Bursa Malaysia Daily Market Report - 3 October

Transcription

1. Tuesday , 03 October, 2017 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only N ew s 1. D ai l y M arke t C om men t a ry 2. D ai l y B ri ef Fu nd a me n tal Rep o r ts 1 . K o s s a n Ru b b e r I n d u s t r ie s Be rh a d : G ro w th Sto ry I n ta c t Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck Pi cks 2. D ai l y St o ck S cr een 3. Fore i gn Te ch n i ca l St o c k W at ch ( A US & FS S TI) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2031 6608 www.ta.com.my
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Daily Market Commentary Tuesday , 03 October 2017 For Internal Circulation Only TA Research, e-mail : taresearch@ta.com.my KLSE Market Statistics (02.10.2017) (mil) Main Market 1,370.5 Warrants 134.9 ACE Market 716.1 Bond 11.0 ETF 0.1 Total 2,232.5 Off Market 122.4 Volume +/-chg (RMmn) 18.8 1,624.0 -26.3 11.3 215.3 102.5 3.3 1.9 0.03 0.1 1,739.8 -31.1 171.5 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP October Futures Other Markets DOW JONES NASDAQ (US) FTSE (UK) NIKKEI (JAPAN) KOSPI (KOREA) HANG SENG (HK) FSSTI (S'PORE) SET (BANGKOK) JCI (JAKARTA) SHANGHAI SHENZHEN AUSTRALIA % YTD chg -0.80 -17.69 -80.27 -2.00 -0.05 -0.14 -0.47 -0.11 6.89 9.13 14.65 6.97 22,557.60 6,516.72 7,438.84 20,400.78 2,394.47 27,554.30 3,262.10 1,688.64 5,914.03 3,348.94 1,988.49 5,729.33 152.51 20.76 66.08 44.50 0.00 0.00 42.19 15.48 13.18 0.00 0.00 47.72 0.68 0.32 0.90 0.22 0.00 0.00 1.31 0.93 0.22 0.00 0.00 0.84 14.14 21.06 4.14 6.73 18.16 25.24 13.24 9.44 11.65 7.90 0.98 1.12 (mn) 44.8 34.0 9.6 7.0 5.0 5.0 4.0 3.2 2.4 2.1 2.0 1.5 % chg 1,754.78 12,513.60 16,870.72 1,749.50 @ @ @ @ @ @ @ @ @ @ @ @ (RM) Counter 0.05 0.34 9.55 0.06 2.05 0.30 1.03 1.93 4.67 6.19 3.67 0.85 SIME PCHEM GENTING MISC GENM HLBANK PETDAG TM HAPSENG PPB Exchange Rate USD/MYR 4.2337 0.0127 USD/JPY 112.78 0.3300 EUR/USD 1.175 -0.0068 Mkt Cap. Chg (RM’mn) (RM) 61,208 46,963 36,242 32,496 30,043 28,466 24,061 23,675 22,606 18,897 -0.02 -0.05 -0.07 -0.02 -0.08 -0.01 -0.10 -0.20 -0.02 -0.10 The local benchmark index drifted for a tenth straight session to a near six-month low Monday, with the absence of local fund support and positive domestic leads dampening market tone.The KLCI shed 0.8 points to end at 1,754.78, off an early high of 1,758.15 and low of 1,750.94, as losers beat gainers 538 to 288 on cautious turnover totaling 2.23bn shares worth RM1.74bn. Persistent foreign selling amid concerns over the impact from deleveraging of the US government's balance sheet which will ultimately raise US interest rates should continue to exert pressure on the local benchmark.Yesterday's breakdown of the mid-July low of 1,751, if followed through, should accelerate correction to the crucial 200-day ma uptrend support at 1,736, with next critical support at 1,728. On the upside, immediate resistance will be the double-top peak of 13 Sept high of 1,793 and 16 June peak of 1,796. Dialog shares need decisive breakout above the 7/9/17 high (RM2.11) to extend rally towards the 138.2%FP (RM2.19) and 150%FP (RM2.26) ahead, while immediate support from RM1.99 is reinforced by the 100-day ma (RM1.95). Mudajaya seems poised for recovery from recent base building, with a confirmed breakout above the 50%FR (RM1.20) to aim for the 61.8%FR (RM1.31) and 76.4%FR (RM1.45) going forward, while support is found at the lower Bollinger band (RM1.02) and 23.6%FR (95sen). News Bites • • • • Top 09 KLCI Movers Based on Mkt Cap. Off Market NICORP ACME MAYBANK TIGER MYEG ECOFIRS WZSATU AEON XIANLNG ORIENT ABMB FPGROUP Review & Outlook Value Value/ +/-chg Volume Up Down -400.8 1.18 207 387 -6.6 0.08 39 88 16.4 0.14 39 56 0.1 0.17 2 5 0.03 1.11 1 2 0.78 288 538 78.0 1.40 Vol. (mn) 7.35 3.59 1.75 0.76 4.54 10.58 0.29 2.45 0.18 0.27 Commodities Futures Palm Oil (RM/mt) 2,667.00 -30.00 Crude Oil ($/Barrel) 50.57 -1.07 Gold ($/tr.oz.) 1,273.50 -9.30 • • • • • • • • Important Dates MTOUCHE - 6:2 Rights Issue - RI of up to 557.5m shares together with up to 278.8m free detachable warrants. 6 rights shares together with 3 free warrants for every 2 existing shares held, at an issue price of RM0.20 per rights share. Entitlement Date: 03/10/2017. Trading of Rights: 04/10 - 18/10/2017. Application Closed: 26/10/2017. LISTING ON: 09/11/2017. • • Petronas Chemicals Bhd has disposed its 50% stake in its polymers and glycol plants at RAPID to Saudi Aramco for USD900mn. Tenaga Nasional Bhd has signed a MoU with Elia System Operator SA, one of the largest Transmission System Operator in Europe, for a strategic collaboration in sharing of best practices in capacity building. The Department of Environment has issued a stop-work order on Lotte Chemical Titan Holding Bhd's KBR Catalytic Olefins Technology catalytic cracking reactor under the TE3 project. Sime Darby Bhd has novated its rights and obligations under its Islamic debt papers programmes to its property development arm, Sime Darby Property Bhd. Johan Holdings Bhd plans to develop part of the 27-acre land in Puchong where the ceramics tiles manufacturing plant of its former subsidiary Prestige Ceramics Sdn Bhd is located. JAKS Resources Bhd has entered into a sale and purchase agreement with Hectare Square Sdn Bhd to dispose a 1.214ha freehold industrial land housing a 1-storey factory in Subang Jaya for RM25.87mn cash. Malaysia Airport Holdings Bhd is in the midst of wooing 5 new airlines, a mix of full and budget carriers, to fly to the Kuala Lumpur International Airport according to its managing director Datuk Badlisham Ghazal. Bina Darulaman Bhd has clinched a RM17.18mn tender from the Agriculture and Agro-Based Industry Ministry to develop tertiary irrigation system to help boost paddy farming productivity in Kedah and Perlis. Ranhill Holdings Bhd has acquired 26.7% stake in Tawau Green Energy Sdn Bhd for RM18.70mn. Carimin Petroleum Bhd has secured contract for the provision of maintenance, construction and modification services from Petronas Carigali Sdn Bhd for an undisclosed sum. Uchi Technologies Bhd has been granted pioneer status by the Malaysian Investment Development Authority, which is valid for 5 years from the production date yet to be fixed. Tropicana Corporation Bhd has appointed Dion Tan Yong Chien, 27, son of its founder and largest shareholder Tan Sri Danny Tan Chee Sing, as group managing director. Reduced new orders in the manufacturing sector in September lowered the Nikkei Malaysia Manufacturing Purchasing Managers' Index to 49.9 from August's 50.4. The Institute for Supply Management (ISM) said its index of national factory activity surged to a reading of 60.8 last month, the highest reading since May 2004, from 58.8 in August Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan, Head of Research MENARA TA ONE, 22 JALAN for TA SECURITIES HOLDINGS BERHAD (14948-M) A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BHD P RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL : 603 - 2072 1277. FAX : 603 - 2032 5048 www.ta.com.my
3. Tuesday , October 03, 2017 FBMKLCI: 1,754.78 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Brief Market View, News In Brief: Corporate, Economy, and Share Buybacks TA Research Team Coverage Tel: +603-2072 1277 taresearch@ta.com.my www.taonline.com.my M a r k e t V i e w Foreign Selling to Pressure Index The local benchmark index drifted for a tenth straight session to a near six-month low Monday, with the absence of local fund support and positive domestic leads dampening market tone. The KLCI shed 0.8 points to end at 1,754.78, off an early high of 1,758.15 and low of 1,750.94, as losers beat gainers 538 to 288 on cautious turnover totaling 2.23bn shares worth RM1.74bn. Breakdown of 1,751 to Target 1,736 Persistent foreign selling amid concerns over the impact from deleveraging of the US government’s balance sheet which will ultimately raise US interest rates should continue to exert pressure on the local benchmark. Yesterday’s breakdown of the mid-July low of 1,751, if followed through, should accelerate correction to the crucial 200-day ma uptrend support at 1,736, with next critical support at 1,728. On the upside, immediate resistance will be the double-top peak of 13 Sept high of 1,793 and 16 June peak of 1,796. Buy Dialog & Mudajaya Dialog shares need decisive breakout above the 7/9/17 high (RM2.11) to extend rally towards the 138.2%FP (RM2.19) and 150%FP (RM2.26) ahead, while immediate support from RM1.99 is reinforced by the 100-day ma (RM1.95). Mudajaya seems poised for recovery from recent base building, with a confirmed breakout above the 50%FR (RM1.20) to aim for the 61.8%FR (RM1.31) and 76.4%FR (RM1.45) going forward, while support is found at the lower Bollinger band (RM1.02) and 23.6%FR (95sen). Robust Economic Data from China Lift Asian Markets Asia markets traded modestly higher on Monday, lifted by a robust reading of industrial activity in China issued over the weekend, though trading activity across the region remain muted as several major markets in the region were shut for holidays. China’s manufacturing activity grew at the fastest pace since 2012 in September as factories cranked up output to take advantage of strong demand and high prices. The official Purchasing Managers’ Index (PMI) released on Saturday rose to 52.4 in September, from 51.7 in August. Prior to market open, the Bank of Japan also released the results of its "Tankan" survey that showed business confidence among large manufacturers in Japan improved in the three months from the previous survey in June. Markets in China and South Korea were shut all week, while Hong Kong and India were closed for holidays. In Australia, the ASX 200 closed up 47.69 points, or 0.84 percent, to 5,729.30. Major banking shares climbed, with ANZ closing up 1.01 percent, Commonwealth Bank higher by 1.45 percent, Westpac up 1.07 percent and the National Australia Bank advancing 0.73 percent. Japan’s Nikkei share average rose on Monday, buoyed by Wall Street’s increases and upbeat domestic data, although caution towards an upcoming general election limited gains. The Nikkei ended Monday 0.2 percent higher at 20,400.78. Page 1 of 9
4. 3-Oct-17 Wall Street Hit Record Highs on Strong Manufacturing Data U .S. stocks started the fourth quarter on a strong note on Monday, with all three major indexes hitting record high closes as data pointed to underlying strength in the economy. A measure of U.S. manufacturing activity surged to a near 13-1/2-year high in September. Disruptions to the supply chains caused by Hurricanes Harvey and Irma resulted in factories taking longer to deliver goods and boosted raw material prices. Optimism about tax reform also continued to bolster stocks. President Donald Trump last week proposed the biggest tax overhaul in three decades, but offered scant details. The small-cap Russell 2000 posted another record high close. Small-cap companies are expected to be among the biggest beneficiaries of a tax cut. Among the sectors with the biggest gains on Monday were materials, industrials and financials. The Dow Jones Industrial Average rose 152.51 points, or 0.68 percent, to 22,557.6, the S&P 500 gained 9.76 points, or 0.39 percent, to 2,529.12 and the Nasdaq Composite added 20.76 points, or 0.32 percent, to 6,516.72. Page 2 of 9
5. 3-Oct-17 N e w s I n B r i e f Corporate The Department of Environment has issued a stop-work order on Lotte Chemical Titan Holding Bhd 's KBR Catalytic Olefins Technology catalytic cracking reactor under the TE3 project. The halt was for the company to mitigate and reduce odour emission and eliminate surface oil sheen/film discharge. The company is attending to the remedial actions and the commissioning and commercial startup of TE3 project remain on target by fourth quarter of 2017. (Bursa Malaysia/The Star) Comment: This announcement is within our expectations (please refer to report dated 25th Sept). To recap, we do not discount the possibility that TE3's start-up date may be deferred due to prolonged investigations and precautionary measures. Assuming the black skies scenario of a 3month delay to Feb 2018, this could potentially result in a cut of 4.5%/2.0% to our FY17E/FY18F forecasts. Nevertheless, we await final details before effecting any changes to our estimates. Maintain Buy on TTNP with unchanged TP of RM6.88 based on unchanged 7x FY18 EV/EBITDA. Sime Darby Bhd has novated its rights and obligations under its Islamic debt papers programmes to its property development arm, Sime Darby Property Bhd. The Islamic programmes comprise an Islamic Medium-Term Note programme of RM4.5bn and an Islamic Commercial Paper/Islamic Medium-Term Note programme of RM500mn. Proceeds from any issuance will be used to finance working capital requirements and general corporate purposes, and to finance future investments and capital expenditure, as well as to refinance debt obligations. (Bursa Malaysia/The Edge) Petronas Chemicals Bhd (PCHEM) has disposed its 50% stake in its polymers (capacity: 1.25bn tpa) and glycol (1.4bn tpa) plants at RAPID to Saudi Aramco for USD900mn (RM3.8bn). Recall that back in Nov-15, PCHEM estimated the cost of its RAPID petrochemical plants at USD3.9bn (inclusive of 350k tpa elastomers plant that was subsequently cancelled). Additionally, PCHEM does not discount the possibility of introducing additional new capacity at RAPID (eg. flexi polyethylene). To recap, Aramco also owns 50% stake in Petronas’ RAPID refinery cracker that will receive 70% of its crude feedstock supply from Aramco. In turn, the integrated petrochemical plants in RAPID receive feedstock from the said refinery. (Bursa Malaysia) Comment: We are largely neutral on this announcement, as it bears pros and cons for PCHEM. Positives include: i) diversification of project’s risks and financing, ii) leverage on Aramco’s experience in large scale integrated petrochemical projects, (e.g., Sadara Chemical Co.), and iii) enhanced feedstock reliability. On the flipside, this divestment results in dilution of lucrative margins from downstream specialty products. Furthermore, we believe that PCHEM has the capacity to spearhead this project entirely on its own, given its healthy balance sheet (net cash: RM8.2bn with close-to-zero borrowings, 2011-16 Annual operating cash flow: RM4.7bn). We have yet to include RAPID projects (completion: 2019) into our forecasts pending more clarity. Maintain Hold with TP of RM7.62 based on 11.5x FY18 EV/EBITDA. Tenaga Nasional Bhd (TNB) has signed a MoU with Elia System Operator SA, one of the largest Transmission System Operator in Europe, for a strategic collaboration in sharing of best practices in capacity building. The MoU covers cooperation in asset management, cross-boundary system and market operations, grid development, network studies and renewable integration. TNB has proposed 13 collaborative projects under the two-year MoU, which is extendable for another year. (Bursa Malaysia) Johan Holdings Bhd plans to develop ceramics tiles manufacturing plant of its located. The first phase will be a mixed commercial development which could part of the 27-acre land in Puchong where the former subsidiary Prestige Ceramics Sdn Bhd is development comprising service apartments and have projected gross development profit of Page 3 of 9
6. 3-Oct-17 RM69 .5mn. The company said the application process for the phase one of the development plan could take up to 12 months and the development period for phase one was about 3 years. (Bursa Malaysia/The Edge) JAKS Resources Bhd has entered into a sale and purchase agreement with Hectare Square Sdn Bhd to dispose a 1.214ha freehold industrial land housing a 1-storey factory in Subang Jaya for total cash consideration of RM25.87mn. The sales proceed will be used to repay bank borrowings and the proposed disposal is expected to be completed in the first quarter of calendar year 2018. (Bursa Malaysia) Bina Darulaman Bhd has clinched a RM17.18mn tender from the Agriculture and AgroBased Industry Ministry to develop tertiary irrigation system to help boost paddy farming productivity in Kedah and Perlis. The completion period for the project shall be 18 months from the date of site possession. (Bursa Malaysia/The Star) Ranhill Holdings Bhd has acquired 26.7% stake in Tawau Green Energy Sdn Bhd (TGE) for RM18.70mn. TGE is principally involved in the design, construct, own, operate and maintain a renewal energy power plant for selling electrical energy to Sabah Electrical Sdn. Bhd. (Bursa Malaysia/The Star) Carimin Petroleum Bhd has secured contract for the provision of maintenance, construction and modification services from Petronas Carigali Sdn Bhd for an undisclosed sum. The details of the scope of works in relation to the contract will be addressed in a work order which are generally related to topside structural maintenance, work over preparation and facilities improvement project. The contract duration will be for a primary period of 5 years with 1-year extension option. (Bursa Malaysia/The Star) Tanco Holdings Bhd has entered into Sale and Purchase Agreement with Wawasan Indera Sdn. Bhd. to acquire a 4-storey building together with all its existing fittings and fixtures and with a gross floor area of approximately 16,355 sq. ft., erected on all that piece of freehold land measuring approximately 435 square metres at Pekan Kinrara, Daerah Petaling, Selangor for total cash consideration of RM8mn. The acquisition is expected to be completed within 3 months from the date of the agreement. (Bursa Malaysia) Uchi Technologies Bhd has been granted pioneer status by the Malaysian Investment Development Authority, which is valid for 5 years from the production date yet to be fixed. The company said the pioneer status was for the design, development and manufacturing of real-time centralized energy measurement and control system, high precision hot fluid temperature control system, and ultra-low temperature and mass sensing control system for bio-chemical equipment. (Bursa Malaysia/The Edge) Tropicana Corporation Bhd (TCB) has appointed Dion Tan Yong Chien, 27, son of its founder and largest shareholder Tan Sri Danny Tan Chee Sing, as group managing director. Dion was previously with Accenture, a global management and technology consulting firm, as a strategy consultant with experience in telecommunications, media and property sectors. Meanwhile, Datuk Yau Kok Seng, the current CEO of TCB, will retire at the end of November this year due to health reasons. (Bursa Malaysia/The Edge/The Sun) Malaysia Airport Holdings Bhd is in the midst of wooing 5 new airlines, a mix of full and budget carriers, to fly to the Kuala Lumpur International Airport according to its managing director Datuk Badlisham Ghazal. (Bernama) The Sultan of Johor Sultan Ibrahim Sultan Iskandar has emerged as the second largest individual shareholder of Berjaya Asset Bhd as he bought additional 6.7% stake via direct business transaction. The share acquisition brought Sultan Ibrahim’s total shareholding to Page 4 of 9
7. 3-Oct-17 10 .09%. (Bursa Malaysia/The Edge) Mtouche Technology Bhd has entered a MoU with A Conceptech Sdn. Bhd to collaborate and explore opportunities to develop, support, promote and enrich the Onlineto-Offline International Educational Hub and its programs for higher learning, e-learning research activities, and to promote highest level human experience in conventional education environment by embracing technological innovation. (Bursa Malaysia) Page 5 of 9
8. 3-Oct-17 N e w s I n B r i e f Economy Asia Malaysia Sept Nikkei PMI Slips to 49 .9 on Lower New Orders, Says IHS Markit Reduced new orders in the manufacturing sector in September dragged down the Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) slightly to 49.9 following a marked improvement in August which recorded 50.4. According to a report by IHS Markit, which compiles the survey, new orders continued to decline amid reports of weak demand from domestic and international sources, and that output growth slowed to a fractional pace. Despite that, the PMI’s average over the third quarter of 2017 as a whole was the highest since the first quarter in 2015. In addition, IHS Markit said firms continued to raise their staffing levels, with the rate of employment growth the second-fastest since October 2015. On the price front, a sharp and accelerated increase in input costs prompted firms to raise their output charges in order to protect margins. Separately, Malaysia’s latest Business Confidence Index, RAM Ratings agency said that corporations and small and medium enterprises (SMEs) have continued to show positive sentiment, moving forward. The corporates and SME indices registered positive readings of 55.8 and 52.1 for the fourth quarter of 2017 to the first quarter of 2018 (4Q17-1Q18) period. (The Edge Market/ The Star) Singapore's Home Prices Rise for First Time in Four Years Singapore’s home prices rose for the first time in four years, snapping a record run of declines and confirming recent signs that the property market is rebounding. An index tracking private residential prices gained 0.5% in the three months ended Sept 30 from the previous quarter, according to preliminary data from the Urban Redevelopment Authority released. A jump in home sales and developers’ aggressive bids for land are stoking optimism the property market is making a comeback. At the same time, the bulk of Singapore’s cooling measures rolled out from 2009 are still in place. Before the latest data, a 15-quarter decline in prices was the longest since the index was first published in 1975. (Bloomberg) Australia Manufacturing Sector Slows in September The manufacturing sector in Australia continued to expand in September, albeit at a much slower pace, the latest survey from the Australian Industry Group showed with a Performance of Manufacturing Index score of 54.2. That's down sharply from 59.8 in August, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction. It also marks the 12th straight month of expansion. Individually, production, new orders, employment, stocks, sales, exports and deliveries all were in expansion territory. (RTT News) Japan Business Mood Hits Decade-High: BOJ Tankan Big manufacturers have more confidence in Japan’s business conditions than they have had for a decade as global demand adds momentum to economic recovery, a closely watched central bank survey showed. The upbeat data supports Bank of Japan policymakers’ hopes that a sustained economic recovery will boost wages and household spending, helping to accelerate inflation towards the central bank’s ambitious 2% target. The Bank of Japan “tankan” survey could also help premier Shinzo Abe as he tries to convince voters in an Oct. 22 election that his “Abenomics” stimulus policies have improved their livelihoods, analysts say. The BOJ’s quarterly “tankan” survey showed the headline index for big manufacturers’ sentiment stood at plus 22 in September, handily exceeding a median market forecast of plus 18 to mark the highest level since September 2007. The big non-manufacturers’ sentiment index stood at plus 23, unchanged from June and matching a median market forecast, the survey showed. Big firms expect to increase capital expenditure by 7.7% in the Page 6 of 9
9. 3-Oct-17 current fiscal year ending in March 2018 , compared with a median market forecast for a 8.3% gain. Both big manufacturers and non-manufacturers expect business conditions to deteriorate in the next three months, according to the survey, reflecting their concerns about uncertain outlook. (Reuters) United States US Manufacturing Activity Hits 13-year High; Construction Spending Up U.S. factory activity surged to a more than 13-year high in September amid strong gains in new orders and raw material prices, pointing to underlying strength in the economy even as Hurricanes Harvey and Irma are expected to dent growth in the third quarter. The economic outlook was also bolstered by other data showing a rebound in construction spending in August. The acceleration in manufacturing activity and the accompanying increase in prices could harden expectations that the Federal Reserve will raise interest rates in December. The Institute for Supply Management (ISM) said its index of national factory activity surged to a reading of 60.8 last month, the highest reading since May 2004, from 58.8 in August. A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12% of the U.S. economy. The ISM said Harvey and Irma had caused supply chain and pricing issues in the chemical products sector. There were also concerns about the disruptive impact of the storms in the food, beverage and tobacco products industries. The hurricanes are expected to chop off as much as six-tenths of a percentage point from gross domestic product growth in the third quarter. Harvey, which pummeled Texas at the end of August, has undercut consumer spending and weighed on industrial production, homebuilding and home sales. Further weakness in likely after Irma struck Florida in early September, causing widespread power cuts. Manufacturing outside the areas affected by the hurricanes remained strong in September. The ISM survey's production sub-index rose 1.2 points to a reading of 62.2 in September. A gauge of new orders jumped to 64.6 in September from 60.3 in August. Factories reported paying more for raw materials, with the survey's prices paid index surging 9.5 point to 71.5, the highest reading since May 2011. In separate report, the Commerce Department said construction spending rose 0.5% to $1.21 trillion. July's construction outlays were revised sharply down to show a 1.2% plunge instead of the previously reported 0.6% drop. Construction spending increased 2.5% on a year-on-year basis. In August, spending on private residential projects increased 0.4%, rising for a fourth straight month. Spending on nonresidential structures increased 0.5%, snapping two straight monthly declines. In the wake of Harvey and Irma, nonresidential construction spending could fall in September. According to the Commerce Department, Texas and Florida accounted for 22% of U.S. private nonresidential construction spending in 2016. (CNBC) Europe and Uni ted Kingdom ECB’s Praet: Deflation Has Disappeared but Inflation Isn’t High Enough Inflation in the Eurozone hasn’t yet reached the European Central Bank’s definition of price stability and the path toward this goal will shape the ECB’s plan to end its bond-buying program, the central bank’s chief economist said Monday. Peter Praet said the ECB remained confident that inflation would ultimately hit levels that were close to, but below, 2%, the ECB’s medium-term price stability target. But “the evidence still shows insufficient progress toward a sustained adjustment in the path of inflation toward those levels,” Mr. Praet said in remarks in London and published on the ECB’s website. Data released last week showed inflation in the Eurozone was 1.5% on the year in September, lower than economists’ expectations. Moreover there was evidence that price pressures could be easing. Core inflation, which excludes prices of energy and food that the ECB has little influence over, stood 1.1%, its lowest level since June. The reading for September may mark a peak for many months to come. That is because oil and food prices rose rapidly in the early months of this year, but have since moderated. Indeed, the ECB has warned that inflation is likely to dip below 1% at the start of next year, when it is likely to start to cut back on its bond buys. (The Wall Street Journal) Page 7 of 9
10. 3-Oct-17 Eurozone September Factory PMI Hits Highest Since Feb 2011 Factories across the Eurozone enjoyed their most productive month since early 2011 in September , and the momentum looks set to continue into October as new order growth accelerated, a survey showed. That increase in demand and activity came despite firms raising prices at the fastest rate in five months, in welcome news for policymakers at the European Central Bank, which look set to announce a reduction of its asset-buying programme soon. IHS Markit’s final manufacturing Purchasing Managers’ Index climbed to 58.1 from August’s 57.4, just missing a flash estimate of 58.2 but its highest level since February 2011. Any reading above 50 indicates growth. (Reuters) Eurozone Unemployment Rate Unchanged at 9.1% in August The number of unemployed in the Eurozone eased by 42,000 to 14.751 million in August against July, but the jobless rate remained at 9.1%, data from the European Union’s statistics office Eurostat showed. Economists polled by Reuters had expected the unemployment rate to ease to 9.0% from 9.1% in July. The unemployment rate eased in the Eurozone’s biggest economy Germany to 3.6% in August from 3.7% in July. It also eased by 0.1 point in Ireland, Italy, and the Netherlands. It rose by 0.1 point in France and 0.2 points in Austria. (Reuters) UK Factory Growth Slows, Price Pressures Rocket Again: Markit PMI British manufacturing growth cooled last month as cost pressures lurched higher, according to a survey that could put the Bank of England a step closer to raising interest rates, despite a murky outlook ahead of Brexit. IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) fell to 55.9 from a downwardly revised 56.7 in August, undershooting the consensus of 56.4 in a poll of economists. By contrast, Eurozone factories had their best month since early 2011. While the PMI survey signaled solid expansion at British factories, helped by robust exports, softer growth in new orders and a slowdown among producers of investment goods raised concern about the months ahead. Britain’s economy initially withstood the shock of the June 2016 vote to leave the European Union. But growth began to slow sharply this year as inflation rose following the pound’s post-Brexit vote plunge, hitting households. (Reuters) Page 8 of 9
11. 3-Oct-17 Share Buy-Back : 02 October 2017 Company AMPROP BORNOIL CHEETAH DAIBOCI E&O EKSONS FFHB GRANFLO JCBNEXT TROP UNIMECH Bought Back Price (RM) Hi/Lo (RM) 75,000 300,000 364,700 31,000 104,900 58,300 41,000 40,000 9,000 160,000 9,400 0.75/0.74 0.10 0.49/0.48 2.19/2.18 1.57/1.55 0.87/0.86 0.675/0.665 0.25/0.245 1.70 0.94/0.93 1.05/1.04 0.785/0.73 0.10/0.095 0.49/0.465 2.20/2.18 1.57/1.54 0.87/0.86 0.68/0.645 0.25/0.24 1.70 0.94/0.925 1.06/1.04 Total Treasury Shares 14,874,500 300,000 11,752,300 515,600 6,611,247 3,539,600 384,000 7,359,000 197,300 5,956,142 5,718,010 Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2031 6608 www.ta.com.my Page 9 of 9
12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) BETA EPS (sen) PER (X) Div Yield (%) FY17 FY18 FY17 FY18 FY17 FY18 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 02-Oct-17 AUTOMOBILE BAUTO 2.08 2.40 0.99 10.3 16.1 20.1 13.0 5.6 7.7 2.32 -10.3 1.84 13.0 -2.3 MBMR 2.05 2.09 0.94 20.7 23.2 9.9 8.8 2.0 2.3 2.67 -23.2 2.03 1.0 -4.2 PECCA 1.55 1.69 na 7.8 11.0 19.9 14.1 3.2 3.6 2.00 -22.5 1.45 6.9 -2.5 UMW 5.55 5.04 1.32 19.7 30.6 28.1 18.1 2.3 3.6 6.08 -8.7 4.09 35.6 31.4 BANKS & FINANCIAL SERVICES ABMB 3.88 4.80 1.31 33.6 31.0 11.6 12.5 4.1 4.1 4.49 -13.6 3.60 7.8 4.3 AFFIN 2.54 3.70 0.90 29.4 33.6 8.6 7.6 3.1 3.1 3.00 -15.3 2.14 18.7 6.3 AMBANK 4.40 5.70 1.19 43.9 48.6 10.0 9.1 4.0 4.1 5.70 -22.8 3.90 12.8 2.1 CIMB 6.34 8.00 1.50 49.6 55.2 12.8 11.5 4.0 4.4 7.08 -10.5 4.49 41.2 40.6 HLBANK 15.86 17.50 0.63 104.9 114.2 15.1 13.9 2.8 2.8 16.30 -2.7 12.80 23.9 17.5 MAYBANK 9.55 10.20 0.98 69.7 76.1 13.7 12.6 5.2 5.2 9.86 -3.1 7.52 27.0 16.5 PBBANK 20.58 23.60 0.65 137.2 142.4 15.0 14.5 2.7 2.8 20.90 -1.5 19.40 6.1 4.4 RHBBANK 5.04 5.80 1.36 50.6 55.0 10.0 9.2 3.0 3.0 5.59 -9.8 4.53 11.3 7.0 BURSA 9.98 11.10 0.72 40.2 39.0 24.8 25.6 3.4 3.4 10.98 -9.1 8.08 23.5 14.4 CONSTRUCTION BPURI 0.35 0.38 0.65 4.7 4.6 7.5 7.6 0.0 0.0 0.51 -31.4 0.33 7.7 -19.5 GADANG 1.22 1.75 0.25 15.3 14.3 8.0 8.5 2.5 2.5 1.37 -10.9 0.89 37.9 16.2 GAMUDA 5.31 6.00 0.98 28.6 34.5 18.6 15.4 2.3 2.3 5.52 -3.8 4.65 14.2 11.1 IJM 3.31 3.50 0.86 15.3 20.2 21.7 16.4 2.3 2.9 3.61 -8.3 3.07 7.8 3.4 PESONA 0.51 0.78 0.91 4.9 5.7 10.2 8.8 5.0 5.0 0.74 -31.3 0.40 26.3 -16.5 SENDAI 0.83 0.58 1.31 8.3 9.6 10.0 8.6 1.2 1.2 1.39 -40.3 0.46 82.4 44.3 SUNCON 2.29 2.26 na 12.7 12.5 18.1 18.2 2.4 2.4 2.41 -5.0 1.56 46.8 34.7 WCT 1.74 1.49 0.86 11.5 11.7 15.1 14.9 1.7 1.7 2.48 -29.7 1.61 8.1 1.2 LITRAK 5.75 6.26 0.37 41.9 45.7 13.7 12.6 4.3 4.3 6.15 -6.5 5.57 3.2 -2.2 Building Materials CHINHIN 1.32 1.58 na 8.6 11.8 15.3 11.2 3.0 4.5 1.49 -11.4 0.85 56.2 51.7 WTHORSE 1.97 1.67 0.38 6.7 10.0 29.4 19.8 5.1 5.1 2.19 -10.0 1.92 2.6 -2.0 CARLSBG 14.86 18.06 0.55 79.3 86.2 18.7 17.2 5.3 5.8 15.30 -2.9 13.72 8.3 6.8 HEIM 18.68 19.14 0.45 79.6 84.0 23.5 22.2 3.8 4.0 19.58 -4.6 15.56 20.1 14.0 AEON 2.04 2.23 0.44 6.5 7.5 31.3 27.1 2.0 2.3 2.91 -29.9 1.98 3.0 -20.6 AMWAY 7.30 8.62 0.33 30.6 38.7 23.8 18.9 4.5 4.8 8.49 -14.0 7.05 3.5 -0.4 F&N 24.66 27.41 0.20 121.1 150.9 20.4 16.3 2.8 3.0 26.00 -5.2 22.44 9.9 5.0 HUPSENG 1.16 1.50 0.36 6.5 6.6 17.8 17.5 5.2 5.2 1.28 -9.4 1.13 2.6 0.8 NESTLE 84.80 92.76 0.41 292.7 325.4 29.0 26.1 3.2 3.3 85.98 -1.4 74.12 14.4 8.4 CONSUMER Brewery Retail PADINI 4.50 4.67 0.48 23.5 27.0 19.2 16.7 2.6 2.8 4.65 -3.2 2.26 99.1 77.2 POHUAT 1.92 2.50 0.69 27.4 27.4 7.0 7.0 4.2 4.2 2.06 -6.8 1.52 26.3 11.0 QL 3.94 4.32 0.39 15.7 16.7 25.1 23.6 1.1 1.1 4.03 -2.2 3.26 21.0 18.3 SIGN 0.84 1.23 0.85 8.5 11.6 9.9 7.3 3.0 4.2 1.07 -21.5 0.78 7.7 5.7 42.92 52.08 1.22 198.6 187.4 21.6 22.9 4.7 4.7 51.04 -15.9 40.61 5.7 -2.8 GENTING 9.48 11.51 1.43 45.6 54.4 20.8 17.4 1.5 1.7 10.00 -5.2 7.50 26.4 19.3 GENM 5.30 6.53 1.47 21.0 27.1 25.2 19.5 1.5 1.7 6.38 -16.9 4.42 19.9 17.3 BJTOTO 2.44 3.34 0.83 18.3 23.2 13.3 10.5 5.7 6.6 3.33 -26.7 2.25 8.4 -17.6 LUSTER 0.13 0.15 2.12 0.4 0.4 35.8 36.1 0.0 0.0 0.16 -18.8 0.05 160.0 160.0 IHH 5.70 6.41 0.77 7.9 13.1 71.8 43.6 0.6 0.6 6.60 -13.6 5.54 2.9 -10.2 KPJ 1.05 4.67 0.40 13.3 16.2 7.9 6.5 5.8 7.1 1.14 -7.9 0.96 9.1 0.5 HARTA 6.95 6.87 0.60 17.2 24.6 40.5 28.3 1.2 1.6 7.40 -6.1 4.53 53.4 43.9 KOSSAN 6.90 7.35 0.14 31.6 38.7 21.9 17.8 2.3 2.8 7.36 -6.3 5.62 22.8 4.7 SUPERMX 1.70 1.80 0.31 10.6 15.1 16.1 11.3 1.9 2.6 2.38 -28.6 1.69 0.6 -19.4 TOPGLOV 5.60 6.05 -0.26 26.4 29.8 21.2 18.8 2.4 2.7 5.94 -5.7 4.56 22.8 4.7 KAREX 1.50 1.60 0.23 2.8 4.6 53.8 32.3 1.3 0.8 2.62 -42.7 1.37 9.5 -36.4 SCIENTX 8.67 9.38 0.41 52.3 64.9 16.6 13.4 1.8 2.1 9.85 -12.0 6.50 33.4 29.4 SKPRES 1.51 1.75 0.56 8.4 10.4 18.1 14.6 2.8 3.4 1.55 -2.6 1.24 21.8 17.1 ASTRO 2.83 3.40 1.21 13.2 14.6 21.4 19.4 4.4 4.6 2.94 -3.7 2.47 14.6 8.8 MEDIA PRIMA 0.78 0.60 0.32 0.9 2.8 91.5 27.7 0.9 2.9 1.36 -42.6 0.66 19.1 -32.2 STAR 1.69 1.00 0.60 3.3 4.0 51.0 41.8 24.9 10.7 2.22 -23.8 1.63 3.7 -13.2 Tobacco BAT GAMING Casino NFO HEALTHCARE Hospitals Rubber Gloves INDUSTRIAL MEDIA OIL & GAS DNEX 0.48 0.75 1.22 3.6 4.5 13.1 10.5 2.1 2.1 0.69 -31.2 0.23 111.1 86.3 LCTITAN 4.98 6.88 na 44.1 65.0 11.3 7.7 3.6 6.4 6.53 -23.7 4.14 20.3 -23.4 MHB 0.74 0.78 1.64 -2.0 -0.5 na na 0.0 0.0 1.16 -36.6 0.63 17.6 -19.7 MISC 7.28 6.56 1.03 56.3 46.9 12.9 15.5 4.1 4.1 7.90 -7.8 7.03 3.6 -1.0 PANTECH 0.69 0.69 1.10 4.0 6.1 17.4 11.2 2.6 4.0 0.71 -2.1 0.44 58.6 55.1 PCHEM 7.30 7.62 1.00 44.3 44.7 16.5 16.3 2.6 2.7 7.80 -6.4 6.54 11.6 4.6 SENERGY 1.46 1.66 2.68 6.6 -0.4 22.1 na 0.7 0.0 2.10 -30.5 1.33 9.8 -9.9 SERBADK 2.29 2.77 na 22.1 25.2 10.4 9.1 2.9 3.3 2.34 -2.1 1.51 51.7 52.7 UMWOG 0.30 0.80 1.63 -12.0 -3.5 na na 0.0 0.0 0.92 -67.5 0.27 9.8 -64.9 0.0 0.0 1.98 -27.8 1.28 11.7 -15.9 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.43 1.55 1.22 11.3 12.3 12.7 11.6
13. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) FGV 1.67 1.52 1.91 IJMPLNT 2.86 3.58 0.40 IOICORP 4.53 4.14 1.27 KFIMA 1.70 1.89 0.50 KLK 24.62 26.18 SIME 9.00 UMCCA BETA EPS (sen) FY17 PER (X) Div Yield (%) 52weeks 52weeks % Chg FY18 FY17 FY18 FY17 FY18 High Price % Chg Low Price % Chg YTD 1.0 2.5 168.9 65.6 3.0 3.0 2.45 -31.8 1.42 17.6 7.7 12.3 14.1 23.3 20.3 2.4 2.8 3.70 -22.7 2.86 0.0 -15.9 17.3 21.0 26.1 21.5 2.1 3.5 4.81 -5.8 4.30 5.3 3.0 19.9 13.3 8.5 12.8 5.3 5.3 1.96 -13.3 1.65 3.0 0.0 0.79 103.4 120.4 23.8 20.4 2.1 2.4 25.50 -3.5 23.00 7.0 2.6 9.80 1.48 34.2 37.3 26.3 24.1 2.6 2.6 9.70 -7.2 7.59 18.6 11.1 6.38 7.52 0.40 37.5 31.8 17.0 20.1 3.6 2.7 6.83 -6.6 5.50 15.9 6.8 GLOMAC 0.66 0.60 0.49 1.4 5.0 45.6 13.1 4.1 4.1 0.80 -17.5 0.61 8.2 -5.0 HUAYANG 0.83 0.96 0.56 17.3 10.2 4.8 8.1 4.8 2.4 1.42 -41.4 0.80 3.7 -26.5 IBRACO 0.92 0.94 na 3.3 10.5 28.1 8.8 2.2 4.4 1.05 -12.9 0.76 21.2 -8.5 IOIPG 2.02 2.23 1.01 18.9 16.9 10.7 12.0 3.0 3.0 2.39 -15.3 1.85 9.3 3.6 MAHSING 1.51 1.76 0.95 14.3 13.5 10.5 11.2 4.3 4.3 1.69 -10.7 1.34 12.7 5.6 SNTORIA 0.84 0.98 0.28 6.2 10.3 13.6 8.1 1.2 1.2 1.00 -16.0 0.69 21.7 5.0 PLANTATIONS PROPERTY Note: SNTORIA proposed bonus issue of warrants & right issue of shares. For more details please refer to 25.09.17 report. SPB 4.73 5.98 0.56 25.6 22.8 13.7 15.4 2.5 2.5 5.19 -8.9 4.32 9.4 7.0 SPSETIA 3.50 4.10 0.93 11.6 12.5 15.3 14.3 4.0 4.0 4.50 -22.2 3.10 12.9 11.8 SUNWAY 1.78 1.78 0.62 15.8 15.3 12.8 13.3 2.8 2.8 1.96 -9.1 1.24 43.7 38.4 Note: SUNWAY proposed bonus issue of shares and warrants. Ex-Target price RM1.69. For more details please refer to 15.06.17 report. REIT SUNREIT 1.73 1.86 0.69 8.9 10.1 19.5 17.1 5.3 5.8 1.84 -6.0 1.63 6.1 0.6 CMMT 1.42 1.72 0.42 8.1 8.6 17.6 16.5 5.9 6.3 1.72 -17.4 1.40 1.4 -7.2 -24.8 POWER & UTILITIES MALAKOF 1.03 1.22 0.66 6.8 6.9 15.1 15.0 6.8 6.8 1.67 -38.3 1.00 3.5 PETDAG 24.22 21.47 0.71 98.2 102.3 24.7 23.7 3.0 3.1 25.70 -5.8 23.00 5.3 1.8 PETGAS 17.90 19.37 0.86 87.6 100.1 20.4 17.9 3.5 3.9 22.50 -20.4 17.80 0.6 -16.0 TENAGA 14.32 17.38 0.78 131.8 130.4 10.9 11.0 3.0 3.2 14.80 -3.2 13.00 10.2 3.0 YTLPOWR 1.37 1.40 0.76 8.4 11.4 16.3 12.0 3.6 3.6 1.64 -16.5 1.36 0.7 -8.1 11.2 TELECOMMUNICATIONS AXIATA 5.25 5.40 1.28 15.7 16.9 33.5 31.0 1.5 1.6 5.40 -2.8 4.11 27.7 DIGI 4.91 4.90 0.83 20.0 20.4 24.5 24.1 4.1 4.2 5.19 -5.4 4.63 6.0 1.7 MAXIS 5.81 5.85 0.72 24.5 24.7 23.7 23.5 3.4 3.4 6.60 -12.0 5.48 6.0 -2.8 TM 6.30 7.40 0.64 22.7 23.4 27.8 26.9 3.2 3.3 6.83 -7.8 5.81 8.4 5.9 ELSOFT 2.54 3.00 0.56 11.3 14.1 22.5 18.0 3.1 3.9 2.95 -13.9 1.24 105.0 80.9 IRIS 0.18 0.25 1.68 -1.3 0.6 na 31.6 0.0 0.0 0.22 -20.5 0.10 75.0 59.1 INARI 2.55 2.75 0.85 11.4 13.1 22.4 19.5 3.8 3.6 2.65 -3.6 1.59 60.0 53.9 MPI 13.84 15.40 0.11 89.5 110.2 15.5 12.6 2.0 2.0 14.30 -3.2 7.20 92.2 86.8 UNISEM 3.78 4.30 0.65 26.9 32.1 14.0 11.8 3.2 3.2 4.25 -11.1 2.27 66.5 60.2 TECHNOLOGY Semiconductor & Electronics TRANSPORTATION Airlines AIRASIA 3.42 3.76 1.00 44.0 37.6 7.8 9.1 1.2 1.5 3.59 -4.7 2.16 58.3 49.3 AIRPORT 8.55 8.10 1.22 17.2 17.5 49.6 48.9 1.2 1.2 9.45 -9.5 5.91 44.7 41.1 TNLOGIS 1.55 1.80 0.90 12.0 13.6 12.9 11.4 2.8 3.2 1.83 -15.5 1.48 4.7 -0.6 WPRTS 3.75 4.05 0.79 17.1 15.1 21.9 24.8 3.4 3.0 4.45 -15.7 3.58 4.7 -12.8 Freight & Tankers SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) Beta EPS (cent) FY17 FY18 PER (X) FY17 FY18 Div Yield (%) FY17 FY18 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 21.24 23.30 1.23 172.9 189.2 12.3 11.2 2.8 2.8 22.3 -4.5 14.80 43.5 22.5 OCBC 11.26 12.00 1.20 87.7 92.4 12.8 12.2 5.7 6.7 11.5 -2.0 8.84 35.2 26.2 UOB 24.00 25.40 1.05 192.9 206.5 12.4 11.6 2.9 2.9 24.6 -2.4 17.98 33.5 17.6 PLANTATIONS WILMAR 3.22 3.72 0.87 28.9 31.1 11.1 10.3 2.5 2.8 4.0 -19.5 3.08 4.5 -10.3 IFAR 0.44 0.53 1.08 4.9 5.2 9.1 8.5 2.7 2.9 0.6 -26.1 0.44 1.1 -16.2 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
14. COMPANY UPDATE Tuesday , October 03, 2017 FBMKLCI: 1,754.78 Sector: Healthcare THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Kossan Rubber Industries Berhad TP: RM7.35 (+6.5%) Last Traded: RM6.90 Growth Story Intact Wilson Loo HOLD Tel: +603-2167 9606 wilsonloo@ta.com.my From our meeting with management, we continue to expect Kossan to emerge stronger in 2HFY17, underpinned by Plant 16, its latest glove plant. However, we note that a pickup in contributions is only likely to be observed in 4QFY17. Our earlier capacity growth assumptions were a tad bullish. After moderating it, we now estimate earnings growth for FY17/FY18/FY19 at 20.9%/22.5%/11.2% from 29.9%/17.9%/15.5% before. Management reiterated its expansion ambitions, which entail glove capacity growing at a CAGR of 11.3% across 2018 to 2023. With regards to headwinds from volatility in the USD/MYR and prices of raw materials, management reassured of the group’s ability to pass through costs, albeit with a time-lag. Meanwhile, we note that the group will continue to focus on efficiency improvements and product innovation to remain competitive. We reiterate our Hold recommendation with a TP of RM7.35/share based on a PE multiple of 19.0x against CY18 EPS. Expectations for a Stronger 2HFY17 Intact We continue to expect Kossan to emerge stronger in 2HFY17. While the group’s 1HFY17 earnings of RM92.0mn (-0.2% YoY) accounts for 45.6% of our latest FY17 estimates of RM201.9mn, expectations are for 2HFY17 to be underpinned by the ramp-up of Plant 16 – the group’s latest glove plant at Jalan Meru, Klang that commenced operations in 3QFY17. To recap, the plant has a capacity of 3.0bn gloves p.a. and enlarges the group’s capacity by 13.6% to 25.0bn gloves p.a. However, do note that a pickup in contributions is only likely to be observed in 4QFY17 as the commissioning of production lines in stages is still underway with completion expected in November 2017. Indicative of healthy plant utilisation rates as well as upside to the group’s 1HFY17 sales volume growth of 6.7% YoY, we note of the sustained growth in demand for the group’s latest innovation – accelerator free nitrile gloves featuring low dermatitis potential. Growth in the Foreseeable Term to Remain Driven by Glove Division Management reiterated its ambitions to continue expanding the glove division – the group’s core division which accounts for ~85-90% of revenue. Apart from the long-term growth potential for medical gloves, especially from populated emerging markets with low usage per capita, growth opportunities are also present for non-medical gloves. No specific timeline was given but the group seeks to double the capacity of its special purpose and industrial gloves to 30%. Based on latest expansion plans (see Table 1), during 2018 to 2023, the glove division’s capacity is expected to enlarge by 22.5bn gloves p.a. to 47.5bn gloves p.a., translating into a CAGR of 11.3%. Right now, the group is working on the construction of Plant 17 (+1.5bn gloves p.a.) and Plant 18 (+3.0bn gloves p.a.) at Jalan Meru, Klang which are expected to commence operations respectively in 3QFY18 and 4QFY18. As for the subsequent phase of expansion at Bestari Jaya, which entails 4 plants (Plant 19 to Plant 22) each with a capacity of 4.5bn gloves p.a., construction is expected to begin in 2018. Our earnings growth projection for FY17/FY18/FY19 is at 20.9%/22.5%/11.2%. www.taonline.com.my Share Information Bloomberg Code KRI MK Stock Code 7153 Listing Main Market Share Cap (mn) 639.5 Market Cap (RMmn) 4,412.3 52-wk Hi/Lo (RM) 7.36/5.62 12-mth Avg Daily Vol ('000 shrs) 412.7 Estimated Free Float (%) 27.5 Beta 0.1 Major Shareholders (%) Kossan Holdings Sdn Bhd - 51.1 EPF - 11.5 Forecast Revision (%) Forecast Revision (%) Net Profit (RM mn) Consensus TA/Consensus (%) Previous Rating FY17 FY18 (6.9) (3.3) 201.9 247.4 209.2 243.3 96.5 101.7 Hold (Maintained) Financial Indicators Net gearing (x) CFPS (RM) P/CFPS (x) ROAA (%) ROAE (%) NTA/Share (RM) Price/ NTA (x) FY17 0.1 0.4 18.0 12.5 17.9 1.8 3.9 FY18 0.0 0.5 14.7 14.1 19.9 2.0 3.5 Share Performance Price Change (%) 1 mth 3 mth 6 mth 12 mth KRI (4.2) 5.3 10.2 0.3 FBMKLCI (1.0) (0.8) 0.5 6.2 (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 4
15. 3-Oct-17 Table 1 : Expansion Plans for 2017 to 2023 Plant Plant 17 Plant 18 Plant 19 Plant 20 Plant 21 Plant 22 6 Plants Capacity (gloves p.a.) 1.5bn 3.0bn 4.5bn 4.5bn 4.5bn 4.5bn 22.5bn Glove Type Targeted Construction Commissioning Timeline Commenced Commenced 3QFY18 4QFY18 2018-2022 2019-2023 Nitrile Source: Company, TA Securities Ample Financial Strength for Expansion and Dividends Supported by its healthy operating cash flow, there remains no concerns on the group’s capacity to expand and pay dividends. Our projections indicate net gearing to be <0.1x across FY17 to FY19 based on assumptions of CAPEX at RM150mn (management guidance maintained at RM120mn to RM150mn) and dividend payout ratio of 50%. However, do note that we have yet to factor in the group’s recently proposed acquisition of ~39.6 hectares of vacant freehold industrial land in Banting, Selangor for RM96.0mn. In the event it needs to gear up for this, we estimate net gearing to increase to ~0.2x. Navigating Headwinds, Staying Focused on Improving from Within Alleviating concerns on recent headwinds from volatility in the USD/MYR and prices of raw materials (nitrile & latex), management reassured of the cost-pass through mechanism, notwithstanding the time-lag impact from revision of selling prices on a monthly basis. Besides, we understand that the group’s bargaining strength will be facilitated by its practice of not being concentrated on a product or customer. The average sales contribution of each of the group’s top 10 customers is ~5%. Meanwhile, we note that the group continues to focus on improving from within to remain competitive. Efforts are not just focused on tackling on-going cost pressures (i.e. via increased automation and revamping old production lines) but also product innovation to gain an edge over its peers such as in the area of packaging to reduce contamination of gloves during dispending by end-users. Impact Given that a pickup in contributions is only likely to be observed in 4QFY17, we have moderated our capacity growth assumptions, which was initially a tad bullish. Accordingly, our earnings estimates for FY17/FY18/FY19 are revised by -6.9%/-3.3%/-6.9% to RM201.9mn/RM247.4mn/RM275.1mn, implying growth of 20.9%/22.5%/11.2% from 29.9%/17.9%/15.5% before. Valuation & Recommendation Our TP for Kossan is revised to RM7.35/share (from RM7.60/share), pegged to an unchanged PE multiple of 19.0x against CY18 EPS of 38.7sen. We continue to like the stock for its: 1) Sustainable expansion plans, 2) Earnings growth visibility, and 3) On-going efforts to remain competitive. Reiterate Hold. Key risks include fluctuations in foreign exchange and raw material prices. Page 2 of 4
16. 3-Oct-17 Earnings Summary P &L FYE Dec (RMmn) Balance Sheet FY15 FY16 FY17F FY18F FY19F FYE Dec (RMmn) FY15 FY16 FY17F FY18F FY19F Revenue 1,639.5 1,668.0 2,014.8 2,172.3 2,483.8 Fixed assets 771.5 862.5 942.4 1,016.3 1,084.7 EBITDA 337.6 279.3 337.8 402.6 443.6 Goodwill 4.9 4.9 4.9 4.9 4.9 Dep. & amortisation (66.9) (69.3) (70.1) (76.1) (81.6) Others 5.3 8.4 8.4 8.4 8.4 Net finance cost (2.1) (0.0) (3.9) (3.4) (2.5) LT assets 781.7 875.9 955.7 1,029.7 1,098.0 EI (1.0) 0.0 0.0 0.0 0.0 PBT 267.6 210.0 263.8 323.2 359.4 Inventories 205.6 210.7 254.5 274.4 313.7 Taxation (62.2) (39.0) (56.7) (69.5) (77.3) Trade receivables 311.2 332.5 362.7 391.0 447.1 (5.1) (4.1) (5.2) (6.3) (7.1) Cash 168.4 109.8 86.2 97.0 100.9 Net profit 200.2 166.9 201.9 247.4 275.1 Others 9.4 23.0 23.0 23.0 23.0 EPS (sen) 32.5 26.1 31.6 38.7 43.0 Current assets 694.6 676.1 726.3 785.4 884.7 DPS (sen) 12.0 13.1 15.8 19.3 21.5 Total assets 1,476.3 1,551.9 1,682.0 1,815.0 1,982.8 299.0 MI Ratios FYE Dec FY15 FY16 FY17F FY18F FY19F Valuations PER (x) 21.2 26.4 21.9 17.8 16.0 Dividend yield (%) 1.7 1.9 2.3 2.8 3.1 PBV (x) 4.6 4.2 3.8 3.5 3.1 Profitability ratios Trade payables 186.0 200.8 242.5 261.5 ST borrowings 119.8 118.5 111.8 100.6 90.6 Others 18.2 17.1 17.1 17.1 17.1 Current liabilities 324.0 336.4 371.5 379.2 406.7 LT borrowings 103.5 59.0 47.9 43.1 38.8 Others 72.4 82.3 82.3 82.3 82.3 LT liabilities 175.9 141.3 130.2 125.4 121.1 ROAE (%) 23.0 16.3 17.9 19.9 19.9 ROAA (%) 15.0 11.0 12.5 14.1 14.5 EBITDA margin (%) 20.6 16.7 16.8 18.5 17.9 Share capital 319.7 319.7 319.7 319.7 319.7 PBT margin (%) 16.3 12.6 13.1 14.9 14.5 Reserves 631.2 725.5 826.5 950.2 1,087.7 Shareholders' funds 950.9 1,045.3 1,146.2 1,269.9 1,407.5 MI 25.5 28.9 34.1 40.4 47.5 1,476.3 1,551.9 1,682.0 1,815.0 1,982.8 Liquidity ratios Current ratio (x) 2.1 2.0 2.0 2.1 2.2 Quick ratio (x) 1.5 1.4 1.3 1.3 1.4 Total liabilities/equity (x) 0.5 0.4 0.4 0.4 0.4 FYE Dec (RMmn) FY15 FY16 FY17F FY18F FY19F Net debt/equity (x) 0.1 0.1 0.1 0.0 0.0 PBT 268.6 210.0 263.8 323.2 359.4 >100.0 >100.0 69.5 96.9 >100.0 Dep. and amortisation 66.9 69.3 70.1 76.1 81.6 Net interest 10.2 10.0 6.7 6.1 5.5 Other non-cash (7.2) (8.4) (2.9) (2.7) (2.9) Leverage ratios Int. coverage ratio (x) Total liabilities and equity Cash Flow Growth ratios Sales (%) 25.9 1.7 20.8 7.8 14.3 Changes in WC (71.3) 8.4 (32.2) (29.3) (57.9) Pretax (%) 43.8 (21.8) 25.6 22.5 11.2 Tax paid (37.2) (56.1) (56.7) (69.5) (77.3) Earnings (%) 42.7 (19.6) 20.9 22.5 11.2 Net interest Total assets (%) 14.5 5.1 8.4 7.9 9.2 (2.1) (0.0) (3.9) (3.4) (2.5) Operational cash flow 227.7 233.3 245.0 300.5 305.8 Capex (97.6) (159.8) (150.0) (150.0) (150.0) Others 9.6 (2.6) 0.0 0.0 0.0 Investing cash flow (88.0) (162.4) (150.0) (150.0) (150.0) Dividends paid (28.8) (76.7) (101.0) (123.7) (137.6) Net change in debts 24.4 (42.5) (17.7) (16.0) (14.4) Others (32.8) (11.6) 0.0 0.0 0.0 Financial cash flow (37.2) (130.8) (118.7) (139.7) (151.9) Net cash flow 102.5 (59.9) (23.7) 10.8 3.9 Opening cash flow 63.9 168.4 109.8 86.2 97.0 Forex Closing cash flow 2.0 1.4 0.0 0.0 0.0 168.4 109.8 86.2 97.0 100.9 Page 3 of 4
17. 3-Oct-17 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Tuesday, October 03, 2017, the analyst, Wilson Loo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2031 6608 www.ta.com.my Page 4 of 4
18. Tuesday , 03 October, 2017 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only L oc al Te ch n ic al R ep o r ts 1. D ai l y Te ch n ic a l St o ck s P ic ks 2. D ai l y St o ck S cr een Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2031 6608 www.ta.com.my
19. Technical View Tuesday , October 03, 2017 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Technical Stock Picks Malaysia FBM KLCI: 1,754.78 (-0.80, -0.05%) Chartist: Stephen Soo Name FBMKLCI AFF IN ABMB AMBANK AXIATA CIMB DIGI GAMUDA GE NTING GE NM IHH IOICOR P MALAKOF F MAXIS MAYBANK MBS B R HBBANK S IME TE NAGA TM WP R TS AIR AS IA AIR AS IA X AR MADA BINAP UR I CMS B DIALOG E CO WOR LD E KOVE S T GADANG HS L IS KANDAR KIMLUN KKBE MUDAJ AYA MR CB NAIM S AP UR A E NE R GY S UNCON UE MS WAS E ONG WCT Close 2/10/2017 1754.78 2.54 3.88 4.40 5.25 6.34 4.91 5.31 9.48 5.30 5.70 4.53 1.03 5.81 9.55 1.13 5.04 9.00 14.32 6.30 3.75 3.42 0.38 0.72 0.35 3.95 2.06 1.54 1.07 1.22 1.45 1.26 2.25 0.89 1.12 0.93 1.22 1.46 2.29 1.12 0.97 1.74 Change (0.80) 0.00 -0.02 0.04 0.01 0.04 0.01 0.03 -0.07 -0.08 -0.05 -0.01 -0.04 0.01 0.02 0.00 0.01 -0.02 0.00 -0.20 -0.06 -0.03 0.00 -0.01 -0.01 -0.06 0.06 -0.01 -0.02 -0.01 -0.01 0.00 0.02 0.01 0.04 0.00 -0.03 -0.06 0.01 -0.02 -0.01 -0.01 Tel: +603-2167-9607 stsoo@ta.com.my www.taonline.com.my Bollinger Bands RSI Moving Averages DMI MACD Lower Mid Upper 14d 10d 30d 50d DI + DI - ADX Diff Line Signal Diff 1,758.15 1,750.94 1,753.45 1,773.84 1,794.23 33.61 1,767.23 1,773.24 1,771.31 14.15 30.67 20.32 (16.51) (4.01) (0.92) (3.092) High 2.58 3.90 4.42 5.26 6.35 4.91 5.32 9.58 5.41 5.75 4.56 1.07 5.81 9.57 1.16 5.07 9.02 14.36 6.40 3.82 3.48 0.38 0.74 0.36 4.01 2.06 1.55 1.09 1.23 1.46 1.28 2.25 0.89 1.12 0.98 1.25 1.52 2.29 1.14 0.97 1.75 Low 2.53 3.83 4.36 5.22 6.29 4.86 5.28 9.41 5.30 5.68 4.50 1.02 5.79 9.54 1.11 5.00 8.97 14.28 6.26 3.74 3.41 0.37 0.72 0.34 3.90 2.00 1.52 1.07 1.21 1.44 1.26 2.24 0.89 1.08 0.92 1.22 1.46 2.22 1.11 0.96 1.72 2.52 3.75 4.20 4.95 6.09 4.83 5.27 9.46 5.25 5.70 4.47 1.01 5.72 9.39 1.12 4.96 8.95 14.25 6.32 3.72 3.33 0.36 0.72 0.34 3.83 1.97 1.54 1.07 1.20 1.44 1.25 2.12 0.85 1.02 0.88 1.14 1.39 2.23 1.11 0.95 1.71 2.60 3.85 4.39 5.10 6.59 4.88 5.34 9.77 5.67 5.89 4.57 1.08 5.78 9.67 1.22 5.09 9.09 14.46 6.40 3.82 3.44 0.38 0.74 0.36 4.02 2.03 1.57 1.11 1.23 1.47 1.28 2.18 0.88 1.07 1.00 1.20 1.56 2.29 1.16 0.98 1.76 2.68 3.95 4.57 5.26 7.08 4.93 5.42 10.08 6.10 6.07 4.67 1.15 5.83 9.95 1.31 5.21 9.22 14.68 6.48 3.92 3.55 0.40 0.76 0.37 4.21 2.10 1.60 1.15 1.27 1.51 1.32 2.24 0.91 1.11 1.12 1.26 1.73 2.35 1.22 1.00 1.82 39.87 50.98 44.34 74.24 38.29 56.22 41.94 36.18 32.73 32.02 47.30 42.04 57.33 39.57 29.75 47.00 30.67 39.23 42.70 47.81 51.66 48.40 44.10 42.74 48.16 63.56 39.04 38.20 45.79 41.50 40.85 61.43 36.22 55.79 33.54 52.12 40.76 53.66 40.30 45.28 41.87 2.59 3.87 4.43 5.14 6.37 4.88 5.32 9.68 5.50 5.81 4.58 1.05 5.78 9.76 1.18 5.12 9.08 14.42 6.39 3.81 3.45 0.38 0.74 0.36 3.95 2.01 1.57 1.09 1.23 1.46 1.27 2.20 0.87 1.07 0.95 1.22 1.60 2.27 1.15 0.98 1.75 2.58 3.85 4.45 5.02 6.64 4.88 5.37 9.76 5.78 5.92 4.55 1.07 5.78 9.65 1.23 5.05 9.13 14.40 6.40 3.77 3.39 0.38 0.74 0.36 3.98 2.01 1.57 1.11 1.24 1.47 1.29 2.19 0.89 1.08 1.01 1.20 1.54 2.29 1.16 0.98 1.79 2.57 3.87 4.64 4.91 6.62 4.84 5.37 9.72 5.87 5.94 4.52 1.06 5.74 9.66 1.24 5.03 9.26 14.31 6.39 3.73 3.34 0.38 0.72 0.36 3.94 1.98 1.57 1.11 1.25 1.50 1.31 2.23 0.99 1.13 1.04 1.21 1.53 2.22 1.16 0.97 1.83 18.42 17.80 20.55 28.17 13.58 14.13 10.01 8.74 6.94 7.15 18.04 18.89 18.34 16.61 9.34 21.02 18.51 21.28 10.59 14.27 18.65 19.51 19.31 26.17 17.64 22.02 14.93 12.18 18.20 19.69 23.28 23.82 22.36 32.75 20.66 28.34 21.24 21.30 18.03 26.29 14.55 29.26 9.94 21.74 9.70 26.68 17.72 20.01 23.34 33.01 28.73 17.27 18.81 15.65 32.56 26.24 18.40 17.65 19.60 16.60 16.81 19.57 15.98 17.54 28.57 20.16 10.67 21.37 24.12 15.67 23.30 15.17 39.01 35.52 20.53 29.44 22.29 26.45 24.65 22.90 24.48 24.34 25.29 22.73 16.74 35.46 32.69 16.77 31.74 19.60 38.18 33.36 24.27 17.80 9.53 25.22 22.82 20.92 17.05 39.41 14.85 20.44 7.43 25.57 28.25 19.15 16.90 27.14 18.11 19.99 9.77 14.81 15.23 27.14 51.96 13.09 24.39 24.48 27.33 16.61 19.02 23.96 43.57 -10.84 7.86 -1.19 18.47 -13.10 -3.60 -10.00 -14.60 -26.07 -21.59 0.77 0.07 2.70 -15.95 -16.90 2.62 0.86 1.68 -6.01 -2.54 -0.92 3.53 -2.40 -2.51 11.35 11.35 -6.45 -11.94 2.53 -3.61 8.11 -15.19 -13.16 12.22 -8.77 6.05 -5.21 -3.35 -4.87 1.82 -9.79 0.00 0.00 -0.06 0.08 -0.11 0.01 -0.02 -0.06 -0.15 -0.06 0.01 0.00 0.01 0.02 -0.03 0.02 -0.06 0.01 -0.01 0.02 0.03 0.00 0.00 0.00 -0.01 0.01 0.00 -0.01 -0.01 -0.01 -0.02 0.00 -0.03 -0.01 -0.04 0.01 0.01 0.01 -0.01 0.00 -0.03 0.00 -0.01 -0.07 0.07 -0.08 0.01 -0.02 -0.01 -0.11 -0.04 0.02 0.00 0.01 0.04 -0.02 0.03 -0.06 0.04 0.00 0.03 0.04 0.00 0.00 0.00 0.00 0.01 0.00 -0.01 -0.01 -0.01 -0.02 -0.01 -0.04 -0.02 -0.03 0.00 0.02 0.02 0.00 0.00 -0.03 (0.010) 0.007 0.011 0.010 (0.037) 0.002 (0.006) (0.048) (0.041) (0.019) (0.011) (0.003) 0.002 (0.018) (0.011) (0.012) (0.003) (0.036) (0.003) (0.013) (0.009) (0.001) (0.003) (0.001) (0.014) (0.003) (0.003) (0.003) (0.001) 0.001 (0.001) 0.009 0.010 0.011 (0.009) 0.006 (0.014) (0.007) (0.006) (0.003) 0.003 DMI MACD DMI MACD Recent Signal Signal Change SELL SELL SELL BUY SELL BUY SELL SELL SELL SELL SELL SELL BUY BUY BUY SELL SELL BUY BUY BUY SELL SELL SELL BUY SELL SELL BUY BUY SELL SELL BUY SELL BUY SELL SELL BUY SELL BUY SELL SELL SELL BUY SELL SELL BUY BUY BUY SELL BUY SELL SELL SELL SELL SELL SELL BUY SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL SELL BUY SELL BUY BUY BUY SELL BUY SELL SELL SELL SELL BUY S E LL S E LL S E LL S E LL S E LL - The table above is a compilation of actively traded stocks with some popular technical indicators. The technical BUY/SELL signals on the last four columns are auto generated; the first two being existing or recent signals while the last two represent a signal change from BUY to SELL or the reverse, otherwise no change is indicated by a dash. INTERPRETATION OF TECHNICAL INDICATORS: Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders tend to buy on price breakouts above the upper band, and sell when price breaks down below the lower band. 14-day Relative Strength Index (RSI): A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30day moving average should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day average is bearish and imply further near-term downside risk. Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day average, and negative if it remains below. A longer-term uptrend is intact if share price sustain above the 50-day average, and is deemed broken if it breaches below this level. Directional Movement Indicator (DMI): The DMI is an indicator of trend strength. A positive DMI difference (DMI diff) value is bullish and indicate a higher DI+ vs. DI-, while a negative DMI diff is bearish due to a lower DI+ vs. DI- (DMI diff = DI+ minus DI-). A crossover of DI+ above DI- triggers a BUY signal, while a SELL signal is flashed when the DI+ crosses below the DI-. The Average Directional Movement Index (ADX) indicates the strength of a trend, whether it is up or down. The higher the value of ADX, the stronger the trend. An ADX value above 25 suggests a trending market or stock, while a value below 20 signal congestion or absence of trend. Daily Moving Average Convergence Divergence (MACD): The MACD diff value is derived from the difference between the MACD line (the 12-day EMA minus the 26-day EMA) and the MACD signal line (the 9-day EMA of the MACD). A positive MACD diff value is bullish, while a negative MACD diff is bearish. A BUY signal is generated when the MACD diff rises above zero, and SELL signal sparked when the MACD diff value falls below zero. Page 1 of 4
20. 3-Oct-17 Technical Comments : Buy Dialog & Mudajaya Dialog shares need decisive breakout above the 7/9/17 high (RM2.11) to extend rally towards the 138.2%FP (RM2.19) and 150%FP (RM2.26) ahead, while immediate support from RM1.99 is reinforced by the 100-day ma (RM1.95). Mudajaya seems poised for recovery from recent base building, with a confirmed breakout above the 50%FR (RM1.20) to aim for the 61.8%FR (RM1.31) and 76.4%FR (RM1.45) going forward, while support is found at the lower Bollinger band (RM1.02) and 23.6%FR (95sen). DIALOG RM2.06 (+0.06) BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 2.10 2.03 1.97 10-day 30-day 50-day RM RM RM DAILY MACD BUY Recent Signal Signal Change DMI Recent Signal Signal Change MUDAJAYA RM RM RM SIMPLE MOVING AVERAGES 1.11 1.07 1.02 10-day 30-day 50-day BUY Recent Signal Signal Change DMI Recent Signal Signal Change SELL RM1.12 (+0.04) BOLLINGER BANDS Upper Middle Lower 2.01 2.01 1.98 RM RM RM DAILY MACD 1.07 1.08 1.13 BUY Page 2 of 4