Malaysia Daily, Maybank KE (2014-04-22)

Daily 22 April 2014 RESULTS REVIEW Public Bank: Maintain Sell Rich valuations 1Q14 results within expectations at 24% of our forecast and consensus full-year forecasts. Fundamentals still solid, but loan growth and NIMs tapering off, as guided. Still a SELL on valuation ground, TP unchanged at MYR18.00, pegged to an FY14 P/BV of 2.7x (ROE: 19.8%). Click here for full report » COMPANY UPDATE IJM Corp: Maintain Buy Wins MYR396m job  Shariah-compliant Wins MYR396m building construction job. More orderbook replenishment from WCE and Kuantan Port. Maintain BUY with an unchanged TP of MYR6.75. Click here for full report » RESULTS PREVIEW Tenaga Nasional Bhd: Maintain Buy Expect higher fuel costs  Shariah-compliant We estimate TNB's 2QFY8/14 core net profit at about MYR920m (+4% YoY, -25% QoQ), 19% of our FY8/14 forecast. Coal generation declined by 14% QoQ, leaving TNB dependent on costlier LNG-sourced gas for generation. Reiterate our BUY rating on the stock, with an unchanged target price of MYR14.00. Click here for full report » Technicals Index is headed up The FBMKLCI rose 10.24 points to close at 1,862.93 yesterday, while the FBMEMAS and FBM100 also closed higher by 64.82 points and 62.62 points, respectively. We recommend a �Buy on Dips� stance for the index. Trading idea is a Short-Term Buy on PBA with upside target areas at MYR1.61 & MYR1.80. Stop loss is at MYR1.30. Click here for full report » Other Local News Banking: OSK can raise at least MYR1b to acquire new businesses. OSK Holdings Bhd is expected to announce the acquisition of new core businesses or assets within the next six months, having recently completed the full integration process following the merger of its investment banking unit with RHB Group last year. Management said that OSK has much capacity to borrow given its current low net gearing of 0.1t times of its shareholders fund of MYR2.6b excluding its liquid assets of some MYR400.9m in short term financing lent to clients. (Source: The Edge Financial Daily) Alam Maritim: Malaysian billionaire Quek to take stake? Alam Maritim Resources Bhd is embarking on a new share sale exercise that could see savvy investors Tan Sri Quek Leng Chan and Paul Poh emerging as strategic investors, according to banking sources. Alam Maritim yesterday requested for the trading of its shares to be suspended for two days to make way for a material announcement after the stock shot up 10 sen, or 6.4%, to MYR1.65. This is the highest level the stock has hit since December 2007. It had been trading between the MYR1.30 and MYR1.60 range for the last one year, with not much volume. Yesterday alone, close to 31m shares crossed hands, which some dealers said was based on speculation of a new strategic shareholder emerging. The company had earlier disclosed that it was looking to embark on a fund-raising exercise, possibly via a new share sale. (Source: The Star) KPJ: Upbeat on data technology. Aside from improving medical services, KPJ Healthcare Bhd estimates its nationwide cloud infrastructure for managing patients� data will lead to a savings of 30% to 40% in hardware costs over the next five years. The group is investing MYR17m over the next three to five years for the roll-out of the private cloud system to link patient data across 13 hospitals by the end of this year. In a non-cloud environment, the group spends about MYR5m each time it upgrades the hardware of individual hospital servers, which over the network of 25 local hospitals meant a total cost of MYR125m. Each server usually lasts three to five years. By moving the healthcare provider's IT infrastructure to the cloud, the group was able to deliver IT services to the hospitals nationwide efficiently through a central server. (Source: The Star) MKH: Expects MYR800m sales from nationwide property carnival. MKH Bhd (MKH) expects its current nationwide property carnival comprising of affordable and mid-range landed residential homes to record MYR800m in sales. As MKH targets mainly mass-market segments this year, the projects are priced from MYR300,000 and above. MKH has a total gross development value (GDV) of MYR8b with remaining GDV of MYR6.5b beyond FY2014 to be developed over the next five years. MKH's property sales had accelerated this year to MYR280m as of February 2014. (Source: The Star) Sapura Resources: Firms up MYR1.3b development JV with KLCCH. Sapura Resources Bhd (SRB) will be developing a prime parcel of land along Jalan Kia Peng, Kuala Lumpur, measuring 81,863 sq ft, in a 50:50 joint venture with a unit of Petronas. In a filing to Bursa Malaysia, SRB said its board had approved the proposed acquisition of a 50% stake in the joint venture entity, Impian Bebas Sdn Bhd, from KLCC (Holdings) Sdn Bhd (KLCCH) for MYR108.5m cash. Impian Bebas plans to develop commercial buildings on the land, including a 46 storey office tower, a three storey conventional centre, a retail podium and a seven storey basemen car park making up 1.64m sq ft in gross floor area. The proposed development will cost about MYR1.3b, excluding the value of the land. The project will be financed through a combination of bank borrowings secured by Impian Bebas, as well as funds contributed by SRB and KLCCH based on the equity interest each holds. (Source: The Edge Financial Daily) Outside Malaysia U.S: An improving job market and increasing factory production in March contributed to a jump in the U.S. index of leading indicators that signals the pace of economic growth is poised to snap back. The Conference Board's index, a gauge of the outlook for the next three to six months, rose 0.8%, the most since November, after a 0.5% gain in February, the New York-based group said. The measure's 6.1% advance over the past year is the biggest since July 2011. (Source: Bloomberg) U.K: The number of fines issued to senior bankers by the U.K.'s financial watchdog has fallen 40% since 2010 as the new regulator continues to seek its first "big fry." The Financial Conduct Authority handed out 18 fines to finance workers classified as performing a so-called significant influence function in 2013, marking a decline from the 30 it issued in 2010, law firm Reynolds Porter Chamberlain LLP said in a report. (Source: Bloomberg) Japan: Weakest export growth in a year spurred a wider-than-forecast trade deficit in March, adding to challenges for Prime Minister Shinzo Abe in steering the economy through the aftermath of an April 1 sales-tax rise. The 1.8% rise in the value of shipments overseas from a year earlier, reported. An 18.1% jump in imports helped widen the deficit to the biggest ever for the month. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,862.9 (0.2) 0.6 JCI 4,892.3 14.5 (0.1) STI 3,255.8 2.8 0.1 SET 1,413.1 8.8 0.3 HSI 22,760.2 (2.3) 0.0 KOSPI 1,999.2 (0.6) (0.3) TWSE 8,951.2 3.9 (0.2) DJIA 16,449.3 (0.8) 0.2 S&P 1,871.9 1.3 0.4 FTSE 6,625.3 (1.8) 0.0 MYR/USD 3.3 (0.7) 0.3 CPO (1mth) 2,695.0 2.5 0.0 Crude Oil (1mth) 104.4 6.0 0.1 Gold 1,286.5 7.1 (0.8) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.94 14.00 Genting Msia 4.19 4.74 HLBK 14.00 16.40 AMMB Holdings 7.25 8.50 Bumi Armada 3.98 5.00 IJM Corp 6.35 6.75 MPHB Capital 2.00 2.42