Apr 30, 2009


Sector Update
Banking: Underweight

–  Mar ’09 statistics: Some resilience
Positive  signs.  Loan  disbursements,  repayments,
applications and approvals rebounded with strong double-digit
MoM growth, flattish-to-low-teens YoY growth, and in absolute
term, were back to pre-Aug/Sep ’08 levels. Absolute NPLs
continued to inch lower, mainly from the working capital
segment.  Nonetheless, it is early to tell whether these are
sustainable as global fundamentals remain weak. 

Media: Underweight (Downgraded from Neutral)
–  Strong Mar showing unsustainable.
Downgrade to
Welcome relief but maintain cautious outlook. Mar ’09 total
adex recorded a much lower YoY contraction of 1% (Feb ’09:
13% YoY) driven by TV (+13% YoY). Despite this reprieve,
the high 2Q08 and 3Q08 total adex base will be difficult to
repeat due to lack of adex friendly events this year. We
downgrade Star and Media Prima to Sell as valuations have
run ahead of fundamentals.

Overnight Policy Rate (OPR)
–  Nowhere to go
OPR unchanged.
Bank Negara Malaysia (BNM) maintained
the Overnight Policy Rate (OPR) at a record-low of 2% after
the Monetary Policy Committee (MPC) meeting yesterday (29
Apr ‘09).  Earlier, the OPR was cut three times by total of
150bps between Nov ’08 and Feb ’09.  The latest move was
not that surprising after the “not so subtle hint” contained
within recent comments by the central bank’s Governor.

Outside Malaysia 
U.S: Economy shrank at 6.1% QoQ rate in 1Q09 
U.S: Fed keeps Treasury purchase targets unchanged,
sees stability 
U.S: Fed finds at least six of 19 biggest U.S. banks need
to raise more capital 
E.U: Retail sales declines in April, least in 11 months 
E.U:  Lending declines in March as ECB's `deflation
problem' worsens 
E.U: Capacity-utilization rate drops to lowest since 1990 in
current quarter  
Spain: Contracts most in 40 years, Central Bank says   
Singapore: Employers fire the most workers in 1Q09
since at least 1990  
Singapore: Central Bank predicts ‘slow’ climb out of
N. Zealand: Central Bank cuts benchmark interest rate by
0.5% to record-low 2.5%

Other Local News 
Primus Pacific Partners LLP (PPP): Keen to expand
in Malaysia 
Maybank: MoU between Maybank and ICD terminated 
EPIC: First Quarter Results 
EPIC: Variation of Audited Results for FY08 
TM: Appointment of Chief Technology and Innovation
Port  Klang  Authority:  Ordered  by  the  Transport
Ministry to release report 
Opcom: Datuk Mukhriz Mahathir to divest Opcom

Daily Technical Viewpoint
Overnight US markets climbed on news that the recession is
starting to ease as the economy is showing signs of levelling.
The Dow Jones Industrial Average gained 2.11% or 168.78
points to 8,185.73.

The KLCI inched up 1.76-points to close at 967.46 yesterday.
Investors will on dips to the support areas of 950 and 967.
Profit taking on rallies to the resistance areas of 972 and 996
will cap market gains for now. A key high was sighted at
996.60 on this Monday. As a result, the KLCI had finished a
swift correction down to 952.37 yesterday. This is a fine
bargain-hunting opportunity before the market starts turning up
again very soon. As a result, investors will bargain hunt on
weakness for a medium-term rise to 996.60, 1,008.25 and
higher – should the KLCI remain above 936.63 and 890.57.
Two stocks we like are TITAN (2nd buy call since our 1st buy
call on 17 April) and ECM. We also like LIONCOR and MANULFE.

Daily Trading Idea 
– ECM (RM0.615): FIRM BUY (Technical)

ECM is in a very firm uptrend. Since its recent low on Mar
’09, it rose in a very strong upward phase. With its
indicators very clearly positive, ECM is poised to trend
higher on a very strong move that will test the resistance of
RM0.64 and RM0.75 and upside target areas in the near

FIRM BUY (TECHNICAL) on dips for ECM with firmer
support areas at RM0.50 and RM0.615, with excellent
potential to reach its upside target areas of RM0.71 and
RM0.90. Stop loss is at RM0.48.

Daily Trading Idea 
- TITAN (RM0.86): FIRM BUY (Technical)
TITAN made a low at RM0.465 on Mar ’09. The fine 18-day
and 40-day moving average golden cross continue to indicate
an excellent uptrend for TITAN. With the superb positive buy
indicators, TITAN has very strong possibilities of reaching its
resistance of RM0.90 and RM1.05 and target areas.  

FIRM BUY (TECHNICAL) on dips for TITAN with firmer
support areas at RM0.69 and RM0.86, with excellent potential
to reach its upside target areas of RM0.90 and RM1.05. Stop
loss is at RM0.67.

From Maybank Investment Bank Research