Malaysia Daily, Maybank KE (2014-06-12)

Daily 12 June 2014 RESULTS REVIEW Berjaya Auto: Maintain Buy Dashing to the finish line  Shariah-compliant FY14 results were ahead of consensus' expectations and ours. Declares 2nd interim DPS of 3.5sen (single-tier). BAuto is our top pick for the sector, for its strong earnings growth, improving balance sheet and inexpensive valuations. Reiterate BUY with an unchanged TP of MYR2.90 (12x CY15 PER), offering 26% upside. Click here for full report » SP Setia: Maintain Hold Below expectations  Shariah-compliant 1HFY10/14 core net profit of MYR141m (-25% YoY) below expectations. Declares first interim NDPS of 4sen; in line. Maintain HOLD as we review our earnings forecasts and TP of MYR3.36 (on 0.7x P/RNAV). Click here for full report » ECONOMICS Industrial Production (IP), April 2014 Sustained growth on mining rebound Industrial production growth was sustained at +4.2% YoY in Apr 2014 (Mar 2014: +4.3% YoY). Mining output rebounded amid slower increases in manufacturing and electricity production. Overall output growth at the start of 2Q 2014 was slightly slower than 4.9% YoY average in 1Q 2014, implying possible moderation in real GDP after the 6.2% YoY growth in 1Q 2014. Click here for full report » Technicals Inching towards 1,880? The FBMKLCI advanced 1.77 points to 1,878.38 yesterday, while the FBMEMAS and FBM100 gained 22.16 points and 19.60 points, respectively. We expect some firmer buying interest to emerge near the obvious supports of 1,860 to 1,878, whilst profit taking may emerge at the resistances of 1,880 and 1,889. Trading idea is a Short-term Buy on SEAL with upside target areas at MYR0.96 & MYR1.06. Stop loss is at MYR0.70. Click here for full report » Other Local News TH Heavy: Allocates MYR891m capex for next two years. About MYR800m would be used for its floating production and storage offloading (FPSO) segment and MYR90m for its year operations in Pulau Indah, Selangor. (Source: The Edge Financial Daily) Axiata: Capex, MYR400m to boost capacity and speed. MYR400m out of MYR950m allocated for this year will go into upgrading its network to be 4G enabled. Of the MYR400m, MYR100m has been used thus far and the rest would be used for its IT upgrade and network utilization. (Source: The Star) Econpile: To focus on expanding market share. Econpile en route to be listed on the Main Market, plans to use 30% of the proceeds to purchase machinery and equipment to expand its market share. It currently has 13% share of the piling and foundation services market. It aims to MYR48.6m from IPO, targeted on June 30. (Source: The Star) UEM Sunrise: To unveil tie-ups. UEMS is expected to announce soon several partnerships in mall management, investment, property development and hospitality, with three local and foreign parties, according to sources. (Source: The Edge Financial Daily) MSM: In expansion talks with 4 firms. MSM is in talks with at least 4 global entities for M&A opportunities to expand its upstream and downstream businesses overseas. MSM is eyeing to expand downstream business in several countries in Indochina and for its upstream business, Asia and Africa. (Source: Business Times) MSM: Cries foul over state of refined sugar imports in Malaysia. MSM claims that there are an increasing number of players with import permits issued by the Government this year. (Source: The Star) Outside Malaysia U.S: Budget deficit narrows as economy, jobs boost revenue. The U.S. posted a USD 130b budget deficit in May and the smallest shortfall for the first eight months of a fiscal year since 2008, as a stronger economy and rising employment bolster revenue. The deficit last month was about USD 9b less than the USD 139b shortfall in May 2013, the Treasury Department said in Washington. (Source: Bloomberg) U.S: Fed prepares to keep record balance sheet for years. Federal Reserve officials, concerned that selling bonds from their USD 4.3tr portfolio could crush the U.S. recovery, are preparing to keep their balance sheet close to record levels for years. Central bankers are stepping back from a three-year-old strategy for an exit from the unprecedented easing they deployed to battle the worst recession since the Great Depression. Minutes of their last meeting in April made no mention of asset sales. Officials worry that such sales would spark an abrupt increase in long-term interest rates, making it more expensive for consumers to buy goods on credit and companies to invest, according to James Bullard, president of the Federal Reserve Bank of St. Louis. (Source: Bloomberg) U.K: Unemployment fell to the lowest level in more than five years as the strengthening economic recovery boosted payrolls by a record. The jobless rate dropped to 6.6% in the three months through April from 6.8% in the first quarter, the Office for National Statistics said. While employment rose 345,000, the biggest increase since records began in 1971; the data also showed wage growth slowed. (Source: Bloomberg) Thailand: Junta takes page from Thaksin playbook with populist steps. Thailand's junta is taking a page out of Thaksin Shinawatra's policy playbook, adopting some of the populist measures that drove his political success in a move that may help stabilize growth for the remainder of 2014. Since the May 22 coup that displaced former Prime Minister Yingluck Shinawatra's Pheu Thai government, the military has vowed to accelerate budget spending, capped fuel costs and asked consumer-product makers to freeze prices, echoing steps favored by Yingluck and her brother Thaksin. It also restarted payments under a disputed rice purchase program, aiding farmers who were the biggest supporters of the Shinawatras. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,878.4 0.6 0.1 JCI 4,971.9 16.3 0.5 STI 3,290.0 3.9 (0.1) SET 1,463.7 12.7 (0.4) HSI 23,257.3 (0.2) (0.3) KOSPI 2,014.7 0.2 0.1 TWSE 9,229.8 7.2 0.1 DJIA 16,843.9 1.6 (0.6) S&P 1,943.9 5.2 (0.4) FTSE 6,838.9 1.3 (0.5) MYR/USD 3.2 (1.9) 0.2 CPO (1mth) 2,380.0 (9.4) (0.3) Crude Oil (1mth) 104.4 6.1 0.0 Gold 1,261.1 4.9 0.1 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.78 14.00 Genting Msia 4.25 4.74 HLBK 13.90 16.20 AMMB Holdings 7.19 8.50 Bumi Armada 3.59 4.55 IJM Corp 6.80 7.20 MPHB Capital 2.00 2.42