Malaysia Daily, Maybank KE (2014-05-08)

Daily 08 May 2014 RESULTS REVIEW Malaysia Marine And Heavy Engineering: Maintain Buy Results yield no surprises  Shariah-compliant 1Q14 net profit of MYR35m within our expectation but significantly below consensus. Expect new job flows to be prominent in 2H14. Maintain BUY and MYR4.20 TP, pegged to 20x FY15 PER. Click here for full report » Maxis Bhd: Maintain Hold Still transforming  Shariah-compliant Both 1Q14 EBITDA and net profit were in line; the company had guided for a slow start to 2014. A 40sen DPS is unlikely in 2015, as net debt/EBITDA approaches self-imposed ceiling of 2x by end-2014. Maintain HOLD with a slightly lower TP of MYR7.10. Click here for full report » ECONOMICS External Trade, May 2014 Lower than expected trade growth Trade growth eased in Mar 2014 as exports rose by +8.4% YoY (Feb 2014: +12.3% YoY) while import growth slowed sharply to +0.5% YoY (Feb 2014: +9.5% YoY). YTD, exports and imports were up by +10.9% (2013: +2.4%) and +5.5% (2013: +7.0%). Positive trade figures so far this year is a boost to 1Q 2014 GDP data due next week. Click here for full report » Technicals Sell into this �Denial Phase� The FBMKLCI was unchanged at 1,860.43 yesterday, while the FBMEMAS and FBM100 declined by 7.92 points and 8.17 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a Take Profit call on YINSON with downside target areas at MYR7.50 & MYR6.96. Click here for full report » Other Local News Construction: PNB calls pre-qualification tender for Warisan Merdeka. Permodalan Nasional Bhd (PNB) has called for pre-qualification tender for the construction of the 118-storey tower, Warisan Merdeka. It has invited local and foreign contractors with the experience in constructing tall buildings to bid for the main contractor role in the development. (Source: The Edge Daily) Water: New conflict over water. The federal and state governments cannot agree on certain terms in the draft of the heads of agreement (HoA), which they need to sign to end the fiver-year water impasse and to kick-start the Langat 2 project, said sources. (Source: The Edge Daily) Zhulian: Investing MYR35m for new facilities. Zhulian Corp Bhd is investing MYR35m to set up new production facilities and upgrade its existing machinery. Group MD Teoh Meng Keat said that the group had spent MYR7.7m for a new plant in Bayan Lepas that would be used for the production of home and personal care products. The new facility should be ready for operations by 2015. (Source: The Star) Outside Malaysia U.S: Consumer credit climbs by most in more than a year in March as Americans stepped up credit-card use and took out school and auto loans. The USD 17.5b increase in consumer credit was bigger than projected and followed a revised USD 13b February advance that was smaller than initially reported. Non-revolving loans, including borrowing for cars and college tuition, rose by the most in six months. (Source: Bloomberg) U.S: Yellen says stimulus still needed to meet Fed's goals. Federal Reserve Chair Janet Yellen made it clear she believes the economy still requires a strong dose of stimulus five years after the recession ended because unemployment and inflation are well short of the Fed's goals. "A high degree of monetary accommodation remains warranted," Yellen said in testimony to the Joint Economic Committee of Congress. "Many Americans who want a job are still unemployed," and inflation is below the central bank's 2% target, she said. (Source: Bloomberg) Germany: Factory orders unexpectedly fell in March, signaling that growth in Europe's largest economy remains uneven. Orders, adjusted for seasonal swings and inflation, fell 2.8% MoM from February, when they increased a revised 0.9% MoM, the Federal Statistics Office said. (Source: Bloomberg) Thailand: Yingluck ouster puts spotlight on July poll. Thailand's caretaker government installed an acting prime minister to stave off collapse after a court removed Yingluck Shinawatra, casting doubt on a general election planned for July and risking renewed protests. The ruling Pheu Thai Party named Deputy Prime Minister Niwattumrong Boonsongpaisan, 66, as interim premier after the Constitutional Court ousted Yingluck, 46, and some cabinet members. The nine judges of the court were unanimous in finding Yingluck guilty of abuse of power related to the 2011 transfer of a top security official. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,860.4 (0.3) 0.0 JCI 4,862.1 13.8 0.6 STI 3,236.4 2.2 (0.3) SET 1,402.6 8.0 (0.1) HSI 21,746.3 (6.7) (1.0) KOSPI 1,939.9 (3.6) (1.0) TWSE 8,893.2 3.3 (0.2) DJIA 16,518.5 (0.4) 0.7 S&P 1,878.2 1.6 0.6 FTSE 6,796.4 0.7 (0.0) MYR/USD 3.3 (0.8) (0.1) CPO (1mth) 2,642.0 0.5 0.4 Crude Oil (1mth) 100.8 2.4 1.3 Gold 1,289.9 7.3 (1.4) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.94 14.00 Genting Msia 4.16 4.74 HLBK 13.76 16.40 AMMB Holdings 7.13 8.50 Bumi Armada 3.99 5.00 IJM Corp 6.34 6.75 MPHB Capital 1.94 2.42