Technical | Fundamental Analysis Discussion Stocks Listed In Bursa

Monday, April 12, 2010

Batu Kawan, Sunway, Glove Makers, Pos, Tan Chong, WCT, Mulpha

DJ MARKET TALK: Charts Hint Batu Kawan May Rise To MYR11.50 - OSK

0545 GMT [Dow Jones] STOCK CALL: OSK stays bullish on Batu Kawan's (1899.KU) immediate, mid-term outlooks based on charts. Technical analyst Shin Kao Jack says stock has so far risen on strong mid-term uptrend line extending from a low in late 2008; will likely continue to extend gains until trend line is taken out. "Should the uptrend line remain solid going forward, it will be a matter of time before Batu Kawan retests the MYR11.50 peak created in 2007," says Shin; immediate resistance eyed at MYR11.00. Stock last down 0.2% at MYR10.56. Immediate support eyed at MYR10.36, followed by MYR9.84.

DJ MARKET TALK: Affin Ups Sunway To Add Vs Reduce, Ups Target 38%

0424 GMT [Dow Jones] STOCK CALL: Affin Research upgrades Sunway Holdings (4308.KU) to Add from Reduce, raises target 38% to MYR1.80 on positive outlook; "with improving prospects in Sunway's key construction and property divisions, management's ongoing focus on de-gearing as well as its highly attractive valuations, we have turned positive on the stock," says Affin analyst Shakira Hatta; ups FY10-FY12 net earnings forecast by 9%-12%. Notes Sunway has MYR16.1 billion worth of local and overseas target tenders in pipeline. "Local projects tendered for include the LCCT (low cost carrier terminal), estimated at MYR1.3 billion and for which Sunway has been identified as a frontrunner (along with IJM and UEM-Bina Puri)," she says; given historical contract win rate of 10%-15%, annual orderbook replenishment is estimated at MYR1.5-MYR2.0 billion, which slightly higher than previous house forecast of MYR1 billion a year. Stock last +3.2% at MYR1.61.(

DJ MARKET TALK: Malaysia Glove Makers Down As MYR Strengthens

0323 GMT [Dow Jones] Malaysian glove makers mostly lower on concern stronger MYR may erode earnings as their products are mostly USD-denominated; shares of glove makers have been among the best performers year-to-date, with many hitting record highs amid optimistic demand outlook. "The ringgit is getting stronger by the day and this is creating some concern that the impact of higher demand may be somewhat offset by a drop in profit margins," dealer says. Top Glove (7113.KU) down 0.3% at MYR13.66, Kossan (7153.KU) down 1.0% at MYR7.91, Hartalega (5168.KU) down 3.1% at MYR7.93, Supermax (7106.KU) down 1.3% at MYR7.05. USD/MYR last bid at 3.1870 vs 3.1885 late Friday, around 3.4220 at end-2009.

DJ MARKET TALK: Pos Malaysia Flat; Warns Analysts On Forecasts

0258 GMT [Dow Jones] Pos Malaysia (4634.KU) unchanged at MYR3.14; stock reached nearly 3-year high on April 8, but since company on April 9 warned analysts their assumptions of the impact of the hike in postal tariffs starting July 1 may be overly bullish, stock confined to a narrow range. "Pos Malaysia has cautioned that street estimates on revenue had been optimistic as discounts on bulk mails were not taken into account," OSK Research analyst Ahmad Maghfur Usman says; adds, however, Pos clarified that 16% average pay rise for postal workers will begin only in July and won't be backdated to start of the year, but 2010 earnings will still be lower than analysts' expectations. Following briefing, OSK Research says FY10 earnings forecast raised by 15%, but FY11 and FY12 forecasts cut by 26% and 13% respectively.

DJ MARKET TALK: Tan Chong +9.7%; MYR Strength May Boost Earnings

0212 GMT [Dow Jones] Tan Chong (4405.KU) +9.7% at MYR4.96 to extend recent uptrend; stock has gained 52% since early March, following strengthening of MYR, which currently at 23-month high; dealers say Tan Chong, which assembles, distributes Nissan vehicles, among major beneficiaries of a stronger MYR as higher local currency reduces import costs for components, boosting profit margins. "Investors are also positive on the long-term prospects of Tan Chong's venture into the Indo-China market, with Laos being the latest market where they have gained exclusive rights for Nissan," dealer says; stock tipped to test MYR5.00 psychological resistance near term. (

DJ MARKET TALK: WCT +1.1%; New Jobs May Exceed MYR2B -Maybank

0224 GMT [Dow Jones] WCT (9679.KU) +1.1% at MYR2.80 on expectations builder likely to clinch more jobs in coming months; Maybank Investment Research says WCT likely to surpass its own target of getting MYR2 billion worth of new contracts in 2010. "The group's low cost base with an extensive fleet of heavy equipment allows it to compete aggressively in tenders," Maybank says; keeping Buy call, with unchanged target price of MYR3.40; dealers tip stock to test immediate resistance at MYR2.85 in coming sessions. "If the stock can breakthrough that level, we should see the stock heading for the MYR3.00 psychological resistance quite quickly," dealer says.

DJ MARKET TALK: Mulpha May Rise; Plans To List Unit In Hong Kong

0029 GMT [Dow Jones] Mulpha (3905.KU), which has interest in properties, financial services, engineering and construction, may rise to test 6-month high of MYR0.52, says dealer with local brokerage; this, after company says in stock exchange filing late Friday, it plans to list engineering unit Manta Holdings on stock exchange of Hong Kong. Adds, planned listing will enable Manta to raise funds from the capital market to fund business activities, expansion plans; expects listing to be completed in 3Q. "Investors will likely view this as a positive news as the planned listing will also enable Mulpha to unlock the value of its investments in Manta," says dealer. Mulpha owns 88% of Manta. Stock closed flat at MYR0.49 last Friday

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