Monday, May 7, 2012

Morning call | 7 May 2012

MORNING CALL                                      7 MAY 2012
FLOWS;
BUYS: PBBank, CIMB, Sime, MRCB
SELLS: IOIC, Maxis, IJM
Technical Stock Alert;
SOP (RM6.75) - Showing signs of divergence between its share price which has remained resilient despite weakening technical indicators of MACD and RSI which has slipped from 82 to 41. Its price touch a year high of RM6.95 and based on the reversal of fortunes in CPO pxs recently, we expect SOP to slip back to its immediate support of RM6.40 and possibly RM6.00. Trim

Stock of the Day;
TG OFF (RM0.69)- Stock has been punished to the tune of 28% since announcing the divestment of its OSV division on the 24th April. It touched a low of RM0.65 before showing signs of bottoming with RSI coming off 28 and MACD wide divergence possibly cutting up soon.

- The sale of vessels will raise RM220m and also involve the repayment of RM44m in advances of which RM130m has been earmarked to be distributed as a special dividend. This translates to RM0.444/share. TG OFF will also allow its shareholders to invest in the SPV which acquired its OSV division via a right offer of the RCPS.

- The company will now concentrate on its maintenance and engineering business with a stronger balance sheet.

- Trading buy with an immediate upside target of RM0.76.