Close Bollinger Bands RSI Moving Averages DMI MACD Change High Low 19/10/2017 Lower Mid Upper 14d 10d 30d 50d DI + DI - ADX Diff Line Signal Diff 1743.99 (5.00) 1,750.59 1,741.62 1,745.63 1,759.78 1,773.94 29.80 1,756.21 1,767.26 1,769.62 13.53 29.54 24.15 (16.02) (5.83) (4.47) (1.357) 2.57 3.82 4.48 5.18 6.18 4.77 5.13 9.60 5.24 5.80 4.49 1.01 5.74 9.35 1.12 4.99 9.04 14.32 6.09 3.77 3.38 0.38 0.72 0.37 3.75 2.21 1.53 1.16 1.21 1.53 1.39 2.25 0.83 1.25 0.92 1.23 1.47 2.30 1.10 0.94 1.62 -0.01 -0.06 -0.02 0.00 0.03 -0.12 -0.05 -0.05 -0.08 0.00 -0.05 -0.01 -0.02 -0.07 0.00 -0.11 -0.03 0.04 -0.06 -0.03 -0.06 0.00 -0.01 -0.02 -0.05 0.00 0.01 0.02 0.00 0.01 0.01 -0.03 0.00 0.00 -0.01 0.00 -0.01 0.00 0.00 -0.01 0.02 2.60 3.88 4.50 5.20 6.21 4.90 5.21 9.74 5.35 5.84 4.59 1.03 5.80 9.43 1.13 5.11 9.07 14.38 6.16 3.81 3.48 0.38 0.73 0.38 3.88 2.26 1.53 1.16 1.22 1.55 1.44 2.30 0.83 1.27 0.94 1.23 1.49 2.30 1.11 0.94 1.63 2.57 3.81 4.44 5.09 6.15 4.76 5.12 9.48 5.24 5.75 4.49 1.00 5.70 9.35 1.12 4.98 9.02 14.24 6.07 3.77 3.38 0.38 0.71 0.37 3.72 2.20 1.51 1.13 1.20 1.49 1.39 2.20 0.82 1.24 0.92 1.22 1.46 2.27 1.10 0.94 1.60 2.54 3.78 4.33 5.05 6.17 4.79 5.15 9.37 5.17 5.65 4.48 1.00 5.72 9.31 1.08 4.99 8.98 14.13 6.09 3.68 3.37 0.37 0.70 0.34 3.76 1.93 1.50 1.04 1.20 1.42 1.19 2.16 0.83 1.00 0.86 1.20 1.35 2.22 1.07 0.93 1.63 2.58 3.87 4.45 5.23 6.31 4.89 5.26 9.59 5.40 5.78 4.54 1.04 5.82 9.60 1.15 5.11 9.07 14.30 6.29 3.79 3.44 0.38 0.73 0.36 3.90 2.09 1.54 1.09 1.22 1.47 1.29 2.25 0.88 1.15 0.92 1.23 1.51 2.28 1.12 0.96 1.73 2.62 3.96 4.57 5.40 6.45 4.99 5.38 9.81 5.63 5.90 4.60 1.07 5.93 9.90 1.21 5.24 9.15 14.47 6.49 3.90 3.51 0.39 0.75 0.37 4.03 2.25 1.59 1.15 1.24 1.51 1.39 2.33 0.93 1.31 0.98 1.25 1.68 2.34 1.16 1.00 1.82 46.15 45.05 50.61 50.28 34.14 39.17 22.83 48.78 37.77 48.58 42.03 37.00 38.99 25.90 33.50 39.52 41.88 51.65 36.08 48.69 45.61 49.21 43.52 53.82 32.55 71.92 43.64 64.38 42.82 64.98 64.46 50.90 25.99 65.35 42.05 54.59 45.02 53.30 40.25 35.13 31.18 2.58 3.86 4.47 5.27 6.30 4.89 5.23 9.56 5.33 5.77 4.52 1.03 5.85 9.50 1.13 5.12 9.08 14.24 6.22 3.80 3.43 0.38 0.72 0.36 3.87 2.16 1.53 1.10 1.22 1.48 1.31 2.28 0.88 1.22 0.92 1.23 1.47 2.30 1.10 0.95 1.71 2.59 3.86 4.43 5.18 6.45 4.89 5.30 9.69 5.54 5.83 4.56 1.06 5.81 9.62 1.18 5.10 9.09 14.39 6.33 3.81 3.44 0.38 0.73 0.36 3.96 2.08 1.55 1.10 1.23 1.47 1.29 2.22 0.88 1.12 0.96 1.21 1.53 2.29 1.14 0.97 1.74 2.57 3.87 4.51 5.05 6.58 4.86 5.34 9.71 5.71 5.89 4.53 1.05 5.79 9.63 1.21 5.04 9.16 14.33 6.36 3.75 3.38 0.38 0.73 0.35 3.95 2.03 1.56 1.11 1.24 1.48 1.30 2.23 0.91 1.11 0.99 1.21 1.51 2.27 1.14 0.97 1.78 18.10 12.62 22.59 12.57 14.56 12.60 5.25 16.70 15.85 16.54 21.02 12.50 13.76 10.52 15.25 15.59 18.45 20.52 13.09 16.04 15.15 18.75 16.92 35.76 10.03 35.51 13.54 26.37 16.87 37.34 36.39 23.65 12.82 42.14 22.47 30.49 20.14 24.59 17.79 18.36 12.95 18.30 19.40 19.03 18.49 33.01 25.36 24.61 15.03 28.17 13.74 9.62 20.37 30.31 38.89 19.90 22.83 20.71 23.58 21.36 15.91 19.66 14.03 16.46 19.30 26.77 6.52 19.10 12.32 20.41 13.80 7.12 36.66 57.01 13.71 25.70 17.75 24.93 16.07 16.75 33.24 33.75 13.09 17.30 14.25 34.42 27.91 17.38 42.77 24.80 34.23 30.63 23.33 14.75 13.58 33.70 28.32 18.45 14.02 27.75 23.39 13.92 8.61 23.35 13.19 20.80 24.86 44.28 15.83 26.00 11.93 17.33 29.95 17.58 40.95 33.73 16.31 26.50 18.45 21.60 10.83 18.15 30.58 -0.20 -6.77 3.56 -5.92 -18.46 -12.77 -19.36 1.66 -12.32 2.79 11.40 -7.87 -16.55 -28.37 -4.66 -7.24 -2.26 -3.05 -8.27 0.13 -4.51 4.72 16.47 -16.74 28.99 28.99 -5.56 14.05 -3.54 23.55 29.27 -13.01 -44.19 28.43 -3.23 12.74 -4.79 8.52 1.04 -14.88 -20.80 0.00 0.00 0.00 0.05 -0.10 -0.01 -0.05 -0.05 -0.12 -0.03 -0.01 -0.01 0.01 -0.06 -0.03 0.01 -0.03 -0.04 -0.06 0.01 0.01 0.00 0.00 0.00 -0.05 0.05 -0.01 0.01 -0.01 0.01 0.02 0.02 -0.02 0.04 -0.02 0.01 -0.02 0.01 -0.02 -0.01 -0.04 0.00 0.00 -0.02 0.07 -0.09 0.01 -0.04 -0.05 -0.12 -0.04 -0.01 -0.01 0.02 -0.04 -0.03 0.02 -0.03 -0.03 -0.04 0.01 0.02 0.00 0.00 0.00 -0.03 0.04 -0.01 0.00 -0.01 0.00 0.00 0.02 -0.02 0.03 -0.03 0.01 -0.02 0.01 -0.02 -0.01 -0.03 (0.000) (0.000) 0.015 (0.024) (0.009) (0.015) (0.012) 0.005 0.003 0.014 (0.004) (0.001) (0.013) (0.026) 0.001 (0.010) 0.006 (0.001) (0.016) (0.002) (0.007) 0.000 (0.001) 0.002 (0.018) 0.010 (0.001) 0.010 (0.001) 0.010 0.017 0.002 (0.003) 0.011 0.006 0.000 (0.002) (0.001) (0.000) (0.003) (0.011) DMI MACD DMI MACD Recent Signal Signal Change SELL SELL SELL SELL BUY SELL SELL SELL SELL BUY SELL BUY BUY SELL SELL SELL SELL SELL SELL SELL SELL BUY SELL BUY BUY SELL BUY BUY SELL BUY SELL BUY BUY SELL SELL BUY SELL BUY SELL BUY BUY SELL SELL SELL SELL BUY SELL SELL SELL SELL BUY BUY BUY SELL SELL SELL SELL BUY SELL BUY SELL SELL SELL SELL BUY SELL BUY SELL BUY SELL BUY SELL BUY BUY BUY SELL BUY BUY BUY SELL SELL SELL SELL SELL SELL SELL BUY BUY SELL S E LL S E LL S E LL BUY - 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 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. Page 1 of 4
20. 20-Oct-17 Technical Comments : SELL DIGI & TM Bearish technical momentum on DiGi.com point to potential break below the 50%FR (RM4.75) to test better retracement supports at the 38.2%FR (RM4.65) or 23.6%FR (RM4.52) before stabilizing, while strong overhead resistance from the 76.4%FR (RM4.98) is reinforced by the 200-day ma. Likewise, TM may break below the 23.6%FR (RM6.06) to test better chart supports at RM5.97/5.90, with crucial support from the 30/12/16 low (RM5.81), while immediate overhead resistance is from the 50%FR (RM6.36) and then 61.8%FR (RM6.48). DIGI RM4.77 (-0.12) BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 4.99 4.89 4.79 10-day 30-day 50-day RM RM RM DAILY MACD DMI Recent Signal Signal Change SELL Recent Signal Signal Change TM RM RM RM SIMPLE MOVING AVERAGES 6.49 6.29 6.09 10-day 30-day 50-day DMI Recent Signal Signal Change SELL RM6.09 (-0.06) BOLLINGER BANDS Upper Middle Lower 4.89 4.89 4.86 SELL Recent Signal Signal Change RM RM RM DAILY MACD 6.22 6.33 6.36 SELL Page 2 of 4