Credit Suisse like the following laggards: Laggards with potential catalysts: Bursa, Public Bank, IJM Corp and Alliance Bank. They also like low-beta laggards with high dividend yields, which may be off investors’ radar screen in the short term as the market appears to be chasing for beta – they include Berjaya Sports Toto, Maxis, Digi and Sunway REIT. Low beta stocks are out for me, you are wasting your time. Its like you can have any ride at Disney, and you go and pick the teacup ride.
Bursa (beta of 1.33). Possible catalysts: 1) Rising liquidity; 2) Improving capital market related news flow (Including record listings). Investment view: CS maintains an OUTPERFORM as it is a proxy to the strong markets, with liquidity returning to the market. Its foreign shareholding was 19% as of October 2010, close to an all-time low of 14% (versus peak of 44% in October 2007). Well, I don't prefer Bursa, if its volume play, go for TA and OSK.
IJM (beta of 1.49). Possible catalysts: 1) Completion of te selldown of IJM shares by major shareholder Zelan, 2) positive news flow on the expansion prospects of its construction orderbook, 3) rerating of its listed property arm, IJM Land. Investment view: CS continues to rate IJM an OUTPERFORM, as they believe that its construction orderbook expansion prospects appear promising and expect near-to-medium-term positive news flow on contract wins to rerate the stock. IJM trades at 14.0x 2011E P/E (versus 15.4x for Gamuda), a discount to the market's 15.7x. I like IJM too, especially with Zelan finishing its sell down, and a possible corporate exercise with IJM Land.
Alliance Finance (beta of 1.08). Possible catalysts: 1) Potential takeover target, 2) beneficiary of rising interest rates, 3) renewed IR initiatives could raise earnings visibility and 4) a huge potential for provision write-back. Investment view: CS have an OUTPERFORM on Alliance. The key senior management team remains intact, and the stock should get rerated as the market gets more comfortable with the new CEO. Alliance could be a beneficiary of improving Singapore-Malaysia ties as authorities may become increasingly more flexible on Temasek's exposure to Alliance. To me, there are better stocks to trade in the current market trend.
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