Malaysia Daily, Maybank KE (2014-07-18)

Daily 18 July 2014 RESULTS REVIEW DiGi.com: Maintain Hold Strong earnings delivery again  Shariah-compliant 1H14 net profit was above ours and consensus expectation as depreciation continued to stay low; EBITDA was in line. Depreciation to remain low, net profit forecasts raised by 4-8%. Dividend estimates raised by similar quantum. Maintain HOLD, TP unchanged at MYR5.60. Click here for full report » Bursa Malaysia: Maintain Hold Earnings in line, dividend surprise  Shariah-compliant 1H14 net profit made up 49%/48% of our/concensus full year forecasts. 20sen special DPS, lifting total interim to 36sen. Our unchanged TP, plus 6.6% 12M dividend yield, implies 4.8% total return. Maintain HOLD. Click here for full report » Pavilion REIT: Maintain Buy Continues to grow 1H14 core net profit of MYR112m (+6% YoY) was in line. Space reconfiguration to yield additional 11,000 sq ft NLA. Raising our earnings forecasts by 1-1.2%. Maintain BUY with DCF-based TP of MYR1.52 (+2sen). Click here for full report » CapitaMalls Malaysia Trust: Maintain Buy No surprises 1H14 realised net profit of MYR75m (+4% YoY) was in line. Reconfiguration and asset enhancement works to lift yields at Gurney Plaza and East Coast Mall. No change to earnings forecasts, MYR1.74 DCF-based TP; BUY. Click here for full report » ECONOMICS Singapore Exports, June �14 �Structural� NODX, �Cyclical� NORX NODX in Jun 2014 declined by -4.6% YoY (May 2014: -6.6% YoY). In contrast, NORX grew by +7.5% YoY (May 2014: -4.7% YoY). Trend in NODX is �structural�, while trend in NORX is �cyclical�. Click here for full report » Technicals Bearishness to persist in the short-term The FBMKLCI declined by 3.57 points to 1,883.14 yesterday, while the FBMEMAS and FBM100 fell 22.52 points and 22.19 points, respectively. We recommend a �Take Profit� stance for the index. Trading idea is a Short-Term Buy on SPSETIA with upside target areas at MYR3.65 & MYR4.37. Stop loss is at MYR3.14. Click here for full report » Other Local News MH17 crash, 298 onboard. Malaysia Airlines (MAS) have confirmed that there was 298 people onboard flight MH17 and not 295. As opposed to an earlier statement, the airline confirmed that MH17 was carrying 283 passengers, including three infants of various nationalities, and 15 Malaysian crew members. Flight MH17 disappeared from radar screens in eastern Ukraine at around 1415 GMT, hours after the Boeing 777, bound for Kuala Lumpur, had taken off from Amsterdam�s Schiphol airport. The Boeing 777 is believed to have been accidentally shot down 50km from the Ukraine-Russia border.(Source: The Star) DRB-Hicom: Proton wants Government to pay research and development cost. Proton Holdings Bhd, a unit of DRB-Hicom Bhd, is seeking reimbursement from the Government for the amount spent on its research and development (R&D) programmes to produce new cars. Proton would be launching a new car by the end of the year and seeking reimbursement from the Government for its investments in R&D works. According to Proton, the new car had cost as much as RM300mil to develop. (Source: Business Times) Sumatec: To finalise USD250m acquisition by year end. Upstream oil and gas firm Sumatec Resources Bhd plans to sign the sale and purchase agreement (S&P) for the acquisition of Borneo Energy Oil and Gas Ltd for USD250m (MYR795m) sometime in the current quarter. Borneo Energy owns the Karaturun oil fields in Kazakhstan through its wholly-owned subsidiary, Buzachi Neft LLP. Sumatec plans to fund the acquisition through a combination of cash, rights and share issues. (Source: The Edge Financial Daily) Boustead: BN shipyard gets MYR9b Royal Malaysian Navy deal. Boustead Naval Shipyard Sdn Bhd (BN Shipyard), a subsidiary of Boustead Holdings Bhd (BHB) and an associate company of Boustead Heavy Industries Corp Bhd (BHIC), yesterday signed a MYR9b contract to design, build and deliver six second-generation patrol vessels with littoral combat ship capability for the Royal Malaysian Navy (RMN). BN Shipyard was previously presented a letter of award (LOA) from the Ministry of Defense (MOD) on December 16 2011. The contract is to be implemented over Tenth, Eleventh and Twelfth Malaysia Plans. (Source: Business Times) Property: Iskandar Malaysia secures MYR9.7b new investments. Iskandar Malaysia has secured MYR9.7b in new investments from April to June this year, bringing total new investments for this year to MYR14.6b. Since 2006, 48% of the total cumulative committed investments or MYR69.5b has been realized as projects on the ground. (Source: The Edge Financial Daily) O&G: Mitsubishi interested in Murphy Oil�s Malaysian assets. Japan�s biggest trading house Mitsubishi Corp has submitted a non-binding bid to buy Murphy Oil Corp�s Malaysian oil and gas assets valued at MYR8.0b. India�s state owned Oil & Natural Gas Corp (ONGC) and Oil India Ltd are among other suitors preparing to submit bids for the Murphy assets. Malaysia is the biggest of Murphy�s Asian portfolios, accounting for more than 45% of its total 2012 net production. (Source: The Edge Financial Daily) Outside Malaysia U.S: Building drop in south highlights housing hurdles. Housing starts unexpectedly declined in June to a nine-month low, led by a record plunge in the South that shows the construction industry must still overcome hurdles before it can contribute more strongly to U.S. economic growth. Work began on 893,000 homes at an annualized rate, down 9.3% from a 985,000 pace in May that was weaker than previously estimated, according to figures from the Commerce Department issued. (Source: Bloomberg) U.S Jobless claims unexpectedly decreased last week. Jobless claims declined by 3,000 to 302,000 in the week ended July 12, a Labor Department report showed. The number of people continuing to receive jobless benefits fell to a seven-year low. (Source: Bloomberg) E.U: Inflation rate held steady in June, as weak energy and food costs continued to subdue prices. Annual consumer-price growth remained at 0.5% YoY, in line with an initial estimate on June 30, the European Union's statistics office said. Energy costs increased 0.1%, after stagnating in May, while prices of alcohol, food and tobacco declined 0.2% following a 0.1% rise. (Source: Bloomberg) Russia: Retail sales grow slowest since 2010 as sanctions bite. Sales climbed 0.7% YoY in June after a 2.1% YoY increase in May, the Federal Statistics Service in Moscow said. Real disposable incomes fell 2.9% YoY, surprising analysts who projected a 3.5% YoY advance. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,883.1 0.9 (0.2) JCI 5,071.2 18.6 (0.8) STI 3,306.9 4.4 0.1 SET 1,535.7 18.2 0.3 HSI 23,520.9 0.9 (0.0) KOSPI 2,020.9 0.5 0.4 TWSE 9,408.2 9.3 (0.8) DJIA 16,976.8 2.4 (0.9) S&P 1,958.1 5.9 (1.2) FTSE 6,738.3 (0.2) (0.7) MYR/USD 3.2 (3.0) (0.3) CPO (1mth) 2,381.0 (9.4) 0.1 Crude Oil (1mth) 103.2 4.8 2.0 Gold 1,319.2 9.8 1.5 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.30 14.00 Axiata 6.94 7.60 Sime Darby 9.65 10.30 Genting Msia 4.25 4.70 Gamuda 4.25 5.30 UMW O&G 4.16 5.15 AFG 5.10 5.50 MPHB Capital 2.25 2.42 Perdana Petroleum 1.86 2.55 Hock Seng Lee 1.96 2.25