Stock With Momentum: RCE Capital

This article first appeared in The Edge Financial Daily, on January 15, 2019.
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RCE Capital Bhd (-ve)

TRADING of shares in RCE Capital Bhd (fundamental: 1.55/3, valuation: 3/3) triggered our proprietary momentum algorithm yesterday for the first time since August last year.

A total of 1.62 million shares crossed yesterday, more than four times the counter’s 200-day average of 371,625 shares, before it closed eight sen or 5.3% higher at RM1.59, bringing it a market capitalisation of RM543.68 million.

RCE’s loans have grown at a double-digit teen pace annually — approximately double that of the banking industry — since the financial year ended March 31, 2015 (FY15). In FY18, its loan growth slowed to a single-digit pace of 8% to RM1.6 billion, but it was still almost double the banking industry’s 4.4% growth.

According to its group chief executive officer Loh Kam Chuin, for FY19, RCE is benchmarking its loan growth to the banking industry average of about 5%.