Malaysia Daily, Maybank KE (2014-04-23)

Daily 23 April 2014 COMPANY UPDATE Hong Leong Bank: Maintain Buy Strategies bearing fruit We remain positive on HL Bank which is seeing selective traction in lending, as well as growth in NOII. HL Bank continues to offer exposure to the industry's second most efficient bank with impeccable asset quality. BUY maintained � unchanged MYR16.40 TP on CY14 P/BV of 1.9x, supported by ROEs of 15%. Click here for full report » Technicals Headed up to 1,870 & 1,882 The FBMKLCI rose 3.49 points to close at 1,866.42 yesterday, while the FBMEMAS and FBM100 also closed higher by 31.83 points and 29.53 points, respectively. We recommend a �Buy on Dips� stance for the index. As the FBMKLCI broke through the key 1,839.26 level recently and it is now poised to head higher. Trading idea is a Short-Term Buy call for CYPARK with upside target areas at MYR3.12 & MYR3.59. Stop loss is at MYR2.73. Click here for full report » Other Local News Property: Battersea developer joins record loan binge. Companies converting London's Battersea Power Station into a luxury apartment complex with sale prices as high as USD50m (MYR163m) are part of a record syndicated loan rush by Malaysian borrowers. A consortium led by SP Setia and Sime Darby is seeking as much as MYR10.98b from local and international banks to renovate the site. (Source: The Edge Financial Daily) BAT: Cautious about spending amid volume decline. BAT will keep a tighter rein on its capex and remain focused on cutting costs to maintain profit growth this year, amid and overall shrinkage of the legal tobacco market consumption. (Source: The Edge Financial Daily) Maybank: Taps Bancassurance annuity market. Maybank has expanded into deferred annuity market through its "Smart Retirement Xtra" (SMX) plan, the first deferred annuity insurance plan in Malaysia through the Bancassurance channel. It targets to generate MYR48m in premiums this year and aims to tap the potential of the life insurance market in Malaysia, which has a penetration rate of 41.22 per cent currently. (Source: Business Times) AirAsia: AirAsia India to secure operating permit. The Directorate General of Civil Aviation (DGCA) is expected to clear AirAsia's operating permit this week, paving the way for the launch of the low-cost airline's India operations. (Source: Business Times) Outside Malaysia U.S: Home prices rose 6.9% YoY in February as recovery cools. Prices climbed 0.6% on a seasonally adjusted basis from January, the Federal Housing Finance Agency said. Price gains, driven by competition for a tight supply of listings, may be poised to slow as real estate becomes more expensive, more sellers list houses and homebuilders add to the supply of available properties. The average rate for a 30-year fixed mortgage has climbed by almost a percentage point from a year ago, further reducing affordability. (Source: Bloomberg) U.S: Sales of previously owned homes fell in March for the third consecutive month as rising prices and cold weather discouraged would-be buyers. Closings, which typically take place a month or two after a contract is signed, fell 0.2% to a 4.59 million annual rate, the lowest level since July 2012, the National Association of Realtors reported. (Source: Bloomberg) China: Cuts reserve requirement ratio for some rural banks. Chinese central bank cuts reserve requirement ratio for county-level rural cooperative banks by 0.5ppts and county-level rural commercial banks by 2 ppts. Cuts are effective April 25. PBOC says in statement RRR cuts will help boost financial powers of rural banks registered in county areas which have a larger proportion of loans extended to agricultural sector than rural banks registered in cities. PBOC reiterates it will maintain prudent monetary policy and keep liquidity at a proper level. (Source: Bloomberg) Vietnam: Aims first debt sale of bank cleanup as growth slows. Vietnam's state asset management company aims to start selling bad debt from banks in the third quarter, stepping up efforts to overhaul lenders and spur economic growth. The asset manager, known as VAMC, was set up last July to acquire non-performing loans and enable banks to lend again. It has bought about VND 45tr (USD 2.1b) of bad debt and plans to purchase about VND 15tr more between now and the end of June, Vice Chairman Nguyen Quoc Hung said in an interview. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,866.4 (0.0) 0.2 JCI 4,898.2 14.6 0.1 STI 3,277.5 3.5 0.7 SET 1,415.1 9.0 0.1 HSI 22,730.7 (2.5) (0.1) KOSPI 2,004.2 (0.4) 0.3 TWSE 8,974.7 4.2 0.3 DJIA 16,514.4 (0.4) 0.4 S&P 1,879.6 1.7 0.4 FTSE 6,681.8 (1.0) 0.9 MYR/USD 3.3 (0.3) 0.5 CPO (1mth) 2,730.0 3.9 1.3 Crude Oil (1mth) 102.1 3.8 (2.1) Gold 1,283.8 6.8 (0.5) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.94 14.00 Genting Msia 4.20 4.74 HLBK 14.06 16.40 AMMB Holdings 7.24 8.50 Bumi Armada 4.00 5.00 IJM Corp 6.32 6.75 MPHB Capital 1.98 2.42