Malaysia Daily, Maybank KE (2014-03-04)

Daily 04 March 2014 MARKET STRATEGY Strategy: Neutral Growth subdued, but will continue We maintain our 1,940 end-2014 KLCI target and sector weights, and remain selective on stocks. 4Q13 saw more results meet our expectations and the ratio of below-to-above expectation results also improved. We estimate that the KLCI core earnings grew 5.1% in 2013, and expect 8.1%/8.4% growth in 2014/2015. Click here for full report » Market Strategy: Neutral February fund flows We think it is still early to conclude a sustained return of foreign funds into equities despite last week's net buying. We expect volatility to persist into 2Q14 with US' QE Taper and China's macros to drive near-term equities momentum. No change to our 1,940 YE KLCI target and sector weights; and we remain selective on stocks. Click here for full report » SECTOR UPDATE Banking Sector: Maintain Neutral Too early to excite Industry loan growth was decent at 11% YoY in Jan 2014 versus 10.6% in Dec 2013. Still cautious in view of the drop in loan applications; 2014 industry loan growth forecast of 9.8% maintained. Still NEUTRAL on the banking sector; BUYs are AMMB, HL Bank and HL Financial Group. Click here for full report » Technicals A softer tone to 1,813 & 1,800 The FBMKLCI fell 10.97 points to close at 1,824.69 yesterday, while the FBMEMAS and FBM100 also closed lower by 76.40 points and 68.19 points, respectively. In terms of market breadth, the gainer-to-loser ratio was 223-to-671, while 242 counters were unchanged. A total of 2.10b shares were traded valued at MYR2.05b. Major Asian indices lost ground as heightened concerns on the Ukraine conflict led to selling in the risky emerging markets as well as the Asia-Pacific markets yesterday. Click here for full report » Other Local News FGV: Eyes brownfield plantation acquisition. Felda Global Ventures Holdings Bhd (FGV) said that it is evaluating several potential brownfield plantations including Singapore-based Asian Plantations Ltd (APL). APL currently owns four estates totaling 20,770ha in Sarawak. (Source: The Edge Financial Daily) Selangor Properties: To sell land for MYR450m. Selangor Properties Bhd says it is selling a piece of land in Damansara for MYR450m to little known Jendela Mayang Sdn Bhd for a MYR376.2m gain. Jendela Mayang is believed to be controlled by Datuk Desmond Lim Siew Choon of Malton Bhd, who already owned several parcels of land within Pusat Bandar Damansara. The freehold land is zoned for commercial development. (Source: Malaysian Reserve, The Star) GDEx: Kicks off regional expansion. GD Express Carrier Bhd (GDEx), which is 26.01-%owned by Temasek Holdings Ltd, is looking beyond the shores of Malaysia and Singapore as it continues to expand its express delivery business to other Asean countries like Indonesia by 2015. The group has chosen Indonesia as its first nation to expand to. (Source: The Star) Property: 20 vying for development of RRI land. Physical work on the Rubber Research Institute (RRI) land, which is being shaped into one of the largest township developments in the Klang Valley, is poised to kick-start with 20 Tier 1 developers vying for the first tranche of the project. Kwasa Land Sdn Bhd, the master developer of the 2,330-acre Kwasa Damansara township in Sungai Buloh, has pre-qualified the companies to come up with proposals for the development of the town centre on a 64.07-acre site. The developers shortlisted are Bandar Raya Developments, Bandar Utama City Corp, DRB-Hicom, Eastern & Oriental, Gamuda, Goldis, Guocoland Malaysia, IJM Land, IOI Properties, I&P Group, Mah Sing Group, Malaysian Resources, PerbadananKemajuanNegeri Selangor, Putrajaya Holdings, SP Setia, Sunway, Tropicana Corp, UEM Sunrise, WCT and YTL Corp. (Source: The Star) Outside Malaysia U.S: Consumer spending climbed more than forecast in January, reflecting the biggest increase in services in over 12 years as Americans began to enroll for the Obama administration�s health-care program. Household purchases, which account for about 70% of the economy, rose 0.4%, after a 0.1% gain the prior month that was smaller than previously estimated, Commerce Department figures showed. (Source: Bloomberg) U.S: Manufacturing expanded at a faster pace than projected in February, showing the U.S. economy is making headway in emerging from the harsh winter weather that has slowed growth in early 2014. The Institute for Supply Management's manufacturing index rose to 53.2 from 51.3 in January, the Tempe, Arizona-based group reported. Readings above 50 signal expansion. (Source: Bloomberg) Russia: Raised its main interest rate the most since 1998 as the currency plunged to a record and investors pulled money from the stock market on concern that President Vladimir Putin will invade Ukraine. The one-week auction rate, the benchmark introduced in September, was increased temporarily to 7% from 5.5%, the Bank Rossii said on its website. The regulator also temporarily raised its other major lending rates by 150 basis points, or 1.5 percentage points. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,824.7 (2.3) (0.6) JCI 4,584.2 7.3 (0.8) STI 3,087.5 (2.5) (0.7) SET 1,339.2 3.1 1.0 HSI 22,500.7 (3.5) (1.5) KOSPI 1,964.7 (2.3) (0.8) TWSE 8,602.0 (0.1) (0.4) DJIA 16,168.0 (2.5) (0.9) S&P 1,845.7 (0.1) (0.7) FTSE 6,708.4 (0.6) (1.5) MYR/USD 3.3 0.2 0.1 CPO (1mth) 2,821.0 7.3 (0.1) Crude Oil (1mth) 104.9 6.6 2.3 Gold 1,350.6 12.4 1.8 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.98 12.50 Genting Msia 4.24 4.74 HLBK 14.22 16.40 AMMB Holdings 7.19 8.50 Bumi Armada 3.90 5.00 IJM Corp 5.79 6.75 Time dotCom 3.65 4.40 Cahya Mata Swak 7.69 8.40 MPHB Capital 1.83 2.42