GASMSIA (5209) - Gasmsia: IBR coming

Gasmsia has revealed that incentive-based regulation (IBR) for the gas sector is well under way. It is expected to be implemented by as soon as Jan 2016. This has prompted CIMB to lower our target price to RM2.25 as we change our valuation method to SOP from 22x CY16 P/E to better reflect its earnings composition. We also downgrade to Reduce from Hold as IBR could lead to a sharp earnings erosion.For more, check out the report in the Star newspaper.

Chartwise, we can see that Gasmsia has broken below its strong horizontal support at RM2.60. While it may find support at RM2.50 or even RM2.40, these support levels are relatively weak. In line with the negative development on both the fundamental & technical fronts, I would recommend a SELL on Gasmsia.


Chart: Gasmsia's weekly chart as at Jun 17, 2015 (Source: ShareInvestor.com)

Note: 
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Gasmsia.

 GASMSIA (5209) - Gasmsia: IBR coming 

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