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Friday, June 14, 2013

Local Brokerages Stock Call 14 June 2013

From UOB KH:
City Developments (CIT SP, C09) –
Technical BUY with +5.3% potential return

Last price: S$9.78
Resistance: S$10.30
Support: S$9.65
BUY with a target price of S$10.30 with tight stops placed
below S$9.65. The stock has retraced a little closer to its
previous support on 4 Jun 12. Its 14-day RSI has a reading of
18.1, which suggests the stock is oversold. Its Stochastics
indicator looks poised to form a bullish crossover in the
oversold region and could trend up. Watch to see whether the
stock will move away from its lower Bollinger band towards
its declining 15-day moving average.
Our institutional research has a fundamental HOLD with a
target price of S$12.19.

CNMC Goldmine Holdings (CNMC SP, 5TP) –
Technical BUY with +32.2% potential return

Last price: S$0.31
Resistance: S$0.41
Support: S$0.285
BUY with a target price of S$0.41 with tight stops placed
below S$0.28. The stock is trading near its previous support
level on 19 Apr 13 and is breaking above its downward
sloping resistance line. Prices have also rebounded from its
lower Bollinger band. Its MACD indicator appears to hook up
and its RSI has correspondingly rebounded from a level of
40. Watch to see whether the stock could move above its
declining 150-day moving average, which is near S$0.355.

Civmec (CVL SP, P9D) -
Technical SELL with +20.9% potential return

Last price: S$0.885
Resistance: S$1.03
Support: S$0.70
SELL with a target price of S$0.70 with tight stops placed
above S$0.955. The stock has gapped down to break below
its previous low on 5 Jun 13, with its declining 50-day moving
average acting as a resistance. A dead cross has formed as
well. Its Stochastics indicator has formed a bearish crossover
and is turning down. Watch to see whether its MACD indicator
could form a bearish crossover below its centreline.

S’pore Telecommunications- Updates from India.
(ST SP/HOLD/S$3.60/Target: S$3.87)

FY14F PE(x): 16.4
FY15F PE(x): 15.1
Finally achieving pricing stability. The take-up for the auction of the 2G spectrum conducted in Nov 12 was poor due to high reserve price. Less than half of the 2G spectrum that was affected by the corruption scandal has been taken up. The total number of players has been reduced from 14 to 10 with the exit of Etisalat, STel, Loop and MTS. Pricing stability has been restored. ARPM has stabilised at about Rs0.42/min for the past four quarters, while ARPU has rebounded 4.3% qoq to Rs193/month.

Guidance for FY14. SingTel guided revenue on a group basis to be stable. It expects low single-digit growth for its Singapore mobile business and a mid single-digit decline for its Australian mobile business. Group EBITDA is expected to grow at low single digit driven by Group Consumer. Group Digital Life is expected to incur start-up losses. SingTel expects dividends from mobile associate to continue to grow.

Maintain HOLD. Our valuation for SingTel is reduced slightly from S$3.94 to S$3.87 based on the sum-of-the-parts (SOTP) methodology. The lower target price is due to the correction in share price for Bharti and the recent depreciation of the Indian rupee and the Philippines peso.

From DBS:
We believe that STI’s correction has touched a short-term low
off the 3100 level that coincided with the 13.1x (-0.5SD) 12-
mth forward PE level. The Singapore McClellan short-term
market breadth indicator fell to -58 yesterday, which is the
lowest reading since August 2011 and near to the extreme
oversold reading of -70. This adds to the list of oversold
technical indicators that includes the stochastic and RSIs.
Scope for an initial rise to c.3200.
The decline in SREITs should also stabilize heading into next
week’s FOMC meeting and as more of them have fallen
closer to their respective Nov12 lows that opens up trading
Buy opportunities. Our analyst’s picks are MCT, MGCCT,
FCOT, Cache, AREIT and MIT.

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