Malaysian consumer stocks seem to be facing headwinds in tandem with a prevailing bearish sentiment affecting the consumer segment. Hovid Berhad, a pharmaceutical company based in Malaysia has seen its share price falling to 1-year low of MYR0.345 per share.
Is Hovid in an oversold position? Or is there is any further downside risk? The technical indicators (shown below) seem to suggest that Hovid is currently in an oversold position. There could be some potential support at MYR0.34.
Further, BIMB Research has a recent target price of MYR0.39 for this company:
In tandem with the movement of its underlying, Hovid-W (warrant) fell to its 24-month low of RM0.16 per share. This instrument has an exercise price of RM0.18 per share, with warrant expiry by June 2018.
Regressing the share price of Hovid-W against Hovid and Days To Expiry – it appears that Hovid-W is reasonably valued at this juncture, actual RM0.16 vs predicted RM0.166, with a 95%-confidence interval of between MYR0.136 – MYR0.195
The above analysis is a high-level desktop analysis. Further detailed analysis (including the use of the appropriate option pricing models) shall be required.
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