Hot stock


  • Business
  • Saturday, 01 Feb 2003

MBM Resources Bhd 

 

MBM Resources Bhd is generally well liked by analysts. A major plus point is that the management is quite clear on its strategy to face the challenges brought about by Afta (Asean Free Trade Area). MBM owns 23.6 per cent of Perodua. Its subsidiary Daihatsu (M) Sdn Bhd is the sole distributor of Daihatsu vehicles.  

Over the week, it was announced that Perodua was the fastest growing national car make last year. It chalked up a growth of 15 per cent against Proton's 7 per cent. In that period and within the national car segment as well, Perodua gained 2.7 per cent market share from Proton. Perodua sold 127,478 units in 2002 with a market share of 37.2 per cent in 2002.  

MBM offers a cheaper entry into the second national car project Perodua. Its undemanding valuation and lower risk profile make it an attractive long-term investment. 

For the nine months ended September 2002, MBM's net profit grew to RM74 million from RM58 million in the nine months of FY01. 

The stock hit a 52-month high and low of RM3.51 and RM2.26 respectively. It closed the week at RM2.69 – by Anita Gabriel 

Technical analysis 

 

THE previous bullish cycle of this stock lasted for about 10 months, pushing prices up from the RM1.20 level to peak at RM3.50 on May 20 last year. 

Subsequently, it retreated on profit taking and to correct its overbought condition. Having retraced about 50 per cent of the previous upward cycle, it finally bottomed out at the RM2.43 level on Oct 9, 2002. Prices have been making higher lows during the current gradual recovery process over the past few months and attempted to cross above the 21-day moving average price line of RM2.70 on Thursday. 

Volume is seen picking up again. Technically, the current upward momentum remained intact. 

The stochastics momentum index has issued a short-term buy signal on Wednesday. Meanwhile, the14-day moving average line has made a “golden crossing” against the 21-day moving average line on Thursday. 

These positive signals are suggesting that this stock has further upside potential. It is poised to challenge the one-month old high of RM2.90 in the immediate term and could achieve an upside objective of RM3.24 in the medium-term. 

Crucial support is at RM2.60. – by K. M. Lee 

 

  • The comments above do not represent a recommendation to buy or sell 

     

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