PP 7767/09/2010(025354)

RHB Research
Malaysia Technical Research Institute Sdn Bhd
A member of the
RHB Banking Group
Company No: 233327 -M

Da ily T rad ing S trat egy

1 July 2010
MARKET DATELINE

Market Technical Reading

Near-term Outlook Remains Bearish...

Chart 1: FBM KLCI Daily Chart 2: FBM KLCI Intraday

Local Market Leads:

♦ Share prices in the local bourse ended off low on Wednesday, thanks to the mild bargain-hunting activities
reemerging after the sharp selldown in the previous day.

♦ This was in line with the regional markets that experienced follow-through selling momentum yesterday. China’s
SHComp and HSI fell 1.2% and 0.6% respectively, as Nikkei 225 lost another 2% upon closing.

♦ Overall sentiment remained sluggish as investors stayed sidelined amid uncertainty on the global economic
recovery.

♦ Though the index ended negatively for the day, mild bargain-hunting activities emerged on lower liners like KEuro
(+7sen) and Time (3sen), while speculative counters like GPacket-WA (-0.5sen) and Gamuda-WD (unchanged)
attracted heavy participation from retailers.

♦ Daily turnover dropped significantly to 564m shares from 741m shares yesterday, while market breadth improved
marginally with 267 gainers against 343 losers.

Technical Interpretations:

♦ Due to the overnight plunge on the US DJIA, the FBM KLCI opened almost 10-pts down yesterday, near the 40-
day SMA of 1,308.

♦ However, as bargain-hunters returned, the FBM KLCI recovered and closed at 1,314.02, narrowing its losses from
13.6 pts to merely 5.82 pts or 0.44% upon closing. It registered a positive candle on the chart.

♦ The candlestick pattern, positioned just at above the 40-day SMA, suggests a potential rebound today.

♦ But, given the poorer state of momentum readings, this rebound, if any, will likely be shallow, in our view.

♦ The technical supports of the index stay at the 40-day SMA and the 1,300 psychological level.

Please read important disclosures at the end of this report.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 1 of 6
available for download from www.rhbinvest.com
 1 July 2010

Daily Trading Strategy:

♦ Although index closed with a positive candle yesterday, neatly at above the 40-day SMA and could spell follow-
through buying support today, the index is still under pressure, in our view.

♦ The immediate-term upside is expected to be capped at the 10-day SMA near 1,322. And, without recapturing
the 10-day SMA, its short-term technical outlook will likely stay negative.

♦ In fact, with the regional market sentiment still negatively biased, on fresh doubts over the sustainability of the
global economic recovery, investors are expected to adobt a “wait-and-see” strategy before committing to any
fresh positions.

♦ Therefore, we are keeping our bearish near-term outlook for the local market, and remain watchful on the
possibility of a resumption of selling activities.

♦ As a note, a loss of the 1,300 critical level will trigger significant selling pressure, which will lead to further
downside towards the 1,250 key support level.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 24 June 25 June 28 June 29 June 30 June Local Key Indices Closing
(Pts) (%)
Gainers 318 251 227 175 267 FBM KLCI 1,314.02 -5.82 -0.4
Losers 332 370 340 514 343 FBM 100 8,643.78 -35.19 -0.4
Unchanged 294 278 241 252 259 FBM ACE 3,801.36 18.16 0.5
Untraded 418 463 505 423 494 Major Overseas
Indices
Market Cap Dow Jones 9,774.02 -96.28 -1.0
Turnover Nasdaq 2,109.24 -25.94 -1.2
(mln shares) 749 568 535 741 564 S&P 500 1,030.71 -10.53 -1.0
Value (RM FTSE 4,916.87 2.65 0.1
mln) 1077 923 778 1,059 988 Hang Seng 20,128.99 -119.91 -0.6
Jakarta Composite 2,913.68 20.31 0.7
Currency Nikkei 225 9,382.64 -188.03 -2.0
MYR vs US Seoul Composite 1,698.29 -9.47 -0.6
Dollar 3.2310 3.2430 3.2230 3.2505 3.2350 Shanghai Composite 2,398.37 -28.68 -1.2
SET 797.31 -1.78 -0.2
Source: RHBInvest & Bloomberg FT Straits Times 2,835.51 5.17 0.2
Taiwan Weighted 7,329.37 -94.20 -1.3
India Sensex 17,700.90 166.81 1.0
Major Commodities
NYMEX Crude Oil
(US$/barrel) 75.63 -0.31 -0.4
MDEX CPO – Third
Month (RM/metric ton) 2,373.00 7.00 0.3
US Interest Rate Current Last Updated
22-23 Jun
Overnight Fed Fund Rate 0-0.25% Unch
2010
Next FOMC meeting 10 Aug 2010

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 2 of 6
available for download from www.rhbinvest.com
 1 July 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Similarly, the local futures market closed lower yesterday. However, it closed the day significantly off its day low.

♦ The expired FKLI for Jun contract slid to an intraday low of 1,304, near the psychological support of 1,300, but
recovered steadily throughout the day and ended the day at 1,313, merely with a loss of 2.5 pts or 0.19%.

♦ The closely followed index, the Jul contract, however, closed 7 pts lower at 1,308, despite an early recovery to a
high of 1,316 due to the late selling momentum.

♦ The FKLI for Jun contract closed with a “hammer-like” candle, while the Jul contract ended with a “doji” candle.

♦ The candlestick patterns suggest a milder recovery momentum likely ahead.

♦ As such, we remain sceptical on its ability to stage a strong recovery ahead, as we see a clear resistance at the
10-day SMA near 1,324, followed by the recent high of 1,342.

♦ Strong supports are expected near the 40-day SMA of 1,308 and the psychological level of 1,300.

♦ A fall towards the 1,270 – 1,300 support region can be expected if it loses 1,300 in the near term.

♦ Upon further breakdown, the FKLI will likely head further south to an additional support at May’s low of 1,240.5.

Daily Trading Strategy:

♦ Yesterday’s closing points to a slight bargain-hunting support ahead, but the technical momentum appears
limited.

♦ As a result, we prefer to stay cautious on fear of a potential breach of the 1,300 level soon.

♦ For today, the futures index is expected to trade within 1,303 to 1,320.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Jun 10 1311.00 1316.50 1304.00 1313.00 -2.50 1313.00 4093 8920
Jul 10 1308.00 1316.00 1302.50 1308.00 -7.00 1308.00 8307 13322
Sep 10 1308.50 1315.00 1303.00 1307.00 -7.50 1307.00 239 529
Dec 10 1308.00 1313.50 1306.00 1306.50 -8.50 1306.50 30 205

Source: Bursa Malaysia

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 3 of 6
available for download from www.rhbinvest.com
 1 July 2010

Chart 5: US Dow Jones Industrial Average (DJIA) Daily Chart 6: US Nasdaq Composite Daily

US Market Leads:

♦ US stocks continued to fall yesterday, ending the 2nd quarter with a sharp negative note.

♦ Throughout the day, stocks seesawed between the positive and negative territories, weighing the poor jobs data
against the positive European banks’ outlook reported earlier. But selling resumed in late sessions, pounding all
three major indices to close near the day’s low, and at their lowest level since late 2009.

♦ The ADP report showed that less jobs were created by the private sector than economists had forecasted in Jun.
It said that 13,000 jobs were created compared to the forecast of around 61,000. This has offset the positive
report earlier that the European banks might need lesser loans than the market’s previous thought.

♦ In the New York Mercantile Exchange, the US light sweet crude oil futures for August delivery fell US$0.31 to
US$75.63 a barrel yesterday.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ In line with our expectation, the US DJIA continued to slide yesterday, following the preivous day’s plunge below
the 10,150 and the psychological level of 10,000.

♦ The US DJIA closed at 9,774.02, losing another 96.28 pts or 0.97% for the day, with another bearish candle on
the chart.

♦ Technically, added with the fresh downtick on the stochastic oscillators and the bearish 14-day RSI’s reading, the
index is expected to breach the immediate support at 9,700 today.

♦ That, if it happens, will push the index into the 9,200 – 9,700 support region in the near term.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite index fell 25.94 Pts or 1.22% to 2,109.24 on Wednesday, recording another bearish
candle on the chart and indicating a likely follow-through selling momentum today.

♦ As the momentum indicators remain face-down, trading is expected to stay on the negative course in sessions
ahead. As such, it has a strong chance of breaching the immediate support at 2,100 soon. An expected support
zone is at 2,000 – 2,100 region.

♦ Immediate resistance is at 2,190, followed by the 21-day SMA of 2,236.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 4 of 6
available for download from www.rhbinvest.com
 1 July 2010

Daily Technical Watch:

Chart 7: Genting Daily Chart 8: Genting Intraday

Genting (3182)

Rangebound within RM6.80 – RM7.45 likely in the near term…

♦ After hitting a high of RM7.87 in Oct 2009, the share price of Genting halted its seven-month uptrend with a
series of profit-taking activities.

♦ The stock fell to below the RM7.45 crucial resistance level, before relaunching another attempt to overcome the
hurdle in Jan 2010.

♦ As it failed to beat last Oct’s high, it spiraled into a steeper downtrend, breaching the key RM6.80 level in Feb
2010.

♦ Thereafter, the stock traded sideways at below the RM6.80 level, until a successful penetration in Jun that hit a
high of RM7.50 recently, near the solid resistance level at RM7.45.

♦ But, a steep fall on Tuesday confirmed that the stock has yet to garner enough momentum to remove RM7.45
hurdle.

♦ The stock closed yesterday with a small positive candle, indicating that sellers are taking a breather after
Tuesday’s selldown.

♦ Chart wise, we expect the stock to stabilise near the 40-day SMA of RM6.97, pending further slides on the
momentum readings, before making another attempt to rechallenge the RM7.45 hurdle. A greater support is
sighted at RM6.80.

♦ Overall, we foresee the stock to trade within the sideways range of RM6.80 to RM7.45 in the near term.

Technical Readings:

♦ 10-day SMA: RM7.327

♦ 40-day SMA: RM6.973

♦ Support: IS = RM6.80 S1 = RM6.00 S2 = RM5.15

♦ Resistance: IR = RM7.45 R1 = RM8.15 R2 = RM8.90

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 5 of 6
available for download from www.rhbinvest.com
 1 July 2010

IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank Berhad
(previously known as RHB Sakura Merchant Bankers Berhad). It is for distribution only under such circumstances as may be permitted by applicable law. The
opinions and information contained herein are based on generally available data believed to be reliable and are subject to change without notice, and may differ or
be contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not to be
construed as an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything stated herein in any
manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against RHBRI. RHBRI and/or its associated persons
may from time to time have an interest in the securities mentioned by this report.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives
of persons who receive it. The securities discussed in this report may not be suitable for all investors. RHBRI recommends that investors independently evaluate
particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or
strategy will depend on an investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates, employees or agents accepts
any liability for any loss or damage arising out of the use of all or any part of this report.

RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as well as providing
investment banking and financial advisory services. In the ordinary course of its trading, brokerage, banking and financing activities, any member of the RHB
Group may at any time hold positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers, in debt or equity
securities or loans of any company that may be involved in this transaction.

“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will seek investment banking or other
services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect
information known to, professionals in other business areas of the “Connected Persons,” including investment banking personnel.

The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based
upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

Technical recommendation framework for stocks and sectors are as follows: -

Technical Recommendation:
Trading Buy = Short-term positive opportunity spotted. It is an aggressive trading recommendation with a book to sellers’ price for short-term technical upside.
Bargain Buy = Short-term positive but technical signals have yet to trigger a rally. Traders can park and queue for their desired entry level within a small range.
Buy on Weakness = Short- to Medium-term positiveness anticipated, but technical readings are still negative. Traders can pick-up the stock for future rally.
Sell on Strength = Short-term momentum still positive, Traders are advice to lock in profit base on current strength.
Take Profit = Short-term target achieved. Traders are advice to exit before the technical readings turn bearish.
Avoid = Risky situation in the short-term and high volatility expected on the share price. Traders’ best strategy is staying away until it stabilises.

Technical Time Frame:

Immediate-term = short time frame within a contra period.
Short-term = moderate time frame within two to three contra periods. For tracking purposes, we refer to 10 trading days.
Medium-term = medium time frame usually refers to two to three weeks period. For tracking purposes, we refer to 20 trading days.

Technical recommendations are generally short-term in nature and may differ from RHBRI’s equity fundamental view and recommendation on the same company.

RHBRI is a participant of the CMDF-Bursa Research Scheme and will receive compensation for the participation. Additional information on recommended
securities, subject to the duties of confidentiality, will be made available upon request.

This report may not be reproduced or redistributed, in whole or in part, without the written permission of RHBRI and RHBRI accepts no liability whatsoever for the
actions of third parties in this respect.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 6 of 6
available for download from www.rhbinvest.com