Malaysia Daily, Maybank KE (2014-11-13)

Daily 13 November 2014 RESULTS REVIEW Gas Malaysia: Maintain Hold Earnings have peaked?  Shariah-compliant 9M14 net profit was in line at 80% of our full-year forecast, and 76% of consensus. We are expecting a sequentially weaker 4Q14; doubts remain over a 100% payout in 2014. Maintain HOLD, TP unchanged at MYR3.40. Click here for full report » REGIONAL COMPANY UPDATE Bumitama Agri: Maintain Buy Potential DPS upside 9M14 core PATMI above expectations. We raise FY14E earnings mainly on higher CPO ASP achieved. BAL mulling higher payouts as new-planting target slows on tougher RSPO requirements. Maintain BUY & SGD1.38 TP, at 16x FY15E EPS, implying just 0.7x PEG. Catalysts from 21% FFB output CAGR over 2013-16, among highest in industry and potential DPS upside. Click here for full report » Technicals Headed to 1,812, 1,800 and below The FBMKLCI declined 8.87 points to 1,816.24 yesterday, while the FBMEMAS and FBM100 also closed lower by 53.60 points and 50.41 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a Take profit call on ALAM with downside target areas at MYR0.86 & MYR0.60. Click here for full report » Other Local News O&G: Petronas buying remaining Malacca refinery stake for MYR2.12b. Petronas is buying the remaining 47% stake in Malaysian Refining Company Sdn Bhd (MRC). MRC was commissioned in 1998 and it has a refining capacity of 170,000 barrels per day. (Source: The Star) Bumi Armada: US1.8b FPSO signing delayed again. After several delays, Bumi Armada still has yet to finalize the execution of the USD1.18b contract to supply one floating production, storage and offloading (FPSO) vessel to Husky-CNOOC Madura Ltd (HCML). The contract will be terminated should both parties fail to sign by Nov 27, about two weeks from now, unless another extension is agreed upon. (Source: The Edge Financial Daily) Yinson: Yinson's associate gets three Petronas licenses. Its 30%-owned associate company Yinson Energy Sdn Bhd had been awarded three licenses by Petronas. The licenses would give a new source of income for Yinson. Yinson expects new opportunities from the licenses to contribute to its future earnings and net assets. (Source: The Edge Financial Daily) Outside Malaysia U.K: Unemployment held at a six-year low in the third quarter and wage growth accelerated as the labor market continued to improve. The jobless rate based on International Labor Organization methods was 6%, the same as in the three months through August, the Office for National Statistics said. Wages grew an annual 1%, faster than the 0.8% predicted by economists in a Bloomberg survey, and basic pay outstripped inflation for the first time since 2009. (Source: Bloomberg) Russia: Trade surplus narrows as falling oil erodes exports. Russia's trade surplus narrowed in September to the lowest in seven months as falling oil prices cut export revenue during President Vladimir Putin's escalating standoff with the U.S. and the European Union over Ukraine. The surplus fell 20% YoY to USD 13b, the central bank said. Imports decreased 10% YoY to USD 25.8b and exports fell 13% YoY to USD 38.8b. (Source: Bloomberg) India: Inflation eases as factory output grows in Rajan boost. India's retail inflation eased more than economists predicted and factory output exceeded estimates, taking some pressure off central bank Governor Raghuram Rajan to lower interest rates. Consumer prices rose 5.52% YoY in October, the Statistics Ministry said in New Delhi, after a 6.46% YoY increase the previous month. That was the slowest pace since the index was created in January 2012. Industrial production grew 2.5% in September compared with a revised 0.5% in August. (Source: Bloomberg) S. Korea: Household debt increased at the fastest pace in at least a decade after President Park Geun Hye loosened lending requirements and the central bank cut borrowing costs. Bank lending to households rose KRW 6.4t in October to KRW 507.7t (USD 462b), the biggest gain since the Bank of Korea began compiling the data in 2003. Mortgage lending and borrowings for long-term rent jumped by KRW 5.5t to KRW 355.1t. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,816.2 (2.7) (0.5) JCI 5,048.8 18.1 0.3 STI 3,283.7 3.7 (0.3) SET 1,562.0 20.3 (0.6) HSI 23,938.2 2.7 0.5 KOSPI 1,967.3 (2.2) 0.2 TWSE 8,919.0 3.6 (1.3) DJIA 17,612.2 6.2 (0.0) S&P 2,038.3 10.3 (0.1) FTSE 6,611.0 (2.0) (0.2) MYR/USD 3.330 1.7 (0.5) CPO (1mth) 2,214.0 (15.8) (0.9) Crude Oil (1mth) 77.2 (21.6) (1.0) Gold 1,163.5 (3.2) 1.1 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 13.40 16.00 Axiata 7.05 7.60 Sime Darby 9.61 10.20 Gamuda 5.15 6.00 AFG 4.53 5.50 Perdana Petroleum 1.37 2.40 Hock Seng Lee 1.89 2.25 SP Setia 3.27 3.98