Malaysia Daily, Maybank KE (2014-09-09)

Daily 09 September 2014 MARKET STRATEGY Special Feature Invest Malaysia 2014, London 48 UK-based funds with USD13t in total AUM participated in Invest Malaysia 2014 in London last week. M�sia is on track to achieving its high-income economy status that is both inclusive and sustainable, the key message sent. Specific Malaysian PLCs also generated interests; there is no change in our stock calls for the featured Malaysian PLCs. Click here for full report » RESULTS REVIEW Berjaya Auto: Maintain Buy Turbo-charged kick start  Shariah-compliant 1QFY4/15 earnings within our forecast but above Street's. Declared a 2sen interim dividend to go ex on 23 Sep. Near-term catalysts are favourable: forex, new model launches and production capacity expansion. Reiterate BUY with unchanged Street-high TP of MYR3.50 (12x CY15 PER), offering 21% upside. Click here for full report » COMPANY UPDATE UMW Oil & Gas Corporation: Maintain Buy Naga 6 to be deployed to Vietnam  Shariah-compliant Bags a USD46.5m firm charter for 250 days (from Oct�14) with extension options for another 332 days. Decent DCR, comparable to prevailing regional rates of USD150k-170k. Reiterate BUY and MYR5.15 TP, based on 23x FY15 PER. Click here for full report » Eversendai Corp: Maintain Hold Maiden gas terminal project  Shariah-compliant A new MYR72m gas terminal project in Terengganu lifts order book to MYR1.7b (+4%). External jobflow remains slow and we await the execution of its maiden liftboat jobs. Maintain HOLD and TP of MYR0.98 (10x FY14 PER). Click here for full report » Technicals Still inching up on last minute rises The FBMKLCI gained 2.63 points to 1,871.09 yesterday, while the FBMEMAS and FBM100 also closed higher by 15.36 points and 12.36 points, respectively. We recommend a �Range Trading� stance for the index. Trading idea is a Short-Term Buy on TEOSENG with upside target areas at MYR2.24 & MYR2.60. Stop loss is at MYR1.78. Click here for full report » Other Local News Banking: BTMU Malaysia, ICD ink USD100m Islamic finance pact. Bank of Tokyo-Mitsubishi UFJ (Malaysia) yesterday signed a USD100m (MYR317m) commodity Murabahah agreement with the Islamic Development Bank Group�s private sector arm, Islamic Corporation for the Development of the Private Sector (ICD), to finance projects in ICD member countries. (Source: New Straits Times) Genting Malaysia: Proposes MYR5b medium term notes plan. Genting Malaysia has proposed to set up a MYR5b medium term notes programme (MTN) for capital expenditure, development of properties and resorts including those in Genting Highlands. According to Genting Malaysia, the proposed MTN programme has been assigned an initial long-term rating of AAA(s) by RAM Rating Services with a tenure of 20 years from the date of first issuance. (Source: The Star) Maybank: No real M&A opportunities for Maybank yet. Group president and CEO of Malayan Banking Datuk Abdul Farid Alias said that the group will not be undergoing any mergers or acquisitions anytime soon, even in the region. His statement was made with regard to the planned mega-bank merger among CIMB Group Holdings, RHB Capital and Malaysia Building Society to form the largest banking group in Malaysia. (Source: The Edge Financial Daily) External reserves as of 29 August 2014 amounted to MYR424.2b or USD132.0b - equivalent to 9.0 months of retained imports and 1.2 times of the country's short-term external debt. This was up from MYR422.7b or USD131.6b at 15 August 2014. The gain in reserves was probably due to the return of capital flows into the country. Based on the latest available data, foreigners were net buyers of both domestic equities and debt securities. In July 2014, foreign holders net purchased MYR9.1b of Malaysian debt securities, bringing total foreign holdings to a new high of MYR257.2b. MYR strengthened against the US Dollar moving with an average of 3.15 for second half August 2014 versus the average of 3.20 in first half of August 2014. We continue to see strong correlation between movements in fixed income foreign flows and USD/MYR. Meanwhile, foreign equity holdings was up to MYR 0.1b in August 2014 (July 2014: -MYR 0.3b). Source: BNM, MKE Outside Malaysia U.S: Consumer credit in July surges on more loans for automobile. The USD 26b increase in credit followed an USD 18.8b advance in June that was more than previously estimated. Non-revolving loans, which include borrowing for autos and college tuition, climbed USD 20.6b, the biggest gain since July 2011. Credit-card lending rose for a fifth straight month. (Source: Bloomberg) Germany: Exports rose above EUR 100b for the first time in July and the trade surplus climbed to an all-time high, even as escalating sanctions against Russia threatened trade flows. Exports gained the most in more than two years, climbing 4.7% MoM from June to EUR 101b, data from the Federal Statistics Office in Wiesbaden showed. The trade gap widened to EUR 23.4b from EUR 16.6b. (Source: Bloomberg) China: Posts record surplus in August as exports-imports diverge. Exports increased 9.4% YoY, the Beijing-based customs administration said as imports unexpectedly dropped 2.4% YoY, leaving a trade surplus of USD 49.8b. (Source: Bloomberg) Japan: Economy contracted the most in more than five years, highlighting the challenge for Prime Minister Shinzo Abe in steering the nation through the aftermath of a sales-tax increase. GDP shrank an annualized 7.1% in the three months through June, the most since the first quarter of 2009, the Cabinet Office said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,871.1 0.2 0.1 JCI 5,246.5 22.7 0.6 STI 3,335.2 5.3 (0.2) SET 1,584.8 22.0 0.0 HSI 25,190.5 8.1 (0.2) KOSPI 2,049.4 1.9 0.0 TWSE 9,407.9 9.2 0.0 DJIA 17,111.4 3.2 (0.2) S&P 2,001.5 8.3 (0.3) FTSE 6,834.8 1.3 (0.3) MYR/USD 3.2 (3.1) (0.3) CPO (1mth) 2,054.0 (21.8) 0.6 Crude Oil (1mth) 92.7 (5.9) (0.7) Gold 1,255.5 4.5 (1.1) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.46 14.00 Axiata 6.94 7.60 Sime Darby 9.43 10.20 Gamuda 4.84 5.30 UMW O&G 3.89 5.15 AFG 5.01 5.50 Perdana Petroleum 1.80 2.55 Hock Seng Lee 1.93 2.25