The local market experienced a lacklustre trading session in the month of November as the FBMKLCI had been trading within the negative territory throughout the month while an eleventh hour run-up in the final two trading days helped the benchmark index to close marginal 0.32% MoM higher at 1,812.72. This was partly due to lack of price catalyst in view of uninspiring corporate earnings release coupled with continued outflow of foreign funds. However, our OR portfolio tracker managed to report 2.75% average total return in the month. On a YTD basis, the average total return of 21.97% for the tracker portfolio is still outperformed the barometer index by 645bps. Moving on to the year-end festive season month of December, a year-end window dressing activities is possible, which will move the market higher. For now, the index is expected to be well supported at 1,770-1,780 with 1,822-1,826 acting as the major resistance levels.

A well balance month in November. We issued six On Our Radar (OR) reports last month, including two new stocks namely RUBEREX (FV: RM1.08) and PRESBHD (FV: RM2.64). Of which, we have two NOT RATED reports on ECS (FV: RM1.22) and PRESBHD, two Trading Buy calls on PIE (FV: RM7.56) and RUBEREX, and two Take Profit recommendations on TGUAN (FV: RM1.63) and ENGTEX (RM1.68). We upgraded PIE’s fair value to RM7.56 from RM5.14 after our recent visit revealed that the group is set to benefit from the tech industry’s up-cycle. The share price of PIE has risen 51% since our first report released on 18 Apr. In our view, the new featured RUBEREX is expected to get some attention from its earnings turnaround story while it is trading at steep c.48% discount to its peers’ valuations. We decided to take profit on ENGTEX as its share price rallied 47% in two months after we released our Trading Buy call on 12 Sep. We also booked in 31% total returns on TGUAN as its near to midterm prospects turned cautious. In addition, we have removed the ZHULIAN from our Trading Buy’s list as we had initiated core coverage on this stock on 5 Sep.

A slow month. There is a total of 19 Trading Buys in our OR tracker portfolio list after Taking Profit on two stocks and adding one new Trading Buy last month. Against the market where the barometer index which posted 0.32% MoM gain (or 0.67% including dividends), our OR tracker portfolio registered a 2.75% gain on an average total monthly return in November. This is mainly driven by PIE (+31.43%) and PESTECH (+16.03%). On a YTD basis (as at 29 Nov), our OR tracker portfolio reported a total return of 17.67%, which beat the FBMKLCI’s total return of 10.86%. This is mainly attributable to the strong gain on PESTECH (+143.42%), PIE (+58.94%) and FIBON (+88.43%). On the flipside, GLOMAC (-12.79%) and SBCCORP (-13.11%) are the two main underperformers.

FABER still the top realised gainer. Our OR tracker portfolio has posted an average total return of 21.97% since its inception, which beat the total return of FBMKLCI (+15.52%) by 645bsp. In fact, our total realised gain of 25.71% alone is already more than the key index’s gain, as all of our realised stocks after the month of March had recorded more than 30% total return. In all, FABER remains the top in the list of realised gain with 104% total gain, followed by PWROOT (+68%) and GHL (+63%). On the other hand, the worse performers since inception were BONIA, MKLAND and GCB, with -17%; -13% and -12% of negative total return, respectively.

Source: Kenanga