Malaysia Daily, Maybank KE (2014-04-30)

Daily 30 April 2014 SECTOR UPDATE MY Construction Sector: Maintain Overweight Strengthened Pipeline Current pipeline is more solid than a year ago; RRIM, RAPID, WCE, Warisan Merdeka, Langat 2 works to kick off this year, KVMRT2 go-ahead is merely procedural. Impending major construction awards, to at least sustain the earnings momentum, is good enough reason to remain Overweight on the sector. Also, stock valuations remain undemanding at 8x-14x 2015 PER versus 16x for the KLCI; our Top Pick is still IJM Corp. Click here for full report » COMPANY UPDATE Public Bank: Maintain Sell Proposes rights issue Proposes rights issue at a discount of 20-35% to its theoretical ex-rights price (TERP), to raise up to MYR5b. We estimate 7% dilution to FY15 EPS and a lower FY15 ROAE of 17.7% from 19.1%. Positively, CET1 enhances to c.10.4%. SELL maintained, particularly with this dilution to ROE. TP of MYR18.00 pegged to an unchanged FY14 P/BV of 2.7x. Click here for full report » Hock Seng Lee: Maintain Buy More Jobs From SCORE  Shariah-compliant Wins MYR74m infrastructure construction job. HSL to continue benefiting from SCORE and urbanisation of Sarawak. Maintain BUY with an unchanged TP of MYR2.30. Click here for full report » Eversendai Corporation: Maintain Hold A slew of job wins  Shariah-compliant Secures contracts worth MYR172m in Middle East and India. Still in need of more jobs to boost depleting orderbook. Maintain HOLD with unchanged earnings forecasts and TP of MYR0.98, pegged to 10x FY14 PER target. Click here for full report » RESULTS REVIEW CIMB Group Holdings: Maintain Hold A subdued start for CIMB Niaga CIMB Niaga's 1Q14 earnings weaker than expected due to NIM compression and lower fee income. Trimming CIMB Group�s FY14 and FY15 net profit by 3% respectively. Maintain HOLD on CIMB Group with an unchanged TP of MYR8.00 (CY14 P/BV of 1.8x). Click here for full report » Technicals Rebounding into heavy selling The FBMKLCI advanced 3.60 points to close at 1,859.34 yesterday, while the FBMEMAS closed lower by 2.61 points but the FBM100 closed higher by 9.90 points. We recommend a �Take Profit� stance for the index. After the FBMKLCI broke the key 1,839.26 level, it stalled at 1,870.89 after that. Trading idea is a Take Profit call on STONE with downside target areas at MYR0.315 & MYR0.06. Click here for full report » Other Local News Petronas: Sells 15% of Canada gas project stake to Sinopec. Sinopec will absorb 1.8million tonnes of LNG from annual production for at least 20 years. Value of deal was not specified. (Source: The Edge Financial Daily) UMW-OG: Takes delivery of jack-up rig worth USD223m. This is a delivery of the second jack-up rig worth MYR726.7m from rig designer and builder Keppel FELS Ltd. Addition of Naga 5 to its fleet is in line with group's plan to become a regional player. (Source: The Edge Financial Daily) TNB: Signs MoU with Trilliant. TNB has signed a MoU with US-based Trilliant on a smart grid technical exchange collaboration. Trilliant is a leading smart grid platform company and the MoU follows the recent US-Asia Pacific Comprehensive Energy Partnership's High-Levels meeting. (Source: Business Times) AirAsia X: To expand 'aggressively' this year. AirAsia X is betting its dual strategy of scale and multi-country hubs will make it the region�s dominant airline and help it survive the short-term impact of declining yields. Steep price cuts by Malaysian Airlines on medium and long-haul routes last year hit passenger yields at AirAsia X, forcing it to discount fares to maintain load factors. (Source: The Star) Outside Malaysia U.S: Consumer confidence declined in April from a six-year high as Americans became less optimistic about the economy and labor market. The Conference Board's index decreased to 82.3 from 83.9 a month earlier that was stronger than initially estimated and the highest since January 2008, the New York-based private research group said. (Source: Bloomberg) U.S: Home-prices in 20 cities rose at a slower pace in the year ended February as the residential real-estate market cooled. The S&P/Case-Shiller index of property values increased 12.9% from February 2013, the smallest 12-month gain since August, after rising 13.2% in the year ended in January, a report from the group showed. (Source: Bloomberg) E.U: Euro-area economic confidence unexpectedly fell in April, increasing pressure on the European Central Bank as it considers unprecedented steps to avert the risk of deflation. An index of executive and consumer sentiment decreased to 102 from a revised 102.5 in March, the European Commission in Brussels said. (Source: Bloomberg) Germany: Inflation accelerated less than economists forecast in April, increasing pressure on the European Central Bank to add stimulus in the euro area. Inflation, calculated using a harmonized European Union method, was 1.1%, up from 0.9% in March, the Federal Statistics Office said. (Source: Bloomberg) U.K: Economic growth accelerated in the first quarter as the recovery broadened, leaving output excluding oil and gas back above its pre-recession peak. GDP expanded 0.8% from the final three months of 2013, when it grew 0.7%, the Office for National Statistics said. Growth from a year earlier was the most in more than six years. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,859.3 (0.4) 0.2 JCI 4,819.7 12.8 0.0 STI 3,237.7 2.2 (0.2) SET 1,412.3 8.7 0.1 HSI 22,453.9 (3.7) 1.5 KOSPI 1,964.8 (2.3) (0.2) TWSE 8,872.1 3.0 0.7 DJIA 16,535.4 (0.2) 0.5 S&P 1,878.3 1.6 0.5 FTSE 6,769.9 0.3 1.0 MYR/USD 3.3 (0.5) (0.2) CPO (1mth) 2,690.0 2.4 (1.0) Crude Oil (1mth) 101.3 2.9 0.4 Gold 1,295.9 7.8 (0.1) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.90 14.00 Genting Msia 4.21 4.74 HLBK 14.02 16.40 AMMB Holdings 7.16 8.50 Bumi Armada 4.00 5.00 IJM Corp 6.36 6.75 MPHB Capital 1.96 2.42