Morning Call 090212

FLOWS;

BUYS: Benalec, Genting, PChem

SELLS: KNM, Maybank, WCT

Technical Stock Alert;

Genting Msia (RM3.81) - Hit immediate 5mth support levels of RM3.80 after sell off yesterday in reaction to disappointing new on its bid for a Florida casino lic. Minimal downside as we don't think its strong support level of RM3.72 (SMA 200) will be breached. Accumulate.

GLOMAC (RM0.86) - Rotational play into property counters has seen volume return to the market laggards. Price has been creeping up off its support of RM0.82 with an immediate resistance of RM0.90 and short term target of RM1.06. A privatization possibility with the stock trading only at 0.38x Pr/bk.

Stock of the Day

Faber - (RM1.75)

- Price recently has been bogged down by litigation issue relating to Middle East projects and the delay in renewal of its hospital support services concession.

- The initial 15 year hospital support services concession expired last year and was extended temporarily for 6 months to April 2012 pending a decision. This service contributes on average an EBITA of RM70m-RM80m.

- We believe that the concession will be re awarded to Faber's subsidiary Faber Medi Serve, probably on revised terms.

- The clinching of this long term concession should prove to be a major re rating catalyst for the company back to it two year average of RM2.20. BUY

Market Roundup 130112

FBM30 1523.07 -2.49 points (-0.16%)  Vol 1,766mil Value 1,608mil

1) KLCI was mostly traded in the red throughout the day contrary to firmer regional markets reacting to signs that Europe's debt crisis is easing. Select situationals hogged the limelight: Pos +5.1%, DRB +3.8%, whilst recent outperformers were sold down at close: MAS -3.7%, Proton -5.13%. TENAGA (gained as much as 2.7% after announcing co received an advanced payment of RM1bn from the govt on behalf of Petronas as compensation for additional costs arising from a gas supply shortage). Market breadth was mixed with losers edging gainers 397:373. Futures closed 1525.5 (2 points premium).

2) Heavyweights: IOICORP-1.1% RM5.43, GENTING-0.7% RM10.88, CIMB-0.4% RM7.27, DIGI-0.5% RM3.90, PBBANK-0.2% RM13.16, YTL-0.7% RM1.49, SIME-0.1% RM9.15, GENM+0.8% RM3.88, MMCCORP+2.6% RM2.80, MAYBANK+0.1% RM8.26

3) DBT: FRONTKN 59.5mil @ RM0.12, SUBUR 21.5mil @ RM1.99, BJLAND 10.7mil @ RM0.92.

4) Situationals:

FABER-2.2% RM1.78: Shares retreated on concerns over the increasing legal disputes the company is facing involving its projects in the Middle East. On Thursday, the company said that its subsidiary Faber Ltd Liability Company was facing a suit from sub-contractor, Sweet Home Technical Works Ltd Liability Company, for services provided for housing projects in Abu Dhabi. The claim dated Jan 10 was for RM11.21mil.

CANONE+5.6% RM1.88, KIANJOO+7.5% RM2.16: Shares climbed on market expectations that Can-One would likely launch a general offer for KJCH after securing the 32.9% block. Last Thursday, Jan 5, Can-One won the legal tussle to acquire the 146.13 mil KJCF shares held by Kian Joo Holdings Sdn Bhd after a Federal Court ruled in its favour. The Court had allowed Can-One's appeal to proceed with the completion of the acquisition of the 32.9% stake for RM241.1mil. Market talk was that Can-One could then launch a GO for the remaining shares in KJCF.

5) Mitrajaya: Co announced that it's wholly owned subsidiary Pembinaan Mitrajaya SB has on Jan 13 accepted a LOA from Putrajaya Holdings SB for the proposed construction & completion of a) 63 units 2-storey terrace houses in Precinct 11, Putrajaya for a contract sum of RM20.5m and b) 25 units 2-storey shop office, 4 units 3-storey shop office & associated works at Precinct 8, Putrajaya for contract sum of RM12.9m. Both the contract are to be completed within a period of 22 months from the date of possession of site & are expected to contribute positively to Mitrajaya group's future earnings; +ve.

6) Mkt - continue with range trading and rotational play amongst sectors.