Analyst calls for Aug 22
KUALA LUMPUR, Aug 22 — This is a selection of morning calls by local research houses for the day.
Today’s Market Preview
Whilst our Malaysian stock exchange was closed for the Hari Raya Aidil Fitri festival, regional bourses finished between broadly flat and slightly up, paced by India (+1.1 per cent so far this week) and Thailand (+0.7 per cent). Over on Wall Street, major U.S. equity indices were down between 0.3 per cent and 0.5 per cent since last Friday.
This could pave the way for Malaysia’s key FBM KLCI to inch up a bit more today. On the chart, the benchmark index may cut above and pull away marginally from the immediate resistance line of 1,650 ahead.
With some investors probably still on extended holidays, trading activity will likely be light today. Against a backdrop of thin news flows, KNM shares could attract interest (following a media report saying that it is close to securing financing for its RM2.2b waste-to-energy project in UK) while Guan Chong’s share price may take a hit from its decision to abort its dual listing plan in Singapore.
Affin Holdings:Loan Impairment Writeback Booster
2Q12 ahead of estimates. Affin’s 2Q12 net profit of RM141m (+4.9 per cent yoy; -15.2 per cent qoq) beat our and consensus expectations with 1H12 net profit of RM307m (+27.7 per cent yoy) accounting for 111.5 per cent of our and 110 per cent of consensus full-year estimates. Affin enjoyed a net loan impairment writeback of RM7m in 1H12 as compared to our earlier 23bps assumption.
Forecasts. FY12-14 net profit projections raised by 2.9-4.4 per cent after we lowered our FY12/FY13/FY14 credit cost assumptions to 14bps/26bps/24bps from 23bps/31bps/29bps respectively.
Investment case. With the changes above, fair value upped to RM3.50 from RM3.40, based on 9x CY13 PER. Maintain Market Perform call.
FLKI – Weak Friday
The index is increasingly weaker after it failed to stay above the 1,650-pt resistance level. In fact, it closed at its lowest for the week, with last Friday’s black candles eliminating the prior three “Dojis”. Though weaker, more is needed to conclusively signal an end to the three-month rebound. The index is comfortably above both the 50-day MAV line and the rising 200-day MAV line, supported by the longer-term positive “Golden Cross” that emerged in February.
Thus, the index has to close above 1,650 pts to keep the upward bias going. Resistance can be reasonably expected at every 10-pt interval, with the next level at 1,660 pts. However, failure to close above 1,650 pts should see a continuation in selling, potentially reigniting the negative bias that appeared three weeks ago. Support is at last week’s low of 1,642 pts, and a close below it will nullify the “Long White Day’s” upward bias on 13 Aug. Supports are expected at 1,638 pts, 3 Aug’s low of 1,630 pts and August’s low of 1,623 pts. Further support is at 1,614 pts, followed by 5 July’s low of 1,610 pts.
Stronger support remains just above the 1,600-pt psychological level, at 1,602.50 pts.
These recommendations are solely the opinion of the respective research firms and not endorsed by The Malaysian Insider. The Malaysian Insider shall not be liable for any loss arising from any investment based on any recommendation, forecast or other information contained here.