Malaysia Daily, Maybank KE (2014-05-07)

Daily 07 May 2014 RESULTS PREVIEW Media Prima: Maintain Hold Adex support in 1Q14 1Q14 results may still show YoY growth despite higher electricity tariff which had affected adex in the past. We leave our earnings estimates little changed as challenges remain. Maintain HOLD with a 2% higher TP of MYR2.52. Continue to advocate a MYR2.20 entry point on 1.4x trailing P/BV. Click here for full report » RESULTS REVIEW Petronas Gas: Maintain Hold A largely routine quarter  Shariah-compliant 1Q14 net profit was in line with expectation at 25% of both ours and consensus full year forecasts. 2Q14 will reflect the new GPTA, which is more stable and marginally more accretive than the old GPTA. Maintain HOLD, TP unchanged at MYR23.50. Click here for full report » Hartalega: Maintain Hold In a transition  Shariah-compliant 4QFY3/14 results within our expectation but below street's. A temporary earnings blip before charting steep growth in FY3/16. Maintain HOLD and MYR6.70 TP, but investors should look to accumulate on further weakness. Click here for full report » Technicals Treading water before the fall The FBMKLCI declined marginally by 0.11 points to close at 1,860.43 yesterday, but the FBMEMAS and FBM100 rose by 10.01 points and 4.98 points, respectively. We expect heavy selling to emerge near the resistances of 1,860 to 1,873. Trading idea is a Take Profit call on IRIS with downside target areas at MYR0.41 & MYR0.28. Click here for full report » Other Local News Encorp: Felda Investment buys 49.45% stake for MYR239.7m. Felda Investment Corp (FIC), the investment arm of the Federal Land Development Authority (Felda), has bought out all the shares in Encorp Bhd held by two major shareholders for MYR239.72m. This will oblige FIC to extend a mandatory takeover offer for the shares, warrants and loan stocks that it does not own in Encorp at MYR1.55, MYR0.55 and MYR1.55 apiece, respectively. (Source: Bursa Malaysia) UEM Sunrise, Mulpha: In JV to build roads in Iskandar Malaysia. UEM Sunrise Bhd and Mulpha International Bhd have formed a joint venture for three road projects in the vicinity of Iskandar Malaysia valued at MYR107m. UEM Sunrise subsidiary Nusajaya Rise Sdn Bhd (NRSB) will own 59% stake in the venture while Mulpha International unit Leisure Farm Corp Sdn Bhd (LFC) will hold the balance stake. The collaboration was set to create a direct link from Gerbang Nusajaya and Leisure Farm Resort to the Malaysia-Singapore Second Link (Linkedua). (Source: The Star) Lion Corp: Megasteel mulls Indonesian move. Megasteel Sdn Bhd may just pack up its operations within the next three months and move to Indonesia, if the government fails to grant its petition for higher import duties. Tan Sri William Cheng, executive chairman of The Lion Group, of which Megasteel is a unit, said the company has been hit hard by higher taxes at its China operations as well as the government�s imposition of high duties on HRC imports. (Source: Business Times) RHB: Gets banking licence in Laos. RHB Capital Bhd has been granted with the banking licence by the Governor of the Bank of Lao People's Democratic Republic for the establishment of RHB Bank Lao Ltd, a subsidiary of RHB Bank Bhd. RHB Bank Lao will commence business operations upon receipt of the business registration licence from the Ministry of Industry and Commerce of Laos. (Source: Bursa Malaysia) Outside Malaysia OECD: Cut its global growth forecast as expansions in China and other emerging markets slow. The world economy will expand 3.4% this year instead of the 3.6% predicted in November, the Paris-based organization said. China will grow 7.4%, down from a previous projection of 8.2%. (Source: Bloomberg) U.S: Trade gap shrinks in March as exports show global boost. The trade gap shrank by 3.6% to USD 40.4b from the prior month's USD 41.9b according to Commerce Department figures. Sales to foreign customers climbed 2.1% MoM to the second-highest level on record as demand grew for aircraft, autos and fuels. (Source: Bloomberg) U.K: Services grew at the fastest pace in four months in April as employment and new business picked up, pointing to continuing momentum in Britain's recovery. A Purchasing Managers' Index increased to 58.7 from 57.6 in March, Markit Economics said. The index has been above the 50 level that divides expansion from contraction since the start of last year. (Source: Bloomberg) China: Deflating property market seen raising local-debt risk. Land sales in 20 major cities fell 5% YoY in March, the biggest drop in at least a year, according to China Real Estate Information Corp. data compiled by Bloomberg. The value of land sales in third-tier cities declined 27% YoY last month, according to SouFun Holdings Ltd., the nation's biggest real-estate website owner. (Source: Bloomberg) Australia: Central bank left its benchmark interest rate unchanged at a record low as slowing inflation and anticipated cuts to government spending give policy makers room to support economic growth. Governor Glenn Stevens and his board kept the overnight cash-rate target at 2.5% and reiterated borrowing costs are likely to remain steady for a period. The Reserve Bank of Australia noted "improvement in indicators for the labour market," in one of few changes from last month's statement. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,860.4 (0.3) (0.0) JCI 4,834.5 13.1 (0.2) STI 3,245.6 2.5 0.1 SET 1,404.0 8.1 (1.2) HSI 21,976.3 (5.7) 0.0 KOSPI 1,959.4 (2.6) 0.0 TWSE 8,912.4 3.5 0.5 DJIA 16,401.0 (1.1) (0.8) S&P 1,867.7 1.0 (0.9) FTSE 6,798.6 0.7 (0.3) MYR/USD 3.3 (0.7) (0.0) CPO (1mth) 2,632.0 0.2 (0.3) Crude Oil (1mth) 99.5 1.1 0.0 Gold 1,308.1 8.9 (0.2) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.92 14.00 Genting Msia 4.22 4.74 HLBK 13.84 16.40 AMMB Holdings 7.14 8.50 Bumi Armada 3.98 5.00 IJM Corp 6.35 6.75 MPHB Capital 1.94 2.42