Malaysia Daily, Maybank KE (2014-10-28)

Daily 28 October 2014 RESULTS REVIEW Nestle Malaysia: Maintain Hold 3Q results broadly in line  Shariah-compliant 9M14 results were largely in line. 3Q14 topline down 4% YoY on lower export sales but bottomline up 9% YoY on (i) more favourable raw material costs, and (ii) stronger MYR against USD. Maintain HOLD with a lower TP of MYR63.60 (MYR64 previously. Click here for full report » NCB Holdings: Maintain Sell Long road to recovery  Shariah-compliant 3Q14 results substantially below our and street's estimates. Near-term anaemic earnings growth and unattractive DY. Maintain SELL with a lower DCF-derived TP of MYR2.25. Click here for full report » Technicals The short-term rebound may persist The FBMKLCI rose 4.29 points to 1,823.15 yesterday, while the FBMEMAS and FBM100 also closed higher by 51.07 points and 43.62 points, respectively. In terms of market breadth, the gainer-to-loser ratio was 637-to-226 while 255 counters were unchanged. A total of 2.29b shares were traded valued at MYR1.86b. Today's trading idea is a Short-Term BUY CALL on MAXIS with target price of RM7.01 and RM7.20. Click here for full report » Other Local News 3-tier fuel subsidy mechanism: Second Finance Minister (MOF2) revealed that the new targeted fuel subsidy mechanism next year will be divided into three tiers, where individuals with monthly income of MYR10,000 will not be eligible for fuel subsidy, while those with monthly income of MYR5,000-MYR10,000 will get partial fuel subsidy and those with monthly income of less than MYR5,000 will qualify for full subsidy. The detailed mechanism is still being worked out by the Ministry of Domestic Trade, Cooperatives and Consumerism, but MOF2 said a special body to verify the entitlement and monitor the implementation will be set up. (Source: The Sun) MAHB: Could sell stake in Istanbul's Sabiha Gokcen. Malaysia Airports Holdings (MAHB) may sell a minority stake in Istanbul�s Sabiha Gokcen airport after it takes full ownership in the coming months. Khair Mirza, senior general manager of MAHB mentioned that MAHB is determined to have the majority stake at least for the short term but they do not have the intention to hold 100% stake forever. (Source: The Edge Financial Daily) IOI: IOI Properties to launch MYR10b GDV projects in 2 to 3 years. IOI Properties Group is looking to launch projects worth up to MYR10b in gross development value (GDV) over the next two to three years across Malaysia, Singapore, and China, said chief executive office Lee Yeow Seng. Of these, some 60% will be in Malaysia, and MYR3b out of the MYR10b GDV worth of projects will be launched over the second half of its financial year ending June 30, 2015 (2HFY15). (Source: The Edge Financial Daily) Kulim: Makes foray into O&G exploration. This is via a joint venture with two Indonesian companies (PT Graha Sumber Berkah and PT Radiant Bukit Barisan E&P to explore and develop O&G fields in South-West Bukit Barisan Block, Central Sumatera. The total cost for exploration activites from 2015 to 2018 is estimated at MYR175.7m. (Source: The Edge Financial Daily) BIMB: Still eyeing Indonesian mart. Bank Islam Malaysia Holdings (BIMB), which is re-attempting to penetrate the Indonesian Islamic banking market, said it will continue to assess the country's regulatory environment before proceeding with the plan. Its group managing director and chief executive officer Johan Abdullah said the new regulations in Indonesia, which limit foreign ownership in local companies to a certain percentage, is one of the key factors that the bank is considering in making the decision. (Source: The News Straits Times) Outside Malaysia U.S: Home-buying contracts in September signal sales to plateau. The pending home sales index increased 0.3% MoM after dropping 1% MoM in August, the National Association of Realtors said in Washington. (Source: Bloomberg) E.U: Stress test shows capital rules giving banks room to hide. The European Union's toughest-ever stress test was meant to leave banks with nowhere to hide. The results show how the bloc's capital rules got in the way. A total of 24 lenders failed the European Banking Authority's stress test with a capital shortfall of EUR 24.6b (USD 31.2b). The EBA used EU rules as applicable over the three-year horizon of the test. These give national supervisors scope to allow banks to count instruments whose eligibility as core capital will be gradually eliminated over the next four years. (Source: Bloomberg) Germany: Business confidence dropped for a sixth month as the specter of a recession haunts Europe's largest economy. The Ifo institute's business climate index, based on a survey of 7,000 executives, dropped to 103.2 in October from 104.7 in September. That's the lowest since December 2012. (Source: Bloomberg) China: Fake invoice evidence mounts as Hong Kong figures diverge. The gap between China's reported exports to Hong Kong and the territory's imports from the mainland widened in September to the most this year, suggesting fake export-invoicing is again inflating China's trade data. China recorded USD 1.56 of exports to Hong Kong last month for every USD 1 in imports Hong Kong registered, leading to a USD 13.5b difference, based on government data compiled by Bloomberg. Hong Kong's imports from China climbed 5.5% YoY to USD 24.1b while China's exports to Hong Kong surged 34% YoY to USD 37.6b, according to mainland data on Oct. 13. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,823.2 (2.3) 0.2 JCI 5,024.3 17.5 (1.0) STI 3,226.1 1.9 0.1 SET 1,547.9 19.2 0.5 HSI 23,143.2 (0.7) (0.7) KOSPI 1,932.0 (3.9) 0.3 TWSE 8,627.8 0.2 (0.2) DJIA 16,817.9 1.5 0.1 S&P 1,961.6 6.1 (0.2) FTSE 6,363.5 (5.7) (0.4) MYR/USD 3.277 0.0 (0.0) CPO (1mth) 2,188.0 (16.7) (0.5) Crude Oil (1mth) 81.0 (17.7) (0.0) Gold 1,226.6 2.1 (0.4) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 13.06 14.00 Axiata 7.08 7.60 Sime Darby 9.40 10.20 Gamuda 5.00 5.30 UMW O&G 3.41 5.15 AFG 4.79 5.50 Perdana Petroleum 1.72 2.55 Hock Seng Lee 1.91 2.25