MORNING CALL 7 March 2012
FLOWS;
BUYS: Genting, Maybank, Axiata
SELLS: MISC, PCHEM, PBBank
Technical Stock Alert;
UMW (RM7.16) - Price rerated from a low of RM6.14 in Nov 2011 to the current high. The bounce has mainly been driven by a recovery in its O&G division, which is expected to post a small gain this year after incurring losses in the past. Another factor that has driven the price up is the recent rumours of a restructuring in Perdua of which UMW holds 28%. We expect the price to meet resistance from above the RM7.20 and fundamentally the auto division is meeting some headwinds on sales due to the recent BNM tightening on personal financing guidelines. RSI currently above neutral at 67, sell into strength.
TEBRAU (RM0.87) - Price has retraced significantly from its high of RM0.975 after the rally in Jan/Feb. RSI has now turned neutral at 50.48pts, with a further downside risk possible. Strong support seen at RM0.80 levels as this is the level where the Malay Chamber of Commerce has offered to buy over major shareholder KPRJ's stake. BOW especially around the RM0.80 levels.
Stock of the Day
EKOVEST (RM2.56)
-Current pullback has erased almost all its gains from a high from RM3.01 this year.
-The company should benefit as the PDP for the River of Life Project with its land bank in the vicinity to benefit from the beautification process.
-There have been several M&A plans rumoured in the pipeline that could transform this company to the big league.
-BUY as we expect the stock to be well supported around the RM2.50 levels.