Malaysia Daily, Maybank KE (2014-06-30)

Daily 30 June 2014 COMPANY UPDATE MPHB Capital: Maintain Buy Quite a lot going on Several positive developments this year that are value enhancing are pending completion. BUY maintained, SOP-based TP raised to MYR2.54 (+12sen) after updating valuations � upside 21%. Revaluing MPI lifts SOP to MYR2.80 (+33% upside). If Ampang land is sold at MYR500psf, SOP rises to MYR3.07 (+46%). Click here for full report » Sime Darby: Maintain Buy REIT, a missing puzzle? A REIT structure is a step in the right direction, a missing puzzle in Sime�s existing property business model. Sime, being an active developer with prime land bank in Klang Valley, could be an active sponsor. No change in our forecasts; reiterate BUY and MYR10.30 TP pegged at 18x 2015 PER. Click here for full report » Axis REIT: Maintain Hold Sime is buying Axis REIT Managers?  Shariah-compliant The potential entry of Sime Darby into Axis REIT Managers, if true, should be positive, valuations aside. No change to our earnings forecasts for Axis REIT. Maintain HOLD; our MYR2.70 DCF-based TP is under review. Click here for full report » RESULTS REVIEW Yinson Holdings: Maintain Buy No surprises 1QFY1/15 results are tracking to expectations. Targets one new FPSO job for 2014, a new catalyst. Reiterate BUY with an adjusted MYR3.03 TP for 1-for-1 rights and share split, on 19x FY1/16 PER target. Click here for full report » Technicals Marginal profit-taking from highs The FBM KLCI fell 4.79 points WoW to close at 1,880.93, as some profit-taking activities led the index down from its fresh 1,892.33 all-time high. With the buying that emerged from 1,860.20, we advise clients to buy at the support areas of 1,860 to 1,880. The resistance levels of 1,883 and 1,892 will see some profit-taking activities. Trading idea is a Short-Term Buy call on SEAL with upside target areas at MYR1.28 & MYR1.57. Stop loss is at MYR0.90. Click here for full report » Other Local News Maxis: To stop practice of borrowing for dividends. Maxis Bhd plans to stop its practice of borrowing lots of money to part-fund its dividend payments from 2015 onward, signalling a possible dip in its payouts. Maxis would prefer to make its dividend payments solely from the free cash flow it generates and hence cannot guarantee that the telco would be able to continue the same level of dividends from 2015 onward. Maxis had been borrowing about MYR1b a year to top up the MYR2b free cash flow generated to make the MYR3b or 40 sen per share in dividend payouts since its re-listing in 2009. (Source: The Star) MRCB: Eyes 11.6ha Government plot. MRCB is said to be targeting an 11.6ha government land adjacent to its PJ Sentral project in Petaling Jaya under a possible privatisation deal. The plot, home to the former Hotel Singgahsana, Petaling Jaya Magistrate Court and the Chemistry Department, has a potential gross development value (GDV) of more than MYR7b. The land, owned by the Department of Director General of Lands and Mines under the Natural Resources and Environment Ministry, is valued at more than MYR600m, or over MYR450 per square feet. A privatisation proposal for that piece of land was submited by a consortium led by Nusa Gapurna Development (NGD) Sdn Bhd about four years ago, although a deal did not materialise. (Source: Business Times) Automotive: Authorities checking out two companies planning to make energy-efficient vehicles. The Government expects to secure up to MYR7b more in investments by the end of this year from foreign automotive players looking to manufacture energy-efficient vehicles (EEVs) in the country. If approved, it will complement the existing MYR7b in investments that has already gone into the industry so far this year. Malaysian Investment Development Authority (Mida) and MAI were conducting a cost benefit analysis on two potential companies who were looking to manufacture EEVs. (Source: The Star) Oil & Gas: Technip-Fluor consortium gets Petronas� PMC deal. Petronas has awarded the programme management consultancy (PMC) deal for the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor, to the Technip-Fluor consortium. The PMC contract will include the overall project and site management of the Rapid project, and the provision of project management services for specific engineering, procurement, construction and commissioning (EPCC) packages within Rapid throughout the pre-award as well as warranty management and close-out phases. (Source: Business Times) Outside Malaysia U.S: Consumer sentiment rose in June from month earlier as higher stock prices and an improving labor market helped bolster Americans' views of the economy. The Thomson Reuters/University of Michigan's final sentiment index climbed to 82.5 from 81.9 in May. (Source: Bloomberg) E.U: Euro-Area economic confidence unexpectedly declines on industry, as tensions in Ukraine and the single currency's strength hindered efforts by the European Central Bank to boost lending and growth. An index of executive and consumer sentiment fell to 102 from a revised 102.6 in May, the European Commission in Brussels said. (Source: Bloomberg) Japan: Output rebounds in sign manufacturers enduring tax rise. Industrial output rose 0.5% MoM after dropping 2.8% MoM in April, the trade ministry said. The government projects production will decrease 0.7% MoM in June and increase 1.5% MoM in July. (Source: Bloomberg) Vietnam: 2Q 2014 GDP growth quickens as Dong devalued. Gross domestic product rose 5.25% YoY in the second quarter, according to data released by the General Statistics Office in Hanoi. That compares with a revised 5.09% YoY pace in the three months through March. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,880.9 0.7 (0.5) JCI 4,845.1 13.4 (0.6) STI 3,271.1 3.3 (0.2) SET 1,483.2 14.2 0.4 HSI 23,221.5 (0.4) 0.1 KOSPI 1,988.5 (1.1) (0.3) TWSE 9,306.8 8.1 (0.2) DJIA 16,851.8 1.7 0.0 S&P 1,961.0 6.1 0.2 FTSE 6,757.8 0.1 0.3 MYR/USD 3.2 (1.9) (0.2) CPO (1mth) 2,468.0 (6.1) (0.8) Crude Oil (1mth) 105.7 7.4 (0.1) Gold 1,316.2 9.5 (0.0) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.14 14.00 Genting Msia 4.20 4.70 HLBK 13.80 16.20 AMMB Holdings 7.13 8.50 Bumi Armada 3.40 4.55 IJM Corp 6.70 7.20 MPHB Capital 2.10 2.42