Today's outlook 20-Dec-2010

Last Friday, US market ended flat with DJIA down 7.34p to 11491.90p while S&P gained 1.04p to 1243.91p.

Here are some of the news that may have affected last Friday's US market:
ii) Oracle reported quarterly profit which rose 28% yoy
ii) RIM revenue jumped 40% yoy
iii) Volatility Index has gone down to its 8 months low
iv) Bank of Montreal will buy Marshall & IlsleyCorp for US$4.1b
The major news during the weekend is the news that South Korea plans levy on foreign currency bank debt.


My view:
Overall, US market was flat with the news flow are mostly related to US local economy. However, the robust financial result from Oracle and RIM are positive for technology counters. The South Korea plan is generally negative to equity market but the impact should not be as high as China, due to their smaller GDP. Overall, today should be slightly bearish for KLCI as investors are likely to stay cautious while waiting for further indicators.

Stocks that I STILL find attractive:

1. SCIENTX (Hit RM2.00 on Friday close, capex of RM14.4m in FY2011 should grow the Manufacturing earnings by 10%, still cum 6 sen dividend ex date 7-Jan-2011, new potential: may go up to RM2.16)
2. DRBHCOM (HwangDBS Target Price at RM3.55, historical PER of 7.49x now means it is still trading at huge discount compared to other conglomerates in Malaysia, got potential to go up to RM3.00)
3. FPI (Trade at attractive historical PER of only 5.92x, strong balance sheet with net cash of RM81.42m or 33.14 sen per share, got potential to go up to RM1.39)