‘DATASONIC, MYEG STILL ATTRACTIVE’

BIMB Securities reaffirms ‘buy’ and ‘hold’ calls despite selldowns

SHARES of Datasonic Group Bhd and MyEG Services Bhd continued to slide as they breached the “oversold” territory, but analysts have different views on the two stocks.

Analysts have maintained a bullish view on MyEG but downgraded Datasonic to “hold” with a lower target price, although that is still higher than its current share price.

The stocks tumbled mainly due to weak market sentiment, they added.

However, their fall was much more severe compared to the overall FTSE Bursa Malaysia KLCI (FBM KLCI) as they were linked to the corruption and criminal charges against former deputy prime minister Datuk Seri Ahmad Zahid Hamidi.

Datasonic and MyEG lost 4.4 and 7.25 per cent, respectively, yesterday while the FBM KLCI close 1.44 per cent, or 24.87 points, lower to 1,697.60.

MyEG eased 10 sen to settle at RM1.28, while Datasonic lost two sen to close at 43.5 sen.

Stock market analyst Nazarry Rosli said the shares were in the “oversold” zone but remained attractive to long-term traders.

“The two stocks are expected to recover once the market sentiment improves. Currently, the sentiment is negative not just for the two stocks, but also the overall market,” he told NST Business.

Nazarry expects the two stocks to see some respite in the short term, based on the relative strength index (RSI) indicator.

Datasonic and MyEG’s RSI had slipped below 30 since Friday, the day when the two companies were allegedly implicated in Zahid’s charges.

Nazzary said this indicated an “oversold” or “undervalued” condition that could signal a trend change or price reversal to the upside.

RSI readings of 70 or above, on the converse, indicated that a security was becoming “overbought”