MORNING CALL 23 MAY
2012
FLOWS;
BUYS: JCY, Maybank, Sime
SELLS: TNB, Gamuda, TM
Technical Stock Alert;
AXIATA (RM5.38) - The draw of its 15sen final dividend
which ex on the 28th May has driven the stock back up to record levels. MACD is
showing a negative divergence which RSI is trending above 70 coupled with
current year fundamentals of 16x PE and 4% yield indicating fair valuation.
Downside risk could come from the new auction for cancelled 2G spectrum lic by
the Indian Govt, as prices are expected to be significantly higher than those
initially issued in 2008. Trim
SWKPLNT (RM2.58) - Share price has fallen 26% from its
high of RM3.25 (4/4/2012). We believe this provides a buying opportunity given
PE valuation of 7.82xFY2012 against its mid-cap peers of 11x with dividend
yield of 6.3%. Strong support seen at the 200MA of RM2.51 level. Current CPO
price of RM3100/MT is still above analyst estimates of around RM3000-3100/MT
despite CPO prices falling 14% from its peak of RM3613/MT. Assuming 9XPE, share
price should be trading at RM2.97 which is 61.8% retracement and close its gap
at RM2.98. BUY