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 ComfortDelGro is one of largest land transport companies in the world with a global workforce, a global shareholder base and a global outlook. NextInsight file photo
Comfort Delgro
Capital Research Management Company - a unit of Capital Group of Companies - declared last night that they increased their stake in locally-listed integrated transport company Comfort Delgro last week.
Their purchase of 1.6475 million shares at $2.94 was transacted in the open market. They now hold 5.04% of Comfort Delgro. By crossing the 5% threshold, they have become a substantial shareholder of the company.
CD pulled back more than 10% after they announced their earnings in the middle of February. At these levels the stock is priced at 22.3 X current PE. Recent news surrounding an increase in local ridership, together with a likely regulatory restructuring of their bus operations, will keep this stock under the spotlight of many traders.
Although the stock pulled back from a high of $3.28 to around the $2.80 level after their results last month, the low of this move was still above their November high of $2.74, which would lend support that the uptrend move that started in January is still on track.
A firm break of the $3.01 level may lead to a retest of the $3.28 high. Conversely, support for the stock remains around the $2.80 level. Failure to hold this may see Comfort pulling back to around the $2.47 level.
Incidentally, this announcement makes it the third stake increase reported this week by significant shareholders on locally-listed blue chips, after Noble and Golden Agri reported insider buying the last two days.
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Reserve Bank of Australia (RBA) Decision
To the market's surprise, the RBA left rates unchanged in their meeting yesterday.
The AUD/USD popped up after the announcement, and seems to have held on to its initial gain. One reason for the decision to leave rates unchanged may be the fact that the RBA may have had a 'preview' of key leading economic numbers - scheduled to be released over the next days - that may be more optimistic than initially thought.
Australian quarterly GDP numbers out this morning came in at 2.5% year-on-year. Economists had expected a read of 2.6%. On Thursday, key monthly trade and retail sales numbers will be released. A flat or even more positive than estimated number may have swayed the RBA to hold off further cuts to rates for the time being.
Oil
The WTI oil picture looks interesting. On the one hand it seems to be struggling to form a higher low here which, if held, could propel the commodity back to the recent high of around $54. On the other hand, a pullback from these current levels could also see it complete a bearish wedge formation, which could see it test its late January lows of around the USD43.5 level.
It's certainly worth a watch.
