Mar 14, 2017

JCY – Trading Buy


JCY Target Price RM0.71.

JCY Daily Chart (click to enlarge):jvc technical buy

JCY saw its share price climbing 2.5 sen (4.03%) to close at RM0.645 on strong trading volume. The bullish price action yesterday has led the share price to break out from its 1.5-month consolidation phase while settling above all its key SMA trend lines. MACD line is looking to stage a bullish crossover above its signal line to lend a hand on the bullish-bias outlook ahead, while positive uptick in daily RSI is indicating improved buying interest on the stock. From here, we reckon the immediate-term outlook to be biased to the upside, where a swift recapture of the immediate resistance level of RM0.655 (R1) would see the stock gear towards our target price objective of RM0.71 (3 bids below our measurement objective of RM0.725 (R2)). Key support levels to note are RM0.62 (S1)/RM0.58 (S2), where our conservative stop-loss level is placed at RM0.595 (3 bids below S1).

source: Kenanga Research – 14/3/2017

The company currently engaged in business of design and development of hard disk drive (HDD) and other technology-related activities.

Mar 6, 2017

MRCB – Technical Rebound


Stock Code 1651

MRB Daily Chart:mrcb technical analysis

MRCB has formed a breakout-pullback-continuation pattern above the EMA60 level with high volumes. The MACD Histogram has turned green, while the RSI has risen above 30. Price may rally further, targeting the RM1.55-RM1.68 levels. Support will be set around the RM1.39 level.

Source: Mplus Research – 6/3/2017

The Company is principally an investment holding company. The Company also engages in construction related activities environmental engineering property development property investment and provision of management services to its subsidiaries.

Feb 28, 2017

OKA - Stock Code 7140


Yesterday, OKA’s share price surged to an intraday high of RM1.39, before ending the day up by 3.0 sen (2.3%) at RM1.35. This came on the back of its 3Q17 earnings announcement on Friday, which showed a 32.0% YoY jump, spurred by higher margin products. Consequent to the bullish move, OKA’s share price has just broken out of a pattern resembling a “Cup & Handle” – indicative of a continuation of its longer term uptrend. In fact, the major SMAs have also completed a “Golden Crossover” (50-day/ 100-day SMA) while the MACD is showing signs of bullish convergence. From here, expect a retest of the RM1.38/1.39 (R1) highs. Once taken out, further gains would then be expected towards RM1.49 (R2) and finally the “Cup & Handle” measurement objective of RM1.57 (R3) next. Downside support levels include RM1.30/1.32 (S1) where investors may look to accumulate, although a break below RM1.28 (R2) would be highly negative for the stock

OKA Corporation Daily Chart:

OKA analysis

Source: Kenanga Research – 28/2/2017

The Company's principal activities are manufacture and trading of pre-cast concrete products trading of ready-mix concrete; as well as manufacture and trading of reinforced and pre-stressed concrete piles and the provision of transportation services.

Feb 27, 2017

Trading Buy - ENGTEX

Stock Code: 5056

engtex analysis

  • Target Price: RM1.40
  • Last closing price: RM1.28
  • Potential return: 9.3%
  • Support: RM1.25
  • Stop Loss: RM1.19

Uptrend continuation. ENGTEX’s share price consistently moved into higher low and higher-high, giving rise to formation of an uptrend after undergoing retracement from previous high of RM1.37. Both bullish RSI and MACD indicators signal reasonable entry level, with anticipation of continuous improvement in both momentum and trend in near term. Should resistance level of RM1.29 be genuinely broken, it may continue to lift price higher to the next resistance level of RM1.40.

However, failure to hold at support level of RM1.25 may indicate weakness in the share price and hence, a cut-loss signal

Source: PublicInvest Research – 27/2/2017

The Group is involved in the distribution and wholesale of pipes valves and fittings (PVF) plumbing materials and general hardware products

Feb 22, 2017

AIRASIA – Technical View


Stock Code: 5099

Airasia Daily Chart:airasia analysis

After rebounding off the EMA20 level, AIRASIA has broken out of the RM2.71 resistance level with improved volumes. The MACD Line has issued a BUY signal, but the RSI is slightly overbought. Price may trend towards the targets of the RM3.00 and RM3.30 levels. Support will be set around the RM2.57 level.

source: MPlus Research – 22/2/2017

The Company is a leading low cost carrier in Southeast Asia. The Group focuses on providing high frequency services on short-haul point-to-point domestic and international routes.

Feb 20, 2017

Malaysia: Technical, Currency and Feng Shui Outlook 2017

Technical, Currency and Feng Shui outlook for 2017
■ Three speakers presented at our 2017 Technical, Currency and Feng Shui Day
■ Technical charts point to a better 2H for the KLCI and ringgit
■ Fengshui analysis revealed that the market could see setbacks in Dec 17- Jan 18
■ Cycle analysis suggests that the next major low in KLCI could be in mid-2019
■ We maintain our end-2017 KLCI target of 1,820 pts and top picks

Technical, currency and fengshui outlook for 2017
We hosted a half-day conference yesterday, featuring (1) Dr Suresh Ramanathan, an expert on currency; (2) Master Bo Xu, a consultant on fengshui; and (3) Nigel Foo, our very own regional technical chartist. The technical and fengshui outlook points to a volatile equity and currency markets in 2017.

FBM KLCI Monthly Chart:fbm klci monthly chart
Technical charts point to a better second half for KLCI
Our technical analysis view is that the KLCI is currently on a rebound rather than in a bullish phase. We expect the market to weaken and potentially bottom sometime in 3Q before rebounding in late 2017. We are also looking at the ringgit appreciating against the US$ in 2H17 and this could help the KLCI kickstart a sustainable medium-term uptrend for the local bourse in the later part of the year.

Food for thought: 10.5-year cycle
Since the KLCI's inception, there appear to be a 10.5-year or 126-month cycle for the local bourse, with the KLCI finding a significant low close to the end of each of this major cycle (+/– 3 months). Basically, in the first half of the cycle, the wind seems to be behind the bull’s sail while the second half tends to favour the bears. The 1,896 high for the KLCI in Jun 2014 was 4 months after the mid-point of the current 126-month cycle. If this cycle continues to play out, then the next major low for the KLCI can be expected in mid-2019.

Currency outlook
Dr Suresh Ramanathan, a market economist with stints in Bank Negara Malaysia (BNM) and global financial institutions, presented his view on the currency markets. He believes the US$ still has room to appreciate against major and EM currencies, including the Malaysian ringgit. He thinks sustained ringgit weakness poses a risk to the real and financial economy, and proposed a three-pronged strategy to improve FX market liquidity and transparency: 1) Ringgit Continuous Linked Settlement (RCLS), a centralised FX clearing and settlement platform, 2) US$ Enhancement Note to improve onshore US$ liquidity, and 3) an FX stabilisation fund to realign the ringgit vs. regional currencies during bouts of excessive depreciation.

Fengshui master positive on long-term investment
Fengshui consultant Master Bo Xu said this year, being the year of the “Fire Rooster”, should be good for long-term investors with a 3- to 5-year investment horizon. Wood element businesses such as furniture, pulp and paper, textile, timber and education should flourish while fire element businesses (oil & gas, and restaurant) will not do so well, he said. Stock market wise, a good month for the market would be in May (4 th lunar month) while negative months would be Dec 17 and Jan 18 (lunar month 10 th and 11 th ).

Technical view in line with our fundamental analysis
The technical views on the KLCI and ringgit were in line with our fundamental view that the KLCI should see a stronger 2H17. However, the fengshui analysis points to a lower end for equity market in 2017. We maintain our end-2017 KLCI target of 1,820 pts.

source: CIMB Research – 16/2/2017

Feb 16, 2017

Malaysia Market Strategy - Feedback From 2017 Roadshow

Feedback from 2017 econ and strategy roadshow
■ We spent many weeks marketing our economic and strategy outlook to investors.
■ Some foreign funds are looking to raise their weighting in Malaysian equities.
■ There was no major pushback on our more bullish KLCI target vs. consensus.
■ Investors generally agreed with our 2017 growth and inflation outlook, while key
risks were trade protectionism and continued financial market volatility.
■ Maintain end-2017 KLCI target of 1,820 pts and top picks.

Improving interest from foreign funds…
We spent many weeks marketing our 2017 economic and strategy outlook to 240 investors from 48 investment firms in Kuala Lumpur, Singapore and Hong Kong. We also presented our outlook during CIMB’s 9 th Corporate Day event in January to more than 150 investors. We see improving interest from foreign funds as some are looking to raise their weighting in Malaysia.

…but Malaysian funds are more optimistic
Malaysian funds are generally more upbeat on the market prospects compared to their overseas counterparts. Foreign funds were mostly neutral to underweighted in the market, which is reflected in the low foreign shareholding of 22.3% in the equity market as at end-Jan 2017. However, they remain keen on stock ideas and some are relooking their underweight position in the market.

How we differ from consensus
We revealed to investors that we are more bullish on the end-2017 KLCI target of 1,820 pts (which is based on 16x forward P/E) against consensus estimates of 1,753 pts. This is because we are projecting stronger market earnings growth of 10% for FY17 (driven mainly by our non-consensus overweight call on the banking sector on the back of an earnings recovery). We expect the re-rating in KLCI to be driven by corporate earnings recovery and the return of foreign investors.

Themes and stock calls for 2017 investors most/least receptive to
Among our top three big cap picks, Sime Darby garnered the most attention from clients due to the potential demerger of its plantation assets, and we received some pushback on Tenaga due to concerns over its ability to raise tariffs to pass through higher fuel costs. Among our seven themes for 2017, investors are most keen on (1) PNB transformation; (2) small-mid cap funds and research scheme; and (3) tourism plays.

Keen interest in Malaysia’s macroeconomic outlook
Our meetings solicited interest in Malaysia’s recent macroeconomic developments and outlook. Investors broadly agreed with our outlook for growth (+4.2% in 2017) and inflation (+2.5% in 2017). Unsurprisingly, concerns over the global trade environment and the potential fallout for exporters – including Malaysia – and capital flows, became more pronounced.

Sector Comparisons - Big cap picks (click to enlarge)big cap by sector
Monetary policy options constrained by concerns over ringgit
Although investors were generally receptive to our argument that Malaysia’s monetary policy settings could be more accommodative (CIMB: 25bp cut in OPR in May or Jul), some were of the view that while an OPR cut would help to support the economy, an opportunity for Bank Negara Malaysia (BNM) to act may not avail itself due to volatility in the financial and currency markets. We shared our case that BNM measures in Nov and Dec 2016 would gradually shore up the ringgit, removing that potential roadblock.

Sector Comparisons - Small cap picks (click to enlarge)small cap by sector
KLCI hit new YTD high of 1,710 points
YTD, KLCI has done well, climbing 68.5 points (or 4.2%) to reach a new high of 1,710 pts yesterday. Sime Darby and Genting Malaysia were among the top three best performing stocks in the KLCI index so far in 2017, which fits in nicely with our PNB restructuring and tourism themes. Maintain end-2017 target of 1,820 and our top picks.

source: CIMB Research 16/2/2017