MORNING CALL 24 JULY
2012
FLOWS;
BUYS: Dialog,
Maybank, JCY
SELLS: TNB,
UEMLand, YTLC
Technical Stock Alert;
MMC (RM2.50) - its share price continues to languish
despite the successful exercise of
unlocking of assets in the listed company beginning with Gas Msia
earlier this year and potential listing of Malakoff next year. The company
still trades at a significant discount to its sum of parts value of RM3.20. The
degearing should help reduce its debt burden which has been a major draw back
at earnings levels. Coupled with its PDP agreement for the MRT and tunneling
contract, we expect a better 2H. We rate it an accumulate especially as the
price approaches its strong 52 week support levels of RM2.40.
CMS(2.70) - a low valuation stock with interesting
investing themes: 1) being the main player in the cement, steel and
construction sectors of East Malaysia, CMS is the prime beneficiary of the
government's policy to develop the Sarawak & Sabah corridor (SCORE): 2)
recent investors'
interest in cement stocks as seen by the performance of
LMCement and Tasek Cement; 3) a potential unlocking of its value through
privatization or M&A exercise or outright sale of company by its major
shareholders. Company has started buying back its own shares at prices from
2.58 to 2.70. Stock trades at 6.6x PER, 0.66x p/bk and has a dividend yield of
5.5%. Stock broke out recently from its resistance band and has a potential
upside target of 3.30. Buy
(PT)