MORNING CALL 10 MAY
2012
FLOWS;
BUYS: AirAsia,
Dialog, Genting
SELLS: Kencana,
MPHB, UEMLand
Technical Stock Alert;
1) MMHE (RM4.88 ) - Price has been coming off from its
year high of
RM5.78 ahead of its expected disappointing set of results
which was announced overnight. This has pushed its price to the lowest levels
since Nov 2010 with a RSI of 28. We expect a technical rebound from these
levels as it is on its 5th wave down leg based on Elliot Wave theory of which
upon completion could see a significant rebound. This could be in line with
expected order book replenishment from parent company Petronas. Immediate
resistance of RM5.28 with a possible last
leg downward of around RM4.20 on any negative news.
Stock of the Day - TIMECOM (RM0.665)
- The
share price has been aggressively sold down in the past few days to its SMA 200 day levels of RM0.665 ahead of
its ex date tomorrow.
- Shares
will be consolidated at 5:1 after which a capital repayment of RM50.6m will be distributed.
- Post acquisition it will also acquire Global Transit Com for RM322m via 65.9m new Time Com shares (ex consolidation) and RM88m in cash.
- This
will open regional opportunities to the company to offer wholesale bandwidth services to support its fibre optic
network initiatives domestically with Astro having signed up on a 10yr
partnership to provide HSBB services with IPTV to high rise buildings.
- Valuation for its business remains attractive as its current market cap of RM1657m is supported by its remaining 3.5%
block in Digi valued at RM1105m.
- Trading
buy with an immediate upside of RM0.72 or RM3.60 ex consolidation.
