Company Name: CIMB GROUP HOLDINGS BERHAD
| Research House: HLG | Price Call: HOLD | Target Price: 7.20 |
CIMB (HOLD)
In Talks To But BOC Philippines
'''' CIMB confirmed preliminary talks with San Miguel for the possible acquisition of a stake in Bank of Commerce (BOC) in the Philippines.
'''' Assuming acquisition of a 20% stake (from San Miguel's 58.16% stake), it will only cost RM290m with circa 0.1% dilution to earnings.
'''' .Despite potential small acquisition, it will expand CIMB's regional footprint and open the door for future collaboration with conglomerate San Miguel.
'''' Maintain Hold and target price maintained at RM7.20 (Gordon Growth with ROE of 16.3% and WACC of 10.7%).
''
FBM KLCI: Testing 1400 & Scouting for laggards
'''' Technically, yesterday pick up in trading volume post the Morning Star formation, MACD golden cross as well as both the FBM KLCI and 5-d SMA cut above the 10-d SMA imply bullish undertone and is likely to test the psychological and mid Bollinger band of 1400 today.'' Again, for sustainability, volume need to consistently surge above the 1bn mark. Immediate resistance levels are 1400 (also the mid Bollinger band) and 1423 (30-d SMA). Supports are situated at 1377 (5-d SMA), 1370 (10-d SMA), 1350 and 1333 (lower Bollinger band).
'''' With the strong rebound and uneven performance among stocks, we undertook a scan of top 100 stocks to compared their performances (i.e. percentage rebound from low in September and Oct) with the FBM KLCI to scout for laggards (see table in page 3).
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Dow: Above 11k & MACD Golden Cross
'''' Technically, the Dow has crossed above the 11k psychological barrier, the 20-d SMA line and mid Bollinger band (11081) with MACD emitting a Golden Cross.'' These suggest that the 30-d SMA (11178) is well insight and could be testing the downtrend lines of 11172 (formed since Jul 11) and 11369 (since Aug 11).''''''
'''' Immediate resistance levels are 11,179 (30-d SMA), and tow downtrend lines (11172 and 11369) and 11550 (upper Bollinger Band) while support levels are the 11k psychological level, 10961 (10-d SMA), 10612 (lower Bollinger Band) 10429 (38.2% FR ' from low in Mar 09 to high in May 11) and 10390 (74.6% FR ' from low in Jul 10 to high in May 11).
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