Malaysia: Daily Market Commentary - 12 April

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Daily Note Daily Market Commentary TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (11.04.2017) (mil) Main Market 3,000.2 Warrants 193.3 ACE Market 1,025.8 Bond 9.6 ETF 0.1 Total 4,229.0 Off Market 21.0 Volume +/-chg (RMmn) 956.9 2,395.4 63.4 23.8 -447.2 152.8 -5.2 1.3 0.01 0.1 2,573.3 -144.8 26.9 Value +/-chg 490.1 8.6 -29.8 -0.3 0.00 -583.3 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP April 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 1,735.84 12,392.07 17,516.55 1,740.50 20,651.30 5,866.77 7,365.50 18,747.87 2,123.85 24,088.46 3,174.75 1,582.78 5,627.93 3,288.97 2,022.38 5,929.27 (mn) 6.0 5.0 5.0 1.2 1.1 1.1 @ @ @ @ @ @ -3.68 -24.20 -33.86 -1.50 -6.72 -14.15 16.56 -50.01 -9.47 -173.72 -6.70 1.59 -16.37 19.57 13.88 16.39 Value/ Volume 0.80 0.12 0.15 0.13 1.13 0.61 1.28 Up Down 254 409 65 76 35 75 2 7 2 2 358 569 % chg % YTD chg -0.21 -0.19 -0.19 -0.09 5.73 8.07 19.03 6.42 -0.03 -0.24 0.23 -0.27 -0.44 -0.72 -0.21 0.10 -0.29 0.60 0.69 0.28 4.50 8.98 3.12 -1.92 4.81 9.49 10.21 2.58 6.25 5.97 2.71 4.65 Top 10 KLCI Movers Based on Mkt Cap. Off Market ENRA BJASSET SEG VERSATL BPURI DPS-WB (A Participating Organisation of Bursa Malaysia Securities Bhd) Menara TA One, 22 Jalan P Ramlee, 50250 Kuala Lumpur Tel : 603 - 2072 1277. Fax : 603 - 2032 5048 Wednesday, 12 April 2017 (RM) 2.30 1.00 1.07 1.16 0.42 0.07 Exchange Rate USD/MYR 4.4327 -0.0033 USD/JPY 110.62 -0.6300 EUR/USD 1.061 0.0033 Counter Mkt Cap. (RM’mn) MAYBANK 91,433 SIME 63,384 PCHEM 61,040 CIMB 48,421 AXIATA 45,587 DIGI 39,575 IOICORP 28,296 HAPSENG 22,208 RHBBANK 20,812 PPB 19,608 Chg Vol. (RM) (mn) -0.01 5.56 -0.02 12.57 -0.10 9.15 -0.01 8.34 -0.02 3.52 -0.01 4.84 -0.09 5.78 -0.07 0.37 -0.05 2.08 -0.10 0.44 Commodities Futures Palm Oil (RM/mt) 2,555.002550.56 Crude Oil ($/Barrel) 53.40 -57.85 Gold ($/tr.oz.) 1,276.501275.44 Review & Outlook Stocks stayed in correction mode Tuesday, falling in line with weaker regional markets as rising tensions in the Middle East and political uncertainty in Europe kept investors on edge. The KLCI fell 3.68 points to close at 1,735.84, off an early high of 1,740.13 and low of 1,733.79, as losers beat gainers 569 to 358 on total turnover of 4.23bn shares worth RM2.57bn. The underlying market tone should stay cautious, as the ongoing geopolitical uncertainties in the Middle East and Europe should continue to depress sentiment in the immediate term. Immediate support for the index stays at 1,735 and 1,720, the rising 30 and 50-day moving averages, with the 1,700 psychological level acting as stronger support. Immediate overhead resistance remains at 1,758, the 23.6%FR of the 1,310 to 1,896 upswing closely matching last week's high, with stronger hurdle from 1,782, the 76.4%FR of the 1,867 to 1,503 correction. Any further dip on IOI Corp would be attractive to buy for oversold rebound towards the upper Bollinger band (RM4.77), with tougher hurdle seen at the peak of 24/06/14 (RM5.04) and 123.6%FP (RM5.35), going forward. Key retracement support from the 38.2%FR (RM4.12) is expected to strongly cushion downside risk. Sime Darby should rebuild support at current levels with recovery potential towards the upper Bollinger band (RM9.48) or the peak of 08/07/14 (RM9.55), and the 123.6%FP (RM10.23) acting as the stronger upside hurdle. Crucial support is at the 100-day ma (RM8.71). • • • • • • • • • • • • • • Important Dates JK GLAND - 2:1 Rights Issue - RI of up to 1,516.6m shares. JKGLAND 2 rights shares for every 1 existing share held, at an issue price of RM0.10 per rights share. Application Closed: 10/04/2017. LISTING ON: 21/04/2017. • • News Bites Malaysia's industrial production index rose 4.7% in February, underpinned by the manufacturing sector, but the growth was below a forecast of a 6.1% growth. Indonesia and Malaysia will send a joint mission to meet with European Union officials next month, with the aim to prevent the implementation of a parliamentary call to curb the use of palm oil. Malaysia's construction sector is expected to grow by 8% to RM170bn this year, boosted by the numerous mega infrastructure projects in the country, the Construction Industry Development Board said. TRX City Sdn Bhd, which is the developer of the Kuala Lumpur Air Base relocation project, including eight other locations, costing RM2.7bn, is confident that the project will be ready by year end. Tenaga Nasional Berhad signed a PPA with Edra Energy Sdn. Bhd. to construct, own, operate and maintain a gas-fired combined cycle electricity generating facility with a total nominal capacity of 2,242.131 MW proposed to be located at Alor Gajah, Melaka. Ahmad Zaki Resources Berhad entered into a two-year service contract with Carigali Hess Operating Company Sdn Bhd at the Tok Bali Supply Base in Kelantan. Protasco Berhad has been awarded by Jabatan Kerja Raya, Terengganu, a five year contract to maintain minor roads in the state of Terengganu, at a total contract sum of RM49.9mn. Ire-Tax Corporation Berhad has called for an EGM to consider Elite Cosmo Group Ltd's proposal to replace most of its board of directors. Cypark Resources Bhd expects to tender for RM1bn worth of projects in environmental engineering, waste management, green technology and renewable energy in Malaysian and Singapore during its current financial year. Mulpha International Berhad's initial assessments have determined that the damage caused by a cyclone across the resort on One & Only Hayman Island is sufficiently extensive to require the closure of the resort for the rectification works until approximately mid-2018. Felda Global Ventures Holdings Bhd and KeyGene of Netherland have signed a Memorandum of Collaboration to establish a strategic partnership to start a joint research laboratory. mTouche Techonology Berhad entered into a Memorandum of Understanding with G.I.S. Park (Thailand) Company Limited to invite mTouche Thailand to be the solution and technology partner of G.I.S. PUC Founder (MSC) Berhad entered into a Memorandum of Understanding for the proposed acquisition of a 100% stake in Enovax Private Limited for SGD2.0mn. VSolar Group Berhad entered into a Joint Venture Agreement with Universiti Teknologi Malaysia to develop Solar Energy Generation Facilities with a capacity of up to 30 megawatts and to conduct research and development. The value of road projects which Malaysian firms are bidding for in India's Rajasthan state is US$1.6bn and the outcome is expected to be known in May. The unemployment rate for the OECD area was unchanged at 6.1% in February, though the number of jobless eased from the previous month. 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. for TA SECURITIES HOLDINGS BERHAD Kaladher Govindan, Head of Research
2. Technical Comments : Buy on Weakness IOI Corp & Sime Darby Any further dip on IOI Corp would be attractive for oversold rebound towards the upper Bollinger band (RM4.77), with tougher hurdle seen at the peak of 24/06/14 (RM5.04) and 123.6%FP (RM5.35), going forward. Key retracement support from 38.2%FR (RM4.12) is expected strongly cushioned downside risk. Sime Darby should rebuild support from the current levels with recovery potential towards the upper Bollinger band (RM9.48) or the peak of 08/07/14 (RM9.55), while the 123.6%FP (RM10.23) acting as the stronger upside hurdle. Crucial support is at 100-day ma (RM8.71). IOI CORP Upper Middle RM4.50 (-0.09) BOLLINGER BANDS RM RM 4.77 4.66 10-day 30-day RM 4.55 50-day Lower DMI Recent Signal SELL 4.65 Recent Signal SELL Signal Change SIME DARBY Recent Signal Signal Change RM DAILY MACD Signal Change Upper Middle Lower SIMPLE MOVING AVERAGES RM 4.62 RM 4.67 BOLLINGER BANDS RM RM RM DMI RM9.32 (-0.02) 9.48 9.33 9.18 SELL SIMPLE MOVING AVERAGES RM 9.32 RM 9.26 RM 9.19 DAILY MACD Recent Signal SELL Signal Change 10-day 30-day 50-day Page 2 of 4