Result Review
Fraser & Neave Holdings (RM8.75): Sell
– Running out of fizz
The celebration before the storm. F&N continued to post
double-digit earnings growth in 2QFY09 mainly on lower raw
materials costs. However, an unchanged gross interim
dividend of 17sen/sh reflects the uncertain liquidity and
earnings profile for F&N in FY09-11 as the current bottling
and distribution contracts with Coca-Cola Inc expire from
January 2010. Sell as valuations have reached a peak 16.3x
CY10 PER whilst gross dividend yields have fallen to a low of
3.4%.
Acquisition/Disposal
Berjaya Sports Toto (RM4.86): Buy
– Ups stake in Prime Gaming Philippines
Minimal impact to earnings estimates. Berjaya Sports Toto
(BToto) proposed to acquire another 6.8% of Prime Gaming
Phillipines (PGP) for RM32.3m cash. We would have
preferred BToto pay out dividends with the cash instead as
earnings accretion is minimal. We rate BToto
Buy for its
attractive dividend yields and potential for special dividends.
Ramunia Holdings (RM0.63)/ Sime Darby (RM6.70)
– A win-win solution?
A RM232m deal. Sime Darby has proposed to buy
Ramunia’s business and undertakings for RM232m. This is a
cash plus share deal which values Ramunia at RM0.45/share, 29% below its last closing. We think that the deal is positive for both parties. Ramunia’s shares remain suspended from trading until Friday, 8 May.
Sector Update
Construction : Overweight
– Maintain Overweight: The mega projects are rolling in…
More excitement ahead. The eventual award of the RM1.3b
Pahang-Selangor raw water transfer tunnel works on 28 Apr
confirms that the new administration sees the urgency for
construction in stimulating the economy. Langat 2 should be
next in the limelight, together with the massive Klang Valley
LRT system. We expect more positive news flow over the
near-term. Continue to Overweight Construction.
Other Local News
Halim Mazmin: Receives shareholder approval to go
private
MAS: Former PM Tun Abdullah selected as MAS advisor
Kencana: Expecting to secure 2 offshore deals
Sime Darby: Inks inaugural African plantation deal
Auto: Perodua to phase out its first and oldest model -
Kancil
Outside Malaysia
U.S: S&P 500 erases 2009 losses
U.S: Fed says banks expect deepening of loan losses
this year
U.S: Pending sales of existing homes, construction
spending rose in March
China: Manufacturing expands for first time in nine
months in April on investment
Australia: Annual house prices fall record 6.9% YoY in
1Q09
Crude Oil: Trades near five-month high after U.S. home
sales report
Comment on News
Sime Darby (RM6.70): Fully Valued
– New plantation concession in Liberia
USD800m worth of land. Sime Darby’s 100%-subsidiary
Sime Darby Plantation Sdn Bhd has secured approximately
220,000 ha of land worth USD800m (or RM2.82b) following
the execution of an amended and restated concession
agreement (CA) with the government of the Republic of
Liberia, according to various media reports.
IJM Corporation (RM5.30): Buy
– LoA for raw water transfer project
Much awaited. IJM, part of a consortium (20% stake), has
accepted a Letter of Acceptance (LoA) for the Pahang
Selangor raw water transfer project worth RM1.3b. This
formalizes a Letter of Intent (LoI) received in Feb ’09. No
change to our earnings forecasts and target price. We retain
our Buy recommendation on IJM.
Daily Technical Viewpoint 
The KLCI surged 18.62-points to close at 1,009.36 yesterday.
Investors will buy on dips to the support areas of 990 and
1,009. Profit taking on rallies to the resistance areas of 1,021
and 1,030 will cap market gains for now. Any dip now
represents a fine bargain-hunting opportunity. As a result,
investors will buy on dips for a medium-term rise to 1,043.78,
1,053.18 and 1,077.62. Stocks that we like for today: - AFG,
ANCOM, ASTRO, AXIATA, BURSA, COMMERZ, GENTING,
IJM, LINGUI, MAS, MAYBULK, MMCCORP, MPI, MRCB,
NAIM, PANTECH, PLUS, SARAWAK, SHELL, TWSPLNT,
UNISEM and WTK.
Daily Trading Idea
– MAS (RM3.26): FIRM BUY (Technical) 
MAS had risen in a very firm uptrend. With its indicators
very clearly positive, MAS is poised to trend higher on a
very strong Wave 3 move towards its stipulated resistance
and upside target areas soon.
FIRM BUY (TECHNICAL) on dips for MAS with firmer
support areas at RM2.92 and RM3.26 and excellent
potential to reach its upside target areas of RM3.62 and
RM3.94. Stop loss is at RM2.90.
Daily Trading Idea
– ANCOM (RM0.53): FIRM BUY (Technical) 
ANCOM made a Wave 5 low at RM0.355 on Mar ’09 with
grossly oversold and bullish divergent signals. With the
superb buy indicators, ANCOM has very strong possibilities
of reaching its resistance and target areas.
FIRM BUY (TECHNICAL) on dips for ANCOM with firmer
support areas at RM0.47 and RM0.53, with excellent potential
to reach its upside target areas of RM0.61 and RM0.80. Stop
loss is at RM0.45.
Daily Trading Idea
– MMCCORP (RM1.86): FIRM BUY (Technical) 
MMCCORP made a Wave 2 low at RM1.07 on Jan ’09 with
grossly oversold signals. With positive buy indicators,
MMCCORP has very strong possibilities of reaching its
resistance (of RM1.89 and RM2.05) and target areas.
FIRM BUY (TECHNICAL) on dips for MMCCORP with
firmer support areas at RM1.65 and RM1.86, with excellent
potential to reach its upside target areas of RM2.34 and
RM2.42. Stop-loss is at RM1.63.
Daily Trading Idea
– PANTECH (RM0.64): ACCUMULATE (Technical) 
PANTECH made a Wave 5 low at RM0.40 on Mar ’09 with
grossly oversold and bullish divergent signals. With positive
buy, PANTECH has strong possibilities of reaching its
resistance and target areas.
ACCUMULATE (TECHNICAL) on dips for PANTECH with
firmer support areas at RM0.55 and RM0.64, with excellent
potential to reach its upside target areas of RM0.74 and
RM0.79. Stop-loss is at RM0.53.
Please refer to our full reports for further details.
Daily Trading Idea
– NAIM (RM1.68): ACCUMULATE (Technical) 
NAIM made a Wave 5 low at RM1.08 on Mar ’09 with grossly
oversold and bullish divergent signals. The moving average
golden cross indicates an excellent uptrend for NAIM. We
believe NAIM has very strong possibilities of reaching its
resistance and target areas.
ACCUMULATE (TECHNICAL) on dips for NAIM with firmer
support areas at RM1.41 and RM1.68, with excellent potential
to reach its upside target areas of RM1.82 and RM2.19. Stop
loss is at RM1.39.
Daily Trading Idea
– SARAWAK (RM2.18): ACCUMULATE (Technical) 
SARAWAK close above the 18-day moving average
continues to indicate a firm uptrend for SARAWAK. With the
positive buy indicators, SARAWAK has the right price set-up
to reach its stipulated resistance and target areas.
ACCUMULATE (TECHNICAL) on dips for SARAWAK with
firmer support areas at RM1.99 and RM2.18, with potential to
reach its upside target areas of RM2.36 and RM2.57. Stop
loss is at RM1.97.
From Maybank Investment Bank Retail Research
