Capitamalls Asia - An opportunistic play

Capitamalls Asia ("CMA") seems to be an opportunistic play. Aggressive traders may wish to consider to start initiating long positions via tranches at current levels.
Potential reasons for a possible rebound:
- Laggard STI component stock. Actually, it is the worst performer YTD, dropping 26.5%;
- Has the 2nd greatest total potential return of  25.5% (estimated by analysts as a whole), second only to SIA;
- Oversold to a very large extent. 17 Dec RSI of 24.99 is the 3rd lowest RSI throughout its 238 trading sessions since its listing on 25 Nov 09.
Noteworthy risks
- RSI can remain depressed for a period of time, before it rebounds eventually;
- RSI not a holy grail indicator, but nonetheless a good indicator to filter out some interesting counters;
- Opportunistic play involves substantial risks. Besides, as this is a technical play to play on a retracement in the sharp decline of CMA (and not a reversal), traders should be aware that upside is likely not much.
Please refer to my remisier blog ernestlim15.blogspot.com for more information on CMA. I can be contacted at crclk@yahoo.com.sg .
Have a profitable wk ahead.

0739 GMT [Dow Jones] CapitaMalls Asia ( JS8.SG ) is up 8.1% at S$1.275 with 58 million shares changing hands after 42.15 million shares were traded in a married deal at S$1.20.

An analyst at a foreign brokerage says the block deal is probably the main reason for the gain, as it removes a share overhang; "I''m not too sure who the buyer is, but it seems like (substantial shareholder) the Captial Group Companies is selling," he says.

Year-to-date, The Capital Group has pared down its stake in CMA from just under 10% to 4.95% as of late July.

The analyst adds, other factors are also driving CMA''s shares, such as news Wednesday that non-executive director Olivier Lim bought 370,000 CMA shares, raising his stake to 0.023% from 0.013% while CEO Lim Beng Chee recently bought 100,000 shares, raising his stake to 0.006%; "that''s sending out quite a good signal and definitely positive," he says.

The analyst adds, CMA currently trades at about a 20% discount to book value, and has underperformed substantially year to date. ( matthew.allen@dowjones.com )