Invest Lobby

 GAMUDA BERHAD (Stock Code: 5398)

 

GAMUDA closed RM0.05 or 1.32 % higher at RM3.85. Market action was relatively less volatile as compared to its three-day average. GAMUDA opened at RM3.83 and traded RM0.06 between RM3.83 and RM3.89. Market sentiment was uncertain for GAMUDA as it closes near the open of the day. Trading activity was relatively firm with 8.628m shares traded. The average trading volume for the past one week was 9.864m shares.

Although the day ended uncertain, the immediate trend is still bearish as GAMUDA declined 0.77% since last week. Based on the moving average indicators, the short term trend (using a 30-day moving average) is in an up trend . The mid-term trend, based on a 60-day moving average indicates that the current trend is up. The increase in both short and mid-term averages indicate that the price is in a good mid-term up trend. The 100-day moving average, which is used to identify the long term , is indicating an up trend. The long term trend is strong upwards as both the short and term trends are in convergence.

Generally, the market is dominated by the bulls, based on the 14-period Relative Strength Index (RSI) indicator. The Average Directional Index (ADX) indicator is also indicating a strong bullish strength. The Bollinger Bands indicator, which indicates price volatility indicates that the up trend momentum is weak in the short term. Using the Average True Range indicator, declining daily volatility as compared to the previous week’s volatility indicates weak momentum in the short term.

The price is currently slightly overbought and the increase in the Stochastic indicator shows that price is still being pushed higher. Short term chart patterns shows that there is no sign of any reversal today.


29 Sep 2010: Credit Suisse lifts Gamuda target to RM4.74 from MYR4.50 on 45% net profit increase FY2010, order book expansion, confidence on KL MRT project implementation and the Economic Transformation Programme (ETP)

29 Sep 2010: CIMB Research raises Gamuda's target to RM4.96 from RM4.78 on revised target of 13.8x PE vs 15x PE previously and eventual implementation of the proposed MRT project

29 Sep 2010: RHB Research raises Gamuda's  target to RM4.51 from RM3.96, keeps trading buy on higher FY11-FY12 earnings forecasts 23%-27% to reflect stronger profits from Malaysian property projects and confident its JV with MMC will secure government approval for RM36 billion MRT project before year-end.

29 Sep 2010: OSK Research raises Gamuda's target to RM4.31 from RM4.00, keeps trading buy on higher PE evaluation from 16x to 18x because of MRT project, JV with MMC for government MRT project and record sales on its property business.

29 Sep 2010 (Dow Jones) Gamuda may rise to test RM3.87 (yesterday's intraday high) vs yesterday's close at RM3.80 (down 2.3%), says dealer; this after construction firm posts +77% on-year 4Q net profit to RM76.6 million due to strong contributions from all divisions, higher margins from building, engineering division. Firm posts full fiscal year net profit of RM280.7 million vs RM193.7 million previous year. Adds construction projects progressing on schedule, strong property sales will boost performance which will be "better in the next financial year." Dealer says full-year net profit within market expectations; "players are also looking at prospects of Gamuda clinching larger contracts this fiscal year, particularly related to Kuala Lumpur''s MRT project."

KUALA LUMPUR 29 Sep 2010 (Dow Jones)--Gamuda Bhd. Tuesday said fourth quarter net profit jumped 77%, mainly driven by better margins at its construction division. Net profit for the quarter ended July 31 rose to MYR76.6 million, compared with MYR43.3 million a year ago, the construction and property firm said in an exchange filing. Revenue for the period fell 24% to MYR714.8 million from MYR942.2 million, while operating expenses fell 28% to MYR657.5 million.

For the current fiscal year that began Aug. 1, the company said the outlook was promising. "With the existing construction projects progressing on schedule and the strong property sales recorded by the property division, the group is expected to perform better in the next financial year." The company said its property division continues to benefit from improved market sentiment that has boosted demand for recently launched products.

Net profit for the year ended July 31 rose 45% to MYR280.7 million from MYR193.7 million a year ago. Revenue for the period fell 9.9% to MYR2.46 billion from MYR2.73 billion.For the full year, operational profit from the construction segment rose to MYR99.9 million from MYR63.2 million. Gamuda's total borrowings as at July 31 stood at MYR1.79 billion.


Investlobby is bullish on Gamuda's share price based on technical and fundamental analysis. However, Gamuda's share price may move into a correction as it has been trading way above the short to long term average and therefore expect a minor correction of pullback to the short term support level between RM3.50 and RM3.60. The support level would be a low risk entry. Investlobby's target price RM4.80.