• Playing catch-up against its peers. In the wake of a 3.2% mom decline in RM (vs USD), export -oriented building materials manufacturers such as HEVEA and EVERGREEN share prices had rallied 18% and 28% from their monthly lows, respecti vely. Against its peers, FLBHD share price underperformed with only 8.5% gain from its monthly low of RM1.42 (1 Sep).

• Bottoming up. Technically, FLBHD is expected to play catch up against its peers as momentum built up yesterday following a 3.35% gain in share price and nearly 2.7m (100% and 137% higher against 1M/3M average) shares changed hand.

• On the back of bottoming up daily and weekly indicators, we expect FLBHD to break immediate resistance near RM1.60 (100-d SMA) soon. A decisive breakout above RM1.60 will spur prices higher to retest RM1.72 (22 & 23 Aug high) and our LT objective at RM1.80 (20-w SMA). Major supports are situated at RM1.47 (14 Sep low) and RM1.42 levels. Cut loss at RM1.41.

Source: Hong Leong Investment Bank Research - 20 Sep 2016