CIMB Research has technical sell on RHB Cap at RM6.92

KUALA LUMPUR (Dec 9): CIMB Equities Research has a technical sell on RHB Capital at RM6.92 at which it is trading at a FY13 price-to-earnings of 7.5 times and price-to-book value of 1.4 times.

It said on Friday that respite numerous attempts, RHB Capital failed to swing above its resistance trend line.

'This shows that the bears are firmly in command. If we are right, prices would likely ease towards RM6.53 and RM6.25 over the next few days, if not weeks,' it said.

CIMB Research said as prices stay below its key moving averages, it doubted any rebound would be strong.

'MACD has staged a negative crossover while RSI is also dwindling towards the oversold territory. Near term outlook favours the bear.

'Use any rebound towards its 50-day and 30-day SMAs (now at RM7.25 and RM7.39 respectively) to unload on strength. Put a buy stop at RM7.12-RM7.40, just in case,' it said.

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RHB Capital, OSK get Bank Negara nod to start merger talks

KUALA LUMPUR: RHB CAPITAL BHD [] and OSK HOLDINGS BHD [] have received Bank Negara Malaysia's approval to commence negotiations for a possible merger.

In separate filings to Bursa Malaysia Securities on Friday, Oct 14, RHB Capital and OSK said they had received Bank Negara's approval in principle via letters dated Oct 13 that the central bank had no objection for the parties to commence negotiations for a possible merger of businesses between the RHB banking group and OSK investment banking group.

OSK said the approval to commence negotiations was valid for a period of 3 months from the date of Bank Negara's letter.

'Further details on the possible merger will be announced in due course,' it said.

#Stocks to watch:* Banks, oil and gas, Shell, Dialog, Hartalega, HL Bank

KUALA LUMPUR: Stocks which could attract trading interest on Wednesday, May 11 following fresh corporate news and developments include banks, oil and gas counters, HARTALEGA HOLDINGS BHD [], Shell Refining Company (Federation of Malaya) Bhd and DIALOG GROUP BHD [].

Maybank is raising its deposit and base lending rates effective Wednesday. Its deposit rates will be revised upwards by up to 30 basis points, while its base lending rate (BLR) will be increased by 30 basis points from 6.30% per annum to 6.60% per annum.

RHB Bank Bhd is also raising the BLR from 6.30% per annum to 6.60% per annum, effective Wednesday.

Oil and gas related counters will continue to be in focus, with the latest news that Petroliam Nasional Bhd plans to invest about RM50 billion in an integrated downstream oil and gas complex in Pengarang.

Shell Refining posted net profit of RM135.54 million in the first quarter ended March 31, 2011, up 131% from RM58.61 million a year ago. Revenue increased by 29% to RM3.20 billion from RM2.48 billion while earnings per share were 45.18c versus 19.54 sen a year ago. Shell Refining reported after tax stockholding gains of RM153 million for 1Q11.

Dialog and its business partner Roc Oil Company Limited, Australia are presently tendering for upstream oil & gas prospects in Malaysia. Dialog said that they would look into a possible joint venture if the tender was successful.

Meanwhile, Dialog will report its earnings after market close on Wednesday.

Hartalega's net profit for the fourth quarter ended March 31, 2011 rose 12.9% to RM52.39 million from RM46.41 million a year ago, driven by continuous expansion in production capacity, increase in demand, effective cost control and improvement in production processes.

Revenue for the quarter was up 17.8% to RM192.52 million from RM163.39 million. Earnings per share were 14.41 sen while net assets per share was RM1.36.

HONG LEONG BANK BHD [] has proposed to increase the size of the renounceable rights issue by RM1 billion from RM1.6 billion to RM2.6 billion to further strengthen its capital base and for working capital purposes.

HONG LEONG FINANCIAL GROUP BHD [] is providing a RM2.3 billion loan Hong Leong Bank to assist it with its risk weighted capital adequacy ratio (RWCAR).