MORNING CALL 31 MAY
2012
FLOWS;
BUYS: Genting, Gamuda, SPSetia
SELLS: TNB, Sime, PCHEM
Technical Stock Alert;
IOICORP (RM5.23) - Its price has rebounded 7% from a
recent low of RM4.90 despite the continued weakness in commodity prices
and its weaker 3Q numbers. The bounce could have been sparked by IOI's
management confirming old rumours of separately listing its property arm, but
no time line has been given. The current bounce has help its price bounce back
above its SMA 200 but we don't think this move is sustainable due to the deteriorating
fundamental outlook and view this as an opportunity to sell into the bounce as
prices are expected to retest the RM4.90 lows. Sell on strength.
(PT/DN)
BURSA (RM5.98) - Bursa's removal from the MSCI index
effective today has seen share price fallen from RM6.80 or 12% since the list
was released on the 15th May. Looking at
the bigger picture it has fallen from its previous high of RM7.58 or 21%
(10/2/2012). Volume picked up last 2 days averaging 2.3mil against usual volume
of approximately 400k. The selling pressure could ease after today when most
funds are expected to have rebalanced their portfolios in line with the new
MSCI basket. Limited downside with RSI at oversold levels of 17 and support at
RM5.80. Dividend is attractive at 4.34%. Looking for technical
bounce with immediate target of RM6.20-6.50. Buy on weakness
(TYK/DN)