Sarawak-based stocks advance in early trade

KUALA LUMPUR: Sarawak-based stocks advanced on Monday, April 18 on the heels of Barisan Nasional retaining its two-thirds majority in the East Malaysian state following last weekend's election.

At 9.15am, Naim Holdings rose 15 sen to RM3.07, Cahya Mata Sarawak added 14 sen to RM2.40, Hock Seng Lee up nine sen to RM1.72, Encorp rose 3.5 sen to 85.5 sen and Zecon added one sen to 53 sen.

Sarawak-based companies had run up ahead of the dissolution of the state assembly in late March before easing off.

Since then, market sentiment had been generally cautious on political concerns about the Sarawak polls, which are the most hotly contested in recent years.

Masteel, KUB up on Iskandar Malaysia commuter train job

KUALA LUMPUR: Shares of Malaysia Steel Works (KL) Bhd and KUB MALAYSIA BHD [] advanced on Monday, April 18 after Johor Menteri Besar Datuk Abdul Ghani Othman approved the proposed RM1.23 billion intra-city commuter train service in Iskandar Malaysia which would involve a100km rail network.

The project would be undertaken by Metropolitan Commuter Network Sdn Bhd - a joint venture between Masteel and KUB.

At 9.45am, Masteel rose five sen to RM1.47 and KUB added three sen to 84 sen.

CIMB Research has Sell on Uzma Bhd at RM2.06

KUALA LUMPUR: CIMB Retail Research has a Sell on UZMA BHD [] at RM2.06 as the recent countertrend rebound lifted prices towards its 50% FR level.

In its technical outlook issued on Monday, April 18, it said since then, selling pressure has slowly crept in.

'Looking at the chart, we think traders ought to be cautious here. The 30-day SMA has cut below the longer term 50-day SMA, which is a worrying sign.

'MACD has flattened out while its RSI is also gyrating sideways. We think near term gains are likely capped, probably at around RM2.11-RM2.15,' it said.

CIMB Research said traders should use any rebound towards the stipulated resistance zone to sell into strength. Next support is at RM1.95 followed by RM1.84 next.

CIMB Research downgrades auto sector to Neutral

KUALA LUMPUR: CIMB Equities Research has downgraded the auto sector from Overweight to Neutral as supply risks are emerging.

'Emerging supply risks trigger our downgrade of the auto sector from Overweight to NEUTRAL as we have underestimated the seriousness of the supply situation in Japan,' it said ion its research note on Monday, April 18

CIMB Research cautioned that the protracted delay in resumption of full operations at the auto plants in Japan and the resulting lack of visibility in the supply chain for auto assemblers in Malaysia 2-3 months down the road have raised concerns over their short- to medium-term outlook.

'While demand should stay strong due to firm economic fundamentals and consumer sentiment, supply constraints are likely to put the brakes on domestic sales and throw a damper over the Malaysian auto sector. In addition to cutting earnings numbers for all the stocks by 1-5%, we are downgrading UMW from Buy to Hold as we lower its target price from RM8.80 to RM8.00. Tan Chong remains our top pick,' it said.

CIMB Research has sell on Dayang Enterprise

KUALA LUMPUR: CIMB Retail Research has a Sell on Dayang Enterprise Bhd at RM1.93.

'On the daily chart, we see the potential formation of a head and shoulder pattern. If the neckline support is breached, expect selling pressure to be fierce. The 200-day SMA is also a magnet for prices,' it said.

CIMB Research said at present, the candles are just sitting on the neckline support. Once this level gives way, next supports are RM1.78 and RM1.63.

'Technical landscape looks bleak. MACD histogram bars are falling at a faster pace while RSI is also dwindling. Put a buy stop at RM2.21, just in case,' it said.

CIMB Research sees upside for Box-Pak share price

KUALA LUMPUR: CIMB Retail Research has a Buy on Box-Pak (M) Bhd at RM1.55.

In its technical outlook on Monday, April 18, it said Box-Pak has been gyrating in a consolidation triangle for the past few days. If the candles can swing past the resistance trend line, there is a good chance that prices may set new highs in the foreseeable future. The RM1.62 high is the first target, followed by RM1.75 and RM1.87 next.

'Technical landscape remains compelling. MACD is still positive while RSI remains above the 50pts mark. Another positive is that the 30-day SMA has swung above the 200-day SMA.

'Traders should only buy during pullbacks, especially near the RM1.41 support trend line. A fall below RM1.37 would trigger our stop,' it said.

Smartag active, up on debut

KUALA LUMPUR: Radio frequency identification (RFID) solutions provider Smartag Solutions Bhd was the most actively traded counter when it made its debut on Bursa Malaysia on Monday, April 18.

At 9.05am, Smartag was up 5.5 sen to 36.5 sen with 42.59 million shares done.

Its public tranche of two million shares at 31 sen each was oversubscribed by 268 times.

ECM Libra Research had recently accorded fair value of 36 sen, based on 8.0 times price-to-earnings multiple, which was a 20% discount to peer average P/E multiple of 10 times

Nikkei set to inch up on commodity stocks

TOKYO: Japan's Nikkei is expected to inch up on Monday, April 18 helped by gains on Wall Street at the end of last week, while commodity shares are likely to outperform due to higher gold and oil prices.

Analysts said that U.S. corporate earnings such as Intel Corp'' as well as news related to Japanese manufacturers' earnings starting late this month will likely set the tone in the market this week.

Tokyo stocks have regained around two-thirds of the losses they suffered after the devastating earthquake on March 11. But trade has turned more volatile and thinned out ahead of earnings reports that may pose more questions than give answers, as many firms will likely not give forecasts for this business year.

"We already know that last fiscal year's results were not good. The market is likely to be sensitive on announcements related to this fiscal year," said Yutaka Miura, a senior technical analyst at Mizuho Securities.

For Monday, mining stocks and oil shares are expected to outperform the market, as gold rose 1 percent to a record on Friday and oil gained with Brent crude surging past $123 a barrel, as improving U.S. consumer confidence and industrial production eased concerns on climbing fuel costs.

Nikkei futures in Chicago <2NKc1> pointed to a slightly higher open at 9,590, up 30 points from the Osaka close of 9,560.

The benchmark Nikkei average ended down 0.7 percent, or 62.40 points, at 9,591.52 on Friday -- dipping below the'' settlement of April options prices last week at 9,612.51. The broader Topix shed 0.6 percent to 841.29.

Analysts said the Nikkei may trade between 9,500 and 9,750 on Monday. - Reuters

Smarttag to make debut on Monday, FV 36c

KUALA LUMPUR: Radio frequency identification (RFID) solutions provider Smartag Solutions Bhd will make its debut on Bursa Malaysia on Monday, April 18.

Its public tranche of two million shares at 31 sen each was oversubscribed by 268 times.

ECM Libra Research had recently accorded fair value of 36 sen, based on 8.0 times price-to-earnings multiple, which was a 20% discount to peer average P/E multiple of 10 times.

Cautious start for Asian markets, wary of China policy tightening

WELLINGTON: Asian stocks will probably make a cautious start on Monday, April 18 as another round of policy tightening by economic powerhouse China is likely to keep investors wary despite the improving economic picture.

Solid data from the U.S. showing growing consumer confidence and benign inflation helped drive the main Wall Street indexes between 0.2 percent and 0.5 percent higher.

Strength in defensive shares, such as utilities and healthcare, overcame disappointing results from Google Inc and Bank of America , with a large number of companies due to report results this week.

Global stocks as measured by MSCI's all-country world index'' rose 0.1 percent, while British shares gained 0.5 percent and European shares were up 0.3 percent, with defensive sectors again the best performers.

Asian stocks listed on Wall Street slipped 0.6 percent.

The U.S. dollar struggled on the expectation the Federal Reserve will lag other central banks in raising rates, notably the European Central Bank. The yen advanced for a sixth session out of the previous seven.

Japanese markets are set to recover a little from Friday's 0.7 percent fall, with Nikkei futures traded in Chicago <2NKc1> 40 points above the last closing level in Osaka.

Australian stocks may edge higher, with share price index futures up 16 points to 4,879, a 26.9 point premium to the close of the underlying S&P/ASX 200 index. - Reuters