Our preference: As long as 3.5 is not broken down, we favour an upmove with 4.3 and then 5 as next targets.
Alternative scenario: Only the downside breakout of 3.5 will invalidate our bullish scenario. In this case, a decline should shape towards 3.12 at first, and then 2.55.
Comment: The daily technical indicators are bullish and call for a rise towards 5 in the medium term.
Trend: ST limited rise; MT bullish.
Supports and resistances:
The proposed Goods and Services Tax (GST) is necessary to increase Government revenue and a single issue should not be a cause to derail its implementation, said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok. The GST, which has been postponed indefinitely, is aimed at widening the tax base and reducing the country's deficit. The Government had planned to introduce the GST at 4%, replacing the current sales tax and service tax. (BT)
Industrial production unexpectedly rose in February, due in part to gains in demand for computers and semiconductors that signal the pickup in US business investment is being sustained. Output climbed 0.1%, the eighth consecutive increase, as utility use and mining increased, figures from the Federal Reserve showed in Washington. Another Fed report showed factories in New York kept expanding in March as orders and employment grew. (Bloomberg)
Maintain BUY with lower TP of SGD1.13. We have lowered our target price in tandem with our 3% to 6% cut in EBITDA estimates from lower visitation assumptions and lag in ramping up of table capacity. The share price has retraced by more than 26% over the past two months. Although the current valuation at 13.1x FY11 EV/EBITDA is still relatively expensive vs the regional peer average of 8x to 14x, RWS is a strong long-term growth proposition and a share price de-rating to below 80 cents will be a strong BUY (11x FY11 EV/EBITDA). The group’s balance sheet is one of the strongest among gaming companies after Genting Malaysia. We think the market may need 3-6 months to digest the company’s operating and financial performance before drawing a clearer picture of its earnings visibility and what are deemed sustainable trends, thus providing more opportunities to accumulate on weakness.