Malaysia Daily, Maybank KE (2014-10-21)

Daily 21 October 2014 MARKET STRATEGY MY Strategy: Maintain Neutral Values emerging Malaysian equities not spared from foreign selling; KLCI down 2.3% MTD. KLCI is nearing the low of its PER range of the past two years; current weakness is an opportunity to accumulate. No change to our 2,040 end-2015 KLCI index target; we still Overweight construction, oil & gas. Click here for full report » COMPANY UPDATE WCT Holdings Bhd: Maintain Hold Expanding existing landbank  Shariah-compliant Upbeat on its landbank expansion in Serendah that would enhance the development value of its existing land. Valuation is fair and would support LT property earnings. Earnings estimate unchanged. Maintain HOLD at MYR2.30 TP. Click here for full report » Yinson Holdings: Maintain Buy FPSO Adoon�s contract extended This one-year extension up to Oct 2015, worth USD39m reflects a 9% improvement in dayrate. More positive newsflows in the pipeline - high probability of winning one new FPSO contract in 2014. MYR3.03 TP under review pending outcome of the Ghana tender, due soon. We are positive and maintain our BUY call. Click here for full report » RESULTS REVIEW DiGi.com: Maintain Hold Slowing top-line growth  Shariah-compliant 9M14 EBITDA and net profit were in line with ours and consensus expectation. Revenue growth is slowing, but Digi�s revenue growth would likely still outperform cellular peers in 3Q14. Maintain HOLD, TP unchanged at MYR5.60. Click here for full report » Bursa Malaysia: Maintain Hold Within expectations 9M14 results meet expectations. No change to our earnings forecasts and MYR8.00 TP. Maintain HOLD for its capital management potential. Click here for full report » Axis REIT: Maintain Hold Earnings on track  Shariah-compliant 9M14 core net profit of MYR62m (-2% YoY) was within our expectation but below consensus. Placement of new units is underway to fund its MYR434m worth of new acquisitions in Shah Alam and Nusajaya Maintain earnings forecasts, DCF-based TP of MYR3.34 and HOLD rating. Click here for full report » Technicals A rebound to sell into The FBMKLCI rose 14.83 points to 1,803.14 yesterday, while the FBMEMAS and FBM100 also closed higher by 118.67 points and 112.19 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a Take Profit call on MRCB with downside target areas at MYR1.38 & MYR1.20. Click here for full report » Other Local News MAHB: Eyeing full control? MAHB may end up with full control of Istanbul's second largest airport if it exercises its right to buy the remaining 40% stake it does not own in a deal that could cost about MYR1.2b. Sources said MAHB is planning to exercise its pre-emptive right to buy the 40% stake in Istanbul Sabiha Gokcen International Airport Investment Develop-ment and Operation Inc (ISG) from Turkish builder Limak Holdings AS. However, MAHB�s CFO Faizal Mansor said that the company�s board had yet to make a final decision on that matter. (Source: Business Times) High-5: To be delisted on Friday, Bursa upholds rejection of its regularization plan. In a filing with the exchange, it said the exchanged had decided to dismiss the company's appeal against the rejection of its proposed regularization plan in early August. High-5, still has not been able to mend its financials, with over MYR37.2m in losses for nine months ended July 31, 2014, compared with MYR38.5m in the corresponding period last year. (Source: The Edge Financial Daily) SP Setia: Project ahead of schedule. Its maiden Australia project, Fulton Lane in Melbourne is ahead of schedule by two months. To date, Fulton Lane is 99% taken up. To recap, Fulton Lane, has a GDV of MYR1.37b. (Source: The Edge Financial Daily) Outside Malaysia E.U: ECB said to start purchase program with French, Spanish debt. The ECB acquired short-dated French notes from Societe Generale SA and BNP Paribas SA as well as Spanish securities from other lenders, according to two people familiar with the matter who asked not to be identified because the information is private. Draghi said he intends to expand the bank's balance sheet by as much as EUR 1tr (USD 1.3tr) to stave off deflation in the euro area. (Source: Bloomberg) U.K: London home sellers raised asking prices by the most in more than a year this month as a seasonal surge in demand led a rebound in the capital's property market. Values in the city increased 7% from September to a record average GBP 596,692 (USD 960,000), the biggest jump since October 2013, property website Rightmove Plc said. The gain left prices 0.6% higher than in May, when they were at their previous high, after falling in three of the previous four months. (Source: Bloomberg) China: PBOC said to plan about USD 32.7b bank injection. China's central bank is said to plan the injection of about CNY 200b into some national and regional lenders as Premier Li Keqiang steps up stimulus to support economic growth. The People's Bank of China is providing funds to joint--stock banks to help them prepare for year-end liquidity needs, a government official familiar with the matter said, asking not to be identified because there hasn't been an official announcement. Joint-stock banks are mid-sized national banks with mixed ownership. (Source: Bloomberg) Philippines: Orders bank capital boost amid collateral curbs. The Philippines will order lenders to boost capital and cap the value of real estate that can be used as loan collateral to ensure banks gird themselves for increased risk taking. Bangko Sentral ng Pilipinas approved a minimum capital requirement for larger banks that's about four times the current level, according to figures supplied by Governor Amando Tetangco. Banks must also cap the collateral value of property at 60% under a new credit standard to be implemented over two years, he said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,803.1 (3.4) 0.8 JCI 5,040.5 17.9 0.2 STI 3,181.1 0.4 0.4 SET 1,526.7 17.6 (0.1) HSI 23,070.3 (1.0) 0.2 KOSPI 1,930.1 (4.0) 1.5 TWSE 8,663.1 0.6 1.8 DJIA 16,399.7 (1.1) 0.1 S&P 1,904.0 3.0 0.9 FTSE 6,267.1 (7.1) (0.7) MYR/USD 3.271 (0.2) (0.0) CPO (1mth) 2,147.0 (18.3) (0.8) Crude Oil (1mth) 82.7 (16.0) (0.0) Gold 1,242.4 3.4 0.4 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.56 14.00 Axiata 7.04 7.60 Sime Darby 9.16 10.20 Gamuda 4.93 5.30 UMW O&G 3.46 5.15 AFG 4.84 5.50 Perdana Petroleum 1.54 2.55 Hock Seng Lee 1.80 2.25