Beneficiaries Of Board Merger (ext: OSK)

A quick comparison reveals that Second Board companies on average trade at a slight discount to Main Board companies although this is slight, particularly in the Property and Construction sectors. While the discount may narrow after the boards’ merger, a rally in Second Board stocks is unlikely as constraints such as earnings visibility and thin liquidity remain. Of our 5 stocks, we have Defensive Buy calls on HELP, Kawan Food and LTKM. However, more interest may be focused on the Second Board companies hogging the news of late, including Scomi Engineering, Ramunia and Fajar Baru, none of which are under our coverage.