MORNING CALL 12 JULY
2012
FLOWS;
BUYS: UEMLand, Sime, Digi
SELLS: MAS, Genting, Maybank
Technical Stock Alert;
AMfirst(RM1.02) - An office building REIT which is
currently expanding its capital base and still delivering an attractive yield.
AMfirst's portfolio of properties valued at above RM1bn includes the 3 AMgroup
building (prime commercial centre of Kuala lumpur), Menara AMfirst(PJ), the
Newly acquired Prima 9 & 10 (cyberjaya), Wisma AMfirst (Kelana Jaya), and
Summit Subang (Commercial hubs in KV). As of Mar 2012, occupancy rates remained
strong at 89.9% with further improvements expected via asset enhancement
initiatives as well as effective leasing and marketing strategies. The stock
recently went ex for a 3 rights : 5 shares @ 83sen, raising approximately
RM200m to help pare down borrowing of RM550m. This effectively reduces gearing
to 0,3x vs 0.47x allowing the company to plan investment for asset enhancement
initiatives that are yield accretive of up to RM500mil in high growth areas
such as Penang, Malacca and Johor. Yield remains attractive at 7.6% ex rights
(based on 90% payout of RM52.2m operating income + RM8.9m interest savings).
Average YTD daily volume traded of 500k units. Defensive buy.
(RL/DN)
SKPetro (RM2.19) - the merged entity has traded in a
tight range for the past two month btw RM2.15 - RM2.30. Technical indicators
are showing some signs of a possible break out of this pattern to the upside
with RSI trending higher to above neutral at 55 and MACD also initiating a cut
upwards. A break up could possibly be triggered by earlier guidance for its
Berantai FPSO delivery and news flow for Petrobras contracts in Brazil. Initial
upside target of RM2.50. Buy with a stop loss at RM2.15.
(LJN/DN)
