Market Flash Mercury Securities Mercury Research 21 Jan 2014 FBM KLCI DAILY CHART MARKET STATISTICS Close Chg. LOCAL FBM KLCI 1807.59 Volume (m) Value (RM m) Up Down Unchanged 1557.7 1732.8 278 541 305 (5.42) FOREIGN TECHNICAL INDICATIONS Support : 1822, 1814 Bias : Consolidation Resistance : 1846, 1882 Technically, the benchmark FBM KLCI, which has retreated 8.13 points, or 0.44 per cent since last Monday, may pull away from the immediate support level of 1,825. As we have seen the indices rally above 1850 on 17 December, the next resistances are located at 1882. On the other hand, falling back below 1800 would be negative for the index with the 200-day SMA of 1775 the next target. COMMENTARY Nikkei 225 Shanghai CI Hang Seng STI 15641.68 1991.25 22928.95 3128.79 (92.78) (13.70) (204.40) (18.54) BURSA MOVERS Gainers HLCap AeonCr LafMsia CMSB Asiafle Mild recovery …After three consecutive down days, the key index managed to rebound from its low yesterday. Trading, however, was mixed and it was mainly the rebound of heavyweights like GenM and FGV that helped to lift the market. Off the main board, meanwhile, trading activities remain brisk as rotational plays among lower liners were still present. Iris Corp maintained its position in the active stocks, but profit taking saw stocks like BioOsmo and PDZ succumbing to losses. Losers Finding a footing? …Yesterday’s rebound from the lows has helped to arrest the faltering market and keeping the candle above 1800 points. However, it may be premature to state the bulls have returned as it has yet to find a firm footing for a stronger rebound. Bioosmo Iris PDZ XDL-WA Tiger-WB Close (RM) Chg (RM) 13.50 13.28 8.46 7.39 4.87 0.70 0.60 0.56 0.39 0.30 Close (RM) Chg(RM) Allianz GenP GenP-WA Allianz-PA 12.44 10.42 3.00 12.50 (0.36) (0.30) (0.21) (0.20) PEnergy 2.40 (0.19) Actives Close (RM) Chg(RM) 0.175 0.43 0.125 0.28 0.075 (0.03) (0.005) (0.005) 0.01 0.000 Mercury Research Current Stock Review Trading Buy – PDZ Chart wise: PDZ Holdings Bhd (6254) Trading/Services – RM0.125. PDZ is currently hesitating after the long white candle formation. At the moment, the support is at RM0.12 followed by another support point at RM0.105. The share price must be able to stay above RM0.105 for the trend to remain positive. So far, the buying support had kept the share price buoyant, but a breakout must occur soon to prevent it from falling into consolidation. Hence, it is a buy on breakout. Mercury Research NEWS HEADLINES Commodity, Currency and Economic News The ringgit closed lower against the US dollar yesterday after the United States economy posted a recovery and better-than-expected Chinese growth figures proved short-lived. The ringgit was quoted at 3.3160/3190 against the US dollar from last Thursday's 3.2960/2980. Meanwhile, the local unit traded lower against other currencies. It depreciated against the Singapore dollar to 2.5973/5999 from 2.5865/5895. Against the yen, it declined to 3.1842/1877 from 3.1465/1500. It fell against the British pound to 5.4525/4588 from 5.3843/3883 and weakened to 4.4952/4996 from 4.4845/4876 against the euro. (BTimes) Crude palm oil futures contracts on Bursa Malaysia Derivatives finished higher yesterday due to the depreciation of the ringgit to the US dollar. February 2014 was RM45 higher at RM2,560 a tonne, March 2014 rose RM43 to RM2,568, April 2014 increased RM39 to RM2,579 and May 2014 advanced RM37 to RM2,582. June 2014 edged up RM35 to RM2,581 and July 2014 added RM33 to RM2,573. Turnover advanced to 38,720 lots from 37,087 lots, while open the interest fell to 196,852 contracts from 208,981 contracts. (BTimes) Brent crude oil fell towards US$106 (US$1.00 = RM3.28) per barrel yesterday, weighed down by data showing China's oil demand growth slowed further in 2013 and news Iran had started implementing a nuclear deal with world powers, which could eventually allow more oil exports. Brent crude for March was down 20 cents at US$106.28 a barrel by 1230GMT. The March contract closed up 73 cents on Friday. US crude oil for February delivery was trading 70 cents lower at US$93.67 per barrel from a two-week high on Friday. US crude volumes were low yesterday. (BTimes) The Malaysian rubber market closed mixed yesterday on weak demand as buyers anticipated prices to fall further, dealers said. At noon, the Malaysian Rubber Board's official physical price for tyre-grade SMR 20 decreased three sen to 711 sen a kg, while latex-inbulk increased two sen to 480 sen a kg. The unofficial closing price for tyre-grade SMR 20 eased 4.5 sen to 710 sen a kg while latex-in-bulk rose 0.5 sen to 480 sen a kg. (BTimes) Gold steadied yesterday, after touching its highest level in nearly six weeks, as it found support from a lower dollar and a dip in equities, which improved investor confidence in the metal. Spot gold was up 0.2 per cent at US$1,255.90 an ounce by 1259GMT after hitting a new high of US$1,259.46 earlier in the day. US gold futures for February delivery were up US$3.90 at US$1,255.90 an ounce. Spot platinum rose to US$1,467.75 an ounce, while palladium was down 0.4 per cent at US$744.00 an ounce. Spot silver was at US$20.31 an ounce, up 0.3 per cent. (BTimes) Mercury Research China's annual economic growth eased to 7.7% between October and December 2013 from 7.8% in the previous three months, slightly ahead of market expectations for growth of 7.6%, data showed on Monday. The world's second largest economy grew 7.7% in 2013 from a year earlier, data from the website of the National Bureau of Statistics showed. The government's target was for 7.5% growth in 2013. Other data released alongside GDP showed industrial output grew 9.7% in December from a year ago, versus expectations of 9.8% showed in the Reuters poll. Retail sales in December rose 13.6% on a year ago, in line with expectations. (Star) Japan's factory output in November was weaker than first reported with industrial production turning down 0.1%, according to revised data Monday, in the latest sign of slowing growth. The reading – which came after preliminary data had shown a 0.1% rise in output on-month – also marked the first contraction in three months. However, figures last week showed November machinery orders – a key measure of capital spending – jumped 9.3% from October to a five-year high, suggesting a pick-up in corporate investment. (Star) Major US and UK Equity Indices Index Day Close Change DJIA 16458.56 Holiday S&P 500 1838.70 Holiday Change Index Day Close Change Nasdaq CI 4197.58 Holiday FTSE 100 6836.73 7.43 (%) Change (%) 0.11 Global and Local Headlines Japanese index futures rose while Australian stocks fell a third day as the nation’s currency maintained its rebound against the dollar. Gold held gains near a six-week high as copper futures signalled further declines. Nikkei 225 Stock Average futures were bid 0.1 percent higher at 15,690 in the Osaka pre-market. Australia’s S&P/ASX 200 Index fell 0.1 percent. Standard & Poor’s 500 Index futures were little changed after a U.S. holiday. The Australian dollar, was steady after snapping a four-day slump yesterday. New Zealand bonds fell after inflation data. The Bank of Japan starts a two-day policy meeting today, while U.S. trading resumes after the Martin Luther King holiday. China’s central bank injected funds into the financial system yesterday and expanded access to a lending facility as rising demand for cash before the Lunar New Year drove the biggest jump in money-market rates in seven months. Thailand’s government is considering declaring a state of emergency after 70 people were injured during anti-government rallies in Bangkok. (Bloomberg) Mercury Research Car buyers can expect lower prices within the next five years, under a CPR (Car Price Reduction) framework developed by the Government. “The framework consists of mixed measures. The underlying factor is liberalisation of the local automotive industry, which will enable market forces to determine more competitive car prices,” said International Trade and Industry Minister Datuk Seri Mustapa Mohamed during the unveiling of the National Automotive Policy (NAP) 2014 at Menara Matrade here yesterday. He also said Malaysians could expect more competitive prices for certain new cars this year. “These new models and variants are forecast to capture 55% of market share. So, more than half of Malaysian car buyers can enjoy more competitive car prices,” he said. (Star) S P Setia Bhd has announced the resignation of its chief executive officer (CEO) Tan Sri Liew Kee Sin, chief financial officer Datuk Teow Leong Seng and non-independent & nonexecutive director Tan Sri Lee Lam Thye. In a statement on Monday, the group said Liew will leave on Apr 30, 2014 whilst Teow will stay on until Jul 31, 2014. Lee resigns immediately as a non-independent and non-executive director. The group has appointed its chief operating officer Datuk Voon Tin Yow as acting president and CEO for one year from May 1, 2014 until Apr 30, 2015. Chairman Tun Zaki Tun Azmi said over the next year the group intends to work with its major shareholder Permodalan Nasional Bhd, before finalising potential successors. (Star) MOL Global Pte Ltd, a Malaysian online payment company owned by billionaire Vincent Tan, has picked Deutsche Bank AG and Credit Suisse AG to work on a US$300mil US IPO, said a person with direct knowledge of the plans. The firm is aiming for a Nasdaq listing by the first half of this year, changing from an earlier plan to list in Kuala Lumpur as its peers such as eBay Inc are listed in the US, the source told Reuters. Also known as Money Online, MOL is expanding in South-East Asia and plans to tap a push by Malaysia's government to drive e-payments in preparation for a new consumption tax that kicks in next year. (Star) Shares of Taiwanese PC vendor Acer Inc lost 4.7 percent on Monday after the beleaguered company reported a greater-than-expected net loss of T$7.6 billion ($254 million). The main TAIEX index opened flat. Acer also said its senior executives would take a 30% pay cut. (Star) UMW Toyota Motor Sdn Bhd is targeting to double the sales of its Corolla Altis model to 9,000 units this year, with the introduction of the 11th generation model of the car. “Order taking started in November last year, and to date, we have orders for close to 1,000 units. The introduction of the new Corolla Altis reflects our commitment to the development of the Malaysian automotive industry,” Datuk Ismet Suki, UMW Toyota Motor president, said at the launch of the new Corolla Altis yesterday. He said the company had sold about 4,000 units of the 10th-generation Altis last year, on the back of a total sales of about 92,000 units. (Star) Mercury Research ConnectCounty Holdings Bhd (CHB) is buying a 51% stake in MyGenBizz Bhd (MGB) for RM1mil cash. The company paid 20% of the money or RM200,000 yesterday with the balance to be settled upon completion of the acquisition. It will pay with internally-generated funds and borrowings. Post acquisition, CHB would own a majority stake in MGB while its founder Steve Tan See Kuy will hold the remainder 49% stake or 49,000 shares in MGB. “The purchase consideration represents a premium of RM900,000 over the shareholders’ fund of MGB of RM100,000 as at Jan 20, 2014,” CHB said in a statement yesterday. MGB owns the exclusive marketing rights in Malaysia for MyBrandApp from GenBizz Inc. The MyBrandApp has 70 functions for a person to personalise his or her brand or image digitally by consolidating Facebook, Twitter, GMail, YouTube and other mobile application features on one’s personalised page. (Star) Connectcounty Holdings Bhd, a unit controlled by Datuk Lim Hui Boon, is close to a tie-up with DRB-HICOM Bhd. Its executive director Megat D. Shahriman Zaharudin said if the deal with DRB-HICOM goes through, it will be a major revenue earner for ConnectCounty, a Bursa Malaysia ACE Market-listed company. This is because of the economies of scale at DRB-HICOM unit Proton Holdings Bhd. Proton, the national carmaker, produces some 150,000 cars a year. "We intend to produce wire harnesses for Proton cars. The wire harness will be priced at RM2,000 a unit," Megat said on the sidelines of a ConnectCounty share sale agreement, here, yesterday. (BTimes) Disclaimer All information, views and advice are given in good faith but without legal responsibility. Mercury Securities Sdn. Bhd. (113193-W) or companies or individuals connected with it may have used research material before publication and may have positions in or may be materially interested in any stocks in the markets mentioned. 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