Hot Stock - Renong Berhad


  • Business
  • Saturday, 22 Mar 2003

RENONG BHD 

 

HOVERING between the support and resistance of 36 sen and 57.5 sen respectively since early October last year, this speculative stock rebounded strongly from its downside support over the past several days. 

Its price rose from the 40 sen-level on March 11 and cracked above its 21-day moving average price line of 45.5 sen to reach a peak of 49 sen on Thursday before mild profit taking capped its gains. 

The daily slow-stochastics momentum index remained on an uptrend but the oscillator per cent K has indicated a mild negative divergence. 

Meanwhile, the moving average convergence/divergence (MACD) was also trending upward. The MACD crossed over the daily signal-line to trigger a buy signal on Wednesday. 

Though prices may consolidate in the immediate term, it is anticipated to trend higher in the medium-term as the MACD has issued a buy signal now. 

If prices could break above the most recent high of 57.5 sen convincingly, they have the potential to re-test the RM1 mark. 

Strong support is maintained at 36 sen. – By K. M. Lee 

 

 

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

 

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THE debt-laden conglomerate may see some active trading next week as the time for unveiling its group-wide restructuring plan draws nearer. Renong is expected to announce the details of the plan to pare down its debts of some RM4 billion towards the end of this month. 

Many speculate that Renong's loss-making assets might be hived off to parent United Engineers (M) Bhd to partially offset the RM4.2 billion special purpose vehicle bonds owed to UEM. 

Late last year, Renong received a RM400 million cash injection from the government's investment arm, Khazanah Nasional Bhd, after it came close to slipping into negative shareholders' fund. While this should tide it over for the next few quarters at least, there is still a dire need for the group to regularise its financial position to avoid slipping into the red.  

Though some analysts have cautioned against dabbling in restructuring plays, preferring instead steady income-generating stocks, now that war has broken out, there is still the possibility that Renong-linked counters like Faber, Park May, CIMA and Intria will figure significantly in next week's trading scene. 

Renong closed at 47.5 sen yesterday - By Darshini M. Nathan 

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