Apr 23, 2009

KLSE Market Research 23 April 2009

Equity Focus 
IJM Corporation (RM4.78): Buy
–  Orderbook set to expand
To ride on sector recovery wave. Greater visibility on job
wins has returned as the government races to roll out
construction jobs under its fiscal stimulus plan. This should
benefit IJM at two fronts: construction and building materials.
Near-term earnings will also receive a lift from CPO price
benefiting IJM’s plantation subsidiary. We upgrade our call to
Buy with a TP of RM5.50.

Autos: Underweight
–  Needs a good NAP. Proton, TCM now Sells.

Total industry volume (TIV) still sluggish. Mar 09 and 1Q09
TIV contracted 5% and 9% as expected,, reflecting the
adverse impact from the economic slowdown and tighter
financing  environment.  We  expect  weaker  performance
ahead, with 2009’s TIV projected to contract by a further 15
20% YoY. We recommend investors to Sell Proton and TCM.  

CPI, Mar 09
–  Disinflation momentum continues… 
Consumer Price Index (CPI, 2005=100) moderated further
in Mar ’09 to 3.5% YoY
(Maybank IB estimate: 3.7% YoY;
Consensus estimate: 3.6% YoY) from 3.7% YoY in Feb 09
and the peak of 8.5% YoY in Jul-Aug ‘08. This marked the
seventh consecutive month of disinflation.  MoM, inflation rate
was down by 0.2%, the sixth sequential drop over the past
seven months.

Services Sector Liberalisation 
–  Removal of 30% Bumiputera rule… 
No more 30% Bumiputera equity rule in 27 services sub
sector. The Government removed the 30% Bumiputera equity
requirement for the 27 services sub-sectors (see table in last
page for details) with immediate effect in line with the ASEAN
trade liberalisation and efforts to boost the services sector.

Other Local News
   MBSB: Seeks to finance RM300m property project
   Timber: MTIB boosts use of timber products locally
   Opcom: Bags RM359m TM contract
   Transmile: Hits 1Q net loss of RM44m despite cuts
   Binaik: Okays 75sen per share SCR
   MMC: EPU approves Senai acquisition
   MAHB: Inks asset sales deals with MoF
   IJMPlant: Unit to buy stake in PT Prima Alumga
   Maxis: Ups 3G ante

Outside Malaysia
   IMF: Says Global recession will be deeper, recovery
slower than estimated 
   U.S: Stocks drop following late-day bank slump 
   U.S: Home prices rise 0.7% MoM in February
   U.K: Unemployment rises to highest level in 12 years 
   U.K: Darling plans record USD 392b deficit as recession
saps tax revenue 
   U.K: Darling taxes incomes over GBP 150,000 at 50% 
   Japan: Exports slide slows in March 
   Philippine: Deficit widens, prompting higher overseas
borrowing in March
   Vietnam: Inflation slows to lowest in 19 months in April 
   Australia: Inflation rate slows to 2.5% YoY in 1Q09 on


Daily Technical Viewpoint

Overnight US markets declined, as investors remain jittery
over banks on concerns about rising levels of souring debt on
their balance sheets. The Dow Jones Industrial Average
dropped 1.04% or 89.99-points to 7,886.57.


Investors could buy on dips to the support areas of 954 and
968. Buy on dips while being sensitive to any downturn in the
KLCI, using 952 as its key short-term stop-loss point. The
resistance areas of 980 and 993 may cap market gains for
now. The small overnight losses in the Dow last night may see
the KLCI falling slightly but moving higher levels towards the
close for today. Among the technical buy stocks that we like

 Daily Trading Idea 
AXIATA (RM1.98): ACCUMULATE (Technical)


AXIATA made a Wave 5 low of RM1.45 in Mar ’09, with
grossly oversold and bullish divergent signals. The stock is
in a fledgling Wave 3 uptrend, confirmed by the positive
crossover indicators. We feel that AXIATA will rise and test
the stipulated resistance and target levels.
good support areas at RM1.79 and RM1.98, with fine
potential to reach its stipulated resistance and target areas
of RM2.38 and RM2.48. Stop-loss is at RM1.77.

Daily Trading Idea 
– ZHULIAN (RM1.25): ACCUMULATE (Technical)

ZHULIAN made a Wave 2 low of RM1.00 in Apr ’09, with
grossly oversold signals. Indicators confirm the very strong
Wave 3 uptrend. As such, ZHULIAN will rise further and test
the stipulated resistance and target levels. 
support areas seen at RM1.12 and RM1.25, with great
potential to reach its stipulated resistance and target areas of
RM1.34 and RM1.42. Stop-loss is at RM1.10. 

From retail research by Maybank IB