Technical | Fundamental Analysis Discussion Stocks Listed In Bursa

Monday, April 5, 2010

CPO, O&G, Waseong, Glove Makers

DJ MARKET TALK: BMD CPO Futures Up Midday; Further Upside Unlikely

[Dow Jones] BMD CPO futures higher, rising as much as 1.1% to intraday high of MYR2,588/ton. Gains in CPO likely limited as strengthening ringgit makes it more expensive and affects refiners' margins, Malaysia-based exporter says. CPO futures likely rangebound in afternoon session, moving in MYR2,550-MYR2,590/ton range, analyst from Kuala Lumpur-based brokerage says. Benchmark BMD June CPO futures trading MYR11 higher midday at MYR2,570/ton, off intraday high of MYR2,588/ton.

DJ MARKET TALK: Affin Keeps M'sia Oil & Gas Sector Overweight

0420 GMT [Dow Jones] STOCK CALL:Affin Research keeps Malaysia's oil and gas sector as Overweight; analyst Loong Kok Wen says rising crude oil price will be catalyst for more contract flows. "Current valuations for oil and gas stocks are still undemanding, compared to the past valuations when the oil price was at equivalent levels," says Loong; adds sector is a market laggard. "The upcoming IPOs of two Petronas' subsidiaries signal that Petronas is confident on the outlook of the sector, he says; notes, new listing, which house believes could be at a premium, is likely to be a kicker for sector valuations. Tips Dialog (7277.KU) last down 0.9% at MYR1.12 and Kencana (5122.KU) +0.6% at MYR1.60 as house top picks for the sector.

DJ MARKET TALK: Maybank Keeps Wah Seong At Buy; MYR2.80 Target

0258 GMT [Dow Jones] STOCK CALL: Maybank Investment Bank maintains Buy on Wah Seong (5142.KU), with unchanged target price of MYR2.80; notes stock has strong potential for re-rating should company succeed in bid for Socotherm's (SCT.MI) regional manufacturing assets; results of bid likely to be known by mid 2010. A successful bid would turn Wah Seong into 2nd largest pipe-coating operator in the world, provide company access to new markets such as North America, South America, Europe, analyst Andrew Lee says; adds as Socotherm under administration, assets likely to be sold at distressed prices, below book valuation. "Acquisition of Socotherm's assets could allow (Wah Seong) to grow its earnings base in the long-term"; says successful acquisition of Socotherm assets could boost FY11 earnings forecast by 17.5%. Wah Seong last +1.9% at MYR2.74.

DJ MARKET TALK: Glove Makers Higher On New Flu Cases

0215 GMT [Dow Jones] Glove makers higher, with some stocks like Kossan (7153.KU) hitting fresh record highs, as renewed concerns of H1N1 flu outbreak add to already rosy demand outlook; this after government reported sharp increase in H1N1 infections in Malaysia over past week, though insufficient evidence to warrant declaration of outbreak. "Recent developments like the U.S. healthcare reform bill have been favorable for glove makers. It's still way too early to be concerned, but in the event there were to be a second wave of H1N1 globally, it will certainly be positive for the glove sector," dealer says. Latexx (7064.KU) last +1.5% at MYR4.06, Kossan +1.2% at MYR8.30, Supermax (7106.KU) +1.5% at MYR7.31

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