FBM30 1522.29, +0.3 points (+0.02%), Volume 1,911mil, Value 1,941.5mil
1) KLCI recovered from its low of 1518.80 (-3.19pts) to close just above overnight as heavyweights ended mixed with interest seen mostly on lower liners and penny stocks. Regionals continued to rise on optimism about the US economy but tempered with signs Europe is heading for a recession and warning from Fitch it may downgrade Italy's credit rating. Rotational play saw gains in glove makers led by SUPERMX+10%, TOPGLOV+4%, HARTA+4%. Market breadth was positive with gainers leading losers 437:384. Futures closed 1524 (2 points premium).
2) Heavyweights: AXIATA-1.4% RM4.92, GENTING-1.28% RM10.76, TM-1.63% RM4.83, AMMB-1.37% RM5.74, IOICORP+1.86% RM5.49, TENAGA+1.48% RM6.16, PCHEM+1.57% RM6.46, SIME+0.77% RM9.15
3) DBT: KENCANA 70mil @ RM2.90 (3.5% PUC), SYF 5mil @ RM0.55
4) Situationals:
RHBCAP unch RM7.27/OSK+2.22% RM1.84: Volume picked up for RHBCAP and OSK after midday as both companies announced an application to Bank Negara Malaysia has been made today for the approval of BNM and the Minister of Finance for the proposed merger of OSK and RHB. RHBCAP reached high of RM7.34 while OSK's high was RM1.86 before paring some gains.
5) Supermax
At today's AGM, executive Chairman Datuk Seri Stanley Thai said Supermax is expected to meet its after-tax profit forecast of RM100-110mil for financial year 2011 with revenue estimated about RM1bn. Going forward, Thai estimates a 20-30% increase in sales for financial year 2012 due to lower price of natural rubber and higher sales and expects financial performance similar to 2010. Supermax recorded after-tax profit of RM158.9mil and revenue of RM977mil in 2010.
For 2012, natural rubber contribution to company would be higher due to increasing demand compared to current contribution of 63% from 2011. Supermax currently produces 17.5bil pieces of gloves and would increase gradually to 22bil by 2013 with the completion of its two new plants in Meru, Selangor and the replacement of all its production lines. Neutral
6) Market - Uptrend intact. Track POS which has been in a consolidation phase for the past two months. Recent comment by new parent DRB Hicom indicates there could be some re rating catalyst around the corner. Immediate resistance RM2.80. Trading buy
