Petronas Dagangan lifts KLCI, AirAsia in focus

KUALA LUMPUR:  Petronas Dagangan lifted the FBM KLCI into the positive zone early Friday amid a mixed broader market while AirAsia extended its gains after its  target price was raised by CIMB Equities Research.

At 9.34am, the KLCI was up 0.57 of a point or 0.03% to 1,634.33. Turnover was 241.22 million shares valued at RM126.11mil. There were 159 gainers, 180 losers and 219 counters unchanged.

Asian shares edged up on Friday but were on track for a weekly loss, while the dollar was poised for a winning week as comments from a key Federal Reserve official led to increased betting on the Fed hiking interest rates as early as next month, Reuters reported.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2%, though still down 0.7% for the week.

US crude added 0.5% to US$48.40 a barrel, up nearly 5% for the week, while Brent crude added 0.6% to US$49.12, up nearly 3% for the week.

Hong Leong Investment Bank (HLIB) Research said based on its weekly chart, there is a possibility of the KLCI correcting itself toward its long term uptrend line situated at 1,580-1,575 territories. Near-term wise, KLCI is expected to stabilise and find supports near 1614.14 and the psychological level of 1,600. 

A breach below 1,600 could bring the key index to the weekly support at 1,580-1,575 territories.

“Today, we still expect KLCI to trend sideway with downside bias, mainly due to a drop in oil prices and the prospect of higher US interest rates which has been recently weakening Ringgit against US$.

“Hence, KLCI is expected to find supports near 1624, 1614.14 and the psychological level of 1,600 before it could hit 1,580-1,575 territories,” said the research house.

AirAsia rose two sen to RM2.36 after CIMB Research has raised its target price from RM2.70 to RM3.13 – a significant upside from the last traded price of RM2.34.

“The airline may report a record 1Q group core profit of between RM350mil and RM450mil, versus a loss of RM53mil in last year’s 1Q and profit of RM285mil in 4Q15. As a result, we upgrade our FY16-17 core EPS estimates by 15%-16%, and lift the target price to RM3.13, still based on CY17 P/E of eight times (peer range six to 12 times),” it said.

Petronas Dagangan rose 28 sen to RM23.60, HLFG 18 sen to RM15.02 and UMW advanced 10 sen to RM5.58.

Consumer stocks continued attract attention, with F&N up 22 sen to RM23.70, Carlsberg 10 sen to RM13.36, Heineken 10 sen also to RM14.90.However,   BAT fell 56 sen to RM50.74 after the recent recovery and profit taking saw Ajinomoto losing six sen to RM12.90.

Ta Ann gained 10 sen to RM3.39 as analysts expected the remaining part of 2016 to be better foor the timber-plantation company.

Aturmaju extended its losses, tumbling 21 sen to 70.5 sen in active trade. It hit limit-down on Thursday.

Other decliners were Petronas Gas, down 18 sen to RM21.12 with 100 shares done while RHB Cap five sen lower  at RM5.91.