MORNING CALL 1 AUGUST
2012
FLOWS;
BUYS: AirAsia,
Dialog, Genting
SELLS: FGV,
Maybank, UEMLand
Technical Stock Alert;
FAVCO (RM1.47): Volume has picked up recently with buying
support seen at RM1.40 and MACD cut up. Recent transaction involved a RPT
whereby FAVCO will be acquiring a crane fabrication yard in NSW, Australia
measuring 11.6acres from Muhibbah Engineering which currently owns 55.57% of
FAVCO. Purchase will be satisfied through the issuance of 31.678mil new FAVCO
shares at RM1.5181. This would bumped up Muhibbah's stake to 62.25% based on an
enlarged PUC of 210.8m shares. Given Muhibbah's net debt of RM945.95m or
1.43xnet gearing, Muhibbah could use this opportunity to pare down its stake in
FAVCO to improve liquidity. FAVCO orderbook stands at RM701.5mil. Trading Buy with
undemanding valuation of 6-7xPE and dividend of 4.08% . Immediate upside target of RM1.62.
(TYK)
POSM (RM2.90) - we reiterate our call on POS which looks
to be on a new leg up after breaking above its short term resistance level of
RM2.90. It recently tied up with sister company Bank Muamalat to
offer Islamic pawn broking services at selected POS outlets nationwide. A total
of 50 outlets are targeted within a year. This form of micro credit financing
could be a significant new stream of income to POS. The company's will go ex
div of 17.5sen on the 15 AUG. Immediate target of RM3.20 . BUY