MORNING CALL 5 April 2012
FLOWS;
BUYS: Sime, AMMB, Axiata
SELLS: Digi, Esso, AirAsia
Technical Stock Alert;
1)NOTION (RM2.13) – Its current price recovery is heading to test its 9mth high with MACD cutting upwards and RSI at 62. A breach above these levels should see a near term upside of RM2.35 on the back of a stronger set of 2Q numbers. 1Q numbers were affected by provisions made for the floods in Thailand last year. The supply shortage which initially saw a surge in HDD prices is beginning to normalize but ASP is still expected to be much higher on average vs 2011. HDD remains its largest revenue contributor, providing more than 50% of the topline. BUY
2) MPHB (RM2.72) – Retracement from recent high of RM2.91 has seen it break its neck line support of RM2.74. This indicates an immediate further downside of RM2.64. We feel this provides a good opportunity to accumulate ahead of further sales of non core assets after Menara Multi Purpose was sold last year. A likely candidate to be monetized could be its insurance arm, Multi Purpose Insurance, could be valued at around RM500m based on recent M&A transactions. BOW
3) MUDAJAYA (RM2.89) – Trending close to its near term support of RM2.80 and stronger support of RM2.70 (its SMA 200). RSI is also now below neutral at 40. Possible rebound catalyst could be contract wins in power related civil works in upcoming power plants valued at around RM3bn. BOW
