AirAsia (BUY)

Additional Income Stream from New JV

'''' AirAsia will set up a new JV with Tune Money in association with launching of customer loyalty program and pre-paid card services under the brand 'BIG' in Malaysia.

'''' 'BIG' loyalty program is expected to build-up customer brand loyalty for AirAsia and further boost the demand for low cost travelling.

'''' AirAsia reduces its overall risk (instead of setting up the program by itself) and does not incur any upfront cash.

'''' AirAsia earns upfront revenue from the sales of 'Loyalty Points' and equity account the JV's earnings.

'''' We believe the program will be gradually introduced in other countries, where AirAsia Group operates.

'''' The term of the Commercial Agreement is for a period of 2 years and the estimated transaction value is RM30.4m.

'''' Relating to Thai AirAsia IPO, AirAsia clarified that the exercise is on schedule for 4Q11 listing.

'''' Maintain BUY with unchanged TP of 4.50.

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FBM KLCI - Crucial 1400 support with potential technical rebound

'''' Critical level to watch is the 1400 psychological support as a break below will trigger further pressures towards 1367 pts (61.8% FR from peak 1597 and low 1224). However, some technical indicators are suggesting potential technical rebound with immediate resistance areas at 1444 (10-d SMA) and 1457 (mid Bollinger band).''

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IJM: Potential relief rally amid heavy oversold positions''

'''' Current FY12 P/E of 14x is undemanding vs. 10-eyar average P/E of 15x. Technical indicators are grossly oversold after recent selldown, implying potential relief rally soon. Upside targets are RM5.30 (lower Bollinger band), RM5.46 (5-d SMA) and RM5.64 (10-d SMA). Immediate supports are RM4.87 (38.2% FR) and RM4.71 (150-d SMA ' monthly chart). Cut loss below RM4.85.

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