Malaysia Daily, Maybank KE (2014-10-27)

Daily 27 October 2014 RESULTS PREVIEW Tenaga Nasional: Maintain Buy Expect a strong finish  Shariah-compliant We estimate TNB�s 4QFY14 core net profit at about MYR1.5b (+100% YoY, -4% QoQ), 29% of our FY14 forecast. The benefits from higher coal-fired generation (+22% QoQ) would more than offset seasonally higher costs and potentially higher taxes. Reiterate BUY with an unchanged MYR14.00 TP. Click here for full report » ECONOMICS Singapore IPI, September 2014 Pulled down by volatile biomedical Industrial production (IP) fell -1.2% YoY in Sep 2014 (Aug 2014: +4.0% YoY), dragged by biomedical output (Sep 2014: -10.3% YoY; Aug 2014: +9.5% YoY) Excluding biomedical output, the adjusted IP was up by +0.5% YoY (Aug 2014: +2.8% YoY). Notwithstanding the volatile biomedical sector, IP growth picked up to +1.9% YoY last quarter (2Q 2014: +1.5% YoY), better than the advanced estimate of +1.4% YoY, implying likely upward revision to the preliminary 3Q 2014 GDP growth of +2.4% YoY. Click here for full report » Technicals Diminished autumn selling pressures The FBM KLCI rebounded 30.55 points WoW to close at 1,818.66, as some consistent buying activities led the index up above the 1,800-mark. Volume fell from 2.05b to 1.25b shares. Trading idea is a Take Profit call on RSAWIT at MYR0.72 & MYR0.84. Click here for full report » Other Local News Sime Darby: To develop affordable houses, shoplots worth MYR210m. Sime Darby Property will be building 733 units of affordable houses and 171 units of medium-cost shoplots with a gross development value of MYR210m at the Sime Darby Business Park in Pasir Gudang, Johor. The project is part of the Johor Affordable Homes Project (RMMJ), in which 37,000 houses would be built by 2018. (Source: Business Times) Hock Seng Lee: Eyes new highway jobs. HSL is eyeing new jobs in the Pan Borneo Highway (estimated MYR27b project), which is expected to be accelerated by big funding under the Federal Budget 2015. HSL will bid for the works on a case-by-case basis based on its strength in marine engineering field. Currently, HSL has an order book of about MYR2.2b. (Source: The Star) Parkson: Takes over management of Maju Junction Mall. Maju Group, controlled by Tan Sri Abu Sahid Mohamed, has enlisted the help of Tan Sri William Cheng's Parkson Group to manage and operate Maju Junction Mall. The tenancy agreement was entered via Cheng's Singapore-listed Parkson Retail Asia. It will reposition Maju Junction Mall and be its anchor tenant. Also, Parkson said aside from it's group strategy of owning malls, it also manages malls so as to have a stream of recurring income. (Source: The Edge Financial Daily) Outside Malaysia U.S: Gain in home sales more modest post revisions. Purchases of new houses in the U.S. rose in September, and revisions showed the magnitude of the unfolding recovery was more modest. Sales increased 0.2% to a 467,000 annualized pace, in line with the median forecast of economists surveyed. The August rate of 466,000 was 7.5% weaker than previously estimated, and data for the prior two months also were revised down. (Source: Bloomberg) Italy: Banks emerge as biggest losers in ECB industry health test. Italian banks showed the largest combined capital shortfall in the European Central Bank's review of the region's lenders as the country struggles to emerge from its third recession in six years. Banca Monte dei Paschi di Siena SpA, Italy's third-largest lender, emerged with a capital gap of EUR 2.1b (USD 2.7b) while Banca Carige SpA must replenish EUR 814m of capital after taking into account funds raised this year, the ECB said in a statement. Of the nine Italian banks that failed a stress test, four still showed holes after measures they took this year, according to the ECB's report. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,818.9 (2.6) 0.5 JCI 5,073.1 18.7 (0.6) STI 3,222.6 1.7 (0.4) SET 1,539.9 18.6 0.5 HSI 23,302.2 (0.0) (0.1) KOSPI 1,925.7 (4.3) (0.3) TWSE 8,646.0 0.4 (1.0) DJIA 16,805.4 1.4 0.8 S&P 1,964.6 6.3 0.7 FTSE 6,388.7 (5.3) (0.5) MYR/USD 3.279 0.1 0.2 CPO (1mth) 2,199.0 (16.3) 0.6 Crude Oil (1mth) 81.0 (17.7) (1.3) Gold 1,231.0 2.4 (0.7) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 13.00 14.00 Axiata 7.05 7.60 Sime Darby 9.48 10.20 Gamuda 4.96 5.30 UMW O&G 3.45 5.15 AFG 4.80 5.50 Perdana Petroleum 1.67 2.55 Hock Seng Lee 1.84 2.25