Flows;
BUYS: Axiata, Armada, Kencana
SELLS: UEMLand, TM
Technical Stock Alert;
MMC - Stock was sold down to a low of RM2.81 yesterday after touching a recent high of RM3.06. This selldown presents a buying opportunity ahead of key re-rating catalyst on the listing of Gas Malaysia and the awarding of MRT tunneling job worth RM8bn. Also a laggard in the stable of Syed Mokhtar companies. BUY
DRB - Share price has retraced more than 10% from it's recent high of RM3.26 to touch a recent low of RM2.83 yesterday. Stk seeing immediate support at RM2.88lvls backed by attractive valuations of FY13 P/Bk of 0.8x & PER of 10x. Group remains the best proxy to VW's ambition to become a key Asean player and share price should be well supported by it's massive RM7.5b defense contract & it is currently laying the foundation for potential strong future growth with the acquisition of Proton-trading buy.
Stk of the Day
TNB (RM6.00)
- has pulled back and consolidated for last 1 wk after touching recent high of RM6.38 forming a double top. Stk is seeing accumulation at current 200 SMA lvls of RM5.98 which acts as strong support for stk.
- Energy Commission, Petronas and EPU are in aggressive discussions for a final recommendation on gas price to be presented to Cabinet by March. Matter needs to be resolved soonest possible as @ Nov-Dec 2011 TNB has already incurred additional RM400-500m in extra charges for burning distillates due to shortage of gas supply. The earlier RM2bn advance compensation received will only be recognized in 2Q12 rslts.
- Melaka's Lekas Regassification plant is on track to be operational by Sept 2012 will provide much needed 200mmscfd supply of gas.
- Renewal in policy will be spearheaded by new incoming CEO replacing Che Khalib whose contract expires in June. Replacement should be made known next month or April.
- Accum this GLC for impending resolution is gas price and supply shortage.
