MORNING CALL 30 JULY
2012
FLOWS;
BUYS: Digi, FGV, TNB
SELLS: CIMB, AMMB, DRBHcm,
Technical Stock Alert;
ARMADA (RM3.86) -
the stock drifted down to its lower end of its trading range after
failing to secure any major FPSO contracts so far.
The company has guided for 1-2 FPSO contact wins per year
with 4-5 FPSO tenders out. This division forms the core of its business
accounting for more than 2/3 of its order book. We remain optimistic that the
lack of news flow is more of a delay in the overall sector in the awarding of
contracts. Current levels are around year lows of RM3.82 and also below recent
April's placement of 293m shares @ RM3.95 to institutional investors and
represent a good accumulation level for eventual rerating when contracts are
awarded. RSI has drifted to below 30 and MACD flat, downside looks limited.
Accumulate.
BURSA (RM6.49)- buy as expect 2H's earnings to b stronger
underpinned by the recent listing of 2 large cap IPO (IHH & Felda) and this
yr's record no of structured warrants listed vs last yr is evident of a further
boost to their bottomline. Future listings ie Astro (3Q12) and Malakoff
(1Q13) and more products fr Bursa ie cross border trading
via Asean Trading Link will continue to drive the earnings going fwd. Current
yield is healthy at 4%. Its net cash
position also enables them to distribute more dividends.
Buy
(LJL)
