Bursa Malaysia Daily Market Report - 3 January

Transcription

1. Wednesday , 03 January, 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 o n s u m e r S e c t o r : I n f le c tio n Po in t o f R i s in g Bo o m in e C o m m e rc e 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 (L o ca l) 2. D ai l y St o ck S cr een 3. D ai l y For ei gn T ech n i c al St o ck P i cks (H K ) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
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Daily Market Commentary Wednesday , 03 January 2018 For Internal Circulation Only TA Research, e-mail : taresearch@ta.com.my KLSE Market Statistics (02.01.2018) Volume (mil) +/-chg (RMmn) Main Market 2,216.0 326.2 1,875.5 Warrants 663.8 356.2 99.5 ACE Market 811.1 -118.5 136.7 Bond 6.5 -3.4 1.2 ETF 0.4 -1.4 0.5 LEAP 0.0 0.0 0.0 Total 3,698.0 2,113.4 Off Market 67.9 -34.5 34.5 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP January Futures Other Markets DOW JONES NASDAQ (US) FTSE (UK) NIKKEI (JAPAN) KOSPI (KOREA) HANG SENG (HK) FSSTI (S'PORE) SET (BANGKOK) JCI (JAKARTA) SHANGHAI SHENZHEN AUSTRALIA (mn) 50.0 8.5 3.3 1.7 1.0 1.0 % chg % YTD chg -14.11 -115.61 74.60 8.00 -0.79 -0.89 0.44 0.45 8.59 11.86 16.38 9.63 24,824.01 7,006.90 7,648.10 22,764.94 2,479.65 30,515.31 3,430.30 1,753.71 6,339.24 3,348.33 1,919.20 6,061.28 104.79 103.51 -39.67 0.00 12.16 596.16 27.38 0.00 -16.42 41.15 19.85 -3.85 0.42 1.50 -0.52 0.00 0.49 1.99 0.80 0.00 -0.26 1.24 1.05 -0.06 25.61 30.16 7.07 19.10 22.36 38.70 19.08 13.66 19.68 7.88 -2.53 6.98 0.03 2.25 1.30 1.63 0.39 0.56 Counter Mkt Cap. Chg (RM’mn) (RM) MAYBANK 104,034 TENAGA 86,236 PBBANK 80,165 CIMB 59,966 AXIATA 48,768 MAXIS 46,863 DIGI 38,020 SIMEPLT 37,337 KLK 26,326 NESTLE 23,708 -0.14 -0.04 -0.02 -0.04 -0.10 -0.01 -0.21 -0.51 -0.28 -2.10 Important Dates MENANG - 4:5 Bonus Issue - BI of up to 320.5m shares. 4 bonus shares for every 5 existing shares held. Ex-Date: 05/01/2018. Entitlement Date: 09/01/2018. LISTING ON: 10/01/2018. XDL - 1:1 Bonus Issue - BI of up to 894.2m shares. 1 bonus share for every 1 existing share held. Ex-Date: 08/01/2018. Entitlement Date: 10/01/2018. LISTING ON: 11/01/2018. Key index heavyweights fell for correction on the first trading day of the year, pressured lower by profit-taking interest on strong window-dressing gains at the end of last year. The KLCI shed 14.11 points to settle at 1,782.70, off an early high of 1,783.48 and low of 1,772, as gainers led losers 530 to 490 on strong turnover of 3.69bn shares worth RM2.11bn. The index will need to correct further to neutralize overbought condition sparked by steep window-dressing gains, while buying momentum shift to lower liners in anticipation of domestic catalysts. 1,765 should act as a key resistance-turn-support level, followed by 1,757 and 1,754, the 200 and 100-day moving average levels, and stronger supports from 1,738 and 1,737, the respective 50 and 30-day moving averages. Major overhead resistance is from 1,796 and the 1,800 psychological level. Positive technical momentum on MRCB supports near-term upside bias, with a confirmed breakout above the 200-day ma (RM1.16) to aim for the 50%FR (RM1.22) and 61.8%FR (RM1.30) ahead. Key retracement support is from the 23.6%FR (RM1.04). UEM Sunrise may rise further to the 38.2%FR (RM1.14), while a convincing breakout should target the 50%FR (RM1.18) and 61.8%FR (RM1.22) going forward. Crucial support from the 9/11/16 low (RM1.00) strongly cushions downside risk. News Bites • • • • • Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ @ Up Down 331 312 114 133 76 40 6 3 3 2 0 0 530 490 1,782.70 12,826.96 17,125.47 1,793.00 Off Market DBE MYEG YNHPROP MLGLOBAL OPCOM MEXTER Review & Outlook Value Value/ +/-chg Volume -617.6 0.85 -3.7 0.15 -29.0 0.17 -1.1 0.19 -1.72 1.17 0.00 0.00 0.57 -86.5 0.51 Vol. (mn) 5.28 4.79 1.87 8.97 5.78 2.49 2.65 9.04 0.24 0.12 • • • • • • • • MCT Bhd's major shareholder Regent Wise Investments Limited will extend the remaining shareholders of the group an offer to purchase their shares at 88 sen a piece, after one of its co-founders agreed to sell his 17.2% interest for RM202.5mn. MB World Group Bhd has secured the rights to develop an integrated waterfront in Johor that has an expected GDV of RM1.45bn. Dagang NeXchange Bhd has acquired the exclusive rights to offer ECCouncil Global Services cyber security services in Malaysia. Paramount Corp Bhd is disposing 2 parcels of leasehold land measuring 9.4 acres in Mukim Pekan Baru Sungai Buloh, Selangor to EM Hub Sdn Bhd for RM92.1mn cash. Malaysia Pacific Corp Bhd is in the midst of negotiating with The 21st Metallurgical Development (M) Sdn Bhd for the re-development of Wisma MPL on Jalan Raja Chulan. Prestariang Bhd said its MoU with Kumpulan Modal Perdana Sdn Bhd to help develop a tertiary education facility has lapsed. KKB Engineering Bhd has received letters of awards from NGC Energy Sdn Bhd and Petronas Dagangan Bhd for a combined contract sum of about RM12.7mn. Aluminium Company of Malaysia Bhd is transferring its listing status to a NewCo to streamline its operations including its aluminum product manufacturing business and new venture - property development business. T7 Global Bhd via its subsidiaries Tanjung Offshore Services Sdn Bhd and Wenmax Sdn Bhd has received multiple contracts worth a total of RM260mn. D'Nonce Technology Bhd is proposing to undertake a private placement of up to 10% of its issued share base to raise as much as RM6.1mn, which will be used to repay bank borrowings. Caring Pharmacy Group Bhd is said to have attracted the interest of a South Korean foreign equity firm. The headline Nikkei Malaysia Manufacturing Purchasing Managers' Index fell from 52.0 in November to 49.9 in December. The J.P.Morgan Global Manufacturing PMI™ rose to a near seven-year high of 54.5 in December, up from 54.1 in November. Exchange Rate USD/MYR 4.0195 -0.0419 USD/JPY 112.14 -0.5000 EUR/USD 1.207 0.0061 Commodities Futures Palm Oil (RM/mt) 2,548.00 50.00 Crude Oil ($/Barrel) 60.38 0.28 Gold ($/tr.oz.) 1,319.60 14.50 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. 3-Jan-18 Technical Comments : Bargain MRCB & UEM Sunrise Positive technical momentum on MRCB supports near-term upside bias, with a confirmed breakout above the 200-day ma (RM1.16) to aim for the 50%FR (RM1.22) and 61.8%FR (RM1.30) ahead. Key retracement support is from the 23.6%FR (RM1.04). UEM Sunrise may rise further to the 38.2%FR (RM1.14), while a convincing breakout should target the 50%FR (RM1.18) and 61.8%FR (RM1.22) going forward. Crucial support from the 9/11/16 low (RM1.00) strongly cushions downside risk. MRCB RM1.16 (+0.04) BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 1.15 1.08 1.01 10-day 30-day 50-day RM RM RM BUY Recent Signal Signal Change DMI DAILY MACD Recent Signal Signal Change UEM SUNRISE RM RM RM SIMPLE MOVING AVERAGES 1.10 1.05 1.00 10-day 30-day 50-day DMI Recent Signal Signal Change BUY RM1.10 (+0.06) BOLLINGER BANDS Upper Middle Lower 1.11 1.06 1.04 RM RM RM 1.06 1.05 1.06 DAILY MACD BUY Recent Signal Signal Change BUY Page 2 of 3
4. Wednesday , January 03, 2018 FBMKLCI: 1,782.70 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 Correction Post Window-Dressing Key index heavyweights fell for correction on the first trading day of the year, pressured lower by profit-taking interest on strong window-dressing gains at the end of last year. The KLCI shed 14.11 points to settle at 1,782.70, off an early high of 1,783.48 and low of 1,772, as gainers led losers 530 to 490 on strong turnover of 3.69bn shares worth RM2.11bn. Supports at 1,765/1,757, Resistance at 1,796/1,800 The index will need to correct further to neutralize overbought condition sparked by steep window-dressing gains, while buying momentum shift to lower liners in anticipation of domestic catalysts. 1,765 should act as a key resistance-turn-support level, followed by 1,757 and 1,754, the 200 and 100-day moving average levels, and stronger supports from 1,738 and 1,737, the respective 50 and 30-day moving averages. Major overhead resistance is from 1,796 and the 1,800 psychological level. Bargain MRCB & UEM Sunrise Positive technical momentum on MRCB supports near-term upside bias, with a confirmed breakout above the 200-day ma (RM1.16) to aim for the 50%FR (RM1.22) and 61.8%FR (RM1.30) ahead. Key retracement support is from the 23.6%FR (RM1.04). UEM Sunrise may rise further to the 38.2%FR (RM1.14), while a convincing breakout should target the 50%FR (RM1.18) and 61.8%FR (RM1.22) going forward. Crucial support from the 9/11/16 low (RM1.00) strongly cushions downside risk. Most Asian Markets Advance on China Economic Data Asian indexes were mostly firmer in the first trading session of the year Tuesday, after a survey of Chinese manufacturing proved surprisingly upbeat. The Caixin index of Chinese industry rose to a four-month high of 51.5 in December, confounding forecasts for a decline. The reading pointed to resilience in the world’s second-largest economy even as Beijing pursues a crackdown on air pollution and engineers a cooling property market. Sentiment was also helped by news that North Korea had offered an olive branch to South Korea, with Kim Jong Un saying he was “open to dialogue” with Seoul. North Korean leader Kim Jong Un had declared his country a nuclear power during his New Year's Day address on Monday. The Hang Seng outperformed other major Asian markets by gaining more than 1.8 percent, as technology, banking and property shares led the index higher. China stocks also started 2018 on a bullish note following a survey showing better-than-expected manufacturing activity in December. The Shanghai Composite index closed up 41.88 points or 1.27 percent at 3,349.05. Elsewhere, South Korean markets carved out slight gains following geopolitical developments regarding North Korea in the past week. The benchmark Kospi index tacked on 0.49 percent to close at 2,479.65 as technology stocks mostly gained while automakers fell. Meanwhile, Australia’s S&P/ASX 200 slipped back below the flat line to trade lower by 0.06 percent at 6,061.3. Gains in the telecommunications and resources sectors were offset by declines in the health care and heavily-weighted financials sub-indexes. Markets in Japan, New Zealand and Thailand were closed for holidays. Page 1 of 7
5. 3-Jan-18 Wall Street Starts 2018 on Strong Note as Tech Lift Momentum U .S. stocks kicked off 2018 on a positive note Tuesday, as investors were optimistic that 2018 will bring more gains for the market. Major stock indexes had closed out 2017 with their best performances since 2013. Many investors say the rally could continue this year with help from the recently approved U.S. tax overhaul that is anticipated to boost profits as well as the economy. Gains were driven the most by technology sector, as Apple, Facebook and Microsoft pulled the technology index up 1.4 percent, following a 37-percent surge in 2017 that made it the best-performing S&P sector. On the data front, the IHS Markit manufacturing PMI rose to 55.1 in December, marking the strongest growth in the sector since March 2015. Investors also looked ahead to the release of the December jobs report on Friday. Economists polled by Reuters expect the U.S. economy to have added 188,000 jobs last month. The Dow Jones Industrial Average rose 104.79 points, or 0.42 percent, to 24,824.01, the S&P 500 gained 22.18 points, or 0.83 percent, to 2,695.79 and the Nasdaq Composite added 103.51 points, or 1.5 percent, to 7,006.90. 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 Wednesday, January 03, 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 7
6. 3-Jan-18 N e w s I n B r i e f Corporate MCT Bhd ’s major shareholder Regent Wise Investments Limited will extend the remaining shareholders of the group an offer to purchase their shares at 88 sen a piece, after one of its co-founders agreed to sell his 17.2% interest for RM202.5mn. (Bursa Malaysia/ The Sun) MB World Group Bhd has secured the rights to develop an integrated waterfront in Johor that has an expected GDV of RM1.45bn. Located within Teluk Jawa, Johor Bahru, the development will sit on approximately 49.6 acres of leasehold land. It will comprise both commercial and residential components, including a service apartment, affordable houses, townhouses, shop offices and a shopping mall. (Bursa Malaysia/ The Edge) Dagang NeXchange Bhd has acquired the exclusive rights to offer EC-Council Global Services cyber security services in Malaysia. The agreement will give DNex access to ECCouncil’s methodologies, enabling it to learn from cyber security implementation in key global economies. (Bursa Malaysia/ The Edge) Paramount Corp Bhd is disposing 2 parcels of leasehold land measuring 9.4 acres in Mukim Pekan Baru Sungai Buloh, Selangor to EM Hub Sdn Bhd for RM92.1mn cash for new land acquisition and working capital use. The deal will bring in a gain of RM33.2mn for the group. (Bursa Malaysia/ The Sun) Caring Pharmacy Group Bhd is said to have attracted the interest of a South Korean foreign equity firm. Sources said the private equity firm that has interest primarily in companies with a specialised retail chain was keen on taking up a substantial block of shares in Caring Pharmacy. (The Star) Malaysia Pacific Corp Bhd is in the midst of negotiating with The 21st Metallurgical Development (M) Sdn Bhd (T21) for the re-development of Wisma MPL on Jalan Raja Chulan. T21 and the company have agreed to incorporate a JV company to acquire the company’s shop lot and office units in Wisma MPL. (Bursa Malaysia) Prestariang Bhd said its MoU with Kumpulan Modal Perdana Sdn Bhd, which is whollyowned by the Ministry of Finance and mandated to focus on technology development in support of Malaysia’s Economic Innovation Model, to help develop a tertiary education facility has lapsed. (Bursa Malaysia/ The Edge) KKB Engineering Bhd has received letters of awards from NGC Energy Sdn Bhd and Petronas Dagangan Bhd for a combined contract sum of about RM12.7mn. (Bursa Malaysia/ Bernama) Aluminium Company of Malaysia Bhd is transferring its listing status to a NewCo to streamline its operations including its aluminum product manufacturing business and new venture - property development business. The NewCo acting as the investment holding vehicle will enable the company to have a new and leaner corporate structure with separate identifiable business streams to better reflect the current diverse operations of its businesses. (Bursa Malaysia/ New Straits Times) Rhone Ma Holdings Bhd has signed a distribution deal with CEVA Sante Animale S.A. and CEVA Animal Health Malaysia Sdn Bhd for the exclusive distribution of CEVA's animal health products related to swine. The distribution agreement with CEVA is valid for a period with effect from Jan 1, 2018 until Dec 31, 2020. (Bursa Malaysia/ Bernama) T7 Global Bhd via its subsidiaries Tanjung Offshore Services Sdn Bhd and Wenmax Sdn Bhd has received multiple contracts worth a total of RM260 million. (Bursa Malaysia/ The Edge) Page 3 of 7
7. 3-Jan-18 D ’Nonce Technology Bhd is proposing to undertake a private placement of up to 10% of its issued share base to raise as much as RM6.1mn, which will be used to repay bank borrowings. The exercise is expected to help the group reduce its gearing level 1.1x as at Dec 29, 2017 to 0.96x. (Bursa Malaysia/ The Edge) Berjaya Media Bhd said it is still looking into formulating a plan to regularize its financial condition, after being classified as an affected listed issuer under PN17 last June. (Bursa Malaysia/ The Edge) Ancom Bhd has redesignated its substantial shareholder and managing director Datuk Siew Ka Wei as its executive chairman, while non-executive chairman Datuk Ahmad Johari Abdul Razak is redesignated as an executive director. The group also appointed 43-year-old Lee Cheun Wei as its CEO. (Bursa Malaysia/ The Edge) YFG Bhd has redesignated its executive director Noel Joseph Ha Thien Sen as its CEO. The 63-year-old's redesignation took effect from Jan 1. (Malaysia/ The Edge) Page 4 of 7
8. 3-Jan-18 N e w s I n B r i e f Economy Global Global PMI Ends 2017 at Near Seven-Year High The upturn in the global manufacturing economy gathered further pace at the end of 2017 . Rates of expansion in output and new orders accelerated to the best seen since February 2011, leading to improved jobs growth and rising business optimism. Price inflation also eased slightly after strengthening in recent months. The J.P.Morgan Global Manufacturing PMI – a composite index1 produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – rose to a near seven-year high of 54.5 in December, up from 54.1 in November. The PMI has signalled expansion in each of the past 22 months. Growth was registered across the consumer, intermediate and investment goods sectors in December, with rates of expansion accelerating in all three. The strongest pace of improvement was in the intermediate goods category, followed closely by investment goods, with PMI readings at eighty-two month highs in both cases. Growth was mild in comparison in the consumer goods sector, despite its PMI ticking up to a four-month high. National PMI data signalled that growth was again faster (on average) in developed nations compared to emerging markets. The euro area remained the strongest performing region, with its PMI hitting a series-record high. Rates of expansion improved in the US (33-month high) and Japan, but eased in the UK. PMI readings hit a threemonth high in China, surged to a five-year high in India, five-month high in Russia and remained in expansion territory in Brazil. (Markit Economics) Asia Malaysia’s Manufacturing Economy Stagnates at End of 2017 Business conditions in the Malaysian manufacturing sector broadly stagnated in December, following an improvement in November. The fall in the headline PMI was driven by a contraction in new orders. Moreover, output growth slowed to a modest pace. Despite reports of subdued demand conditions, firms raised their payroll numbers to meet production requirements. On the price front, input cost inflation remained sharp overall and continued to place pressure on firms’ margins. The headline Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) – a composite single-figure indicator of manufacturing performance – fell from 52.0 in November to 49.9 in December. This signalled a broad stagnation in the goods-producing economy, following the strongest growth in over threeand-a-half years in the previous month. Malaysia’s manufacturing sector observed a renewed decline in new orders at the end of the year. That said, the rate of contraction was marginal. Weak domestic demand was reported as the key reason behind lower volumes of new business, as new export orders rose for the second month in succession. Panellists reported that international demand for Malaysian goods increased from key markets, including Thailand and the Middle East. (Markit Economics) A Major Chinese Economic Indicator Hit a Four-Month High for December A survey focused on small and mid-size businesses in China beat expectations, reaching a four-month high. The Caixin/Markit manufacturing Purchasing Managers' Index for December came in at 51.5. Economists polled by Reuters expected the private Caixin/Markit PMI to come in at 50.6 in December versus 50.8 in November. A reading above 50 indicates expansion, while a reading below that signals contraction. The positive reading was due to strong performances in both output and new orders. The Caixin/Markit survey focuses on small and mid-size businesses in China and comes after the world's second-largest economy reported official manufacturing PMI over the weekend. Previously, China reported official manufacturing PMI, as expected, at 51.6 in December — a dip from 51.8 in November. Despite concerns about debt and a property bubble, China's economic data showed robust growth in 2017 due to government spending on infrastructure and a pickup in the overall global macroeconomic environment. (CNBC) Page 5 of 7
9. 3-Jan-18 Indonesia Operating Conditions Deteriorate During December Operating conditions across Indonesia ’s manufacturing economy deteriorated for the first time in five months during December. The downturn was partially driven by renewed declines in output and new orders. As a result, firms cut their staffing levels at a modest pace and reduced their inventory holdings. On the price front, input price inflation accelerated to the sharpest since mid-2017, which led to a further increase in output charges. The headline seasonally adjusted Nikkei Indonesia Manufacturing Purchasing Managers’ Index (PMI) fell from 50.4 in November to 49.3, which was indicative of a marginal deterioration in the overall health of the goods-producing sector. Notably, it was the first time the PMI had posted below the neutral 50.0 level since July. The sub 50.0 PMI reading was partly due to a contraction in production for the first time in three months. Moreover, the rate of decline was the fastest recorded since July. Panellists generally commented on subdued demand conditions and raw material shortages. The volume of new orders received by Indonesian manufacturers decreased for the first time in five months during December. However, the rate of contraction was marginal. Mirroring the trend seen for total new orders, new export work declined during December. That said, the rate of reduction was modest and broadly in line with the long-run series average. (Markit Economics) Australia Manufacturing Growth Robust in December Australia's manufacturing sector continued to expand strongly at the end of the year, the latest survey from the Australian Industry Group revealed. The Performance of Manufacturing Index, or PMI, dropped to 56.2 in December from 57.3 in November. However, any reading above 50 indicates expansion in the sector. Among components, production, stocks and supplier deliveries grew at an accelerated pace, while new orders, employment, exports and sales were slower, albeit still expanding in December. (RTT News) United States December PMI signals strongest Manufacturing Growth Since March 2015 December data indicated a marked improvement in US manufacturing operating conditions. The latest upturn was supported by faster increases in output and new orders, amid reports of greater client demand. In line with stronger production growth, employment rose further and at the fastest pace since September 2014. Backlogs meanwhile increased at the quickest rate since October 2015 to indicate ongoing capacity pressures. Supply chain delays and increased global demand for inputs pushed costs up further, with the rate of cost inflation remaining sharp overall. Charge inflation, however, softened. Business confidence remained robust, driven by more favourable demand conditions. The seasonally adjusted IHS Markit final US Manufacturing Purchasing Managers’ Index (PMI) registered 55.1 in December, up from 53.9 in November. The latest index reading was the highest since March 2015 and signalled a solid improvement in the health of the sector. December data also rounded off the strongest quarterly performance since the start of 2015. Output at manufacturers expanded at a steep pace in December, with growth reaching an eleven-month high. Panelists attributed greater production to more favourable demand conditions and increased new order volumes. (Markit Economics) Europe and Uni ted Kingdom Eurozone Manufacturing Sector Growth Hits Record European factories have reported their strongest month since before the creation of the euro, capping off a much better than expected year for businesses in the single currency area. The Eurozone manufacturing purchasing managers’ index in December hit 60.6, its highest level since surveys began in mid-1997, according to figures released. Any figure above 50 indicates expansion over the month. The figures confirmed earlier “flash” estimates, which suggested the sector had recorded its best annual performance on record, while new national-level data pointed to broad-based growth across the continent. Businesses in Germany, Ireland and Austria all reported record growth, while Greece enjoyed its best results for nearly a decade. The PMI surveys question businesses on indicators such as new orders, pricing and employment growth in order to gain a picture of the overall health of a sector, and are seen as useful early indicators of economic growth. Europe’s economy consistently beat expectations throughout 2017, leading economists and policymakers to Page 6 of 7
10. 3-Jan-18 increase their growth forecasts substantially . The European Central Bank now expects the Eurozone economy to have expanded by 2.4% in 2017, compared with estimates of just 1.7% at the start of the year. (Financial Times) UK Factory Growth Cools in December from Four-Year Highs – PMI Growth in British manufacturing cooled last month from four-year highs struck in November, but the sector remained a bright spot in Britain’s economy heading into 2018, a survey showed. In contrast to accelerating growth in the euro zone, the IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) dropped to 56.3 from 58.2 in November. That was at the bottom end of forecasts in a Reuters poll of economists that had pointed to a reading of 58.0. While growth in new business, output, export orders and employment slowed in December, the PMI stayed above its average for 2017 as a whole. Alan Clarke, a fixed income strategist with Scotiabank, said the disappointing figures for the month probably represented only a temporary setback for the sector which accounts for 10 percent of the country’s overall economic output. (Reuters) Share Buy-Back: 02 January 2018 Company E&O FIAMMA GLOMAC KPJ SCGM UNIMECH Bought Back Price (RM) 60,000 190,000 8,000 50,000 10,000 10,000 1.43 0.51 0.61 0.985/0.975 2.60 1.02 Total Treasury Shares 1.43/1.42 22,803,747 0.51/0.505 21,800,000 0.61/0.60 5,115,400 0.985/0.97 16,737,000 2.62/2.60 347,900 1.02/1.01 6,395,810 Source: Bursa Malaysia Hi/Lo (RM) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 7 of 7
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) Recom Market Cap. (RMm) BETA EPS (sen) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 02-Jan-18 AUTOMOBILE BAUTO 2.18 2.50 Buy 2,517 0.76 14.3 19.9 15.2 10.9 5.3 5.5 2.24 -2.7 1.84 18.5 MBMR 2.23 2.32 Hold 872 0.85 23.2 23.9 9.6 9.3 2.1 2.1 2.60 -14.2 2.01 10.9 -0.9 1.4 PECCA 1.53 1.69 Buy 283 na 11.1 12.5 13.7 12.3 3.6 4.0 1.70 -10.0 1.28 19.5 -1.3 SIME 2.22 1.97 Hold 15,098 1.40 12.0 12.7 18.5 17.5 1.3 1.4 2.55 -12.9 1.85 20.1 0.5 UMW 5.09 4.37 Sell 5,947 1.30 19.2 35.3 26.5 14.4 2.0 3.5 6.08 -16.3 4.09 24.3 -2.1 BANKS & FINANCIAL SERVICES ABMB 4.06 4.20 Buy 6,285 1.37 30.6 35.6 13.3 11.4 3.9 3.9 4.49 -9.6 3.62 12.2 -0.5 AFFIN 2.34 2.50 Hold 4,547 0.80 24.2 28.1 9.7 8.3 3.4 3.4 2.98 -21.3 2.22 5.4 1.3 AMBANK 4.45 5.10 Buy 13,413 1.24 48.6 52.0 9.2 8.6 4.0 4.0 5.70 -21.9 4.06 9.6 0.9 CIMB 6.50 7.00 Buy 59,966 1.53 50.9 56.0 12.8 11.6 3.9 4.3 7.08 -8.2 4.51 44.1 -0.6 HLBANK 17.02 17.50 Buy 34,816 0.67 114.2 120.9 14.9 14.1 2.6 2.6 17.10 -0.5 13.06 30.3 0.1 MAYBANK 9.66 9.70 Hold 104,034 1.04 70.9 77.7 13.6 12.4 5.2 5.2 9.86 -2.0 7.97 21.2 -1.4 PBBANK 20.76 23.60 Buy 80,165 0.62 142.4 149.8 14.6 13.9 2.8 2.9 21.08 -1.5 19.66 5.6 -0.1 RHBBANK 5.06 5.20 Hold 20,291 1.65 52.2 53.8 9.7 9.4 3.0 3.0 5.59 -9.5 4.66 8.6 1.2 BURSA 10.12 11.10 Buy 5,440 0.88 39.0 41.5 26.0 24.4 3.4 3.4 10.98 -7.8 8.08 25.2 0.0 Note: BURSA proposed bonus issue of shares on the basis of 1 for 2. Ex-Target price RM7.04 CONSTRUCTION GADANG 1.14 1.73 Buy 751 1.02 14.3 18.2 8.0 6.3 2.6 2.6 1.37 -16.8 1.01 12.9 2.7 GAMUDA 4.90 6.00 Buy 12,032 0.89 34.5 35.7 14.2 13.7 2.4 2.4 5.52 -11.2 4.58 7.0 -1.2 IJM 3.01 2.89 Sell 10,921 0.87 13.7 18.2 21.9 16.6 3.2 3.2 3.61 -16.6 2.71 11.1 -1.3 PESONA 0.46 0.55 Buy 320 0.86 5.8 4.8 8.0 9.7 3.3 3.3 0.74 -37.4 0.44 5.7 2.2 SENDAI 0.85 0.58 Sell 660 1.28 9.6 9.0 8.8 9.4 1.2 1.2 1.39 -39.2 0.51 67.3 -2.3 -2.0 SUNCON 2.46 2.65 Buy 3,179 0.50 14.7 16.4 16.7 15.0 2.2 2.4 2.53 -2.8 1.67 47.3 WCT 1.61 1.64 Hold 2,265 0.98 12.6 11.2 12.7 14.4 1.9 1.9 2.48 -34.9 1.46 10.3 -0.6 LITRAK 5.49 6.26 Hold 2,897 0.28 45.6 47.1 12.0 11.7 4.6 4.6 6.15 -10.7 5.40 1.7 -1.1 ANNJOO 3.90 4.40 Buy 2,009 1.30 45.3 49.2 8.6 7.9 5.6 6.7 3.98 -2.0 2.14 82.2 1.0 CHINHIN 1.19 1.49 Buy 662 1.13 12.4 12.0 9.6 9.9 4.2 5.0 1.49 -20.1 0.86 38.4 -1.7 ENGTEX 1.10 1.38 Buy 468 0.67 14.2 16.1 7.8 6.8 3.8 5.0 1.52 -27.6 1.07 2.8 0.0 CARLSBG 15.18 18.06 Buy 4,670 0.76 86.2 88.7 17.6 17.1 5.7 5.8 16.00 -5.1 13.90 9.2 -0.8 HEIM 19.04 19.14 Buy 5,752 0.43 84.0 88.3 22.7 21.6 4.0 4.2 19.58 -2.8 15.78 20.7 0.7 AEON 1.68 1.97 Sell 2,359 0.42 6.7 7.7 25.1 21.8 2.4 2.7 2.70 -37.8 1.64 2.4 -4.5 AMWAY 7.37 8.18 Buy 1,212 0.38 43.9 45.2 16.8 16.3 5.2 5.4 8.18 -9.9 7.04 4.7 -0.1 F&N 26.86 28.55 Hold 9,845 0.21 155.7 182.7 17.3 14.7 2.2 2.4 27.02 -0.6 22.64 18.6 -0.5 Building Materials CONSUMER Brewery Retail HUPSENG 1.09 1.25 Hold 872 0.40 5.4 5.6 20.1 19.6 4.1 4.6 1.28 -14.8 1.08 0.9 0.0 JOHOTIN 1.20 1.70 Buy 373 0.75 12.5 12.6 9.6 9.5 4.2 4.5 1.76 -31.8 1.16 3.4 -0.8 NESTLE 101.10 120.50 Buy 23,708 0.41 330.1 373.8 30.6 27.0 2.9 3.3 103.20 -2.0 74.12 36.4 -2.0 PADINI 5.20 4.67 Sell 3,421 0.78 27.0 30.0 19.3 17.3 2.4 2.5 5.50 -5.5 2.26 130.0 -1.5 POHUAT 1.75 2.37 Buy 384 0.66 25.3 25.5 6.9 6.9 4.6 4.6 2.07 -15.4 1.65 6.0 -2.2 QL 4.34 3.26 Sell 7,041 0.27 12.8 14.7 33.8 29.5 1.0 1.1 4.39 -1.1 3.26 33.3 -0.2 SIGN 0.69 0.92 Buy 158 0.98 6.9 9.2 9.9 7.5 3.6 5.1 1.07 -35.5 0.69 0.0 -2.1 37.94 52.08 Buy 10,833 1.39 187.4 175.4 20.2 21.6 5.3 5.3 51.04 -25.7 34.06 11.4 -5.2 GENTING 9.31 11.53 Buy 35,615 1.53 54.4 59.8 17.1 15.6 1.7 1.7 10.00 -6.9 7.85 18.7 1.2 GENM 5.78 6.51 Buy 32,764 1.54 27.0 30.6 21.4 18.9 1.6 1.7 6.38 -9.4 4.50 28.5 2.7 2.26 3.34 Buy 3,044 0.80 21.5 26.0 10.5 8.7 7.1 8.0 3.00 -24.7 2.23 1.3 0.9 CCMDBIO 2.62 2.70 Buy 731 0.76 15.0 16.1 17.4 16.3 3.8 4.0 2.65 -1.1 1.90 37.9 3.6 IHH 5.90 6.40 Buy 48,611 0.72 11.9 15.0 49.7 39.4 0.5 0.6 6.45 -8.5 5.42 8.9 0.7 KPJ 0.98 1.12 Buy 4,179 0.45 3.8 4.2 25.9 23.3 2.1 2.3 1.14 -14.0 0.90 8.9 1.0 HARTA 10.66 7.30 Sell 17,620 0.90 25.8 30.5 41.3 34.9 1.1 1.3 11.40 -6.5 4.53 135.3 -0.2 KOSSAN 8.09 8.80 Buy 5,173 0.08 38.3 43.0 21.2 18.8 2.4 2.7 8.50 -4.8 5.62 44.0 -0.2 SUPERMX 1.94 1.80 Sell 1,272 0.41 15.3 17.9 12.7 10.8 2.7 3.2 2.18 -11.0 1.69 14.8 -3.0 TOPGLOV 7.97 7.00 Sell 10,004 0.00 33.7 36.4 23.6 21.9 2.1 2.3 8.19 -2.7 4.56 74.8 -0.3 KAREX 1.29 1.00 Sell 1,293 0.65 2.8 5.2 46.7 24.8 0.5 1.0 2.52 -48.8 1.20 7.5 -0.8 SCIENTX 8.69 9.84 Buy 4,203 0.33 68.2 74.9 12.7 11.6 2.4 3.0 9.85 -11.8 6.68 30.1 0.3 SKPRES 2.22 2.20 Hold 2,775 0.66 10.4 14.8 21.4 15.0 2.3 3.3 2.32 -4.3 1.24 79.0 -2.6 ASTRO 2.59 3.10 Buy 13,504 1.06 14.0 13.7 18.6 18.9 5.0 5.2 2.94 -11.9 2.45 5.7 -2.3 MEDIA PRIMA 0.73 0.45 Sell 810 1.13 -3.8 -1.7 na na 0.0 0.0 1.28 -43.0 0.58 25.9 -3.9 STAR 1.47 1.25 Sell 1,085 1.17 6.7 6.7 21.9 21.9 8.2 8.2 2.22 -33.7 1.31 12.2 -10.9 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical Rubber Gloves INDUSTRIAL MEDIA
12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) Recom Market Cap. (RMm) BETA EPS (sen) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.53 0.72 Buy 930 1.28 4.2 4.5 12.6 11.7 1.9 1.9 0.69 -23.2 0.25 112.0 LCTITAN 4.75 6.66 Buy 10,797 na 63.4 68.2 7.5 7.0 5.3 5.7 6.53 -27.3 4.14 14.7 9.3 1.1 MHB 0.82 0.78 Sell 1,312 1.76 -0.5 0.3 na 241.6 0.0 0.0 1.16 -29.3 0.63 31.2 -0.6 MISC 7.42 6.56 Sell 33,121 1.11 46.8 52.3 15.8 14.2 4.0 4.0 7.90 -6.1 6.89 7.7 0.0 PANTECH 0.65 0.69 Sell 483 1.11 6.1 6.8 10.6 9.5 4.2 4.7 0.74 -12.2 0.45 46.1 0.8 PCHEM 7.85 8.05 Hold 62,800 1.07 49.8 52.6 15.8 14.9 2.8 2.9 7.86 -0.1 6.80 15.4 1.9 SAPNRG 0.68 1.25 Buy 4,045 2.38 -6.5 -4.9 na na 0.0 0.0 2.10 -67.9 0.67 1.5 -4.9 SERBADK 3.22 3.40 Hold 4,299 na 25.7 27.8 12.5 11.6 2.4 2.6 3.29 -2.1 1.51 113.2 -0.6 UMWOG 0.33 0.51 Buy 2,670 1.74 0.4 1.2 80.4 26.2 0.0 0.0 0.92 -64.8 0.27 20.4 6.6 UZMA 1.31 1.56 Hold 419 1.01 13.2 14.4 9.9 9.1 0.0 0.0 1.98 -33.8 1.27 3.1 2.3 FGV 1.80 2.01 Hold 6,567 1.68 3.7 4.5 48.6 39.6 2.8 2.8 2.18 -17.4 1.51 19.2 6.5 IJMPLNT 2.71 2.69 Sell 2,386 0.24 9.1 12.5 29.7 21.6 3.0 3.3 3.60 -24.7 2.70 0.4 -1.1 IOICORP 4.54 4.12 Sell 28,529 1.14 21.0 21.8 21.6 20.8 3.5 3.7 4.81 -5.6 4.31 5.3 0.0 KFIMA 1.60 1.89 Buy 452 0.52 13.3 14.5 12.0 11.0 5.6 5.6 1.96 -18.4 1.56 2.6 1.9 KLK 24.72 26.18 Hold 26,326 0.81 120.7 126.3 20.5 19.6 2.4 2.5 25.50 -3.1 23.00 7.5 -1.1 -8.5 PLANTATIONS SIMEPLT 5.49 6.25 Buy 37,337 na 21.0 22.1 26.1 24.9 2.6 2.7 6.00 -8.5 4.58 19.9 TSH 1.66 2.10 Buy 2,292 0.70 9.3 9.6 17.8 17.3 1.4 1.5 1.94 -14.4 1.56 6.4 0.6 UMCCA 6.52 6.73 Sell 1,367 0.42 22.8 34.8 28.6 18.7 2.6 2.8 7.08 -7.9 5.76 13.1 0.2 GLOMAC 0.61 0.50 Sell 441 0.69 3.0 4.4 20.6 13.8 3.3 3.3 0.75 -18.1 0.58 5.2 0.0 HUAYANG 0.61 0.59 Sell 215 0.85 1.8 3.4 33.3 17.9 0.8 0.8 1.21 -49.6 0.60 2.5 0.0 IBRACO 0.82 0.92 Hold 405 na 9.1 12.4 8.9 6.5 4.9 6.1 1.02 -20.1 0.76 7.9 0.0 IOIPG 1.84 2.02 Hold 10,131 0.74 16.5 16.3 11.1 11.3 3.3 3.3 2.22 -17.1 1.79 2.8 -0.5 MAHSING 1.46 1.69 Buy 3,542 0.87 13.0 12.6 11.2 11.6 4.5 4.5 1.64 -11.0 1.38 5.8 0.7 SIMEPROP 1.46 1.54 Buy 9,929 na 9.2 9.1 15.9 16.0 1.4 1.4 1.78 -18.0 1.04 40.4 -18.0 SNTORIA 0.67 0.76 Buy 379 0.28 8.3 8.6 8.1 7.8 1.5 1.5 0.91 -26.3 0.60 11.7 -3.6 PROPERTY Note: SNTORIA proposed bonus issue of warrants & right issue of shares. For more details please refer to SPB 4.83 5.28 Hold 1,660 0.70 21.2 26.1 22.8 18.5 2.5 2.5 5.50 -12.2 4.32 11.7 -1.4 SPSETIA 3.37 3.77 Buy 10,193 1.08 21.3 21.9 15.8 15.4 3.6 3.6 4.38 -23.1 3.04 10.9 -15.8 SUNWAY 1.70 1.74 Hold 8,324 0.74 11.9 12.6 14.3 13.5 2.9 3.5 1.96 -13.2 1.27 34.0 4.3 SUNREIT 1.70 1.87 Hold 5,007 0.88 10.0 10.7 16.9 15.9 5.9 6.3 1.90 -10.5 1.64 3.7 -10.5 CMMT 1.43 1.72 Buy 2,914 0.83 8.6 8.9 16.6 16.0 6.3 6.4 1.83 -21.9 1.39 2.9 -21.9 REIT POWER & UTILITIES MALAKOF 0.89 1.16 Buy 4,448 0.82 6.0 6.8 14.9 13.1 7.9 7.9 1.39 -36.0 0.86 3.5 -9.2 PETDAG 24.36 22.08 Sell 24,201 0.44 105.1 105.7 23.2 23.0 3.2 3.2 25.70 -5.2 21.00 16.0 0.4 PETGAS 17.52 19.10 Buy 34,667 0.93 98.8 99.5 17.7 17.6 3.9 4.0 21.76 -19.5 15.82 10.7 0.2 TENAGA 15.22 17.38 Buy 86,236 0.69 129.9 127.9 11.7 11.9 3.0 3.0 15.68 -2.9 13.00 17.1 -0.3 YTLPOWR 1.27 1.17 Sell 10,067 0.86 9.7 10.1 13.2 12.6 3.9 3.9 1.50 -15.3 1.11 14.4 -1.6 TELECOMMUNICATIONS AXIATA 5.39 5.75 Hold 48,768 1.33 16.0 19.5 33.7 27.6 1.5 2.9 5.49 -1.8 4.24 27.1 -1.8 DIGI 4.89 5.20 Buy 38,020 0.81 20.0 20.6 24.5 23.7 4.1 4.2 5.19 -5.8 4.36 12.2 -4.1 MAXIS 6.00 6.10 Hold 46,863 0.71 26.2 25.7 22.9 23.3 3.3 3.3 6.60 -9.1 5.48 9.5 -0.2 TM 6.17 7.20 Buy 23,186 0.54 23.2 24.9 26.6 24.8 3.4 3.6 6.69 -7.8 5.85 5.5 -2.1 ELSOFT 2.71 2.70 Hold 746 0.70 15.0 15.7 18.1 17.2 3.9 4.1 2.95 -8.1 1.36 98.6 0.4 IRIS 0.19 0.25 Buy 470 1.91 0.6 0.7 34.3 28.5 0.0 0.0 0.22 -13.6 0.11 72.7 2.7 INARI 3.43 3.05 Hold 7,038 0.94 14.2 15.9 24.2 21.6 2.9 3.3 3.48 -1.4 1.63 110.9 0.9 MPI 12.32 15.40 Hold 2,450 0.67 105.5 121.2 11.7 10.2 2.6 2.6 14.52 -15.2 7.38 66.9 -2.4 UNISEM 3.66 3.85 Sell 2,686 1.10 27.1 28.7 13.5 12.8 3.3 3.3 4.25 -13.9 2.34 56.4 0.3 TECHNOLOGY Semiconductor & Electronics TRANSPORTATION Airlines AIRASIA 3.34 3.83 Buy 11,162 1.25 38.3 39.8 8.7 8.4 1.5 1.8 3.59 -7.0 2.16 54.6 -0.3 AIRPORT 8.69 8.47 Sell 14,418 1.34 19.7 20.1 44.0 43.1 1.2 1.4 9.45 -8.0 5.98 45.3 -1.1 Freight & Tankers PTRANS 0.29 0.44 Buy 358 na 2.3 3.6 12.5 8.0 2.5 3.8 0.38 -25.4 0.14 102.3 1.8 TNLOGIS 1.33 1.80 Buy 607 1.23 13.6 14.0 9.8 9.5 3.8 3.8 1.83 -27.5 1.29 3.1 -0.7 WPRTS 3.79 4.06 Buy 12,924 0.81 16.8 19.4 22.5 19.6 3.3 3.8 4.35 -12.9 3.34 13.5 2.4 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) Recom Market Cap. (S$m) Beta EPS (cent) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 25.20 23.30 Sell 64,452 1.25 189.1 214.6 13.3 11.7 2.4 2.4 25.4 -0.6 17.15 46.9 1.4 OCBC 12.49 13.50 Buy 52,292 1.21 104.1 110.6 12.0 11.3 6.7 7.7 12.6 -0.8 8.85 41.1 0.8 UOB 26.63 26.90 Hold 44,287 1.06 215.4 229.3 12.4 12.4 2.6 2.6 26.9 -0.8 20.05 32.8 0.7 PLANTATIONS WILMAR 3.14 3.63 Hold 20,091 0.86 29.9 31.8 10.5 9.9 2.5 2.9 4.0 -21.5 3.06 2.6 1.6 IFAR 0.39 0.53 Hold 559 1.00 5.2 5.7 7.5 6.8 3.3 3.6 0.6 -32.8 0.37 6.8 0.0 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. SECTOR UPDATE Wednesday , January 03, 2018 FBMKLCI: 1,782.70 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Consumer Sector Overweight Inflection Point of Rising Boom in eCommerce Damia Othman Tel: +603-2167 9602 damia@ta.com.my (Maintained) www.taonline.com.my In a top-down analysis, we study every facet of eCommerce and what it can do to the retail and F&B businesses in Malaysia, in terms of opportunities and threats. In a nutshell, we opine that eCommerce will be the future trend and companies are bound to play by its rules or at risk of retail bankruptcies and store closings. Generally, we believe companies that are selling identical products are subject to enormous risks, while companies selling necessities would see abundant opportunities. As such, we like Nestle under the context of eCommerce. However, retail players like Aeon and Padini would have a tough time defending their market shares against the ecommerce wave. Maintain our Overweight call on the sector. E-Commerce is Borderless E-Commerce, be it business-to-business (B2B), business-to-consumer (B2C) or consumer-toconsumer (C2C), is more than just a commercial transaction conducted electronically on the internet. It is also a marketplace for consumers to research products and services online, in terms of prices. In our opinion, the biggest advantage of eCommerce relates to its borderless feature, which essentially allows individuals to buy any items from any eCommerce marketplaces like Amazon, eBay, Alibaba, Walmart, etc. So, business opportunities are abundant for Malaysian companies or individuals to sell their products. However, eCommerce could also force business bankruptcies and store closings like what happened to Toys R Us. Malaysians Like Good Deals and Online Shopping Provides That In comparison with its regional ASEAN peers, Malaysians come second after Singapore for the number of internet users penetration to its total population, coming in at 71.1% penetration rate according to an ASEAN based online research platform. However, in terms of eCommerce sales, Malaysia came in fourth in 2016 after Indonesia, Thailand and Singapore, recording total eCommerce sales of USD1.97bn that year and average spending of USD64 per user based on Statista. We take a look at Malaysians shopping behaviour and found that factors affecting Malaysians online shopping decisions are i) discounts and flash sales, ii) free shipping offers and iii) lowest price guarantee according to a study conducted by Shopee surveying over 7,500 online shoppers across Malaysia. Furthermore, according to 2016 Bain Brief and Google’s Consumer Barometer, almost half of Malaysians (14.0mn people) are considered ‘digital consumers’ – they research products or services online. However, only 29% of these convert the research into online purchases. This is due to i) lack of trust and ii) Malaysians prefer to pay cash on delivery. Also, the main reason Malaysians purchase online is because items bought are not available in local market. We find that despite the majority of Malaysians are internet users, the average annual spend per user online is still less than its regional peers as Malaysians value a good deal. According to DI Marketing (market research company in Asia), the top reasons Indonesians shop online are because of i) frequent discount programmes, ii) convenient payment method and iii) competitive pricing. While according to MasterCard 2015 online shopping survey, convenience is the top reason Thais shop online. On the other hand, based on the survey by Shopee, 25% of Malaysians are willing to wait up to a month to find better deals on pricey items and 97% of surveyors plan their online shopping around discounts, vouchers availability and flash sales. Page 1 of 5
14. 3-Jan-18 Retail eCommerce in Malaysia Growing at Double Digit Rate According to Euromonitor , store-based retail sales in Malaysia are expected to grow at a CAGR of 2.9% between 2016 – 2020 reaching a total estimated revenue of RM200.5bn. However, Malaysia online retail sales is estimated to grow at a faster CAGR of 15.1% between 2016 – 2020, reaching a total estimated sale of RM4.8bn. Specifically, based on Euromonitor, online retail transactions in Malaysia is expected to reach RM2.8bn (+18.4% YoY) in 2017. In 2016, the online retail transactions in Malaysia were broken down into apparels and footwear (27%), media products (20%), consumer electronics (14%), homeware and home furnishing (13%), food and drinks (6%), personal accessories and eyewear (2%), consumer appliances (1%) and others (11%). Using Lazada as an example, which has an average monthly web traffic of 22.7mn per month (biggest in Malaysia with approximately 60% market share), Hans-Peter Ressel, its chief executive officer, stated in a local newspaper that the company sees a strong shift in online purchases by its customers. Five years ago, majority of the products sold were electronic items bought by young urban man or woman, which made up 90% of the business. Today, majority of the products bought on Lazada are lifestyle, health, beauty and fashion-related items due to change in customer profiles, i.e. 1) a shift to families with kids; and 2) 50% of their customers are aged 30 or above. Location wise, five years ago majority of the online sales for Lazada were from metropolitan areas like Kuala Lumpur, Penang and Johor Bahru. Currently, more than 80% of its customers are outside of Kuala Lumpur. Ressel also shared that Lazada has a huge customer base in East Malaysia due to the location having limited access to wide range of products and shopping malls. Hence, we find that more and more people are becoming IT literate to shop online to find the best deals. Retail sales has been growing at double-digit rate over past five years and there is no sign of slowing down. Hence, many experts believe that Malaysia is at an inflection point of a booming eCommerce era. Retail and F&B Companies are Expecting the Boom We have identified companies within our coverage, which have adopted the eCommerce as one of their sales channels. Within the Retail players, Aeon has its own online marketplace platform called Shoppu whereby consumers can purchase Aeon’s goods as well as smaller companies’ products online. Padini also has its own online eCommerce platform called Padini.com, which sells apparels and accessories from all of its brands. Both management guided that items sold on the online platforms account for less than 5% of the groups’ annual sales but growing at more than double digit rate on an annual basis. While Amway has its own app and online platform dedicated to its Amway Business Owners (ABOs) to make orders and re-stock their items. This allows the ABOs to save time from going to designated Amway’s store to purchase items, hence improving efficiency in services. The main threat facing the Retail players especially for Padini and Aeon is high level of competition in the market be it from local or overseas players. As highlighted earlier, Malaysians shop online to find the best deals. Therefore, we find that Padini is defending its market share by i) selling valuefor-money items, ii) organising nationwide store-wide sales twice a year and iii) having strong social media presence amongst its targeted customers. However, the competitive environment has reduced its gross profit margin to 39.4% in FY17 from 41.7% in FY16. While Aeon is defending its sales through i) various discount offers for specific product categories from time to time, be it online or in its physical stores, ii) organising nationwide sales, iii) re-aligning its merchandise mix with higher margins to support sales in Retailing segment and iv) refurbishing its underperforming malls to support revenue from its Property segment. The F&B players like Nestle and F&N, however, have approached large eCommerce marketplaces like Lazada and 11Street to sell their food items. Management of both Nestle and F&N guided that it is more cost effective to sell their products through the eCommerce marketplaces as compared to setting up their own online platform. Currently, sales through the online channels accounted for less than 5% of the groups’ total revenue but growing at more than 100% annually. Note that Nestle has also leased a new national distribution centre and expected to roll out in 2Q18 with a Page 2 of 5
15. 3-Jan-18 total capacity of 88 ,000 pallets. It is expected to support Nestle’s growth strategy in the next 15 years. It is located 50km away from the current national distribution centre in Banting. While other F&B players like QL Resources and Hup Seng products can be found online through supermarkets websites like Tesco and Jaya Grocer, which are available in metropolitan areas. We opine that both F&B and Retail sub-sectors are prepared to face the eCommerce wave. Having an online presence is perceived as the minimum requirement to stay relevant in the current market condition where eCommerce boom is expected. Outlook Note that products purchased online are subject to Goods and Services Tax. Having said that, we reckon the net impact on selling price is insignificant as online sales are sometime “subsidised” by banks, who generously offer some discounts to its credit card users. Besides, the anticipated Digital Free Trade Zone agenda will greatly offset this. All in, we believe that boom period of eCommerce in Malaysia is unavoidable as there is still plenty of opportunity to grow towards the likes of other developed economies. e.g. China retail online transaction is expected to be 23.8% of total retail sales in the country for 2017 (vs. Malaysia’s 1.6%). OVERWEIGHT We retain our OVERWEIGHT call on the consumer sector. Our top pick is Nestle as we believe that the company will continue to benefit from eCommerce sales. Maintain Sell on Padini and Aeon considering the growing threats of online competition and reducing margins. We also like Amway, Johore Tin and Hup Seng as we believe that these companies will benefit indirectly through digitization of purchases. Buy Carlsberg, Heineken and BAT as we believe that the companies will benefit from World Cup season. Also Buy Scientex and Poh Huat due to growing export sales. 270 5.0 80.0% 71.1% 67.4% 1,200 90.0% 82.1% 220 Figure 2: ASEAN eCommerce Sales in 2016 1,000 70.0% 4.0 58.3% 800 60.0% 52.7% 50.6% 50.0% 120 40.0% 70 USDbn mn people 170 1,022 5.29 3.0 2.0 30.0% 20.0% 600 2.89 2.13 228 212 -30 Indonesia Thailand Non-Internet Users - LHS Source: AseanUp, TA Securities Singapore Malaysia Internet users - LHS Vietnam Philippines 0.0% Penetration Rate - RHS 400 1.71 1.0 64 20 10.0% 1.97 USD Figure 1: 71% of Malaysians are Internet Users 55 200 33 0.05 0.0 Indonesia Thailand Singapore Malaysia Total eCommerce Sales - LHS Vietnam Philippines Avg Annual Sales/User - RHS Source: Statista Digital Market Outlook, TA Securities Page 3 of 5
16. 3-Jan-18 Figure 3 : Malaysia Online Business Sales 2016 Figure 4: Products Bought Online by Malaysians in 2016 Food and drink 6% 9,000 Cons umer appliances 1% Others 11% 8,000 7,000 Cons umer electronics 14% USDmn 6,000 5,000 Homeware and home furnishings 13% 4,000 3,000 2,000 Appa rel and footwear 27% 3,500 Pers onal accessories a nd eyewa re 2% 1,000 894 260 Goods eCommerce e-Service 2016 e-Travel Medi a products 20% Home i mprovement and ga rdening 6% 2021F Source: Statista, TA Securities Source: Euromonitor, TA Securities Figure 5: Double-Digit Growth in Online Retailing Sales Figure 6: Online Retail Sales Penetration Rate 28.3% 200,000 30.0% 3.0% 200,000 2.4% 25.0% 20.0% 19.0% 19.5% 18.0% 18.4% 150,000 17.0% 14.5% 20.0% 1.8% 15.0% 15.0% 100,000 3.8% 3.9% 4.1% 3.0% 3.8% 3.8% 3.6% 3.6% 2.4% 2.7% - 1.4% 100,000 0.9% 10.0% 50,000 2.0% 1.6% RMmn RMmn 16.6% 2.5% 2.1% 150,000 1.1% 1.5% 1.2% 1.0% 0.7% 0.7% 50,000 5.0% 0.5% 0.0% - 2011 2012 2013 2014 2015 2016 2017E 2018F 2019F 2020F Online Retail sales Store-based Retail Sales Online Retailing Growth Rate Store-based Retailing Growth Rate 0.0% 2011 2012 2013 2014 2015 2016 2017E 2018F 2019F 2020F Store-based Retail Sales Source: Euromonitor, TA Securities Penetration Rate Source: Euromonitor, TA Securities Peers Comparison Company Brewery Carlsberg Heineken Retail Aeon Amway Padini F&B Johore Tin Hup Seng F&N QL Resources Nestle Tobacco BAT Industrial Scientex Signature Poh Huat Recom. Price TP Market Cap (RMmn) PER (x) CY18 CY19 ROE (%) CY18 CY19 Div Yield (%) CY18 CY19 Buy Buy 15.18 19.04 18.06 19.14 4669.4 5752.0 17.5 22.7 17.0 21.6 77.1 54.6 77.0 54.3 5.7 4.0 5.8 4.2 Sell Buy Sell 1.68 7.37 5.20 1.97 8.18 4.67 2358.7 1211.5 3421.1 35.6 16.8 35.6 25.1 16.3 32.5 4.8 31.4 13.5 5.4 31.2 12.6 2.4 5.2 1.2 2.7 5.4 1.3 Buy Buy Hold 1.20 1.09 26.86 1.70 1.25 28.55 371.8 872.0 9845.3 8.6 20.0 43.8 8.4 19.5 36.8 13.3 22.3 9.2 12.6 22.2 9.9 4.2 4.1 1.2 4.5 4.6 1.4 Sell 4.34 3.26 7041.2 60.9 54.3 6.1 6.2 0.5 0.6 Buy 101.10 120.50 23708.0 31.1 27.4 100.4 103.0 2.9 3.3 Buy 37.94 52.08 10831.9 20.2 21.6 93.3 99.5 5.3 5.3 Buy Buy Buy 8.69 0.69 1.75 9.84 0.92 2.37 4203.4 158.1 374.3 24.5 18.0 7.7 21.3 15.2 8.0 8.8 5.0 17.5 8.7 5.6 15.4 1.1 2.2 4.5 1.1 2.7 4.5 Page 4 of 5
17. 3-Jan-18 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) Sector Recommendation Guideline OVERWEIGHT: The industry, as per our coverage universe, is expected to outperform the FBMKLCI over the next 12 months. NEUTRAL: The industry, as per our coverage universe, is expected to perform in line with the FBMKLCI over the next 12 months. UNDERWEIGHT: The industry, as per our coverage universe, is expected to underperform the FBMKLCI over the next 12 months. 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 Wednesday, January 03, 2018, the analyst, Damia Othman, 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 5 of 5
18. Wednesday , 03 January, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only L oc al Te ch n ic al R ep o r ts 1. D ai l y Te ch n ic a l St o ck s P ic ks 2. D ai l y St o ck S cr een Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
19. Technical View Wednesday , January 03, 2018 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Technical Stock Picks Malaysia FBM KLCI: 1,782.70 (-14.11, -0.79%) Chartist: Stephen Soo Close Name FBMKLCI 2/Jan 1782.70 Tel: +603-2167-9607 Change High Low (14.11) 1,783.48 1,772.00 Bollinger Bands RSI stsoo@ta.com.my Moving Averages www.taonline.com.my DMI MACD DMI Lower Mid Upper 14d 10d 30d 50d DI + DI - ADX Diff Line Signal Diff 1,697.71 1,743.38 1,789.05 75.65 1,760.74 1,735.44 1,737.80 42.87 11.01 33.23 31.87 12.62 6.57 6.051 BUY MACD Recent Signal DMI MACD Signal Change BUY - - AFFIN 2.34 0.03 2.34 2.28 2.25 2.31 2.37 43.28 2.31 2.34 2.41 19.89 20.47 28.42 -0.58 -0.03 -0.03 0.005 SELL BUY - - ABMB 4.06 -0.02 4.08 4.04 3.73 3.97 4.20 64.35 4.03 3.87 3.81 28.58 12.84 34.14 15.74 0.08 0.08 0.005 BUY BUY - - AMBANK 4.45 0.04 4.45 4.35 4.02 4.26 4.49 59.71 4.35 4.25 4.28 26.91 13.52 31.30 13.39 0.03 0.01 0.018 BUY BUY - - AXIATA 5.39 -0.10 5.48 5.37 5.30 5.37 5.44 71.40 5.38 5.34 5.34 20.03 11.86 28.27 8.18 0.03 0.02 0.009 BUY BUY BUY - CIMB 6.50 -0.04 6.56 6.47 5.79 6.25 6.71 69.43 6.44 6.15 6.15 32.17 9.79 38.62 22.38 0.12 0.09 0.037 BUY BUY - - DIGI 4.89 -0.21 4.93 4.85 4.58 4.78 4.97 71.22 4.83 4.73 4.79 34.06 16.32 23.52 17.74 0.04 0.01 0.029 BUY BUY BUY - GAMUDA 4.90 -0.06 4.98 4.88 4.62 4.83 5.04 57.85 4.90 4.78 4.88 23.73 16.63 21.41 7.09 0.03 0.01 0.027 BUY BUY - - GENTING 9.31 0.11 9.31 9.09 8.62 8.96 9.30 54.86 9.05 9.01 9.10 26.57 14.73 18.71 11.84 0.02 -0.03 0.045 BUY BUY - - GENM 5.78 0.15 5.78 5.55 5.01 5.43 5.85 62.20 5.56 5.30 5.21 26.34 18.82 21.52 7.52 0.12 0.11 0.010 BUY BUY - - IHH 5.90 0.04 5.94 5.83 5.52 5.75 5.97 60.03 5.86 5.71 5.70 18.74 18.52 16.75 0.22 0.06 0.04 0.015 BUY BUY - - IOICORP 4.54 0.00 4.56 4.50 4.37 4.47 4.57 57.05 4.47 4.47 4.47 18.40 18.21 11.05 0.20 0.01 0.00 0.012 BUY BUY - - MALAKOFF 0.89 -0.09 0.92 0.89 0.87 0.91 0.95 62.10 0.91 0.93 0.96 28.32 14.04 25.81 14.28 -0.03 -0.03 (0.007) BUY SELL BUY - MAXIS 6.00 -0.01 6.03 5.94 5.86 5.94 6.02 62.94 5.97 5.93 5.92 10.74 25.15 42.05 -14.40 0.02 0.01 0.007 SELL BUY - - MAYBANK 9.66 -0.14 9.68 9.59 9.12 9.41 9.71 79.14 9.54 9.34 9.30 41.33 8.12 44.63 33.21 0.09 0.06 0.032 BUY BUY - - MBSB 1.13 0.09 1.14 1.04 1.00 1.05 1.09 40.74 1.04 1.07 1.09 18.70 13.39 15.32 5.30 -0.01 -0.02 0.003 BUY BUY - - RHBBANK 5.06 0.06 5.07 4.93 4.71 4.92 5.12 54.64 4.99 4.89 4.92 21.72 18.76 15.92 2.96 0.02 0.01 0.009 BUY BUY - - SIME 2.22 0.01 2.23 2.19 2.00 2.16 2.32 58.92 2.14 2.13 2.11 29.83 13.79 22.76 16.04 0.02 0.01 0.011 BUY BUY - - 15.22 -0.04 15.34 15.12 14.82 15.33 15.83 54.01 15.13 15.19 15.00 30.39 17.66 31.09 12.73 0.03 0.06 (0.028) BUY SELL - - TM 6.17 -0.13 6.20 6.14 5.88 6.13 6.37 56.68 6.17 6.09 6.11 29.74 10.09 29.59 19.65 0.04 0.02 0.021 BUY BUY - - WPRTS 3.79 0.09 3.79 3.62 3.35 3.56 3.77 55.56 3.63 3.56 3.62 22.72 12.57 18.60 10.15 0.03 0.00 0.025 BUY BUY - - AIRASIA 3.34 -0.01 3.36 3.31 3.13 3.26 3.40 59.01 3.32 3.23 3.26 21.27 10.26 24.08 11.01 0.03 0.02 0.010 BUY BUY - - AIRASIA X 0.36 0.03 0.37 0.34 0.32 0.33 0.35 40.88 0.33 0.35 0.36 9.24 20.59 50.98 -11.35 -0.01 -0.01 0.001 SELL BUY - - ARMADA 0.76 -0.01 0.77 0.76 0.73 0.75 0.76 58.59 0.75 0.75 0.75 27.24 14.35 17.90 -14.27 0.00 0.00 0.003 SELL BUY - - BINAPURI 0.34 0.00 0.35 0.34 0.34 0.34 0.35 42.99 0.34 0.34 0.35 12.69 26.96 21.25 15.89 0.00 0.00 0.000 BUY BUY - - CMSB 3.85 -0.05 3.85 3.77 3.59 3.76 3.92 65.05 3.71 3.66 3.68 37.14 21.24 19.68 10.61 0.02 0.01 0.010 BUY BUY - BUY TENAGA DIALOG 2.50 -0.01 2.52 2.49 2.39 2.46 2.53 63.28 2.48 2.43 2.36 22.00 11.38 28.50 10.61 0.04 0.04 (0.000) BUY SELL - - ECO WORLD 1.39 0.01 1.44 1.38 1.34 1.44 1.54 35.24 1.41 1.45 1.49 13.46 28.73 24.91 -15.27 -0.03 -0.03 (0.007) SELL SELL - - EKOVEST 0.93 0.00 0.94 0.93 0.90 0.93 0.95 41.73 0.93 0.94 0.99 22.28 24.09 27.81 -1.80 -0.01 -0.02 0.005 SELL BUY - - GADANG 1.14 0.03 1.14 1.11 1.04 1.08 1.11 53.48 1.08 1.08 1.14 23.89 12.05 30.06 11.84 -0.01 -0.02 0.009 BUY BUY - - HSL 1.43 0.00 1.43 1.40 1.41 1.45 1.49 43.53 1.43 1.46 1.49 21.42 17.45 12.87 3.97 -0.02 -0.02 (0.000) BUY SELL - - ISKANDAR 1.42 -0.01 1.45 1.41 1.20 1.32 1.45 69.47 1.38 1.30 1.32 31.74 5.63 39.83 26.11 0.03 0.02 0.014 BUY BUY - - KIMLUN 2.20 -0.02 2.23 2.20 2.21 2.28 2.35 38.36 2.26 2.30 2.31 28.24 40.84 15.63 -12.60 -0.02 -0.02 (0.002) SELL SELL SELL - KKBE 0.97 0.02 0.97 0.95 0.93 0.99 1.05 46.93 0.98 0.97 0.91 35.57 32.30 33.95 3.27 0.01 0.02 (0.010) BUY SELL - - MUDAJAYA 0.92 -0.02 0.93 0.91 0.87 0.93 0.98 42.30 0.92 0.97 1.05 22.65 33.81 41.31 -11.16 -0.03 -0.04 0.010 SELL BUY - - MRCB 1.16 0.04 1.17 1.11 1.02 1.08 1.14 63.05 1.10 1.05 1.04 26.37 14.53 28.44 11.84 0.02 0.02 0.005 BUY BUY - - NAIM 1.23 -0.19 1.27 1.21 0.89 1.08 1.26 84.03 1.11 1.09 1.13 57.56 6.86 34.00 50.71 0.03 -0.01 0.038 BUY BUY - - SAPURA ENERGY 0.68 -0.04 0.71 0.67 0.46 0.87 1.27 16.99 0.73 1.02 1.21 6.02 47.36 69.23 -41.34 -0.16 -0.16 0.007 SELL BUY - - SUNCON 2.46 -0.05 2.51 2.42 2.33 2.40 2.47 70.52 2.41 2.39 2.37 28.08 8.36 16.62 19.72 0.02 0.01 0.008 BUY BUY - - UEMS 1.10 0.06 1.11 1.04 1.00 1.05 1.09 46.53 1.06 1.05 1.06 17.21 15.41 16.11 1.80 0.00 0.00 0.002 BUY BUY - - WASEONG 1.09 -0.02 1.11 1.06 1.12 1.16 1.19 44.74 1.15 1.14 1.08 27.95 13.30 52.39 14.65 0.01 0.02 (0.011) BUY SELL - - WCT 1.61 -0.01 1.63 1.59 1.43 1.54 1.65 56.00 1.57 1.57 1.59 30.49 10.24 25.02 20.25 0.00 -0.02 0.020 BUY BUY - - The table above is a compilation of actively traded stocks with some popular technical indicators. The technical BUY/SELL signals on the last four columns are auto generated; the first two being existing or recent signals while the last two represent a signal change from BUY to SELL or the reverse, otherwise no change is indicated by a dash. INTERPRETATION OF TECHNICAL INDICATORS: Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders tend to buy on price breakouts above the upper band, and sell when price breaks down below the lower band. 14-day Relative Strength Index (RSI): A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30day moving average should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day average is bearish and imply further near-term downside risk. Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day average, and negative if it remains below. A longer-term uptrend is intact if share price sustain above the 50-day average, and is deemed broken if it breaches below this level. Directional Movement Indicator (DMI): The DMI is an indicator of trend strength. A positive DMI difference (DMI diff) value is bullish and indicate a higher DI+ vs. DI-, while a negative DMI diff is bearish due to a lower DI+ vs. DI- (DMI diff = DI+ minus DI-). A crossover of DI+ above DI- triggers a BUY signal, while a SELL signal is flashed when the DI+ crosses below the DI-. The Average Directional Movement Index (ADX) indicates the strength of a trend, whether it is up or down. The higher the value of ADX, the stronger the trend. An ADX value above 25 suggests a trending market or stock, while a value below 20 signal congestion or absence of trend. Daily Moving Average Convergence Divergence (MACD): The MACD diff value is derived from the difference between the MACD line (the 12-day EMA minus the 26-day EMA) and the MACD signal line (the 9-day EMA of the MACD). A positive MACD diff value is bullish, while a negative MACD diff is bearish. A BUY signal is generated when the MACD diff rises above zero, and SELL signal sparked when the MACD diff value falls below zero. Page 1 of 3
20. 3-Jan-18 Technical Comments : Bargain MRCB & UEM Sunrise Positive technical momentum on MRCB supports near-term upside bias, with a confirmed breakout above the 200-day ma (RM1.16) to aim for the 50%FR (RM1.22) and 61.8%FR (RM1.30) ahead. Key retracement support is from the 23.6%FR (RM1.04). UEM Sunrise may rise further to the 38.2%FR (RM1.14), while a convincing breakout should target the 50%FR (RM1.18) and 61.8%FR (RM1.22) going forward. Crucial support from the 9/11/16 low (RM1.00) strongly cushions downside risk. MRCB RM1.16 (+0.04) BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 1.15 1.08 1.01 10-day 30-day 50-day RM RM RM BUY Recent Signal Signal Change DMI DAILY MACD Recent Signal Signal Change UEM SUNRISE RM RM RM SIMPLE MOVING AVERAGES 1.10 1.05 1.00 10-day 30-day 50-day DMI Recent Signal Signal Change BUY RM1.10 (+0.06) BOLLINGER BANDS Upper Middle Lower 1.11 1.06 1.04 RM RM RM 1.06 1.05 1.06 DAILY MACD BUY Recent Signal Signal Change BUY Page 2 of 3