TASEK CORPORATION BHD (TKCS:KL) surges 12.8% from Bandar Malaysia development

TASEK CORPORATION BHD (TKCS:KL) surges 12.8% from Bandar Malaysia development

TASEK CORPORATION BHD (TKCS:KL) surges 12.8% from Bandar Malaysia development

The revival of the Bandar Malaysia project, which came as a surprise to the market, sparked a fresh round of buying interest in construction and building materials stocks on Bursa Malaysia today.

The construction index saw a jump of 16.52 points or 8.15% to 219.2 points against broad-based FBM KLCI’s flat close at 1,622.06 points.

Cement player Tasek Corp Bhd was the top gainer, surging 66 sen or 12.8% to RM5.81 on 31,100 shares done. Lafarge Malaysia Bhd, another supplier of the commodity, was up 31 sen or 13.3% to RM2.64.

DWL Resources Bhd, which announced its plan to bid for infrastructure contracts with Gadang Holdings Bhd, rose 37 sen or 28.2% to RM1.68. Gadang, meanwhile, gained 23 sen or 32.2% to 94.5 sen.

Last Friday, Prime Minister Tun Dr Mahathir Mohamad said the government welcomes the commitment by Iskandar Waterfront Holdings Bhd (IWH) and China Railway Engineering Corp Sdn Bhd (CREC) to make an advance payment of RM500 million, in addition to the original deposit sum of RM741 million to be paid within 60 days from the date that the government officially reinstates the Bandar Malaysia project.

IWH and CREC were the winners of the Bandar Malaysia project before their status as the master developer was scrapped in May 2017.

Shares of Tycoon Tan Sri Lim Kang Hoo-linked Iskandar Waterfront City Bhd (IWCity) and Ekovest Bhd and hit limit-up today. At market close, both counters soared 30 sen to RM1.32 and 97 sen, respectively.

Tan is the executive vice-chairman of IWCity and executive chairman of Ekovest. IWCity is a subsidiary of IWH.

Gamuda Bhd and WCT Holdings Bhd rose 27 sen and 13 sen to RM3.35 and RM1.08 respectively, while steel player Ann Joo Resources Bhd increased 21 sen to RM1.86.

Shayne Heffernan, CEO and Founder of Heffx sees the revival of Bandar Malaysia as a positive surprise, saying it undoubtedly brightens the prospects of the local construction sector.

“Reinstatement of this project is an obvious shot-in-the-arm, particularly to the local construction sector. Given the greenfield nature of this project, players exposed to the initial infrastructure-based phases (access roads, earthworks, water and sewerage treatment plants, substantial piling works) could be sizeable opportunities.”

While maintaining a “neutral” call on the construction and property sectors at this juncture, Shayne Heffernan said trading opportunities abound, particularly for construction-related stocks.

Shayne Heffernan said within its universe, big names like Gamuda, IJM Corp Bhd and WCT could be beneficiaries for the construction works.

Specialist contractors are also set to be winners such as Advancecon Holdings Bhd for earthworks, Econpile Holdings Bhd and Pintaras Jaya Bhd for piling, as well as Lafarge and Tasek.

“Other beneficiaries in our view are Malaysian Resources Corp Bhd, which was the joint-venture partner under the Bandar Malaysia Integrated Transportation Terminal and MMC Corp Bhd for the potential revival of Bandar Malaysia MRT 2 underground stations.”

Shayne Heffernan also highlighted that back in 2016, IWH-CREC signed a memorandum of understanding with a consortium of international Chinese and Malaysian banks to provide funding for investors in the Bandar Malaysia project which included local banks such as CIMB Bank, Malaybank, RHB Bank and Affin Bank.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 5.03.

The projected upper bound is: 6.25.

The projected lower bound is: 5.41.

The projected closing price is: 5.83.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 19 white candles and 18 black candles for a net of 1 white candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 7 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 69.0322. This is not an overbought or oversold reading. The last signal was a buy 1 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 70.61. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 8 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 155.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 0 period(s) ago.

Rex Takasugi – TD Profile

TASEK CORP ORD closed up 0.660 at 5.810. Volume was 9% above average (neutral) and Bollinger Bands were 18% wider than normal.

Open High Low Close Volume___
5.250 5.820 5.250 5.810 31,100

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 5.30 4.91 5.85
Volatility: 81 51 41
Volume: 19,450 16,644 15,246

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

TASEK CORP ORD gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
TASEK CORP ORD is currently 0.7% below its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume into TKCS.KL (mildly bullish). Our trend forecasting oscillators are currently bullish on TKCS.KL and have had this outlook for the last 17 periods. Our momentum oscillator is currently indicating that TKCS.KL is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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