Reflections on Volume

Big volume without further upside equals distribution
Big volume without further downside equals accumulation

Volume tends to peak at turning points
Volume often precedes price movement
Volume is a relative study

Wednesday, January 20, 2010

MRCB – Property the key driver

MRCB – Property the key driver going forward Trading Buy
Visit Note- MRCB re-confirmed that it is keen on the Federal land parcels but acknowledged that “it is up to theGovernment to decide on which entity it will award the land to”. We maintain our view that MRCB’sproposed 1-for-2 rights issue is a prelude to these land deals.- MRCB expects its property turnover to increase from 30-40% of group turnover in FY12/09-10, to in excessof 50% by FY12/11, with the construction work on several components of KL Sentral gaining momentum.We believe the “transformation” of MRCB from a largely construction-dependent group to a largelyproperty-dependent group will be made easier with new property projects on the Federal land.- FY12/10-11 EPS are reduced by 12-13%, having reflected dilution from an enlarged share base.- Fair value is rationalised down by 3% from RM1.71 to RM1.66 (ex-rights), having reflected the dilution fromthe rights issue, mitigated by the change in our valuation methodology for KL Sentral from PER to DCF.

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