Morning Call | 14 Nov 2012

FLOWS

Wednesday, 14 November, 2012

BUY

GENTING, TM, MRCB

SELL

TENAGA, SIME, AXIATA

SECTOR ALERT

SECTOR

DATE

PRICE

BUY/SELL

TARGET PRICE

PLANTATION

14/11/2012

-

BUY

-

STOCK PICKS

KLK (2445)

14/11/2012

RM20.72

BUY

RM22.00

TWSPLNT (6327)

14/11/2012

RM4.03

BUY

RM4.50

CPO – MPOB’s Oct statistics showed that CPO inventory rose to a record high of 2.51m mt in Oct (+20% Y/Y; +1% Q/Q), but well below the market expectations of up to 2.7m mt. +16% MoM to 1.76m mt (strong demand from Europe and Pakistan)). Stronger export numbers+16% MoM to 1.76m mt coupled with the slight 3% M/M decline in production help keep inventory in check. This could possibly be seen as inflection point as we enter a seasonally lower production level and a recovery in demand in China seen. From the table below, plantations stocks have generally been resilient vs the 36% dip in CPO prices from its peak. Our pick of the bunch in term of the big cap companies is KLK with an upside target of RM22.00 and in mid caps Tradewinds Plantation with a RM4.50 immediate upside.

Calls for OCT Week 3 / Week 4

STOCK

Initiation Dates

Initiation price

BUY/SELL

TARGET PRICE

LAST PRICE

% Change since Initiated

TM (4863)

07/11/2012

RM5.69

Buy on weakness

RM6.00

RM5.58

-1.9%

AXIATA (6888)

07/11/2012

RM6.02

HOLD

-

RM5.91

-

DIGI (6947)

07/11/2012

RM5.09

HOLD

-

RM4.87

-

MAXIS (6012)

07/11/2012

RM6.74

Buy On weakness

RM7.15

RM6.68

-1.2%

BJTOTO(1562)

08/11/2012

RM4.32

Defensive BUY

RM4.65

RM4.30

-0.4%

SUPERMX(7106)

08/11/2012

RM2.07

ACCUMULATE

RM2.08

RM2.08

+0.00%

DRBHCOM (1619)

09/11/2012

RM2.40

Trading BUY

RM2.80

RM2.41

0.05%

CMSB (2852)

09/11/2012

RM3.28

ACCUMULATE

RM3.60

RM3.32

+1.6%

GAMUDA (5398)

12/11/2012

RM3.66

BUY

RM4.00

RM3.68

+0.6%

UEMLAND (5148)

12/11/2012

RM2.13

TRIM

RM1.90

RM2.13

+0.00%