Bursa Malaysia Daily Market Report - 22 March

Transcription

1. Thursday , 22 March, 2018 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 . C S C S t e e l H o l d in g s B h d : A n A t t ra c tiv e Div i de n d Y ie ld P la y 2 . M a la ys i a n Ec o n o m y : I n f la tio n So f te n e d F u rth e r i n F e b ru a ry 2 0 1 8 3 . U S Ec o n o m y: F e d R a i s e s R a te s , E x p e c t s M o re H i k e s in 2 0 1 9 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 , D a i ly M on e y Fl ow , D ai l y St o ck S cr een (L o c al ) 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
2. Daily Market Commentary Thursday , 22 March 2018 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only Review & Outlook KLSE Market Statistics (21.03.2018) (mil) Main Market 1,647.2 Warrants 325.7 ACE Market 368.2 Bond 3.8 ETF 2.1 LEAP 0.0 Total 2,346.9 Off Market 39.8 Volume +/-chg (RMmn) 418.1 2,332.8 30.2 52.5 -59.9 57.5 -0.3 0.5 1.4 2.4 0.0 0.0 2,445.8 18.3 217.9 Value Value/ +/-chg Volume 376.4 1.42 0.1 0.16 -8.5 0.16 -0.1 0.13 1.6 1.15 0.0 0.31 1.04 179.9 5.48 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP March Futures Other Markets DOW JONES NASDAQ (US) FTSE (UK) NIKKEI (JAPAN) KOSPI (KOREA) HANG SENG (HK) FSSTI (S'PORE) SET (BANGKOK) JCI (JAKARTA) SHANGHAI SHENZHEN AUSTRALIA (mn) 20.0 7.0 4.7 1.7 1.5 1.5 % YTD chg 9.41 43.15 -76.03 13.50 0.51 0.33 -0.49 0.73 3.84 1.20 -9.01 4.29 24,682.31 7,345.29 7,038.97 21,380.97 2,484.97 31,414.52 3,511.13 1,801.43 6,312.83 3,280.95 1,858.61 5,950.27 -44.96 -19.02 -22.30 0.00 -0.55 -135.41 -2.18 1.59 69.25 -9.69 -13.72 13.89 -0.18 -0.26 -0.32 0.00 -0.02 -0.43 -0.06 0.09 1.11 -0.29 -0.73 0.23 -0.15 6.40 -8.44 -6.08 0.71 5.00 3.18 2.72 -0.67 -0.79 -2.14 -1.89 10.37 0.15 0.20 0.85 0.55 1.34 Exchange Rate USD/MYR 3.9118 -0.007 USD/JPY 106.33 -0.070 EUR/USD 1.228 -0.0029 Counter PBBANK TENAGA CIMB PCHEM MAXIS DIGI PETGAS GENTING NESTLE IOICORP Mkt Cap. Chg (RM’mn) (RM) 91,440 89,409 67,346 66,320 46,082 36,931 35,617 34,637 31,095 28,516 0.16 0.02 0.10 0.10 0.02 0.13 0.06 0.05 4.70 0.01 HARTA - 1:1 Bonus Issue - BI of up to 1,714.3m shares. 1 bonus share for every 1 existing share held. Ex-Date: 23/03/2018. Entitlement Date: 27/03/2018. LISTING ON: 28/03/2018. P&O - 1:6 Bonus Issue - BI of up to 41.0m shares. 1 bonus share for every 6 existing shares held. Ex-Date: 27/03/2018. Entitlement Date: 29/03/2018. LISTING ON: 30/03/2018. The underlying market tone should stay cautious on the back of heightened political turmoil in the US oval office, as well as the deliberations from the FOMC meeting. Immediate resistance for the index is revised higher to the 27 Feb high of 1,872, with tough hurdle expected from the 2 Feb peak of 1,880. Immediate support stays at the 50-day moving average level now at 1,844, followed by the lower Bollinger band at 1,835, with stronger supports at 1,820, then 1,800. News Bites Vol. (mn) 8.02 10.51 30.97 11.80 1.54 2.07 0.28 2.09 0.24 2.47 Commodities Futures Palm Oil (RM/mt) 2,446.00 7.00 Crude Oil ($/Barrel) 65.49 2.07 Gold ($/tr.oz.) 1,332.50 21.60 Important Dates The FBM KLCI extended gains on Wednesday, but the broader market was softer in tandem with key regional markets as traders await for signs that the US central bank may take a more aggressive path toward normalizing monetary policy. The FBMKLCI ended up 9.41 points to close at the day's high of 1,865.80, off an earlier low of 1,856.84, as losers edged gainers 443 to 439 on total turnover of 2.34bn shares worth RM2.44bn. IHH Healthcare could dip further on profit-taking correction from recent rally, with better supports from the 50-day ma (RM6.00) and 200-day ma (RM5.88), and immediate resistance from the 76.4%FR (RM6.32) and the peak of 30/11/16 (RM6.60). Hook down momentum indicators on Sime Darby implies near-term correction potential towards the 100-day ma (RM2.43), with better support coming from the 200-day ma (RM2.28), while immediate resistance is capped at 76.4%FR (RM2.74) and the peak of 30/01/18 (RM3.06). Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ @ % chg 1,865.80 13,097.54 15,515.01 1,861.50 Off Market MAYBANK VIZIONE MMAG VERTICE DESTINI YNHPROP Up Down 263 309 133 82 35 48 2 2 4 2 0 0 437 443 • Sapura Energy Berhad has been awarded a contract from Mubadala Petroleum to undertake EPCIC works for the Pegaga Development Project, which are expected to be completed by third quarter of 2021. • Petronas is increasing capital expenditure for upstream activities slightly in 2018 from last year. Petronas allocated RM26bn (USD6.6bn) for upstream expenditure in 2018 which was slightly more than 2017. • RAM Ratings placed the AA2 rating of UMW Holdings Bhd's RM2bn five-year Islamic medium-term notes MTN programme on its rating watch with a positive outlook. • Priceworth International Bhd has been approved to manage and harvest in two more forest compartments, encompassing 1,446 hectares, within Forest Management Unit 5 for a 12-month period. • Vizione Holdings Bhd accepted a letter of intent from Pan Sejati Development (M) Sdn Bhd to jointly develop 3,800 houses in Putrajaya. • IOI Properties Group Bhd created an online community engagement platform via its mobile app 'IOI Community'. This facility will enable two-way communication between the property management team and residents. • Sumatec Resources Bhd agreed to settle a suit against Hoe Loeng Corp Ltd and Ebony Ritz Sdn Bhd for RM27mn. • Malaysia's consumer price inflation eased for the second straight month in February, and at a faster-than-expected pace. Consumer prices climbed 1.4% year-on-year in February, slower than the 2.7% rise in January. • Malaysia's government debt to gross domestic product ratio of 51 percent is "quite high" compared with other countries with an "A" sovereign credit rating, Moody's Investors Service said. • Fed officials said they would increase their benchmark federal-funds rate to a range between 1.5% and 1.75% and penciled in a total of three rate increases for this year. • Fitch Ratings affirmed its A+ rating on China, and said tighter regulations have curbed financial risks without jeopardising growth targets, but warned that it remains to be seen if Beijing would stay committed to debt stabilization. • The U.S. current account deficit widened slightly more than expected in the fourth quarter, amid an increase in goods imports. • The White House is preparing to crack down on what it says are improper Chinese trade practices by making it significantly more difficult for Chinese firms to acquire advanced U.S. technology or invest in American companies. • Sales of previously owned U.S. homes rose strongly in February, overcoming stiff headwinds from a shortage of inventory and affordability concerns caused by rising mortgage rates and home prices. 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. Thursday , March 22, 2018 FBMKLCI: 1,865.80 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 Cautious Amidst External Worries The FBM KLCI extended gains on Wednesday, but the broader market was softer in tandem with key regional markets as traders await for signs that the US central bank may take a more aggressive path toward normalizing monetary policy. The FBMKLCI ended up 9.41 points to close at the day’s high of 1,865.80, off an earlier low of 1,856.84, as losers edged gainers 443 to 439 on total turnover of 2.34bn shares worth RM2.44bn. Resistance at 1,872/1,880; Support at 1,844/1,835 The underlying market tone should stay cautious on the back of heightened political turmoil in the US oval office, as well as the deliberations from the FOMC meeting. Immediate resistance for the index is revised higher to the 27 Feb high of 1,872, with tough hurdle expected from the 2 Feb peak of 1,880. Immediate support stays at the 50-day moving average level now at 1,844, followed by the lower Bollinger band at 1,835, with stronger supports at 1,820, then 1,800. Take Profit IHH & Sime Darby IHH Healthcare could dip further on profit-taking correction from recent rally, with better supports from the 50-day ma (RM6.00) and 200-day ma (RM5.88), and immediate resistance from the 76.4%FR (RM6.32) and the peak of 30/11/16 (RM6.60). Hook down momentum indicators on Sime Darby implies near-term correction potential towards the 100-day ma (RM2.43), with better support coming from the 200-day ma (RM2.28), while immediate resistance is capped at 76.4%FR (RM2.74) and the peak of 30/01/18 (RM3.06). Asian Markets Fall Flat Ahead of FOMC Conclusion Asian stocks were largely flat Wednesday, with some markets giving up significant early gains and finishing the day lower, as investor’s sentiment turn cautious ahead of FOMC March meeting conclusion. Oil stocks were outperforming in the region, after crude’s 2 percent price jump Tuesday on concerns about tensions between Saudi Arabia and Iran. Seoul's Kospi closed little changed after hovering slightly above the flat line earlier in the day. The benchmark shed 0.02 percent to close at 2,484.97 and the junior Kosdaq gave up early gains to slip 0.54 percent. Over in Sydney, the S&P/ASX 200 drifted higher by 0.23 percent to close at 5.950.30. Energy stocks rose 1.17 percent as oil prices held onto gains after surging to their highest levels in three weeks overnight. China stocks erased early gains and ended lower on Wednesday, weighed down by start-up firms, as investors booked profits in shares of technology companies. The Shanghai Composite index was down 0.3 percent at 3,280.95. Japanese markets were closed to mark the first day of spring in the Northern Hemisphere. Wall Street End Lower After Fed Raises Rate U.S. stock-market indexes ended a turbulent session slightly lower on Wednesday after the Federal Reserve delivered its sixth interest-rate increase since the end of 2015 and signaled it still expects to deliver two more before the end of the year. The Fed raised interest rates and forecast at least two more hikes for 2018, signaling growing confidence that U.S. tax cuts and government spending will boost the economy and inflation and lead to more aggressive future tightening. The hike was widely expected, and new Fed Chairman Jerome Powell said in a Page 1 of 8
4. 22-Mar-18 news conference after the rate-hike announcement that the U .S. central bank was trying to take the “middle ground” in raising rates. Stocks were choppy following the Fed announcement, as yields on the 10-year U.S. Treasury note moved closer to 3 percent, touching a one month high of 2.936 percent. Market participants are still trying to decipher the number of rate hikes this year, whether the Fed will stay at three increases as previously forecast by policy makers, or whether a fourth hike is possible. However, energy stocks surged alongside oil prices Wednesday after a weekly report showed U.S. inventories surprisingly decreased during the week ended March 16. The S&P 500 energy sector climbed 2.6 percent, its best day since November 2016. The Dow Jones Industrial Average fell 44.96 points, or 0.18 percent, to end at 24,682.31, the S&P 500 lost 5.01 points, or 0.18 percent, to 2,711.93 and the Nasdaq Composite dropped 19.02 points, or 0.26 percent, to 7,345.29. Page 2 of 8
5. 22-Mar-18 N e w s I n B r i e f Corporate Sapura Energy Berhad has been awarded a contract from Mubadala Petroleum (MDC Oil & Gas (SK 320) Ltd) to undertake engineering, procurement, construction, installation and commissioning (EPCIC) works for the Pegaga Development Project. The EPCIC works are for a central gas processing platform (ICPP) facility in Block SK320, offshore Sarawak, Malaysia. The works are expected to be completed by third quarter of 2021. (Bursa Malaysia) Comment: We are positive on this new contract win, which we believe comprises a chunky portion of this USD1bn field. We maintain our earnings forecast as we await more details, including contract value. Furthermore, this project win falls within our FY19 orderbook replenishment target of RM4.4bn (FY19 YTD order wins: RM900mn). Maintain Buy with TP of RM1.25 based on 0.6x CY18 P/B. Petroliam Nasional Bhd (Petronas) is increasing capital expenditure for upstream activities slightly in 2018 from last year. Petronas allocated RM26bn (USD6.6bn) for upstream expenditure in 2018 which was slightly more than 2017. (The Edge) Priceworth International Bhd has been approved to manage and harvest in two more forest compartments, encompassing 1,446 hectares, within Forest Management Unit 5 for a 12-month period. It expects the timber harvested from these two compartments to contribute positively financially, and to raise the throughput volume of its plywood manufacturing facility. (Bursa Malaysia) IOI Properties Group Bhd created an online community engagement platform via its mobile app 'IOI Community'. This facility will enable two-way communication between the property management team and residents. The IOI Community app will enhance communication with IOI Properties’ customers, leverage on real-time customer feedback to enable prompt customer service and utilise data analytics to continuously improve on products and services delivery. (The Edge) RAM Ratings placed the AA2 rating of UMW Holdings Bhd's RM2bn five-year Islamic medium-term notes MTN programme on its rating watch with a positive outlook. The rating agency cited the group's proposed acquisitions of a stake in MBM Resources Bhd and Perusahaan Otomobil Kedua Sdn Bhd (Perodua) as catalysts that are expected to strengthen UMW's business and financial profiles, and possibly raise the group's rating. (The Edge) Vizione Holdings Bhd accepted a letter of intent from Pan Sejati Development (M) Sdn Bhd to jointly develop 3,800 houses in Putrajaya. The project will be mutually developed by Pan Sejati and Vizione Development through a joint-venture in the proportion of 60:40 respectively. (Bursa Malaysia) GFM Services Bhd’s shareholders approved its proposed purchase of 100% stake in KP Mukah Development Sdn Bhd (KPMD) for RM130mn. It expects its earnings to more than double following the acquisition. KPMD holds a 23-year concession awarded by the government and Universiti Teknologi Mara (UiTM), which entails three years of the design, build and construction of UiTM Mukah campus in Sarawak, and 20 years for the delivery of facilities management services ending September 2035. (Bernama) Page 3 of 8
6. 22-Mar-18 Sumatec Resources Bhd agreed to settle a suit against Hoe Loeng Corp Ltd and Ebony Ritz Sdn Bhd for RM27mn . Under a settlement agreement before the Singapore Mediation Centre, Sumatec will pay RM7mn in cash to Ebony Ritz. It will also issue RM20mn worth of redeemable convertible preference shares to Ebony Ritz. (The Edge) YFG Bhd submitted an appeal to Bursa Malaysia requesting an extension of time to submit a regularization plan following an earlier rejection by the stock exchange. It is appealing against the commencement of delisting procedures on the securities of the company as well as for the stock exchange to reconsider the rejection and to approve the extension of time to submit its new regularisation plan. (Bursa Malaysia) Page 4 of 8
7. 22-Mar-18 N e w s I n B r i e f Economy Asia Malaysia Inflation Eases More than Forecast Malaysia 's consumer price inflation eased for the second straight month in February, and at a faster-than-expected pace, data from the Department of Statistics Malaysia (DOSM) revealed. Consumer prices climbed 1.4% year-on-year in February, slower than the 2.7% rise in January. Economists had expected the inflation to ease to 1.9%. Core inflation rose 1.8% in February compared with the same month of the previous year. Prices of food and nonalcoholic beverages advanced 3.0% and non-food prices gained 0.7%. Meanwhile, clothing and footwear prices dropped 0.7% and transport costs went down by 0.3%. On a monthly basis, overall consumer prices showed no variations in February. (DOSM) Malaysia’s Debt-to-GDP Ratio Runs High among A-Rated Sovereigns Malaysia’s government debt to gross domestic product ratio of 51 percent is ”quite high” compared with other countries with an ”A” sovereign credit rating, Moody’s Investors Service said. The high debt, however, was largely denominated in ringgit, mitigating external risks to the Southeast Asian nation. “Just to put things into perspective, Malaysia’s government debt-to-GDP is about 51 percent and the median for A-rated sovereigns is 41 percent,” Moody’s sovereign risk analyst Anushka Shah said. Moody’s, which affirmed the Malaysia’s local and foreign currency issuer and senior unsecured bond ratings at A3 in December last year, maintained that rating. Shah said that with most of the government debt denominated in the local currency, Malaysia was insulated from global economic events to some extent. “When you look at the debt profile, we find that almost all the debt - about 97 percent - is funded in the local currency and that acts as a mitigating factor in the event there is a currency or interest rate shock,” she told a media briefing on Wednesday. Possible risks to Malaysia cited by Moody’s include a slowdown or stall in economic growth, if the government debt burden continues to rise at a rapid pace or any external shocks that could weaken the ringgit. (The Star) Retailers Can't Impose Surcharges for Payments Using Debit Cards Retailers are not permitted to impose surcharges for payments using debit cards and a similar prohibition is applied for credit card payments under the rules of international card schemes such as Visa and Mastercard under the Payment Card Reform Framework, said Bank Negara Malaysia (BNM). It said the response provided by the Deputy Finance Minister in the Dewan Rakyat was with reference to the interest imposed by credit card issuers on cardholders for outstanding credit card balances that were overdue and not on surcharges imposed by retailers on credit and debit card transactions. BNM said this in a statement today in response to Free Malaysia Today's article dated March 19, 2018, entitled ‘Consumer body: Abolish surcharges on credit cards'. It said the prohibition on surcharges was monitored and enforced by the banks that provided e-payment facilities to merchants (acquiring banks). "Consumers who encounter merchants that impose surcharges are advised to lodge a complaint with their respective banks or payment card issuers," it said. BNM said one of the reasons retailers imposed a surcharge was to recover the cost incurred by them when accepting card payments whereby they were typically charged a transaction fee, also known as the merchant discount rate (MDR). (The Star) Fitch Affirms China's A+ Rating, Says Commitment to Debt Stabilisation Key Fitch Ratings affirmed its A+ rating on China, and said tighter regulations have curbed financial risks without jeopardising growth targets, but warned that it remains to be seen if Beijing would stay committed to debt stabilisation. China's economic growth accelerated last year and comfortably beat the government's target, giving policymakers leeway to crack down on riskier lending practices and slow credit expansion. A key driver of that growth came from improved external demand, with net exports making a positive contribution to the expansion in gross domestic product compared with a negative contribution in 2015-2016. But Fitch Page 5 of 8
8. 22-Mar-18 warned trade tensions with the United States have "clearly" risen, posing a downside risk to the ratings agency's baseline outlook. While Fitch expects the Chinese economy to grow 6.5% this year - in line with Beijing's target of around 6.5% - and is keeping its stable outlook on China's rating, it did not rule out the prospect of Beijing falling back on the old engines of credit-fuelled investment and policy stimulus and postponing commitments to stabilise leverage ratios. (The Star) United States Fed Raises Rates and Signals Faster Pace in Coming Years The Federal Reserve said it would raise short-term interest rates a quarter-percentage point and signaled it could lift them at a slightly more aggressive pace in coming years to keep the strengthening economy on an even keel. Fed officials said they would increase their benchmark federal-funds rate to a range between 1.5% and 1.75% and penciled in a total of three rate increases for this year. But compared with December, more officials think they will need to raise interest rates at least four times this year if the economy performs in line with their expectations. Seven of 15 participants now expect at least four rate increases this year, an increase from four of 16 participants at the December meeting. Most Fed officials also expect the Fed would need to raise rates at least another three times next year. At the December meeting, officials projected around two increases would be needed in 2019. Officials also penciled in two rate increases in 2020, which would leave the fed-funds rate in a range between 3.25% and 3.5%. That would be slightly restrictive of growth because it is above the 2.9% level policy makers estimate would neither spur nor curb economic activity over the long run. Fed Chairman Jerome Powell, in his first press conference as central bank chief, added to the bullish picture by noting officials are projecting faster growth, lower unemployment and higher inflation in coming years than they expected in December. Officials also raised their estimates of economic growth this year and next, likely reflecting an increase in federal spending Congress approved last month. Officials in December revised their growth projections higher because Congress was nearing completion of a bill to cut taxes by $1.5 trillion over a decade. They now see the economy growing by 2.7% this year and 2.4% in 2019, versus earlier projections of 2.5% and 2.1%, respectively. Their forecasts beyond that—2% growth in 2020 and 1.8% growth over the long run—didn’t change. Because officials see the economy growing significantly faster than the level they expect will prevail over the long run, the forecasts imply officials see rising pressure on the economy’s productive resources, which could complicate their rate decisions. The big question heading into their two-day meeting was how much Fed officials expected to lift rates in coming years, particularly after lawmakers approved a more generous federal funding bill in addition to cuts in corporate and individual tax rates at the end of last year. (The Wall Street Journal) U.S. Current Account Deficit Widens in Fourth Quarter The U.S. current account deficit widened slightly more than expected in the fourth quarter, amid an increase in goods imports. The Commerce Department said on Wednesday the current account deficit, which measures the flow of goods, services and investments into and out of the country, widened by $26.7 billion to $128.2 billion, or 2.6 percent of national economic output. Analysts polled by Reuters had expected the current account deficit to widen to $125 billion. (Reuters) U.S. Existing Home Sales Rose Robustly in February Sales of previously owned U.S. homes rose strongly in February, overcoming stiff headwinds from a shortage of inventory and affordability concerns caused by rising mortgage rates and home prices. Existing-home sales rose 3% in February from the previous month to a seasonally adjusted annual rate of 5.54 million, the National Association of Realtors said Wednesday. Economists surveyed by The Wall Street Journal had expected home sales to remain essentially flat, rising just 0.4% to 5.4 million in February. Compared with a year earlier, sales in February were up 1.1%. “Housing demand still remains quite strong” despite Page 6 of 8
9. 22-Mar-18 headwinds from lack of inventory and affordability , said Lawrence Yun, chief economist at the National Association of Realtors. Affordability is a growing obstacle for new buyers trying to enter the market. The national median existing home price rose 5.9% in February compared with a year earlier to $241,700. That is being compounded by rising mortgage rates. The average rate nationwide for a 30-year, fixed-rate mortgage climbed nearly half a percentage point to 4.43% by the beginning of March from 3.95% at the beginning of January, according to mortgage-finance giant Freddie Mac . Rates as of last Thursday stood at 4.44%, according to Freddie Mac. Borrowing costs remain low by historical standards. (The Wall Street Journal) Trump to Ramp Up Trade Restraints on China The White House is preparing to crack down on what it says are improper Chinese trade practices by making it significantly more difficult for Chinese firms to acquire advanced U.S. technology or invest in American companies, individuals involved in the planning said. The administration plans to release on Thursday a package of proposed punitive measures aimed at China that include tariffs on imports worth at least $30 billion. But the tariffs won’t be imposed immediately. Rather, U.S. industry will be given an opportunity to comment on which products should be subject to the duties. As part of the package, the White House will announce possible investment restrictions by Chinese firms in the U.S. and will direct the Treasury Department to outline rules governing investment from China. Final details of the plan, including the amount of imports to be hit by tariffs, remain in flux, those involved with the discussions said. While the rough amount and rationale for the tariffs are expected to be disclosed on Thursday, the final decisions will come once U.S. industry has had its say, they said. A White House spokeswoman declined to comment. The effort stems from a monthslong investigation by the administration into Chinese intellectual property practices that found the damage to U.S. companies from forced technology transfer is $30 billion annually. (The Wall Street Journal) Europe and Uni ted Kingdom UK Wage Growth Accelerates, While Unemployment Rate Slips UK wages rose at the fastest pace in nearly two-and-a-half years in the three months to January, strengthening the case for an interest rate rise in May. Overall UK wages increased by 2.6 per cent in the period, compared to a year earlier, according to the Office for National Statistics. Bank of England officials have flagged accelerating wage growth as one reason for a hawkish shift in monetary policy, fearing an increasingly tight labour market may lead to rising cost pressures for business and higher prices for consumers. Wage growth has so far been the missing piece in the UK’s post-crisis recovery in the UK labour market. “While the UK economy expands, real wages continue to fall and continue to perform poorly compared with our European counterparts,” the ONS wrote in commentary on the figures. The reading was in line with analysts' expectations of 2.6 per cent. Real pay, after accounting for inflation, was 0.2 per cent lower than a year earlier. During January the rate of unemployment fell to 4.3 per cent, down from 4.4 per cent in December. This left the unemployment rate at the lowest level since 1975. The fall in the rate of unemployment was despite a slight increase in the number of unemployed people as employment also rose compared to the three months to the end of October. The UK’s current employment rate of 75.3 per cent is the highest since 1971. (Financial Times) UK Public Sector Net Borrowing Rises in February UK public sector net borrowing excluding state-owned banks grew in February, figures from the Office for National Statistics revealed on Wednesday. The PSNB ex-banks rose by GBP 2.5 billion to GBP 1.3 billion from a year ago, when there was a surplus of GBP 1.2 billion. Economists had predicted GBP 1.8 billion borrowing for February. Net borrowing for the April 2017 to February 2018 period decreased by GBP 2.5 billion to GBP 41.4 billion, which was the lowest year-to-date figure since February 2008. Earlier this month, the Office for Page 7 of 8
10. 22-Mar-18 Budget Responsibility revised down the current financial year 's deficit prediction to GBP 45.2 billion from GBP 49.9 billion predicted in November. (RTT) UK Manufacturers Expect Output Growth to Ease: CBI British manufacturers expect output growth to ease over the next three months, according to the Industrial Trends Survey from the Confederation of British Industry. The total order book balance came in at 4 percent in March, above its negative long-run average of -14 percent. The export order book balance came in at 10.0 percent. Manufacturers expect output growth to slow in the coming quarter, with 34 percent forecasting volumes to increase, and 21 percent expecting a decline, giving a balance of +13 percent. Further, a balance of 24 percent expect average selling prices to increase in the coming three months. (RTT) Share Buy-Back: 21 March 2018 Company AMPROP E&O FITTERS GLOMAC IFCAMSC KFIMA MALAKOF NYLEX SNTORIA SUNWAY SYF TEXCYCL UNIMECH Bought Back Price (RM) Hi/Lo (RM) 37,700 130,000 1,690,000 70,000 286,000 11,000 1,411,100 2,600 27,000 1,750,000 399,700 19,000 26,000 0.715/0.71 1.43 0.40/0.395 0.475/0.47 0.33 1.48/1.47 0.88/0.875 0.79/0.785 0.65 1.54/1.53 0.30/0.29 0.72/0.71 1.03/0.97 0.715/0.705 1.43/1.42 0.40/0.39 0.475/0.465 0.335/0.325 1.48/1.47 0.885/0.865 0.79/0.785 0.65/0.63 1.55/1.52 0.305/0.285 0.72/0.66 1.07/0.97 Total Treasury Shares 16,608,700 26,778,747 38,440,000 6,891,300 741,200 211,300 48,608,000 6,305,924 5,719,100 36,820,262 409,700 1,552,550 7,438,010 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 8 of 8
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) PER (X) Div Yield (%) FY18 FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 21-Mar-18 AUTOMOBILE BAUTO 2.24 2.33 4.0% Buy 2,596 0.52 12.1 19.0 18.5 11.8 4.9 5.1 2.47 -9.3 1.84 21.7 1.8 MBMR 2.46 2.68 8.9% Hold 962 0.70 24.7 26.9 10.0 9.2 2.4 2.8 2.60 -5.4 2.01 22.4 11.8 PECCA 1.32 1.62 22.7% Buy 244 0.47 9.7 10.9 13.6 12.1 3.8 3.8 1.70 -22.4 1.25 5.6 -14.8 SIME 2.62 2.55 -2.7% Sell 17,818 1.63 13.2 16.4 19.9 16.0 1.3 1.6 3.06 -14.4 2.03 29.3 18.6 UMW 6.45 5.52 -14.4% Sell 7,535 1.46 28.6 40.2 22.5 16.0 2.2 3.1 6.98 -7.6 4.70 37.2 24.0 BANKS & FINANCIAL SERVICES ABMB 4.33 4.60 6.2% Buy 6,703 1.19 32.6 35.8 13.3 12.1 3.7 3.7 4.49 -3.6 3.62 19.6 6.1 AFFIN 2.53 2.40 -5.1% Sell 4,916 0.93 22.2 23.9 11.4 10.6 3.2 3.2 2.98 -15.0 2.22 13.9 9.5 AMBANK 4.16 4.70 13.0% Buy 12,539 1.42 38.1 44.4 10.9 9.4 4.3 4.3 5.70 -27.0 3.92 6.1 -5.7 CIMB 7.30 8.60 17.8% Buy 67,346 1.64 58.2 59.9 12.5 12.2 4.0 4.1 7.39 -1.2 5.32 37.2 11.6 HLBANK 18.70 19.30 3.2% Hold 38,253 0.85 116.8 126.8 16.0 14.7 2.6 2.6 20.02 -6.6 13.44 39.1 10.0 MAYBANK 10.28 11.50 11.9% Buy 111,795 1.00 74.1 78.3 13.9 13.1 5.4 5.4 10.58 -2.8 8.89 15.6 4.9 PBBANK 23.68 27.30 15.3% Buy 91,440 0.70 153.3 166.5 15.5 14.2 2.4 2.5 23.68 0.0 19.82 19.5 14.0 RHBBANK 5.41 6.10 12.8% Buy 21,694 1.50 54.3 59.0 10.0 9.2 2.8 2.8 5.61 -3.6 4.71 14.9 8.2 BURSA 11.02 11.80 7.1% Buy 5,923 0.89 43.9 45.0 25.1 24.5 3.3 3.3 11.48 -4.0 9.30 18.5 8.9 -15.0 Note: BURSA proposed bonus issue of shares on the basis of 1 for 2. Ex-Target price RM7.04 BUILDING MATERIALS ANNJOO 3.28 4.34 32.3% Buy 1,699 1.32 43.7 46.6 7.5 7.0 6.6 7.5 3.98 -17.6 2.27 44.5 CHINHIN 1.10 1.39 26.4% Buy 612 1.00 11.4 11.1 9.6 9.9 5.8 5.1 1.49 -26.2 1.00 10.6 -9.1 ENGTEX 1.05 1.38 31.4% Buy 447 0.83 14.2 16.1 7.4 6.5 2.0 3.0 1.52 -30.9 1.01 4.0 -4.5 GADANG 0.92 1.69 83.7% Buy 609 1.14 14.2 18.1 6.5 5.1 3.3 3.3 1.37 -32.8 0.92 0.5 -17.1 GAMUDA 5.08 6.00 18.1% Buy 12,486 0.86 34.5 35.6 14.7 14.3 2.4 2.4 5.52 -8.0 4.58 10.9 2.4 IJM 2.74 2.96 8.0% Hold 9,940 1.20 13.7 18.6 20.0 14.7 3.5 3.5 3.61 -24.1 2.55 7.5 -10.2 CONSTRUCTION KAB 0.26 0.38 47.1% Buy 8 na 31.4 37.3 0.8 0.7 3.9 4.7 0.33 -22.7 0.25 4.1 -15.0 PESONA 0.37 0.46 26.0% Buy 254 1.17 5.0 4.5 7.4 8.0 4.1 4.1 0.74 -50.3 0.36 1.4 -18.9 -14.5 SENDAI 0.74 0.55 -25.7% Sell 578 1.26 9.1 8.5 8.2 8.7 1.4 1.4 1.39 -46.8 0.64 16.5 SUNCON 2.09 2.65 26.8% Hold 2,701 0.64 14.7 16.4 14.2 12.7 3.8 4.3 2.64 -20.8 1.72 21.5 -16.7 WCT 1.33 1.50 12.8% Sell 1,871 0.99 11.3 10.8 11.8 12.3 2.3 2.3 2.48 -46.3 1.30 2.3 -17.9 LITRAK 5.76 6.26 8.7% Hold 3,040 0.32 45.6 47.1 12.6 12.2 4.3 4.3 6.15 -6.3 5.40 6.7 3.8 CARLSBG 19.08 18.09 -5.2% Buy 5,869 0.73 87.8 91.8 21.7 20.8 4.5 4.6 21.00 -9.1 14.36 32.9 24.7 HEIM 20.60 21.64 5.0% Hold 6,223 0.41 93.0 101.6 22.1 20.3 3.7 3.9 23.04 -10.6 16.98 21.3 9.0 AEON 1.81 1.97 8.8% Buy 2,541 0.18 7.5 8.9 24.0 20.3 2.5 2.8 2.52 -28.2 1.45 24.8 2.8 AMWAY 7.50 8.59 14.5% Buy 1,233 0.49 48.3 49.9 15.5 15.0 5.3 5.5 8.10 -7.4 6.97 7.6 2.7 F&N 32.10 33.74 5.1% Buy 11,766 0.25 122.7 145.8 26.2 22.0 2.5 3.0 34.50 -7.0 23.40 37.2 18.9 CONSUMER Brewery Retail HUPSENG 1.06 1.25 17.9% Buy 848 0.41 5.7 5.9 18.6 17.9 5.7 5.7 1.28 -17.2 1.03 2.9 -2.8 JOHOTIN 1.04 1.48 42.3% Buy 323 1.01 11.1 11.7 9.4 8.9 5.8 6.3 1.76 -40.9 1.00 4.0 -14.0 NESTLE 132.60 129.90 -2.0% Hold 31,095 0.44 322.2 360.2 41.2 36.8 2.3 2.5 163.00 -18.7 78.00 70.0 28.5 PADINI 4.47 4.67 4.5% Sell 2,941 0.82 28.0 30.4 16.0 14.7 2.8 2.9 5.50 -18.7 2.86 56.4 -15.3 -26.3 POHUAT 1.32 1.78 34.8% Buy 290 0.59 20.1 23.1 6.6 5.7 4.5 6.1 2.07 -36.2 1.28 3.1 QL 4.95 5.41 9.3% Hold 8,031 0.59 12.8 14.7 38.6 33.6 0.9 1.0 5.05 -2.0 3.47 42.7 13.8 SIGN 0.59 0.92 55.9% Buy 135 0.61 6.9 9.2 8.5 6.4 4.2 5.9 1.07 -44.9 0.57 3.5 -16.3 27.96 34.72 24.2% Hold 7,983 1.47 170.8 168.8 16.4 16.6 5.7 5.7 48.50 -42.4 26.50 5.5 -30.1 GENTING 9.04 11.58 28.1% Buy 34,637 1.44 55.1 61.8 16.4 14.6 1.8 1.8 9.92 -8.9 8.63 4.7 -1.0 GENM 5.17 6.68 29.2% Buy 29,220 1.44 27.6 32.0 18.8 16.2 2.3 2.5 6.28 -17.7 4.80 7.8 -6.7 2.12 3.22 51.9% Buy 2,856 0.57 19.9 26.0 10.7 8.1 7.5 8.5 2.95 -28.1 2.06 2.9 -5.4 CCMDBIO 2.85 3.40 19.3% Buy 795 0.91 16.2 17.4 17.6 16.4 3.8 3.9 3.05 -6.6 1.97 44.7 12.6 IHH 6.09 6.40 5.1% Sell 50,179 0.74 11.9 15.0 51.3 40.7 0.5 0.6 6.33 -3.8 5.42 12.4 3.9 KPJ 0.91 1.13 24.9% Buy 3,814 0.57 3.9 4.4 23.1 20.8 2.4 2.7 1.14 -20.6 0.87 4.0 -6.7 HARTA 11.50 7.80 -32.2% Sell 19,044 1.14 25.2 28.8 45.7 39.9 1.3 1.5 12.18 -5.6 4.84 137.6 7.7 KOSSAN 7.65 9.73 27.2% Buy 4,892 0.58 37.4 42.1 20.4 18.2 2.4 2.7 8.79 -13.0 5.62 36.1 -5.7 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical Rubber Gloves SUPERMX 2.71 2.70 -0.4% Buy 1,777 0.62 20.0 22.6 13.6 12.0 1.9 2.3 2.92 -7.2 1.69 60.4 35.5 TOPGLOV 9.72 12.20 25.5% Buy 12,208 0.69 35.3 42.7 27.5 22.8 1.5 1.8 10.24 -5.1 4.56 113.2 21.7 KAREX 0.81 0.93 15.5% Sell 807 0.86 1.8 3.0 45.5 26.6 0.5 0.9 2.26 -64.4 0.79 2.5 -38.1 SCIENTX 8.12 10.01 23.3% Buy 3,970 0.87 67.5 79.4 12.0 10.2 2.6 3.2 9.85 -17.6 7.23 12.3 -6.2 SKPRES 1.67 2.20 31.7% Buy 2,088 0.92 10.4 14.8 16.1 11.3 3.1 4.4 2.35 -28.9 1.24 34.7 -26.8 ASTRO 2.24 3.10 38.4% Buy 11,679 0.86 14.0 13.7 16.1 16.4 5.8 6.0 2.94 -23.8 2.14 4.7 -15.5 MEDIA PRIMA 0.45 0.45 0.0% Sell 499 1.32 -3.8 -1.7 na na 0.0 0.0 1.24 -63.7 0.42 8.4 -40.8 STAR 1.24 1.20 -3.2% Sell 915 1.06 6.2 5.9 20.0 20.9 7.3 7.3 2.22 -44.1 1.24 0.0 -24.8 INDUSTRIAL MEDIA
12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) FY18 PER (X) Div Yield (%) FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.44 0.69 58.6% Buy 764 1.67 4.0 4.3 10.9 10.1 2.3 2.3 0.69 -37.0 0.39 13.0 -10.3 LCTITAN 6.25 7.60 21.6% Buy 14,206 na 56.3 60.9 11.1 10.3 4.0 4.3 6.53 -4.3 4.14 51.0 33.0 MHB 0.76 0.81 6.6% Sell 1,216 1.49 0.5 1.7 158.2 45.6 0.0 0.0 1.16 -34.5 0.63 21.6 -7.9 MISC 7.30 7.00 -4.1% Sell 32,586 1.15 50.1 53.8 14.6 13.6 4.1 4.1 7.90 -7.6 6.73 8.5 -1.6 PANTECH 0.57 0.69 21.1% Buy 424 1.27 6.1 6.8 9.4 8.4 4.8 5.4 0.74 -23.0 0.52 10.7 -11.6 PCHEM 8.29 8.84 6.6% Hold 66,320 0.84 52.5 53.8 15.8 15.4 3.1 3.1 8.38 -1.1 6.80 21.9 7.7 SAPNRG 0.52 1.25 142.7% Buy 3,086 2.06 -6.5 -5.0 na na 0.0 0.0 2.10 -75.5 0.40 30.4 -27.5 SERBADK 3.41 4.15 21.7% Buy 5,008 na 27.7 31.5 12.3 10.8 2.6 2.9 3.68 -7.3 1.63 109.2 5.2 UMWOG 0.31 0.39 27.9% Buy 2,506 1.87 0.4 1.2 79.9 26.3 0.0 0.0 0.68 -55.0 0.27 13.0 0.0 UZMA 1.51 1.57 4.0% Hold 483 0.78 12.9 13.9 11.7 10.9 0.0 0.0 1.98 -23.7 1.26 19.8 18.0 FGV 1.79 1.98 10.6% Sell 6,530 1.65 3.5 4.4 51.9 41.1 2.8 2.8 2.18 -17.9 1.51 18.5 5.9 IJMPLNT 2.30 2.25 -2.2% Sell 2,025 0.18 6.7 10.8 34.1 21.3 3.5 3.9 3.23 -28.8 2.20 4.5 -16.1 IOICORP 4.67 5.08 8.8% Buy 28,516 0.88 20.9 21.6 22.4 21.6 6.3 3.7 4.76 -1.9 4.21 11.0 5.4 KFIMA 1.48 1.89 27.7% Buy 417 0.68 14.1 14.7 10.5 10.1 6.1 6.1 1.96 -24.5 1.45 2.1 -5.7 KLK 25.46 27.07 6.3% Hold 27,114 0.64 120.7 125.7 21.1 20.3 2.4 2.4 25.78 -1.2 23.66 7.6 1.8 SIMEPLT 5.59 6.25 11.8% Buy 38,017 na 21.0 22.1 26.6 25.3 2.5 2.7 6.00 -6.8 4.58 22.1 -6.8 TSH 1.49 1.97 32.2% Buy 2,057 0.49 9.3 9.6 16.0 15.5 1.6 1.7 1.90 -21.6 1.49 0.0 -9.7 UMCCA 6.27 6.73 7.3% Sell 1,315 0.39 22.7 34.8 27.6 18.0 2.7 2.9 7.08 -11.4 5.92 5.9 -3.7 GLOMAC 0.47 0.40 -14.9% Sell 373 0.76 1.5 2.5 31.1 19.0 4.3 4.3 0.66 -29.2 0.46 2.2 -15.2 HUAYANG 0.51 0.58 14.9% Sell 178 0.86 0.7 3.4 76.1 14.8 1.0 1.0 1.15 -56.1 0.51 0.0 -17.2 IBRACO 0.74 0.80 8.8% Buy 365 na 7.2 10.7 10.2 6.9 4.1 5.4 0.98 -24.6 0.50 47.0 -9.8 IOIPG 1.65 2.00 21.2% Sell 9,085 0.85 16.3 15.7 10.1 10.5 3.6 3.6 2.22 -25.7 1.65 0.0 -10.8 MAHSING 1.00 1.59 59.0% Buy 2,428 0.93 11.8 11.3 8.5 8.9 6.5 6.5 1.64 -39.0 1.00 0.5 -31.0 SIMEPROP 1.45 1.51 4.1% Hold 9,861 na 7.5 7.5 19.3 19.4 2.8 2.1 1.78 -18.5 1.04 39.4 -18.5 SNTORIA 0.65 0.76 16.9% Buy 365 0.13 8.3 8.6 7.9 7.6 1.5 1.5 0.91 -28.5 0.56 16.1 -6.5 SPB 4.53 5.10 12.6% Hold 1,557 0.60 18.7 24.0 24.2 18.9 2.6 2.6 5.50 -17.6 4.39 3.2 -7.6 SPSETIA 3.11 3.73 19.9% Buy 11,672 0.94 19.8 19.4 15.7 16.0 3.9 3.9 4.38 -29.0 3.07 1.3 -22.3 SUNWAY 1.54 1.75 13.6% Hold 7,521 0.90 11.8 12.4 13.0 12.4 3.9 3.9 1.96 -21.4 1.35 14.1 -5.5 SUNREIT 1.53 1.87 22.2% Hold 4,506 0.87 10.0 10.7 15.3 14.3 6.6 7.0 1.90 -19.5 1.52 0.7 -19.5 CMMT 1.00 1.48 48.0% Buy 2,038 0.77 7.8 8.3 12.7 12.1 8.1 8.6 1.83 -45.4 0.98 2.0 -45.4 PLANTATIONS PROPERTY REIT POWER & UTILITIES MALAKOF 0.88 0.82 -6.8% Sell 4,358 0.99 6.6 7.2 13.3 12.2 8.0 8.0 1.30 -32.3 0.86 2.9 -10.2 PETDAG 24.96 24.08 -3.5% Sell 24,797 0.48 114.7 116.3 21.8 21.5 3.4 3.5 25.97 -3.9 20.81 19.9 3.8 PETGAS 18.00 19.46 8.1% Buy 35,617 0.86 99.3 100.0 18.1 18.0 3.8 3.9 20.08 -10.4 15.82 13.8 3.0 TENAGA 15.78 18.22 15.5% Buy 89,409 0.59 131.3 127.5 12.0 12.4 4.1 4.0 16.12 -2.1 13.56 16.4 3.4 YTLPOWR 1.12 1.16 3.6% Sell 8,881 0.92 8.6 8.9 13.0 12.6 4.5 4.5 1.50 -25.3 1.05 6.7 -13.2 TELECOMMUNICATIONS AXIATA 5.49 6.50 18.4% Buy 49,679 1.56 15.9 19.4 34.4 28.2 1.5 2.9 5.82 -5.7 4.54 20.9 0.0 DIGI 4.75 5.15 8.4% Hold 36,931 0.98 19.7 20.4 24.1 23.3 4.1 4.3 5.19 -8.5 4.36 8.9 -6.9 MAXIS 5.90 6.05 2.5% Sell 46,082 1.10 25.2 25.0 23.4 23.6 3.4 3.4 6.60 -10.6 5.48 7.7 -1.8 TM 5.50 7.20 30.9% Buy 20,669 0.69 22.8 24.9 24.1 22.1 3.7 4.1 6.69 -17.8 5.45 0.9 -12.7 ELSOFT 2.50 3.30 32.0% Buy 688 0.89 13.1 15.0 19.1 16.7 3.7 4.2 2.95 -15.3 1.71 46.2 -7.4 IRIS 0.18 0.22 22.2% Buy 445 2.49 0.0 0.3 654.3 56.9 0.0 0.0 0.25 -26.5 0.14 33.3 -2.7 INARI 2.85 3.65 28.1% Buy 5,911 0.75 13.7 15.3 20.7 18.6 3.5 3.9 3.82 -25.4 1.89 51.1 -16.2 TECHNOLOGY Semiconductor & Electronics Note: INARI proposed bonus issue shares on the basis of 1 for 2. For more detail please refer to 30.01.18 report. MPI 8.85 10.70 20.9% Buy 1,760 0.89 73.9 86.9 12.0 10.2 3.6 3.6 14.52 -39.0 8.42 5.1 -29.9 UNISEM 2.61 2.70 3.4% Sell 1,915 1.14 19.0 20.3 13.8 12.8 4.6 4.6 4.25 -38.6 2.49 4.8 -28.5 TRANSPORTATION Airlines AIRASIA 4.06 4.93 21.4% Hold 13,568 1.13 49.3 49.3 8.2 8.2 2.0 2.0 4.75 -14.5 2.77 46.6 21.2 AIRPORT 8.86 8.61 -2.8% Sell 14,700 1.13 18.0 18.8 49.3 47.1 1.5 1.1 9.45 -6.2 6.88 28.8 0.8 Freight & Tankers PTRANS 0.27 0.46 73.6% Buy 336 na 2.3 3.8 11.3 7.0 2.6 4.2 0.38 -30.6 0.20 35.6 -5.4 TNLOGIS 1.07 1.45 35.5% Buy 489 1.02 10.3 10.5 10.4 10.2 4.7 4.7 1.83 -41.6 1.05 1.9 -20.1 WPRTS 3.58 4.06 13.4% Buy 12,208 0.46 15.6 20.0 22.9 17.9 1.1 1.4 4.19 -14.6 3.12 14.7 -3.2 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) % upside Recom Market Cap. (S$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 28.40 30.50 7.4% Buy 72,814 1.11 212.3 246.0 13.4 11.5 2.3 2.5 29.7 -4.4 18.47 53.8 OCBC 13.42 14.30 6.6% Buy 56,156 1.20 109.5 123.2 12.3 10.9 6.7 7.7 13.6 -1.4 9.45 42.0 14.3 8.3 UOB 28.58 27.80 -2.7% Hold 47,491 1.17 216.6 244.0 13.2 13.2 2.8 2.8 29.0 -1.4 21.38 33.7 8.1 PLANTATIONS WILMAR 3.21 3.31 3.1% Hold 20,539 0.82 27.4 29.3 11.7 11.0 3.1 3.4 3.9 -17.1 2.97 8.1 3.9 IFAR 0.33 0.36 10.8% Hold 466 1.05 3.8 4.1 8.6 7.9 1.6 1.7 0.5 -39.3 0.32 1.6 -16.7 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.
13. INITIATE COVERAGE Thursday , March 22, 2018 FBMKLCI: 1,865.80 Sector: Building Materials , THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM1.70 (+19.7%) CSC Steel Holdings Bhd Last Traded: RM1.42 An Attractive Dividend Yield Play Chan Mun Chun BUY Tel: +603-2167 1264 mcchan@ta.com.my We initiate coverage on CSC Steel Holdings Berhad (CSC) with a Buy recommendation. We derive our target price of RM1.70 based on a target PE multiple of 10x. This represents a potential total return of 26.3% (including a 6.6% estimated dividend yield). CSC is principally involved in manufacturing of flat steel products, which include Pickled and Oiled Steel (PO), Cold Rolled Coil (CRC), Galvanized Steel (GI), and Pre-painted Galvanized Steel (PPGI). Investment case: Dominant position in Cold Rolled Steel Products; Protection from anti-dumping duties; and Healthy balance sheet with attractive dividend yield. Forecast We estimate the company to record core profit growth of 7.7%, 2.7% and 1.5% to RM64.4mn, RM66.2mn, and RM67.1mn for FY18, FY19 and FY20 respectively, supported by higher plant utilization rate. The Malaysia operation will still remain as the main revenue generator and we foresee the revenue contribution from other regions will remain flattish. Nevertheless, we believe this stock remains as an attractive dividend yield play due to its generous dividend policy of paying not less than 50% of its annual profit after tax, together with its consistent profit track record, with FY14 as the only exception. Valuation We initiate coverage on CSC with a target price of RM1.70, based on 10x CY18 EPS. With a potential upside of 19.7%, we recommend a BUY call on CSC. Earnings Summary www.taonline.com.my Share Information Bloomberg Code Bursa Stock Code Listing Share Cap (mn) Market Cap (RMmn) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta (x) Major Shareholders (%) CSCS MK CSCSTEL 5094 Main Market 380.0 539.6 2.05/1.33 680.7 36.1 0.7 China Steel Asia PAC- 46.30 Lembaga Tambung Haji- 7.39 Tan Kit Pheng- 3.25 Forecast Revision FY18 Forecast Revision (%) Net profit (RMm) Consensus (RM'mn) TA's / Consensus (%) Previous Rating FY19 - - 64.4 68.3 94.3 66.2 75.5 87.7 - Financial Indicators Net Debt / Equity (%) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth FY18 FY19 net cash 25.2 5.6 7.0 2.2 0.6 net cash 5.8 24.3 6.9 2.3 0.6 CSCSTEL (11.8) FBM KLCI 0.4 (6.6) (19.3) (21.2) 6.5 5.2 6.3 (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg Page 1 of 16
14. 22-Mar-18 About the Company CSC Steel Holdings Berhad (formerly known as Ornasteel Holdings Bhd) is principally involved in manufacturing of flat steel products. The group was incorporated in Malaysia on 20 January 2004, and subsequently it was listed on the Main Board of Bursa Malaysia Securities Berhad on 30 December 2004. Based on the value chain of the steel industry, the group is considered as a midstream player that imports raw materials from the upstream steel players and sell it to the downstream steel manufacturers. The main source of its revenue is generated from 4 main core products, which are PO, CRC, GI, and PPGI. The GI products are sold under the brand name “Realzinc” and “Realzinc Enhance” whereas the PPGI products are sold under the brand name “Realcolor”. Exhibit 1: Core Products and Applications Source: Company, TA Research The core products mainly serve the steel service centres, drum makers, roll formers for roof sheet and cladding, and pipe and tube makers. The sales revenue is mainly domestic driven with about 18% of export sales for FY16. The group has only one manufacturing plant in Melaka with a total capacity to produce 480,000mt (inclusive 40,000mt of PO) of cold rolled steel. The group also has the capacity to produce 240,000mt of GI and 120,000mt of PPGI annually. For more information on products and services, please refer to Exhibit 13. Page 2 of 16
15. 22-Mar-18 The Shareholders and Management The management is led by the Group Managing Director , Mr. Chen Huo-Kun, who has more than 30 years of working experience in steel manufacturing industry as he had been employed with China Steel Corporation, Taiwan since 1983 before being appointed to the Board of CSC in 2016. He is supported by Executive Director cum Vice President of Finance Division, Mr. Tan Chin Teng, who is mainly responsible for the group’s finance & accounting function. He has more than 30 years of finance and accounting experience of which more than 25 years are in a managerial position overseeing financial matters. Besides, the management team also includes Mr. Hsu Tse-Wei, Vice President of Production Division, Mr. Ten Ling Piew, Vice President of Commercial Division, Mr. Koh Kang Huan, Assistant Vice President of Product Division, and Mr. Juang Der-Feng, Assistant Vice President of Product Division. All of them have vast working experience for their respective functions. Based on latest available data, the group is 46.3%-owned by China Steel Corporation, which is the main shareholder and supplier of raw materials to CSC. Investment case Dominant position in cold rolled steel products; Protection from anti-dumping duties; and Healthy balance sheet with attractive dividend yield. Dominant Position in Cold Rolled Steel Products The temporary closure of Megasteel, which used to be the largest cold rolled steel player in Malaysia with a production capacity of 1.45mnmt, presented a great opportunity for CSC together with other smaller cold rolled steel producers to fill in the supply gap. Exhibit 2: Plant Capacity of Domestic Cold Rolled Steel Players Exhibit 3: Installed Capacity of Domestic ColdRolled Market Source: Malaysia Iron & Steel Federation (MISIF) , TA Research *Megasteel has ceased its operation since year 2016 Source: MISIF, TA Research Excluding the installed capacity from Megasteel, with the annual cold rolled steel production capacity of 480,000mt, CSC has since become the dominant cold rolled steel player by enjoying 45% share of the estimated total annual production capacity of 1.06mnmt. Page 3 of 16
16. Exhibit 4 : Domestic Cold-Rolled Sheets and Coils Source: MISIF, TA Research Based on our channel checks, the current annual consumption for cold-rolled sheets and coils in Malaysia is hovering about 1.6mnmt but the domestic actual annual production is only about 700,000mt – 800,000mt. The gap has been consistently filled in by imports, partly due to the grades and qualities, which are not available locally. The wide supply and demand gap has presented an attractive opportunity for the domestic cold rolled steel players. With the temporary absence of Megasteel and potential more stringent safeguard measures to be implemented in due course, the domestic cold rolled steel players are expected to fill in the supply gap. We believe CSC, being the dominant cold rolled steel player in Malaysia, will set to benefit the most. Exhibit 5: Overall Plant Utilisation Rate of CSC Source: Company, TA Research Based on latest available data from management, the plant utilization rate has been consistently surpassed 80% for the past few years. We believe the utilization rate will continue to improve due to strong demand and wide applications of cold rolled steel products given that limited large-scale cold rolled steel players in Malaysia. Previously, Megasteel was the major supplier of Hot Rolled Coils (HRC), the major raw material, for the domestic cold rolled steel players. The shutdown of Page 4 of 16
17. 22-Mar-18 Megasteel has created some impacts to the domestic cold rolled steel players as they need to source the raw materials from foreign countries , which require longer lead time. Hence, one of the core competitive advantages CSC has over its competitors is it can enjoy the benefit of uninterrupted supply of raw materials from its major shareholder, China Steel Corporation, and its related companies in Vietnam, which are the upstream players that involve in iron and steel making. Therefore, with the support from the parent company in terms of raw materials, technology, management and technical expertise, CSC manages to become one of the most efficient cold rolled steel players in Malaysia. Exhibit 6: Price of Hot Rolled Sheet vs. Cold Rolled Sheet in China Source: MISIF, TA Research Since China is the largest steel producer in the world, it sets the benchmark for the international prices. The spread between the HRC and CRC may provide good reference point on the potential margin that cold rolled steel players may be able to extract. Generally, the price of steel products have been trending up ever since the capacity elimination exercise in China. The spread has been stabilising for the past 2 years, giving some indications that the future earnings for cold rolled steel players may likely to maintain, as China has reaffirmed its commitment to perform the supply-side reform. Protection from Anti-Dumping Duties Due to petitions filed by some of the cold rolled steel players, Malaysia government has finalised several safeguard measures in order to provide additional layer of protection to the domestic flat steel players. Exhibit 7: Anti-Dumping Duties Imposed by Malaysia Source: MISIF, MITI, TA Research Page 5 of 16
18. 22-Mar-18 Given most of the core products under CSC are protected under the antidumping duties , we believe the group is the primary beneficiary from safeguard duties as it should help them to ease off the competition from China, Korea and Vietnam. However, the media recently reported that the domestic cold rolled steel players were complaining about the increasing cold rolled steel imports from India and Japan as it had been hurting the industry. As a result, the domestic cold rolled steel players have recently filed a petition to the Ministry of International Trade and Industry (MITI) with the following proposed measures: Restrictions on imports or the implementation of quotas; Import licensing by MITI; Anti-dumping duties be made retrospective to the date of the breach; Any application for cold rolled steel imports be made through Mesyuarat Mingguan Besi Keluli (a technical committee to evaluate import duty exemption applications for raw materials of iron and steel products); and An independent, tier-one audit firm be appointed to ensure importers do not manipulate specifications or quality standards. The final decision will be made in due course. Should any of the proposed measure is being materialised, it will provide some relief to the domestic cold rolled steel players. We expect CSC, being the domestic market leader with about 45% share of the total production capacity in cold rolled steel, to benefit the most as it will help to maintain its margin and profitability. Healthy Balance Sheet with Attractive Dividend Yield Since steel industry is highly cyclical and the profitability is highly correlated with the international steel and raw material prices, having solid balance sheet could act as a buffer to withstand any shock from the market dynamic. We notice that CSC has been in net cash position since 2006. Based on the latest 4QFY17 results, the group does not have any borrowings with a net cash per share of RM44sen. In addition, CSC has fixed a dividend policy of paying not less than 50% of its annual profit after tax. Exhibit 8: Historical Dividend and Dividend Payout Ratio Source: Company, TA Research If we assume a constant dividend payout of 55% for FY18-FY20 respectively, it will translate into 9.3sen/share, 9.6sen/share and 9.7sen/share, or dividend yields of 6.6%, 6.7% and 6.8% for FY18, FY19 and FY20 respectively. Page 6 of 16
19. 22-Mar-18 Target Market More than 80 % of CSC’s sales revenue is derived from domestic market. Its primary local customers are service centres, drum makers, manufacturers, and pipe and tube makers. Meanwhile, we believe export sales will remain flattish as we foresee more and more countries might be implementing anti-dumping measures in order to protect their local steel players from dumping of steel products. Moving forward, we believe the group will put more effort in promoting the value added products such as GI and PPGI as both products are able to generate better margins. Industry Outlook Being a mid-stream steel player, the outlook of CSC is highly dependent on the raw materials cost and the momentum of its downstream customers from various segments such as automotive and manufacturing industries. Since the steel consumption for cold rolled steel products is expected to remain firm at about 1.6mnmt per annum, with the domestic annual production of 700,000mt – 800,000mt, we believe the market demand is sufficient to be shared among the few domestic cold rolled steel players. While we are slightly concerned on the cheap influx from foreign countries, we believe Malaysia government will intervene if there are evidences that the local cold rolled steel players are significantly affected by the dumping activities. On the other hand, China has reinforced its commitment to perform the supply-side reform on its steel industry, which will provide a strong support to the steel prices. According to the media, China had already eliminated 76.7% of its targeted 150mnmt of capacity cut on the general steel production. Nevertheless, the implementation of hefty import tariffs against all the steel products imported into US is expected to affect the global steel trading landscape. Thus, the international prices for all the steel products are expected to be volatile. Financial Performance Exhibit 9: Historical and Projected Financial Performance Source: Company, TA Research Page 7 of 16
20. 22-Mar-18 For FY12-FY16 , CSC’s revenue had been consistently hovering between RM1bn and RM1.2bn. However, the net profit fluctuated in tandem with volatility in the prices of steel products. For FY12, the group’s net profit declined 5.2% YoY to RM28.0mn from RM29.6mn as the prices of flat steel products had generally trended downward. In the subsequent year, the group managed to maintain similar net profit of RM29.4mn as the steel prices remain depressed due to oversupply of steel products internationally and the influx of cheap imports into Malaysia. Net margin was relatively low at about 2% level. FY14 perhaps was a challenging year for CSC as it had incurred first net loss of RM7.8mn since it was listed from 2004. The financial performance was still highly affected by the imbalance of demand and supply globally due to dumping from China, which had caused the steel prices to tumble. The impact of unsustainably low pricing environment had caused steel producers worldwide, including CSC to bleed. To rub even more salt to the wound, the exports sales of CSC remained lacklustre due to weakening currencies of major economies in the South East Asia region. Nevertheless, the group still managed to maintain more than 80% of plant utilisation rate as the group adjusted the product mix accordingly and focused on promoting coated steel products in order to cater for wider market segments. The group returned to the black in FY15 by recording net profit of RM39.1mn. This was a result of lower material cost as the group sourced lesser higher priced HRC locally due to supply disruption from the domestic HRC supplier. The gross profit margin shot up to 7.6% in FY15 from 1.0% in FY14 although steel prices remained at depressed level. For FY16, the group recorded a strong performance as net profit surged 75.8% YoY to RM68.7mn as a result of further reduction in cost of production as the group shifted to source more HRC from its major shareholder instead of relying on the domestic supply. This can be evidenced from the expansion of gross margin to 10.0% from 7.6% a year ago. For the following year, the group posted an impressive 27.8% YoY increase in revenue to RM1,323.3mn thanks to higher steel prices, despite sales volume was marginally lower. However, the higher steel prices also resulted in higher raw material cost since the group was using HRC as the main feedstock to produce all the core products. Coupled with higher overhead and distribution costs, the net profit declined 12.9% YoY to RM59.8mn. Moving forward, we expect the group would be able to maintain its earnings backed by i) sustainable domestic demand for cold rolled steel products, ii) capacity elimination from China, and iii) existing or new anti-dumping duties protection in Malaysia. Capex As far as capex is concerned, we expect CSC to allocate about RM20mn to RM30mn a year for maintenance capex and plant automation. Forecast We estimate the company to record core profit growths of 7.7%, 2.7% and 1.5% to RM64.4mn, RM66.2mn, and RM67.1mn for FY18, FY19 and FY20 respectively, supported by higher plant’s utilization rates of 90%, 91% and 92%. The Malaysia market is expected to remain as the main revenue generator for CSC and we foresee the revenue contribution from other regions to remain flattish. We see CSC as an attractive dividend yield stock due to its generous Page 8 of 16
21. 22-Mar-18 dividend policy with a dividend payout ratio of not less than 50 %. All in, our FY18-20 earnings projections are premised on the key assumptions below: Exhibit 10: Key Assumptions for Earnings Projections Source: TA Research Key Risks Potential risks to our recommendation include: i) Dumping from Foreign Countries The current anti-dumping duties are only applied to selected countries such as China, Vietnam, and South Korea. Therefore, there is a potential risk that increasing import from those foreign countries that are exempted from current duties will affect the profitability of the domestic cold rolled steel players. ii) Escalation of Raw Material and Energy Cost CSC is currently relying heavily on HRC, zinc, electricity and natural gas for its manufacturing processes. As such, the group is exposed to the risk of escalation of raw materials and energy cost, which might adversely affect its margin, if it is unable to pass on the cost escalation to its clients. iii) Foreign Exchange Risk Given the major raw materials such as HRC and other chemical substances together with the export sales are denominated in USD, the fluctuation of USD against MYR will affect the bottom line of the group. Valuation Peer comparison is made between CSC with other cold rolled steel players listed on Bursa Malaysia. We have assigned a target PE multiple of 10x for CSC after considering: a. b. c. d. Dominant position in cold rolled steel industry with 45% share of the estimated total industry production capacity; Strong support from its major shareholder, an integrated steel player, for raw material sourcing, technical and management expertise; Attractive dividend policy with minimum 50% of pay-out ratio; and Healthy balance sheet with net cash of 44sen/share. We derive a target price of RM1.70, based on 10x CY18 EPS, and initiate coverage on CSC with a BUY recommendation. Page 9 of 16
22. 22-Mar-18 Exhibit 11 : Peer Comparison Stock MYCRON YKGI EMETALL AVERAGE CSC Share price (RM) 0.42 0.375 0.65 Market Cap (RMmn) 119.1 130.8 122.4 EPS* (sen) 9.6 -4.8 10.2 1.42 539.6 16.2 P/E ratio (x) 4.4 N/A 6.4 5.4 8.8 DPS (sen) 0.0 0.0 2.5 10.0 Div Yield^ (%) 0.0 0.0 3.8 3.8 7.0 Net gearing (%) Net Cash 62.1 36.9 Net Cash P/B ratio (x) 0.3 0.7 0.6 0.5 0.6 Note: *based on latest 4 rolling quarters of core earnings ^based on previous financial year [ 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] Page 10 of 16
23. 22-Mar-18 Earnings Summary Profit & Loss (RMmn) YE Dec 31 (RMmn) Revenue 2016 2017 2018F 2019F 2020F 1035.2 1323.3 1262.7 1284.4 1304.7 Balance Sheet (RMm) YE Dec 31 2016 2017 2018F 2019F 2020F Fixed assets 220.7 208.1 201.2 195.3 190.4 68.9 68.8 68.8 68.8 68.8 EBITDA 106.4 105.1 108.7 109.9 110.2 Dep. & amortisation (32.6) (34.2) (31.9) (30.9) (30.0) NCA 289.6 276.9 269.9 264.1 259.1 0.0 0.0 0.0 0.0 0.0 Cash 269.5 161.0 256.8 278.7 292.1 Net finance cost PBT 82.1 76.1 83.7 85.9 87.2 Taxation (13.4) (16.3) (19.2) (19.8) (20.0) Net profit 68.7 59.8 64.4 66.2 67.1 Core net profit 68.7 59.8 64.4 66.2 67.1 14.0 10.0 9.3 9.6 9.7 9.9 7.0 6.6 6.7 6.8 GDPS (sen) Div Yield (%) Others Others 326.5 445.2 397.8 411.6 433.5 CA 596.0 606.3 654.7 690.4 725.6 Total assets 885.6 883.1 924.6 954.5 984.8 ST borrowings Other liabilities Cash Flow (RMm) YE Dec 31 2016 2017 2018F CL PBT 82.1 76.1 83.7 2019F 2020F 85.9 87.2 LT borrowings Shareholders' funds 0.0 0.0 0.0 0.0 0.0 57.0 45.2 57.7 57.8 57.9 57.0 45.2 57.7 57.8 57.9 808.6 819.2 848.2 877.9 908.1 0.0 0.0 0.0 0.0 0.0 18.8 Non cash expenses 35.7 40.6 24.5 23.0 22.1 Other LT liabilities 20.0 18.8 18.8 18.8 Non Operating expenses (18.3) (18.5) (19.2) (19.8) (20.0) NCL 20.0 18.8 18.8 18.8 18.8 9.4 (142.1) 59.5 (13.7) (21.8) Total capital 885.6 883.1 924.6 954.5 984.8 Operational cash flow 108.9 (43.9) 148.4 75.4 67.4 Ratio YE Dec 31 2016 2017 2018F 2019F 2020F EBITDA Margins (%) 10.3 7.9 8.6 8.6 8.4 Core EPS (sen) 18.6 16.2 17.0 17.4 17.7 EPS Growth (%) 76.5 (13.1) 4.7 2.7 1.5 7.6 8.8 8.4 8.2 8.0 14.0 10.0 9.3 9.6 9.7 9.9 7.0 6.6 6.7 6.8 Changes in WC Capex (26.4) (21.9) (25.0) (25.0) (25.0) Others (15.6) 7.7 7.8 7.8 7.8 Investment cash flow (42.0) (14.3) (17.2) (17.2) (17.2) Debt raised/(repaid) 0.0 0.0 0.0 0.0 0.0 (29.5) (51.7) (35.4) (36.4) (36.9) (0.1) 1.4 0.0 0.0 0.0 (29.6) (50.3) (35.4) (36.4) (36.9) 0.8 0.0 0.0 0.0 0.0 Dividend Others Financial cash flow Forex effect PER (x) GDPS (sen) Div Yield (%) Net cash flow 38.1 (108.5) 95.8 21.9 13.4 Beginning cash 231.4 269.5 161.0 256.8 278.7 Net cash (RMmn) 269.5 161.0 256.8 278.7 292.1 Ending cash 269.5 161.0 256.8 278.7 292.1 Net gearing (%) (33.3) (19.7) (30.3) (31.8) (32.2) ROE (%) 8.7 7.3 7.7 7.7 7.5 ROA (%) 7.8 6.8 7.0 6.9 6.8 NTA (RM) 2.2 2.2 2.2 2.3 2.4 P/NTA(x) 0.6 0.6 0.6 0.6 0.6 Page 11 of 16
24. 22-Mar-18 Appendix : Exhibit 12: Corporate Structure Source: Annual Report 2016 Page 12 of 16
25. 22-Mar-18 Exhibit 13 : Core Products and Applications Page 13 of 16
26. 22-Mar-18 Source : Company, TA Research Page 14 of 16
27. 22-Mar-18 Exhibit 14 : Overview of the Manufacturing Process Flow Source: Company Website Exhibit 15: Manufacturing Process Flow for Hot-Dipped Galvanized Steel Source: Company Website Page 15 of 16
28. 22-Mar-18 Exhibit 16 : Manufacturing Process Flow for Pre-Painted Galvanized Steel Source: Company Website 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 Thursday, March 22, 2018, the analyst, Chan Mun Chun, 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 16 of 16
29. ECONOMIC UPDATE Thursday , March 22, 2018 FBMKLCI: 1,865.80 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Malaysian Economy Inflation Softened Further in February 2018 Shazma Juliana Abu Bakar Farid Bin Burhanuddin Tel: +603-2167 9608 Tel: +603-2167 9220 shazma@ta.com.my farid@ta.com.my www.taonline.com.my February 2018 review Growth of Malaysia’s Consumer Price Index (CPI) turned out to be way below expectations, rising by only 1.4% YoY in February 2018 (consensus: 1.8% YoY, TA forecast: 1.9% YoY). The annual gain was the slowest since July 2016, underpinned by lower cost of food segment and decline in transportation cost reflecting lower pump prices during the month. High base effect played some role as well. Core inflation (which excludes volatile items of fresh food, as well as administered prices of goods and services) also moderated to 1.8% YoY in February 2018 – vs. January’s 2.2% YoY gain. On a monthly comparison, CPI was flat at 0.0% versus 0.3% MoM rise in January 2018. Details showed softer growth prices for all CPI sub-groups, with negative growth in the Clothing & Footwear; Communication; and Transport. - Transport Index (14.6% of total CPI) declined by 0.3% YoY (January 2018: +5.7% YoY), the first drop since December 2016 due to lower petrol pump prices during the month. Details showed that sub-component Fuels & Lubricants for Personal Transport Equipment (which carries about 8.5% of the total CPI basket), moderated further to 1.6% YoY (Jan18: +8.5% YoY) during the month. This was mainly due to lower average retail pump price, as it decreased by 0.2% YoY, much slower than 8.9% YoY gain tallied in January 2018. To recap, the average retail pump price stood at RM2.34/litre in February 2018 (Jan18: RM2.38/litre). Also, we noted that the sub-index Passenger Transport by Air decreased by 1.0% MoM for a 0.4% YoY, probably due to festive season in February 2018. On a monthly basis, the transport index declined by 0.6% MoM. - The Food & Non-Alcoholic Beverages Index (which accounts for 29.5% of total CPI basket) also moderated to 3.0% YoY in February 2018 (Jan18: +3.8% YoY). This was the slowest gain since October 2016. Food sub-index grew by only 3.0% YoY (Jan18: +3.9% YoY) due to lower costs of most food items such as Meat (Feb18: -0.6% YoY; Jan18: +1.9% YoY); Vegetables (Feb18: +1.7% YoY; Jan18: +7.6% YoY); Milk & Eggs (Feb18: +1.6% YoY; Jan18: +2.5% YoY); and Food Products (Feb18: +1.7% YoY; Jan18: +1.9% YoY). - Others showed cost of Restaurant & Hotel posted a modest growth during the month with a 1.8% YoY gain (Jan18: +2.4% YoY) due the lower Expenditure in Restaurants & Cafés (Feb18: +2.6% YoY; Jan18: +3.1% YoY). In addition Furnishings, Household Equipment & Routine Household Maintenance component eased to 2.1% YoY gain from 2.6% YoY previously, owing to the lower cost of all of it subindices. Outlook Overall, we foresee a mild inflationary pressure this year as prices may continue to stay lower with high base effect to remain. In part, we also attribute the stable prices to the lower pump prices. At the point of writing, the average retail fuel prices decreased by 3.8% YoY and 2.9% MoM to RM2.28/litre in March 2018 vs. RM2.34/litre in February 2018 and RM2.37/litre in March 2017. This could translate to another month Page 1 of 3
30. 22-Mar-18 contraction in the Transport index , thus pulling down the headline inflation lower in March 2018. As such, we maintain our full-year 2018 CPI projection at 2.6% YoY vs. 3.7% YoY in 2017. With that, we also believe that BNM may maintain OPR during the next Monetary Policy Meeting (MPC) which commences in May 2018. No change to our year end OPR target of 3.25% as the central bank came in with a neutral tone in the latest MPC meeting as well as the expectation of moderate inflation rate going forward and moderate consumer spending this year. Figure 1: CPI Sub-components for 6 Months (September 2017 – February 2018) YoY % CPI Components Wt 2017 YoY % 100.0 MoM % 3.7% Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 YTD18 Consumer Price Index (CPI) 4.2% 3.7% 3.4% 3.5% 2.7% 1.4% 0.3% -0.1% 0.7% 0.1% 0.3% 0.0% 2.0% Food & Non-Alcoholic Beverages 29.5 4.0% 4.3% 4.4% 4.0% 4.1% 3.8% 3.0% 3.4% Alcoholic Beverages & Tobacco 2.4 0.2% 0.1% 0.1% 0.2% 0.2% 0.2% 0.1% 0.2% Clothing & Footwear 3.2 -0.3% -0.3% -0.4% -0.5% -0.5% -0.3% -0.7% -0.5% Housing, Water, Electricity, Gas & Other Fuels 23.8 2.2% 2.4% 2.4% 2.2% 2.2% 2.2% 2.0% 2.1% Furnishings, Household Equip. & Routine Household Maintenance 4.1 2.1% 2.8% 2.6% 2.5% 2.4% 2.6% 2.1% 2.4% Health 1.9 2.5% 2.5% 2.4% 2.2% 2.3% 2.3% 2.1% 2.2% Transport 14.6 13.2% 15.8% 12.1% 10.8% 11.5% 5.7% -0.3% 2.7% Communication 4.8 -0.4% -0.3% -0.4% -0.5% -0.5% -0.6% -0.5% -0.6% Recreation Services & Culture 4.8 1.9% 0.4% 0.4% 0.6% 0.5% 0.5% 0.4% 0.4% Education Restaurants & Hotels 1.3 1.7% 1.6% 1.6% 1.5% 1.7% 1.2% 1.1% 1.2% 2.9 2.5% 2.6% 2.7% 2.8% 2.6% 2.4% 1.8% 2.1% Miscellaneous Goods & Services 6.7 1.2% 1.1% 1.2% 0.7% 0.7% 0.9% 0.4% 0.6% Source: DOS, TA Securities Malaysia: Consumer Price Index Figure 2: CPI vs. Core-CPI (January 2015 – February 2018) Figure 3: Average Fuel Price (Week 1 – Week 51) *Week 1 start on 30 March 2017 Source: DOS, TA Securities Source: DOS, TA Securities Page 2 of 3
31. 22-Mar-18 Figure 4 : Average Fuel Price Difference (January 2015 – March 2018) Source: DOS, TA Securities Figure 5: Malaysia Real Interest Rate (January 2015 – February 2018) Source: DOS, TA Securities 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 3 of 3
32. ECONOMIC UPDATE Thursday , March 22, 2018 FBMKLCI: 1,865.80 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* US Economy Fed Raises Rates, Expects More Hikes in 2019 Shazma Juliana Abu Bakar Tel: +603-2167 9608 shazma@ta.com.my www.taonline.com.my Fed Increased Interest Rate for the Third Time This Year The US Federal Reserve continued its gradual pace of interest rate hikes in yesterday’s FOMC meeting. The Fed’s key benchmark rate now sits at 1.50% to 1.75% - 25 basis points higher than before. The increase marked the first one of this year, following three rate hikes in 2017. Since it began bumping up rates back in 2015, the Fed has now made six increases. The vote to raise interest rates at the meeting, the first led by Fed Chairman Jerome Powell, was unanimous, with all eight participants in favour of the rate increase. The decision was also within market and our expectations. On Economic Performance and Projections In approving the rate hike, the committee said that since it met in January 2018, the US job market has continued to strengthen, and economic activity has been rising moderately. The US economy appears to have lost further momentum at the start of the year, with recent data showing soft readings of retail sales, home sales, durable goods orders and industrial production. In addition, the goods trade deficit widened last month as exports fell. 1Q18 real growth is expected to be weaker than the fourth quarter of last year, which grew by 2.5% annualized QoQ. However, the pace of growth is likely to accelerate for the rest of 2018 as the stimulus from a USD1.5 trillion tax cut package and increased government spending kicks in. The below are new macroeconomic projections that accompanied the rate announcement. - Real GDP Growth and Outlook Officials raised their estimates of economic growth this year and next, likely reflecting an increase in federal spending Congress approved last month. In February 2018, Congress approved a USD300bn spending bill that could add around 0.4%-point to GDP this year and next (according to market estimates), on top of last year’s tax cuts that could add a similar boost to output over the same period. The committee collectively raised its estimated US growth this year to 2.7%, up from 2.5% in its December’s projection. It also sees a stronger economic growth in 2019, with real GDP to grow by 2.4% (previous projection: 2.1%). Their forecasts beyond that — 2.0% growth in 2020 and 1.8% growth over the long run — remained as in the previous projection. - Jobless rate The unemployment rate, which currently sits at 4.1% (a 17-year low) is projected to ease further to 3.8% at the end of the year (December projection: 3.9%) and to dip further to 3.6% at the end of 2019 and 2010 (earlier projections: 3.9% and 4.0%, respectively). The Fed’s outlook shows that officials expecting the labor sector to exceed what they consider full employment. This may suggest that it shall be a source of higher inflation pressures by way of rising wages. Since January 2018, glimmers of rising wages have Page 1 of 4
33. 22-Mar-18 jolted financial markets , illustrating market anticipation of stronger price pressures going forward. Average hourly earnings had risen by an average 2.5% YoY YTD18. - Inflation Reaching its 2.0% inflation goal, however, has remained elusive for the Fed – that rate is not expected to be hit until 2019. Inflation has remained below that target for most of the last six years. Fed officials expect inflation, as measured by the personal consumption expenditures price index (PCE inflation), will rise to 2.0% next year, the projection as before. However, they now see inflation going to a 2.1% gain in 2020. Meanwhile, so-called core prices, which strip out food and energy factors, are now seen at a 2.1% rise in 2019 and 2020. Figure 1: Key Macroeconomic Projections by Federal Reserve Board members and Federal Reserve Bank Presidents (as at March 2018) Source: US Federal Reserve Note: 1. For each period, the median is the middle projection when the projections are arranged from lowest to highest. When the number of projections is even, the median is the average of the two middle projections. 2. The central tendency excludes the three highest and three lowest projections for each variable in each year. 3. The range for a variable in a given year includes all participants’ projections, from lowest to highest, for that variable in that year. 4. Longer-run projections for core PCE inflation are not collected. Interest Rate Outlook The Fed still pencilled in a total of three rate increases for this year although more Fed officials are expecting more moves this year. Seven of fifteen participants now expect at least four rate increases this year, an increase from four of sixteen participants at the December meeting, especially if the economy performs in line with their expectations. Meanwhile, eight expected three of fewer increases to be warranted. Including yesterday’s move, market expect the next two rate hikes would be in the second half of the year. As economic prospect is getting rosier, most Fed officials also project the Fed would need to raise rates at least another three times next year. At the December meeting, officials projected around two increases would be needed in 2019. Officials also pencilled in two rate increases in 2020, which would leave them in a range between 3.25% and 3.50%. Page 2 of 4
34. 22-Mar-18 Figure 2 : FOMC participants’ assessments of appropriate monetary policy: Midpoint of target range or target level for the federal funds rate (As at March 2018) Source: US Bloomberg Figure 3: US Interest Rate Probability (as at 22 March 2018) Source: Bloomberg Our View Despite the US interest rate hike and gradual monetary tightening going forward, we do not foresee any changes in Malaysia’s Overnight Policy Rate (OPR) this year. In fact, we do not see much pressures for Bank Negara Malaysia to change our accommodative monetary policy stance this year after the last hike in January 2018. This follows moderate inflationary pressures as indicated by soft consumer prices, modest growth in real GDP, still capital inflows of RM2.1bn YTD18 and strong Ringgit against the USD. So far, the Fed’s move is still within market expectations. Unless the US Fed turns very aggressive on its interest rate hikes, there is currently “positive carry” in terms of the differences between Malaysia and US interest rates and between domestic interest rate and inflation rate which should not necessitate further interest rate hike this year. Page 3 of 4
35. 22-Mar-18 Figure 4 : The Interest Rate Differential Between FFTR and OPR (2010 – March 2018) % OPR FDTR 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 0.0 Source: Bloomberg, TA Securities 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 www.ta.com.my Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 Page 4 of 4
36. Thursday , 22 March, 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. D ai l y Te ch n ic a l St o ck s P ic ks 2. D ai l y Mon e y F low of T e ch n i c a l St o ck Pi ck s 3. D ai l y Mon e y F low of FB MK L CI 4. D ai l y S t o c k S c r e e n 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
37. Technical View Thursday , March 22, 2018 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Technical Stock Picks Malaysia FBM KLCI: 1,865.80 (+9.41, +0.51%) Chartist: Stephen Soo Name F BMKLCI AFFIN ABMB AMBANK AXIATA CIMB DIGI GAMUDA GE NTING GE NM IHH IOICORP MALAKOF F MAXIS MAYBANK MBS B R HBBANK S IME TE NAGA TM WPR TS AIRAS IA AIRAS IA X ARMADA BINAPURI CMS B DIALOG E CO WORLD E KOVE S T GADANG HS L IS KANDAR KIMLUN KKBE MUDAJ AYA MRCB NAIM S AP URA E NE RGY S UNCON UE MS UMWOG WAS E ONG WCT Close 21/Mar 1865.80 2.45 4.33 4.16 5.49 7.30 4.75 5.08 9.04 5.17 6.09 4.67 0.88 5.90 10.28 1.14 5.41 2.62 15.78 5.50 3.58 4.06 0.40 0.85 0.33 4.10 2.84 1.01 0.97 0.92 1.54 1.34 2.09 0.95 0.74 0.99 1.00 0.52 2.09 0.99 0.31 1.59 1.33 Change 9.41 0.00 0.00 0.02 0.00 0.10 0.13 0.03 0.05 -0.03 -0.11 0.01 0.01 0.02 -0.06 0.00 0.09 0.02 0.02 0.04 0.02 -0.05 -0.01 0.01 0.00 -0.04 0.02 -0.07 0.02 0.01 -0.01 -0.05 -0.01 0.00 0.01 -0.01 -0.01 0.03 -0.04 -0.02 -0.01 0.00 0.03 Tel: +603-2167 9607 Bollinger Bands Lower Mid Upper 1,865.80 1,856.84 1,835.98 1,853.51 1,871.03 High 2.46 4.34 4.16 5.53 7.30 4.75 5.08 9.04 5.27 6.13 4.68 0.89 5.93 10.40 1.16 5.42 2.66 15.80 5.52 3.58 4.11 0.41 0.86 0.33 4.14 2.90 1.09 0.98 0.93 1.55 1.38 2.10 0.95 0.75 1.01 1.05 0.53 2.13 1.00 0.32 1.61 1.34 Low 2.43 4.28 4.12 5.44 7.22 4.62 5.05 8.92 5.16 6.06 4.62 0.87 5.77 10.28 1.13 5.32 2.60 15.74 5.46 3.52 4.05 0.40 0.84 0.33 4.04 2.81 1.00 0.96 0.92 1.54 1.34 2.08 0.95 0.73 0.99 1.00 0.49 2.08 0.99 0.31 1.58 1.31 2.20 3.98 3.76 5.21 7.11 4.55 4.92 8.72 5.00 5.95 4.57 0.85 5.65 10.21 1.13 5.23 2.55 15.55 5.39 3.46 3.86 0.38 0.81 0.32 4.05 2.57 1.00 0.94 0.90 1.57 1.27 2.07 0.93 0.70 0.96 0.96 0.37 2.01 0.93 0.29 1.46 1.25 2.39 4.18 4.20 5.45 7.21 4.76 5.02 8.93 5.19 6.06 4.67 0.89 5.89 10.39 1.19 5.35 2.68 15.66 5.76 3.60 4.22 0.41 0.85 0.33 4.22 2.69 1.21 0.99 1.01 1.61 1.36 2.13 0.95 0.82 1.06 1.01 0.57 2.25 1.05 0.31 1.60 1.47 2.57 4.37 4.63 5.68 7.31 4.97 5.11 9.13 5.38 6.17 4.77 0.94 6.13 10.57 1.26 5.47 2.80 15.77 6.13 3.74 4.59 0.44 0.88 0.34 4.40 2.82 1.42 1.03 1.11 1.66 1.44 2.18 0.97 0.93 1.16 1.06 0.76 2.49 1.17 0.34 1.73 1.70 RSI 14d 54.66 65.38 59.92 43.42 52.76 54.61 35.42 53.33 50.54 48.07 62.39 51.83 42.30 49.17 54.93 41.09 50.32 41.97 58.70 30.90 48.79 48.17 50.28 50.23 49.44 46.46 63.18 21.92 43.62 17.57 40.90 56.05 24.20 50.53 24.87 35.22 45.98 33.51 33.25 37.09 46.30 55.29 31.35 stsoo@ta.com.my Moving Averages 10d 30d 50d 1,849.97 1,847.61 1,843.39 2.47 4.24 4.07 5.39 7.21 4.68 5.02 8.92 5.21 6.08 4.69 0.87 5.84 10.40 1.17 5.31 2.63 15.64 5.61 3.55 4.07 0.40 0.84 0.33 4.16 2.70 1.11 0.97 0.96 1.60 1.38 2.10 0.94 0.76 1.02 0.99 0.48 2.15 0.99 0.31 1.56 1.37 2.37 4.16 4.29 5.48 7.14 4.79 4.99 8.93 5.22 6.04 4.64 0.90 5.93 10.29 1.19 5.30 2.69 15.68 5.85 3.59 4.21 0.41 0.84 0.33 4.21 2.68 1.26 0.99 1.02 1.60 1.35 2.15 0.94 0.84 1.07 1.01 0.61 2.33 1.06 0.31 1.53 1.50 2.39 4.18 4.46 5.53 7.04 4.82 5.04 9.14 5.32 6.00 4.60 0.93 5.97 10.14 1.19 5.30 2.74 15.73 5.93 3.56 4.11 0.40 0.84 0.34 4.18 2.67 1.33 1.02 1.07 1.57 1.37 2.19 0.96 0.87 1.13 1.05 0.70 2.41 1.11 0.34 1.47 1.58 www.taonline.com.my DMI DI + 24.30 31.25 24.24 21.97 20.06 24.20 11.88 22.75 10.13 23.70 22.89 18.01 13.04 14.74 18.94 17.61 13.76 17.59 21.54 20.12 10.69 19.93 20.97 13.78 8.96 16.10 24.10 13.45 23.95 6.84 19.06 24.73 22.55 31.30 18.27 14.29 38.44 15.77 14.65 13.39 22.35 21.72 16.05 DI 26.90 16.64 14.49 26.29 25.15 19.39 31.84 12.87 18.31 20.30 11.93 21.41 20.31 28.54 24.53 24.06 19.35 26.60 13.13 28.15 19.35 27.51 18.45 20.80 21.63 18.84 16.28 34.88 21.53 37.35 30.42 14.05 50.15 18.01 44.38 23.13 16.30 30.85 26.83 25.78 18.73 21.74 33.39 ADX 15.00 28.85 22.46 24.37 29.05 22.61 29.29 16.12 23.90 13.71 18.76 15.97 24.99 24.82 28.73 13.13 12.73 23.61 14.69 20.37 15.82 21.69 20.36 19.10 23.17 14.54 15.88 60.16 12.68 43.42 15.69 30.63 28.00 23.64 26.63 24.11 16.12 40.51 33.98 30.79 15.76 18.25 24.28 Diff (2.60) 14.61 9.75 -4.32 -5.09 4.81 -19.97 9.88 -8.18 3.40 10.96 -3.40 -7.27 -13.80 -5.59 -6.45 -5.59 -9.01 8.41 -8.02 -8.66 -7.57 2.53 -12.67 -2.73 7.82 7.82 -21.43 2.42 -30.51 -11.36 10.68 -27.60 13.29 -26.10 -8.84 22.13 -15.08 -12.18 -12.38 3.62 -0.02 -17.34 Line 3.35 0.04 0.04 -0.10 -0.04 0.06 -0.06 0.01 -0.03 -0.01 0.03 0.02 -0.07 -0.06 0.07 -0.01 0.01 -0.02 0.00 -0.12 -0.01 -0.01 0.00 0.00 0.00 -0.01 0.04 -0.07 -0.01 -0.04 0.00 0.02 -0.03 0.00 -0.04 -0.03 -0.01 -0.07 -0.09 -0.03 -0.01 0.03 -0.07 MACD Signal 4.64 0.02 0.02 -0.12 -0.04 0.07 -0.05 0.00 -0.06 -0.03 0.03 0.03 -0.07 -0.05 0.10 0.00 0.02 -0.02 -0.01 -0.11 0.00 0.01 0.00 0.00 0.00 0.00 0.02 -0.07 -0.01 -0.03 0.01 0.01 -0.03 0.00 -0.03 -0.03 -0.02 -0.07 -0.08 -0.03 -0.01 0.04 -0.06 Diff (1.287) DMI MACD Recent Signal SELL SELL DMI MACD Signal Change - 0.018 0.021 0.016 (0.001) (0.013) (0.018) 0.005 0.026 0.018 0.005 (0.012) (0.007) (0.006) (0.033) (0.005) (0.008) (0.003) 0.010 (0.018) (0.007) (0.023) (0.001) (0.002) 0.000 (0.016) 0.015 (0.007) (0.001) (0.008) (0.008) 0.010 0.002 0.001 (0.007) (0.002) 0.003 (0.000) (0.006) (0.002) 0.001 (0.006) (0.014) BUY BUY SELL SELL BUY SELL BUY SELL BUY BUY SELL SELL SELL SELL SELL SELL SELL BUY SELL SELL SELL BUY SELL SELL BUY BUY SELL BUY SELL SELL BUY SELL BUY SELL SELL BUY SELL SELL SELL BUY SELL SELL SELL - BUY BUY BUY SELL SELL SELL BUY BUY BUY BUY SELL SELL SELL SELL SELL SELL SELL BUY SELL SELL SELL SELL SELL BUY SELL BUY SELL SELL SELL SELL BUY BUY BUY SELL SELL BUY SELL SELL SELL BUY SELL SELL BUY SELL - The table above is a compilation of actively traded stocks with some popular technical indicators. The technical BUY/SELL signals on the last four columns are auto generated; the first two being existing or recent signals while the last two represent a signal change from BUY to SELL or the reverse, otherwise no change is indicated by a dash. INTERPRETATION OF TECHNICAL INDICATORS: Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders tend to buy on price breakouts above the upper band, and sell when price breaks down below the lower band. 14-day Relative Strength Index (RSI): A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30-day moving average should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day average is bearish and imply further near-term downside risk. Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day average, and negative if it remains below. A longer-term uptrend is intact if share price sustain above the 50-day average, and is deemed broken if it breaches below this level. Directional Movement Indicator (DMI): The DMI is an indicator of trend strength. A positive DMI difference (DMI diff) value is bullish and indicate a higher DI+ vs. DI-, while a negative DMI diff is bearish due to a lower DI+ vs. DI- (DMI diff = DI+ minus DI-). A crossover of DI+ above DI- triggers a BUY signal, while a SELL signal is flashed when the DI+ crosses below the DI-. The Average Directional Movement Index (ADX) indicates the strength of a trend, whether it is up or down. The higher the value of ADX, the stronger the trend. An ADX value above 25 suggests a trending market or stock, while a value below 20 signal congestion or absence of trend. Daily Moving Average Convergence Divergence (MACD): The MACD diff value is derived from the difference between the MACD line (the 12-day EMA minus the 26-day EMA) and the MACD signal line (the 9-day EMA of the MACD). A positive MACD diff value is bullish, while a negative MACD diff is bearish. A BUY signal is generated when the MACD diff rises above zero, and SELL signal sparked when the MACD diff value falls below zero. Page 1 of 4
38. 22-Mar-18 Technical Comments : Take Profit IHH Healthcare & Sime Darby IHH Healthcare could dip further on profit-taking correction from recent rally, with better supports from the 50-day ma (RM6.00) and 200-day ma (RM5.88), and immediate resistance from the 76.4%FR (RM6.32) and the peak of 30/11/16 (RM6.60). Hook down momentum indicators on Sime Darby implies near-term correction potential towards the 100-day ma (RM2.43), with better support coming from the 200-day ma (RM2.28), while immediate resistance is capped at 76.4%FR (RM2.74) and the peak of 30/01/18 (RM3.06). IHH HEALTHCARE Z RM6.09 (-0.11) BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 6.16 6.05 5.94 10-day 30-day 50-day RM RM RM DAILY MACD BUY Recent Signal BUY Signal Change BUY DMI Recent Signal Signal Change SIME DARBY RM2.62 (+0.02) BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 2.80 2.67 2.54 10-day 30-day 50-day DMI Recent Signal Signal Change 6.07 6.03 6.00 SELL Recent Signal Signal Change RM RM RM DAILY MACD 2.63 2.70 2.74 SELL Page 2 of 4
39. 22-Mar-18 Daily Money Flow of Technical Stock Picks Malaysia Chartist : Stephen Soo No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 Name Tel: +603-2167 9607 Total Money Flow (RM'mn) stsoo@ta.com.my (A) Total 5D MF Prv. Chg www.taonline.com.my (B) Cur. Chg CLOSING PRICE 14-Mar 15-Mar 16-Mar 19-Mar 20-Mar 14-Mar 15-Mar 16-Mar FBMKLCI (36.8) 2.5 (6.5) (8.1) (22.6) (71.4) (1.7) (14.5) 1,857 1,845 1,846 19-Mar 1,848 20-Mar 1,856 Chg 8.45 AFFIN ABMB AMBANK AXIATA CIMB DIGI GAMUDA GENTING GENM IHH IOICORP MALAKOFF MAXIS MAYBANK MBSB RHBBANK SIME TENAGA TM WPRTS AIRASIA AIRASIA X ARMADA BINAPURI CMSB DIALOG ECO WORLD EKOVEST GADANG HSL ISKANDAR KIMLUN KKBE MUDAJAYA MRCB NAIM SAPURA ENERGY SUNCON UEMS UMWOG WASEONG WCT 0.0 (0.1) (0.2) (0.0) (0.3) 0.3 (0.5) (0.5) (1.0) 1.1 2.1 0.6 (0.3) (4.4) 0.1 (0.1) (1.8) (25.3) (0.8) (0.1) (1.6) 0.5 (0.0) 0.0 0.0 0.1 (0.0) 0.3 (0.1) 0.0 (0.2) 0.0 0.0 0.0 0.1 0.0 (0.5) 0.2 0.1 0.1 (0.2) 0.0 (0.0) (0.3) 0.6 0.2 (5.0) (0.2) (0.0) 0.7 (0.8) 0.6 (1.3) 0.2 (0.1) (5.9) (0.2) (0.4) 0.8 6.6 0.3 0.0 (0.7) (0.8) 0.1 (0.0) (0.1) (0.2) (0.0) 0.2 0.0 0.0 (0.2) (0.0) 0.0 (0.0) 0.0 0.0 (3.7) 0.5 (0.0) 0.2 (0.2) (0.1) 0.1 (0.0) (0.1) 1.0 (5.8) (0.1) 1.0 2.1 (0.2) (1.1) (0.4) 0.2 (0.2) (1.2) (0.1) 0.1 (0.2) (10.8) 0.3 (0.1) (0.7) (0.1) 0.4 (0.0) (0.1) 1.8 (0.0) (0.0) 0.0 0.0 (0.5) (0.0) (0.0) 0.0 (0.3) 0.0 (1.0) (0.1) (0.1) (0.0) 0.2 (0.0) 0.0 0.0 0.1 1.1 (2.3) (0.2) 0.5 (0.2) (0.9) 0.3 (0.5) (0.1) 0.0 (1.6) 0.1 (0.6) (0.3) (4.0) (0.0) 0.0 0.6 (0.4) (0.0) (0.0) 0.0 (1.0) 0.0 (0.1) 0.1 0.0 (0.1) 0.0 0.0 (0.0) (0.4) (0.0) (0.2) 0.1 (0.0) (0.1) (0.4) 0.2 0.0 (0.1) (0.7) 1.3 (2.2) 0.4 2.6 (0.3) (0.3) (3.4) 0.0 0.2 (0.1) (7.8) (0.0) (0.6) (2.3) 4.0 0.8 0.1 0.9 (0.4) 0.2 (0.0) (0.0) (2.7) (0.1) (0.4) 0.0 (0.0) (0.1) 0.0 (0.0) (0.0) 0.0 (0.0) (0.0) 0.4 0.2 (0.5) (0.0) (0.1) 0.1 (0.6) (0.3) 3.5 (15.7) 0.2 3.6 1.9 (3.2) (2.6) 0.1 1.1 (0.7) (20.8) (0.1) (1.7) (3.8) (29.6) 0.6 (0.0) (1.5) (1.1) 0.7 (0.0) (0.1) (2.0) (0.1) (0.0) 0.1 0.0 (1.1) 0.0 0.0 (0.1) (0.5) 0.0 (5.4) 1.0 0.3 (0.3) (0.7) 0.0 (0.0) 0.0 0.1 0.1 3.5 (0.1) (0.6) (2.3) (0.8) 1.5 (0.1) (0.3) 0.2 (0.4) 0.2 (0.7) (0.1) 6.8 (0.3) 0.1 1.2 (0.3) (0.5) 0.0 0.1 (2.8) 0.0 (0.1) 0.0 (0.0) 0.4 0.0 0.0 (0.0) (0.0) (0.0) 0.8 0.1 0.1 (0.1) (0.6) 0.2 (0.0) (0.1) (0.7) 0.2 0.1 0.6 2.1 (0.1) 0.7 (3.7) 0.5 0.3 (0.1) (6.2) (0.1) 0.0 (2.0) 8.0 0.8 0.0 0.3 0.0 0.2 (0.0) (0.0) (1.6) (0.1) (0.3) (0.0) (0.0) 0.0 0.0 (0.0) (0.0) 0.4 (0.0) 0.2 0.3 0.2 (0.4) 0.4 (0.3) 2.44 4.30 4.08 5.40 7.24 4.71 5.00 9.05 5.27 6.08 4.86 0.87 5.75 10.44 1.17 5.39 2.65 15.64 5.57 3.53 4.16 0.42 0.83 0.34 4.17 2.77 1.10 0.96 0.95 1.60 1.40 2.10 0.94 0.76 1.01 0.97 0.41 2.20 1.00 1.60 0.30 1.32 2.45 4.14 4.07 5.20 7.22 4.65 5.00 8.90 5.35 6.06 4.68 0.87 5.64 10.36 1.19 5.25 2.62 15.66 5.59 3.64 4.10 0.42 0.84 0.34 4.18 2.73 1.10 0.98 0.94 1.60 1.43 2.10 0.94 0.74 1.01 0.99 0.49 2.14 1.00 1.63 0.32 1.34 2.47 4.32 4.12 5.32 7.22 4.54 5.04 8.95 5.24 6.09 4.58 0.87 5.77 10.32 1.17 5.37 2.70 15.68 5.60 3.52 4.15 0.41 0.82 0.33 4.10 2.78 1.12 1.00 0.94 1.61 1.43 2.10 0.95 0.74 1.00 1.01 0.48 2.11 1.00 1.62 0.31 1.37 2.45 4.32 4.15 5.35 7.26 4.60 5.05 8.99 5.25 6.05 4.61 0.87 5.76 10.32 1.17 5.31 2.66 15.70 5.58 3.54 4.12 0.41 0.84 0.33 4.17 2.80 1.10 0.98 0.92 1.61 1.42 2.10 0.97 0.75 1.01 1.01 0.49 2.12 1.00 1.60 0.31 1.36 2.45 4.33 4.14 5.49 7.20 4.62 5.05 8.99 5.20 6.20 4.66 0.88 5.88 10.34 1.14 5.32 2.60 15.76 5.46 3.56 4.11 0.41 0.84 0.33 4.14 2.82 1.08 0.96 0.92 1.55 1.39 2.10 0.95 0.74 1.00 1.00 0.49 2.13 1.00 1.59 0.31 1.30 0.00 0.01 (0.01) 0.14 (0.06) 0.02 0.00 0.00 (0.05) 0.15 0.05 0.01 0.12 0.02 (0.03) 0.01 (0.06) 0.06 (0.12) 0.02 (0.01) 0.00 0.01 0.01 (0.03) 0.02 (0.02) (0.02) (0.01) (0.06) (0.03) 0.00 (0.02) (0.01) (0.01) (0.01) (0.01) 0.01 0.01 (0.01) 0.00 (0.06) Sources: Bloomberg, TA Securities Daily Money Flow (DMF) Formulation If previous change (A) + current change (B) > 0, then DMF = “IN”; AND if (A) + (B) < 0, then DMF = “OUT”. Money Flow (MF) Calculation The value of money flow is set to zero at the start of the trading day. When a trade is performed, its price is compared to the price of the previous trade (the first trade of the day is compared to the previous day's close). If the prices differ, the money associated with the trade (price times number of shares) is added to or subtracted from the money flow. Additions (inflows, buys) are done on upticks; subtractions (outflows, sells) are done on downticks. Daily Money Flow (DMF) Interpretation In general, money flow trends confirm price trends. As prices rise, money flows are usually positive. As prices fall, money flows are usually negative. A divergence, however, between money flow and price trend can be a signal of a future price trend change. For example, a falling stock price with a positive money flow (IN) can indicate a future rally in the price of the stock. Conversely, a rising stock price with a negative money flow (OUT) implies potential correction in the stock price. Page 3 of 4
40. 22-Mar-18 Daily Money Flow of FBMKLCI Malaysia Chartist : Stephen Soo No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Name FBMKLCI MAYBANK PBBANK TENAGA CIMB PCHEM IHH AXIATA MAXIS HLBANK SIME PLT DIGI NESTLE PETGAS GENTING MISC IOI CORP GENM KLK PETDAG HAP SENG HLFG PPB TM RHBBANK PMETAL SIME YTLCORP KLCCS AMBANK ASTRO (RM'mn) INF LOW OUTF LOW NET FLOW 14-Mar (36.8) (4.4) (2.5) (25.3) (0.3) (0.4) 1.1 (0.0) (0.3) 0.3 (0.2) 0.3 (4.4) (0.0) (0.5) 0.4 2.1 (1.0) 1.9 (0.4) (0.1) 0.3 0.0 (0.8) (0.1) (0.5) (1.8) (0.0) (0.0) (0.2) (0.0) Tel: +603-2167 9607 Total Money Flow (RM'mn) 15-Mar 16-Mar 19-Mar 2.5 (6.5) (8.1) (5.9) (1.2) (1.6) 3.0 3.6 4.1 6.6 (10.8) (4.0) (5.0) (5.8) (2.3) 1.3 6.8 2.0 0.6 0.2 (0.1) 0.4 0.1 (0.2) (0.9) 2.4 0.7 (0.0) (1.3) (0.8) (0.8) 0.7 0.3 (0.0) 0.3 0.3 (0.4) (0.0) 0.8 (0.0) (0.1) 0.6 (0.1) (1.1) 1.0 (0.2) (1.4) 2.8 (0.1) (6.2) 0.8 2.1 0.7 (0.4) (0.2) 1.2 0.0 0.4 0.3 1.0 0.3 0.1 (0.1) (0.2) 0.1 (0.1) (0.1) 0.2 0.3 1.1 0.0 0.3 (3.9) (0.2) 1.0 (0.2) (0.2) (0.0) (0.5) (0.9) 1.6 (0.1) 0.0 (0.1) (1.9) (0.0) (0.6) (1.4) (0.3) 0.0 (0.2) 0.1 (0.1) 20-Mar (22.6) (7.8) (9.1) 4.0 (2.2) (1.8) (3.4) 1.3 (0.1) 0.7 1.0 0.4 0.6 (0.5) (0.3) (0.9) 0.0 (0.3) 0.1 0.9 0.0 (0.3) (0.8) 0.8 (0.6) (2.0) (2.3) (0.2) (0.0) (0.7) 0.9 Total 5D MF (71.4) (20.8) (0.9) (29.6) (15.7) 7.9 (2.6) 3.5 (0.7) 0.4 (0.3) 0.2 (9.9) 2.5 1.9 0.2 0.1 (3.2) 4.0 1.2 0.7 0.1 (1.4) 0.6 (1.7) (4.0) (3.8) (0.2) (0.4) (0.3) 0.8 6.4 18.2 21.1 10.5 10.6 66.7 (43.1) (36.7) (15.6) 2.5 (27.6) (6.5) (18.6) (8.2) (33.1) (22.6) (138.2) (71.4) stsoo@ta.com.my (A) (B) Prv. Chg Cur. Chg (1.7) (14.5) (0.4) (6.2) 0.5 (13.2) 6.8 8.0 3.5 0.1 (4.9) (3.8) 1.5 (3.7) 0.1 0.2 0.2 (0.1) 1.7 0.4 (6.7) 4.8 (0.1) 0.6 7.1 (0.4) (1.0) (0.3) (2.3) (0.1) (0.8) (0.8) (0.1) 0.5 (0.8) 0.7 0.5 (1.5) (0.1) 1.0 (0.4) 0.0 (0.4) (0.1) (2.9) 1.2 (0.3) 0.8 (0.7) 0.0 (1.4) (0.5) (0.1) (2.0) (0.1) (0.3) (0.1) 0.1 0.1 (0.7) (0.3) 1.0 14-Mar 1,857 10.44 23.00 15.64 7.24 8.10 15-Mar 1,845 10.36 23.00 15.66 7.22 8.15 6.08 5.40 5.75 19.30 5.56 4.71 141.00 17.90 9.05 7.13 4.86 5.27 25.20 24.74 9.70 19.10 18.42 5.57 5.39 5.00 2.65 1.44 7.82 4.08 2.33 6.06 5.20 5.64 18.78 5.52 4.65 131.00 18.00 8.90 7.03 4.68 5.35 25.38 24.74 9.70 18.74 18.50 5.59 5.25 4.99 2.62 1.44 7.80 4.07 2.35 OUTFLOW 8 (22) 15 (15) 16 (14) 11 (19) CLOSING PRICE 16-Mar 19-Mar 1,846 1,848 10.32 10.32 23.02 23.12 15.68 15.70 7.22 7.26 8.15 8.15 6.09 5.32 5.77 18.72 5.48 4.54 131.00 18.00 8.95 7.21 4.58 5.24 25.32 24.80 9.70 19.10 18.54 5.60 5.37 4.95 2.70 1.41 7.60 4.12 2.34 6.05 5.35 5.76 18.80 5.50 4.60 129.60 17.86 8.99 7.05 4.61 5.25 25.36 24.80 9.70 19.10 18.54 5.58 5.31 4.96 2.66 1.41 7.40 4.15 2.30 20-Mar 1,856 10.34 23.52 15.76 7.20 8.19 6.20 5.49 5.88 18.70 5.60 4.62 127.90 17.94 8.99 7.30 4.66 5.20 25.40 24.84 9.81 19.00 18.58 5.46 5.32 4.95 2.60 1.40 7.01 4.14 2.16 Chg 8.45 0.02 0.40 0.06 (0.06) 0.04 0.15 0.14 0.12 (0.10) 0.10 0.02 (1.70) 0.08 0.00 0.25 0.05 (0.05) 0.04 0.04 0.11 (0.10) 0.04 (0.12) 0.01 (0.01) (0.06) (0.01) (0.39) (0.01) (0.14) (A+B) DMF OUT OUT OUT IN IN OUT OUT IN IN IN OUT IN IN OUT OUT OUT IN OUT OUT IN OUT OUT OUT IN OUT OUT OUT OUT IN OUT IN Daily Trading Participation COMPANIES INFLOW www.taonline.com.my 12 (18) Date Retail Ins titution Foreign Total 14-Ma r 23.6% 56.0% 20.4% 100% 15-Ma r 16-Ma r 19-Ma r 20-Ma r 21.9% 12.2% 22.6% 19.7% 58.0% 38.5% 55.9% 49.6% 20.1% 49.3% 21.5% 30.7% 100% 100% 100% 100% Sources: Bloomberg, TA Securities Daily Money Flow (DMF) Formulation If previous change (A) + current change (B) > 0, then DMF = “IN”; AND if (A) + (B) < 0, then DMF = “OUT”. Money Flow (MF) Calculation The value of money flow is set to zero at the start of the trading day. When a trade is performed, its price is compared to the price of the previous trade (the first trade of the day is compared to the previous day's close). If the prices differ, the money associated with the trade (price times number of shares) is added to or subtracted from the money flow. Additions (inflows, buys) are done on upticks; subtractions (outflows, sells) are done on downticks. Daily Money Flow (DMF) Interpretation In general, money flow trends confirm price trends. As prices rise, money flows are usually positive. As prices fall, money flows are usually negative. A divergence, however, between money flow and price trend can be a signal of a future price trend change. For example, a falling stock price with a positive money flow (IN) can indicate a future rally in the price of the stock. Conversely, a rising stock price with a negative money flow (OUT) implies potential correction in the stock price. 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 Thursday, March 22, 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 4 of 4
41. Technical View Thursday , March 22, 2018 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Stock Screen Malaysia End Day Census of 21.03.2018 Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my Report Description: The Daily Stock Screen is a retail product which can be a very useful guide for momentum trading and trading ideas. The following list is derived from the screening of more than 1000 stocks currently listed on Bursa Malaysia to identify: the top 20 breakout, 20 breakdown, and 30 ‘potential’ breakout stocks which just climbed above the middle Bollinger band, with potential to appreciate toward the upper Bollinger band. [MIDDLE BOLLINGER RANGEBOUND] List of 30 Potential Breakout Stocks (Short-term BUY for upside toward Upper Bollinger Band or higher to TAKE PROFIT/ SELL) No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Stock Name PANASONIC MANUFACTURING MALA AYER HOLDINGS BHD ATLAN HOLDINGS BERHAD LINGKARAN TRANS KOTA HLDGS SCICOM (MSC) BHD AXIATA GROUP BERHAD KHIND HOLDINGS BERHAD GENTING PLANTATIONS BHD WILLOWGLEN MSC BHD PHARMANIAGA BERHAD BINTULU PORT HOLDINGS BHD INNITY CORP BHD RHB BANK BHD BERMAZ AUTO BHD SHL CONSOLIDATED BHD ALLIANCE BANK MALAYSIA BHD QL RESOURCES BHD MALAYSIA AIRPORTS HLDGS BHD IJ M PLANTATIONS BHD MAGNI-TECH INDUSTRIES BHD WONG ENGINEERING CORP BHD DAIMAN DEVELOPMENT BHD PPB GROUP BERHAD CIMB GROUP HOLDINGS BHD ADVANCE SYNERGY BHD HARRISONS HOLDINGS MALAYSIA ATURMAJ U RESOURCES BHD ECM LIBRA FINANCIAL GROUP BH PAOS HOLDINGS BHD DIALOG GROUP BHD Price 34.54 6.59 4.50 5.76 2.01 5.49 1.92 10.22 1.20 4.20 5.90 0.75 5.41 2.24 2.69 4.33 4.95 8.86 2.30 5.25 1.16 2.18 18.78 7.30 0.16 4.00 0.25 0.52 0.44 2.84 Lower 33.58 6.20 4.18 5.50 1.77 5.22 1.71 9.66 1.07 4.03 5.77 0.52 5.24 1.96 2.55 3.99 4.83 8.65 2.22 4.01 1.02 2.12 17.52 7.12 0.10 3.82 0.19 0.46 0.37 2.56 Middle 34.36 6.56 4.43 5.71 1.97 5.44 1.88 10.00 1.18 4.16 5.88 0.67 5.36 2.13 2.65 4.19 4.91 8.78 2.28 4.65 1.11 2.16 18.16 7.22 0.14 3.92 0.22 0.49 0.41 2.70 Upper 35.14 6.91 4.68 5.92 2.17 5.65 2.05 10.34 1.29 4.29 5.98 0.82 5.48 2.31 2.75 4.39 5.00 8.91 2.33 5.28 1.19 2.20 18.80 7.32 0.17 4.01 0.26 0.53 0.44 2.84 RSI 14-day 49.11 48.79 54.61 53.83 58.51 52.76 50.22 57.72 53.75 54.73 50.03 58.12 55.59 60.09 52.21 59.92 56.42 53.56 47.99 67.65 57.22 56.00 76.90 61.22 64.94 55.37 56.14 62.16 54.61 64.62 10-day 34.41 6.51 4.53 5.65 2.05 5.39 1.81 10.09 1.19 4.18 5.87 0.73 5.31 2.13 2.68 4.24 4.91 8.82 2.26 4.61 1.13 2.15 18.32 7.21 0.15 3.95 0.22 0.49 0.40 2.70 30-day 34.15 6.62 4.42 5.74 1.89 5.48 1.94 9.96 1.15 4.16 5.93 0.66 5.30 2.15 2.66 4.16 4.88 8.79 2.30 4.54 1.10 2.16 17.90 7.14 0.13 3.95 0.23 0.50 0.42 2.68 50-day 35.31 6.78 4.36 5.73 1.80 5.53 2.05 10.10 1.15 4.13 5.95 0.68 5.30 2.20 2.67 4.18 4.84 8.89 2.40 4.82 1.12 2.17 17.71 7.04 0.14 3.96 0.24 0.50 0.43 2.67 Vol 42,000 1,100 1,630,700 709,900 699,500 7,351,300 17,200 426,700 394,900 20,400 1,700 21,100 2,667,800 3,130,900 10,100 2,787,500 2,024,900 5,674,300 151,500 338,300 378,300 50,000 1,430,600 30,964,800 17,923,200 31,000 10,000 97,000 31,000 20,383,100 20-day avg vol 16,000 410 6,755 111,290 343,950 6,050,060 5,495 389,360 383,395 19,795 1,205 16,895 2,023,845 2,533,845 7,610 1,926,585 867,325 3,863,550 68,340 290,300 244,065 18,125 988,265 14,731,020 8,885,260 6,935 1,655 77,435 7,250 14,430,840 Raw data sourced from Bloomberg *Note: To qualify in this list above, the first sorting criteria is stock price must have just climbed or stayed ABOVE the middle Bollinger Band, followed by a second criteria that trading volume for the day must be significantly strong. This is a good watch list for momentum traders looking for short-term BUY ideas, as they are laggards with good upside potential towards the upper Bollinger band or higher to TAKE PROFIT/SELL. Caveat: Some stocks may continue to stay range bound and trade sideways, hence traders should refer to their respective charts to spot accumulation (volume growth) or breakout patterns. INTERPRETATION OF TECHNICAL INDICATORS: Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day, and negative if it remains below this average. 14-day RSI: A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30-day SMA should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day SMA is bearish and imply further near-term downside risk. Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders will buy on price breaks above the upper band, and sell when price breaks below the lower band. Alternatively, a sharp move that originates at one band tends to go all the way to the other band, a useful observation when projecting price targets. Page 1 of 2
42. *Note: To qualify in the breakout list below, the first sorting criteria is stock price must close ABOVE the upper Bollinger Band, followed by a second criteria that trading volume for the day must be significantly higher than the 20-day average volume, which signal a bullish breakout. Caveat: We would caution momentum traders that a highly overbought 14-day RSI reading (> 80) and share price pullback BELOW the upper Bollinger Band are early warning signals to exit buy breakout trades. [UPPER BOLLINGER BREAKOUT] Top 20 Breakout Stocks (Generally BULLISH, but can be short-term TAKE PROFIT/ SELL guide) No Stock Name Price 1 PUBLIC BANK BERHAD 2 CLOUDARON GROUP BHD 3 EDARAN BHD 4 PETRONAS CHEMICALS GROUP BHD 5 WARISAN TC HOLDINGS BHD 6 SHIN YANG SHIPPING CORP BHD 7 UZMA BHD 8 TRIPLC BHD 9 MYETF DJ ISLAMIC TITANS 25 10 COMINTEL CORP BHD 11 GOODWAY INTEGRATED INDUS BHD 12 SEALINK INTERNATIONAL BHD 13 SIN HENG CHAN (MALAYA) BHD 14 MWE HOLDINGS BERHAD 15 BRAHIM'S HOLDINGS BERHAD 16 HCK CAPITAL GROUP BHD 17 PANPAGES BHD 18 METRONIC GLOBAL BHD 19 POLY GLASS FIBRE (MALAYSIA) 20 TPC PLUS BHD Raw data sourced from Bloomberg 23.68 0.35 0.76 8.29 2.15 0.30 1.51 2.44 1.20 0.79 0.29 0.18 0.60 1.63 0.45 1.34 0.28 0.06 0.57 0.42 Bollinger Band RSI Moving Average Lower Middle Upper 22.49 23.01 23.52 0.16 0.23 0.30 0.51 0.61 0.72 7.92 8.09 8.26 1.94 2.03 2.12 0.21 0.24 0.27 1.35 1.42 1.49 2.30 2.36 2.42 1.14 1.16 1.19 0.66 0.72 0.78 0.16 0.21 0.27 0.12 0.14 0.16 0.48 0.53 0.59 1.10 1.36 1.63 0.20 0.32 0.45 1.17 1.26 1.34 0.24 0.26 0.28 0.05 0.05 0.06 0.49 0.53 0.56 0.39 0.40 0.41 14-day 86.06 74.32 65.34 69.29 81.60 78.93 63.44 63.11 60.84 65.67 69.28 64.92 60.66 82.47 64.14 62.63 65.61 57.08 63.96 60.99 10-day 30-day 50-day 23.06 22.59 22.01 0.25 0.23 #N/A N/A 0.60 0.62 0.65 8.09 8.06 8.07 2.05 2.02 2.01 0.24 0.23 0.23 1.42 1.39 1.44 2.37 2.36 2.36 1.16 1.16 1.14 0.70 0.72 0.74 0.21 0.21 0.22 0.14 0.15 0.15 0.53 0.54 0.56 1.39 1.33 1.34 0.32 0.33 0.38 1.28 1.26 1.25 0.26 0.25 0.25 0.05 0.05 0.05 0.52 0.52 0.52 0.40 0.40 0.40 Vol 20-day avg vol 8,009,900 14,500 1,572,300 11,800,200 20,100 39,760,400 498,000 211,100 1,051,000 26,599,800 3,477,900 2,086,300 38,100 117,800 8,274,200 25,000 31,524,600 16,593,400 275,100 56,300 5,955,275 1,225 203,510 7,093,210 1,440 378,425 320,920 86,960 340,045 233,555 2,256,870 26,820 5,415 513,405 3,817,465 12,225 674,255 3,435,300 169,615 56,290 *Note: As for the top 20 breakdown list below, the sole sorting criteria is stock price must close significantly BELOW the lower Bollinger Band, with the largest distance from the lower band at the top of the table, signaling a severe sell-off which is bearish. Caveat: A stock should bottom out if share price moves ABOVE the falling lower Bollinger Band, which can be a good buy signal for technical rebound upside after the sharp sell-off. [LOWER BOLLINGER BREAKDOWN] Top 20 Breakdown Stocks (Generally BEARISH, but can be short-term BUY guide) No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Stock Name Price KLCCP STAPLED GROUP AEON CREDIT SERVICE M BHD SUPERLON HOLDINGS BHD SUNWAY REAL ESTATE INVESTMEN J F TECHNOLOGY BHD PADINI HOLDINGS BERHAD POH HUAT RESOURCES HLDGS BHD AL-'AQAR HEALTHCARE REAL EST POWER ROOT BHD MAGNUM BHD ALLIANZ MALAYSIA BHD PRESTARIANG BHD HAI-O ENTERPRISE BHD NATIONWIDE EXPRESS HOLDINGS TSH RESOURCES BHD AMVERTON BHD SASBADI HOLDINGS BHD INARI AMERTRON BHD FREIGHT MANAGEMENT HOLDINGS LII HEN INDUSTRIES BHD 7.00 12.96 1.49 1.53 0.80 4.47 1.32 1.19 1.25 1.84 12.38 1.39 4.60 0.41 1.49 1.09 0.35 2.85 1.14 2.87 Bollinger Band Lower Middle Upper 7.18 7.69 8.20 13.06 13.45 13.83 1.56 1.70 1.83 1.58 1.67 1.75 0.85 0.91 0.96 4.52 4.95 5.38 1.37 1.51 1.65 1.22 1.29 1.35 1.28 1.55 1.81 1.87 1.93 2.00 12.41 12.81 13.22 1.42 1.57 1.73 4.63 5.01 5.40 0.43 0.49 0.54 1.51 1.57 1.62 1.11 1.25 1.40 0.37 0.47 0.57 2.87 3.20 3.54 1.16 1.20 1.24 2.89 3.06 3.23 RSI 14-day 23.73 34.25 31.59 22.44 19.07 28.70 26.16 17.60 13.88 35.85 19.85 24.53 16.25 32.56 26.06 21.33 21.41 32.38 29.86 28.28 Moving Average 10-day 30-day 50-day 7.67 7.77 7.78 13.40 13.36 13.45 1.68 1.65 1.78 1.66 1.69 1.71 0.91 0.93 1.02 4.86 5.00 5.09 1.49 1.52 1.55 1.27 1.30 1.32 1.49 1.61 1.72 1.94 1.91 1.88 12.72 12.90 13.02 1.53 1.60 1.67 4.91 5.11 5.19 0.49 0.50 0.55 1.56 1.58 1.61 1.21 1.30 1.31 0.45 0.48 0.53 3.12 3.27 3.33 1.20 1.21 1.24 3.04 3.05 3.12 Vol 20-day avg vol 955,600 19,500 527,600 1,867,600 73,500 1,130,300 380,100 190,000 944,400 335,100 213,300 257,100 392,300 20,000 125,800 600 2,991,700 18,604,100 259,000 186,400 348,585 193,070 190,705 1,908,985 65,255 1,609,065 189,760 282,165 652,400 732,880 26,905 96,540 256,730 7,065 209,055 22,095 2,769,485 7,662,870 26,035 286,840 Raw data sourced from Bloomberg 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 Thursday, March 22, 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 2 of 2