R e t a i l M a r k e t M o n i t o r Thursday, 16 July 2015

R e t a i l M a r k e t M o n i t o r Th urs day , 1 6 Ju l y 2 015

w w w . u t r a d e . c o m . m y 1

M A L A Y S I A

MARKET NEWS

The FBMKLCI rose 6.16pt (+0.36%) to close at 1,727.26pt yesterday. Meanwhile, Asian

stocks rose after the Bank of Japan said it would maintain its stimulus programme and

weak US retail sales fuelled bets the Federal Reserve won’t raise interest rates in

September. Mainland Chinese shares slumped. The MSCI Asia Pacific Index added

0.2% to 143.80 as of 3.03 pm in Hong Kong. The FBMKLCI’s top gainers were Hong

Leong Financial Group (+4.1%), Westports Holdings (+3.0%) and British American

Tobacco (+2.1%) while the top losers were Digi.Com (-2.7%), Astro Malaysia Holdings

(-1.7%) and UWM Holdings (-0.8%). In the broader market, gainers outpaced losers

376 to 353 with 341 counters unchanged. Turnover was 1.31b shares valued at

RM1.7b.

The FBMKLCI continued to close positively for the fifth consecutive day on the back of

sustained buying momentum. Given yesterday’s breakout above the short-term moving

average line, we expect the current upward trajectory to continue over the next two

days. The positive mid-point crossover of the RSI also suggests that buying momentum

would continue to gain traction in the near term. We maintain our support and

resistance levels as follows:

Support: 1,688, 1,671

Resistance: 1,737, 1,751

US markets ended lower as investors took profit from recent gains. The DJIA trimmed

3.41pt to18,050.17 while the S&P 500 Index dropped 1.55pt to close at 2,107.40.

industrial production rose 0.3% in June and capacity utilisation continued to grow,

according to data released by the Federal Reserve on Wednesday. BlackRock reported

earnings ahead of forecasts, sending the shares 1.1% higher. Delta Air Lines shares

rose 0.8% as lower fuel prices led to better-than-expected earnings.

WHAT’S IN THE PACK

Marketing Feedback

Local funds remain defensive while

foreign institutional investors still

UNDERWEIGHT Malaysian equities.

However, investors expect the market to

trough in 3Q15, before a liquidity-driven

comeback in 4Q15.

Bursa Malaysia (BURSA MK/HOLD/RM8.10/Target:

RM8.30)

2Q15 results: While still early into 3Q15,

the average daily trading value in the first

two weeks of July reflected a 4.7%

sequential deterioration from 2Q15 levels.

Maintain HOLD.

Maxis Berhad (MAXIS MK/HOLD/RM6.52/Target:

RM7.00)

2Q15 results: In line with expectations.

Fairly pedestrian 2Q15 results as top-line

was impacted by GST freebies.

Oka Corp Bhd (OKAC MK) Technical BUY on breakout with +18.7%

potential return

BUY on breakout with a target price of

RM1.08 and stop loss at below

RM0.80. A surge in buying interest saw

OKA rise above the moving averages to

close marginally below the immediate

resistance of RM0.91 yesterday.

E&O Property Development

Bhd (ENOP MK) Technical BUY on breakout with +16.2%

potential return

BUY with a target price of RM2.37 and

stop-loss at below RM1.74. Since

correcting from the previous high of

RM2.37, E&O has seen its share price

recover above the 7- and 21-day …

Lee Swee Kiat Group Bhd

(LSKG MK) Technical BUY with +55.1% potential return


stop-loss at below RM0.24.Yesterday,

LSKG’s share price closed above the

BBI line…

FBMKLC I CHART

Source: BursaStation

KEY IND ICES

Prev Close Chg (%)

YTD (%)

DJIA 18,050.17 (0.02) 1.27 S&P 500 2,107.40 (0.07) 2.36 FTSE 100 6,753.75 0.00 2.86 CSI 300 3,966.76 (3.54) 12.25 FSSTI 3,338.86 0.67 (0.78) HSCEI 11,681.20 (1.31) (2.53) HSI 25,055.76 (0.26) 6.15 JCI 4,869.85 (0.65) (6.83) KLCI 1,727.26 0.36 (1.93) KOSPI 2,072.91 0.66 8.21 Nikkei 225 20,463.33 0.38 17.26 SET 1,486.74 (0.11) (0.73) TWSE 9,054.20 0.14 (2.72) BDI 951.00 3.93 21.61 CPO (RM/mt) 2,196.00 (0.41) (3.09) Nymex Crude (US$/bbl) 51.61 0.39 (9.25)

TOP VOLUME

Stock Price (RM)

Chg (%)

Vol (‘000)

Kinsteel Bhd 0.20 18.18 77,411

Digi.Com Bhd 5.40 (2.70) 20,670

Apft Bhd 0.20 (2.50) 19,253 Airasia Bhd 1.29 0.00 18,869

Scanwolf Corp Bhd 0.46 (4.21) 17,705

TOP GA INERS

Stock Price (RM)

Chg (%)

Vol (‘000)

Asia Media Group Bhd

0.03 20.00

7,873 Lee Swee Kiat Group Bhd

0.29 18.37

14,565

Kinsteel Bhd 0.20 18.18

77,411

Lion Corp Bhd 0.04 16.67

150 Inix Technologies Holdings Bhd

0.15 16.00

859

TOP LOSERS

Stock Price (RM)

Chg (%)

Vol (‘000)

M3 Technologies Asia Bhd

0.13 (21.21) 60 Focus Dynamics Technologies Bh

0.07 (12.50) 3 Metrod Holdings Bhd 1.71 (12.31) 1 Compugates Holdings Bhd

0.05 (10.00) 873 Key Alliance Group 0.05 (9.09) 5 Source: Bloomberg



M A L A Y S I A

TRADERS’ CORNER

Oka Corp Berhad (OKAC

MK) Technical BUY on breakout with +18.7%

potential return

Last price : RM0.89

Target price : RM1.08

Support : RM0.80

Stop loss : RM0.79

BUY on breakout with a target price of

RM1.08 and stop loss at below RM0.80.

A surge in buying interest saw OKA rise

above the moving averages to close

marginally below the immediate

resistance of RM0.91 yesterday. The

MACD is suggesting that the bullish

trend will continue in the near term while

buying momentum is expected to pickup

given the upward trending RSI. As such,

we expect the stock to breakout above

the RM0.91 mark and retest its previous

high of RM1.08.

Expected Timeframe: 2 weeks to 2

E&O Property Development

Berhad (ENOP MK)

Technical BUY on breakout with +16.2%

potential return

Last price : RM1.85

Target price : RM2.04, RM2.37

Support : RM1.74

Stop-loss : RM1.72


stop-loss at below RM1.74. Since

correcting from the previous high of

RM2.37, E&O has seen its share price

recover above the 7- and 21-day EMA

following a five-day rally. This effectively

reversed its downtrend. With yesterday’s

gain accompanied by high trading

volume as well as rising MACD and RSI

indicators, we expect positive

momentum to strengthen further in the

near term. A retest of the immediate

resistance of RM2.04 is expected in the

near term, with further upside expected

towards the previous high of RM2.37 if it

manages to penetrate the crucial

RM2.04 mark.




M A L A Y S I A

TRADERS’ CORNER

Lee Swee Kiat Group

Berhad (LSKG MK)

Technical BUY with +55.1% potential

return

Last price : RM0.245

Target price : RM0.35, RM0.38

Support : RM0.24

Stop-loss : RM0.23


stop-loss at below RM0.24.Yesterday,

LSKG’s share price closed above the

BBI line, accompanied by a pickup in

trading volume and a positive indication

of the ADX indicator. With the sharp

spike in the RSI and the bullish

crossover in the ADX, we expect LEESK

to continue its upward movement

towards our immediate resistance of

RM0.35 in the near term with an

extended rally towards RM0.38

expected upon further breakout from the

immediate resistance.


months.



M A L A Y S I A

CORPORATE NEWS

MMC Corp: Ups NCB stake. MMC Corp Bhd is buying a 9.08% stake in logistics

and port operator NCB Holdings Bhd for RM186.5m as it seeks to maintain its position

as a key player in the ports industry in Malaysia. This brings its total stake in NCB to

30.13%. MMC Ventures Sdn Bhd (MMCV) had signed an agreement with Retirement

Fund Inc (KWAP) to acquire 42.67m shares of NCB. At RM4.37, this was 9.25% above

NCB’s closing price of RM4 yesterday. (Source: The Star)

Parkson Holdings: To sell retail asset to HK unit for RM641m. Parkson

Holdings Bhd is expected to pocket SGD228.5m (RM641.4m) cash should the retail

group’s proposal to sell its entire 67.6% stake in Parkson Retail Asia Ltd in Singapore to

another subsidiary, Parkson Retail Group Ltd go through. The retail group said the PRA

stake is now being held by East Crest. Parkson proposes for the proceeds to be utilized

for new investment opportunities or working capital. (Source: The Edge Financial Daily)

Perwaja: China’s Zhi Yuan to inject RM1.8b as a major shareholder. China’s

Tianjin Zhi Yuan Investment Group Lt d will inject about RM1.8b into Perwaja Holdings

Bhd and emerge as a loss-making steel company’s major shareholder. Perwaja’s group

executive chairmen Datuk Alan Ong said the corporate exercise will begin in Sept and is

expected to complete by June 2016. Under an agreement signed, the restructuring

scheme includes the regularisation of its balance sheet and reduction of accumulated

losses. (Source: Malaysian Reserve

Scanwolf Corp & JHM Consolidation: Get UMA queries. Bursa Malaysia has

issued two unusual market activity (UMA) queries to plastic extrusion manufacturer

Scanwolf Corp Bhd and LED component maker JHM Consolidation Bhd. Both

companies have received UMA queries more than once this year. In JHM’s case share

price has quadrupled from 12 sen since the beginning of the year to 48 sen at

yesterday’s close. Scanwolf had been in the limelight for a boardroom tussle and legal

case, and possible irregularities related to its property development business. (Source:

The Star)

SECTOR

Consumer: Poor Ramadhan sales vet retailers. Malaysian retailers are

lamenting the most dispiriting Ramadhan sales in years, adding to evidence recent hard

decisions on taxes and subsidies might be costing the economy its main growth engine.

The fasting month is traditionally the busiest time of the year, but the country’s retailers

association are predicting a plunge in Ramadhan sales of as much as 20% compared to

last year. (Source: The Malaysian Reserve)

ECONOMICS

Inflation: June inflation 2.5% higher. Consumer prices rose last month following

the increase in petrol prices. The weaker ringgit as well as the GST also contributed to

the inflationary pressure. Data from the Statistics Department showed that the consumer

price index (CPI) gained 2.5% in June compared with the same month a year ago with

food and non-alcoholic beverages contributing to most of the rise in the index. (Source:

The Star)



M A L A Y S I A

FROM THE REGIONAL MORNING NOTES. . .

Marketing Feedback

In our recent market outlook presentations at home and abroad, cash-flushed local funds

were predictably defensive while foreign institutional investors remained

UNDERWEIGHT on Malaysian equities. Nevertheless, investors generally share our

hope that the market would trough in 3Q15, before a liquidity-driven comeback in 4Q15.

Our top picks are large-caps Maybank, Tenaga, Genting Bhd and IJM Corp, and

small/mid-caps Top Glove, Scientex, JCY International and Sunsuria.

Bursa Malaysia: 2Q15: Results Point To A Slower

3Q15

(BURSA MK/HOLD/RM8.10/Target: RM8.30)

Bursa’s 2Q15 results were within our expectation but below consensus. While still early

into 3Q15, the average daily trading value in the first two weeks of July reflected a 4.7%

sequential deterioration from 2Q15 levels, which could lead to a potential earnings

downgrade. Maintain HOLD. Target price: RM8.30 (23x 2015F PE). Entry price: RM7.50.

Maxis Berhad: 2Q15: Results In Line, Healthy EBITDA

Margin

(MAXIS MK/HOLD/RM6.52/Target: RM7.00)

2Q15 top-line was adversely affected by GST freebies but cost nimbleness (general

expenses moderated in the quarter) and lower unrealised forex loss helped stabilise

2Q15 EBITDA at RM1,101m (+4% yoy, +5% qoq). The earnings are in line with our and

consensus estimates. Against a backdrop of uninspiring interim earnings outlook and

lofty valuations, we maintain our HOLD call on Maxis with a DCF-based target price of

RM7.00. Entry price: RM6.30

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M A L A Y S I A

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R e t a i l M a r k e t M o n i t o r Thursday, 16 July 2015