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, March 16, 2011

Maybank IB Research keeps Petronas Chemicals (5183.KU) at Buy TP RM8.00

0631 GMT [Dow Jones] STOCK CALL: Maybank IB Research keeps Petronas Chemicals (5183.KU) at Buy with an unchanged target of MYR8.00, based on 14.4X 2011 PER.

The house says the petrochemicals producer may deliver a record profit in 2011, driven by higher demand, strong product margins and an increasing price divergence between natural products and synthetic alternatives. "High oil prices are beneficial as Petronas Chemicals' products track oil price increases with a 91% correlation," says Maybank.

In addition, as Japan is a major petrochemical producer (estimated 7.5% of Asia's total supply), "we think the earthquake and tsunami impact will cause shortages of supply which may support higher product prices," it adds. Maybank forecasts 2011E recurring net profit at MYR4.43 billion vs MYR2.94 billion in 2010. The stock is flat at MYR6.59.

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