Malaysia Daily, Maybank KE (2014-07-04)

Daily 04 July 2014 COMPANY UPDATE Lafarge Malaysia: Maintain Buy Slowly but surely  Shariah-compliant Industry-wide cement price hikes seen; we raise FY14-16 EPS forecasts by 5%. Remains a defensive big cap play with good dividend yields of 4.6%-5.1%. Maintain BUY with higher MYR10.75 TP (21x mid-2016 PER). Click here for full report » CIMB Group: Hold (New) Nazir moves to Chairman position Dato' Sri Nazir Razak will take over as Chairman of CIMB Group, new CEO to be announced. No change in direction of group envisaged with establishment of an Executive Committee. HOLD maintained, TP: MYR8.00 on CY14 P/BV of 1.8x. Click here for full report » Technicals May break above 1,892.33 The FBMKLCI rose 1.85 points to 1,888.69 yesterday, while the FBMEMAS and FBM100 rose 11.79 points and 6.50 points, respectively. We recommend a �Buy on Dips� stance for the index. Trading idea is a Short-Term Buy on ULICORP with upside target areas at MYR1.68 & MYR1.95. Stop loss is at MYR1.17. Click here for full report » Other Local News O&G: 1MDB plans to raise MYR9.6b from IPO. 1Malaysia Development Bhd (1MDB) plans to raise about USD3b (MYR9.6b) from the proposed listing of its energy assets on Bursa Malaysia, which is slated for 4Q14. The proceeds from the initial public offering (IPO) would be used to fund future business growth, partial repayment of its outstanding debts and general corporate purposes. 1MDB has appointed Deutsche Bank AG and Malayan Banking Bhd (Maybank) as the joint global coordinators for the IPO, while Maybank and AmBank (M) Bhd will be joint principal advisors, with Goldman Sachs made advisor for the IPO. (Source: The Star) O&G: PSC terms expanded. Petroliam Nasional Bhd (Petronas), Petronas Carigali Sdn Bhd and Shell Malaysia have broadened the terms of the 2011 Baram Delta production-sharing contract (PSC) for enhanced oil recovery (EOR) projects offshore Sarawak (2011 Baram Delta EOR PSC) to include gas rights. With that, Shell and Petronas Carigali will gain access to gas rights not previously included under the 2011 Baram Delta EOR PSC. (Source: The Star) Maybank: On Bloomberg top 20 list again. Malayan Banking Bhd has again stamped its mark in the ever-competitive global financial landscape by maintaining its ranking among the world�s top 20 strongest banks for this year. (Source: The Star Business) Gadang: Completes PT Ikhwan acquisition. Gadang Holdings Bhd has completed its purchase of a 60% stake in PT Ikhwan Mega Power, an Indonesian hydroelectricity utility firm, for 9b rupiah (MYR2.41m) following the approval of Indonesia�s Minister of Laws and Human Rights. This marks the company�s foray into the power sector. (Source: The Edge Financial Daily) Landmarks: Developer will unveil USD650m plan later this year. Phase 1 details of Landmarks Bhd�s integrated resort development on Bintan Island, Indonesia known as Treasure Bay Bintan were released yesterday. The initial facilities within Phase 1 of the project will be open for operations in 4Q14. By 2016, Landmarks will have fully developed the 90ha piece of land that has been allocated to Phase 1 which includes a wellness resort operated by the US company Canyon Ranch. It is expected that the completion of Phase 1 will help solve the current shortage of hotel rooms on Bintan Island. (Source: The Edge Financial Daily) Outside Malaysia U.S: Payroll surge fuels self-sustaining expansion. Payrolls rose by 288,000 workers in June following a 224,000 gain the prior month that was bigger than previously estimated, Labor Department figures showed. The 1.39 million increase in employment over the past six months is the biggest over a similar period since early 2006.(Source: Bloomberg) U.S: Services in June grow at second-fastest pace in almost year. The Institute for Supply Management's non-manufacturing index was 56 last month after May's 56.3, which was the highest since August, the Tempe, Arizona-based group said. The median forecast in a Bloomberg survey of economists called for no change from May. Readings greater than 50 signal expansion. (Source: Bloomberg) E.U: Manufacturing and services growth point to a strengthening economy in the second quarter, even as activity cooled in June. Growth in the 18-nation economy may have accelerated to 0.4% from 0.2% in the first quarter, London-based Markit Economics said, citing its monthly Purchasing Managers' Index. While a gauge for both industries slipped to 52.8 in June from 53.5, it's still above the 50 mark that indicates growth. (Source: Bloomberg) E.U: ECB Keeps rates unchanged as Draghi illumination awaited. The European Central Bank kept interest rates unchanged at record lows, shifting the focus onto whether Mario Draghi will reveal more details on last month's historic stimulus package. The 24-member Governing Council left the main refinancing rate at a record low of 0.15%. The deposit rate stayed at minus 0.1% and the marginal lending rate at 0.4%. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,888.7 1.2 0.1 JCI 4,888.7 14.4 (0.4) STI 3,273.2 3.3 0.3 SET 1,493.2 15.0 0.1 HSI 23,531.4 1.0 (0.1) KOSPI 2,011.0 (0.0) (0.2) TWSE 9,526.2 10.6 0.4 DJIA 17,068.3 3.0 0.5 S&P 1,985.4 7.4 0.5 FTSE 6,865.2 1.7 0.7 MYR/USD 3.2 (2.5) (0.3) CPO (1mth) 2,469.0 (6.1) 0.8 Crude Oil (1mth) 104.1 5.7 (0.4) Gold 1,321.2 9.9 (0.4) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.46 14.00 Genting Msia 4.16 4.70 HLBK 13.82 16.20 AMMB Holdings 7.16 8.50 Bumi Armada 3.31 4.55 IJM Corp 6.67 7.20 MPHB Capital 2.21 2.42