Malaysia Daily, Maybank KE (2014-07-01)

Daily 01 July 2014 SECTOR UPDATE MY Banking Sector: Maintain Neutral Sub-10% loan growth in May Industry loan growth moderated further to 9.7% YoY in May from 10.0% YoY in April. Non-HH loan growth continues to be the main drag. Still NEUTRAL on the sector; BUYs are AFG, AMMB, HL Bank and HLFG. MPHB Capital is also a BUY with a TP of MYR2.54. Click here for full report » COMPANY UPDATE RHB Capital: Maintain Hold Aborts Bank Mestika acquisition Mildly positive on this move, which had been anticipated. Management�s growth targets may need to be scaled back. HOLD maintained, TP of MYR8.70 (P/BV 1.2x, ROE: 11.3%). Click here for full report » Technicals Late afternoon 2Q window dressing The FBMKLCI inched up by 1.78 points to 1,882.71 late yesterday, while the FBMEMAS and FBM100 gained 9.26 points and 10.07 points, respectively. We recommend a �Buy on Dips� stance for the index. Trading idea is a Short-Term Buy on VITROX with upside target areas at MYR2.68 & MYR3.30. Click here for full report » Other Local News Construction: MRT Corp seeks speedy Line 2 decision. MRT Corp hopes a decision on Line 2 of the Klang Valley Mass Rapid Transit (KVMRT) project will be made soon as it wants to immediately deploy resources to it from Line 1, which is more than 45.6% completed as at May 31. MMC-Gamuda JV � a 50:50 joint venture between Gamuda Bhd and MMC Corp Bhd � was appointed as the project delivery partner (PDP) for Line 1 in January 2011. It also won the MYR8.2b tunnelling job. Line 2 will comprise the north-south line from Selayang to Putrajaya, while Line 3 is the circle line that will loop around the Kuala Lumpur city centre. (Source: Business Times) MRCB: Wins MX-1 bid. MRCB has won the bid to develop the much-sought after MX-1 project, earmarked to be the main town centre of the Kwasa Damansara township in Sungai Buloh, Selangor. The MYR7b mixed development is the first project awarded in the Kwasa Damansara township, which is being undertaken by Kwasa Land Sdn Bhd. Property sales from the MX-1 development must be fully completed within 12 years. (Source: Business Times) NCB: Rubani to helm Northport. NCB Holdings Bhd yesterday announced the appointment of Rubani Dikon as the chief executive officer for its wholly-owned subsidiary, Northport (Malaysia) Bhd. In a filing to Bursa Malaysia, it said the appointment is effective from September 1. Rubani is a member of the Association of Chartered Certified Accountants, the United Kingdom, and has served Northport for more than 18 years. He is currently the company�s head of finance division/company secretary. (Source: Bernama) I-Bhd: Adopts new dividend policy. I-Bhd has adopted a new dividend policy. The property developer aims to pay out not less than 30% of its net profit to shareholders starting from financial year 2014 ending Dec 31. Seperately. I-Bhd plans to launch properties worth up to MYR600m a year over the next couple of years and aims to double its property segment revenue to MYR180m by FY14. (Source: The Edge Financial Daily) Symphony House: To obtain nod on Ranhil RTO by year-end. Symphony House Bhd expects to obtain the Securities Commission Malaysia�s approval on the proposed reverse takeover (RTO) of the firm by Ranhil Energy and Resources Bhd over the next three or four months. Under the RTO exercise, Symphony House will become a unit of newly incorporated, special purpose vehicle Ranhil Holding Sdn Bhd, which will be listed in its place on Bursa Malaysia. Ranhil Holdings will facilitate the injection of Ranhil Energy�s water and power assets, with the issuance of new shares worth MYR800m. (Source: The Edge Financial Daily) Outside Malaysia U.S: Pending sales of existing homes in May rise most in four years, a sign the residential-real estate market is rebounding after a slow start to the year. The pending home sales index climbed 6.1%, the biggest advance since April 2010, after a revised 0.5% increase in April, the National Association of Realtors said. (Source: Bloomberg) E.U: Inflation rate held steady in June at less than half the European Central Bank's target, underscoring the challenge faced by Mario Draghi as he tries to stoke prices and ignite growth. Consumer prices grew 0.5% YoY, equaling May's increase, the European Union's statistics office said. Core inflation unexpectedly accelerated. (Source: Bloomberg) U.K: Mortgage approvals fell in May, dropping to the lowest level in 11 months, and the cost of new borrowing increased, adding to evidence that the property market may be cooling. Approvals declined to 61,707 from 62,806, the Bank of England said. The BOE also said the effective interest rate on new mortgages rose six basis points to 3.13%, the highest since August. (Source: Bloomberg) Japan: Corporate mood weakens on sales tax in challenge for Abe. Sentiment among large Japanese manufacturers deteriorated more than forecast following an April sales-tax hike, increasing the challenge for Prime Minister Shinzo Abe in stoking a rebound. The Tankan index was at 12 in June, dropping from 17 in March, a Bank of Japan quarterly report showed. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,882.7 0.8 0.1 JCI 4,878.6 14.1 0.7 STI 3,255.7 2.8 (0.5) SET 1,485.8 14.4 0.2 HSI 23,190.7 (0.5) (0.1) KOSPI 2,002.2 (0.5) 0.7 TWSE 9,393.1 9.1 0.9 DJIA 16,826.6 1.5 (0.1) S&P 1,960.2 6.1 (0.0) FTSE 6,743.9 (0.1) (0.2) MYR/USD 3.2 (2.0) (0.1) CPO (1mth) 2,448.0 (6.8) (0.8) Crude Oil (1mth) 105.4 7.1 (0.3) Gold 1,327.3 10.5 0.8 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.18 14.00 Genting Msia 4.20 4.70 HLBK 13.80 16.20 AMMB Holdings 7.12 8.50 Bumi Armada 3.40 4.55 IJM Corp 6.70 7.20 MPHB Capital 2.15 2.42