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.
Economics
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
recession
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
are: AIRPORT, ASTRO, AXIATA, GENTING, ORIENT,
TENAGA, UCHITEC and ZHULIAN.
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.
ACCUMULATE (TECHNICAL) on dips for AXIATA with
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.
ACCUMULATE (TECHNICAL) for ZHULIAN, with strong
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
