Malaysia Daily, Maybank KE (2015-01-14)

Daily 14 January 2015 SECTOR UPDATE Malaysia Gloves Sector: Maintain Overweight Pent up growth ahead Industry will see increasing competition ahead due to the incoming capacities. However, mitigating factors are the high USD/MYR and low rubber prices. Maintain Overweight. We have BUYs on Hartalega (unchanged TP MYR8.50), Kossan (raised TP to MYR5.90) and Riverstone (unchanged TP SGD1.20). Click here for full report » Technicals Rebound is gaining momentum The FBMKLCI rose 13.82 points to 1,748.90 yesterday, while the FBMEMAS and FBM100 also closed higher by 90.41 points and 88.39 points, respectively. We expect minor nibbling at the supports of 1,718 to 1,748, whilst heavy profit taking would be at the resistances of 1,750 and 1,770. Trading idea is a Short-Term Buy call on LATITUD with upside target areas at MYR4.44 & MYR5.08.Stop loss is at MYR3.78. Click here for full report » Other Local News Automotive: Higher auto sales expected if car scrappage scheme approved. The Malaysian Automotive Institute (MAI) has projected that the "cash for clunkers" scheme could lift total industry volume (TIV) by as much as 50,000 new cars, if implemented this year. MAI is now in talks with government agencies such as the Finance Ministry, other related Government bodies and original equipment manufacturer. Also, MAI is studying the viability of such programmes on whether both the Government and the OEMs can afford to continue forking out such similar amounts. (Source: The Star) Malaysia Marine and Heavy Engineering Holdings: Appoints new MD, CEO effective March 1. It will appoint Abu Fitri Abdul Jalil as its Managing Director (MD) and Chief Executive Officer (CEO) effective March 1, 2015, suceeding the incumbent Dominique de Soras, who has served MHB as MD and CEO since Feb 2011. (Source: Business Times) SP Setia: Precinct 11 launches exceed expectations. SP Setia saw the launch of its 3-storey terrace houses called "Caffra" fully taken up, as well as a 95% take up of its 3-storey semi-detached "Serrata" homes, in Precinct 11, Setia Alam, Selangor, within a day on Sunday. Caffra offered 100 units, with a built up of 2330 sq ft and priced from MYR783,000 per unit while Serrata offered 44 units, with built up of 2,800 sq ft and priced from MYR1.13m per unit. (Source: The Edge Financial Daily) Outside Malaysia Global: World Bank cuts growth outlook with U.S. lone bright spot. The world economy will expand 3% in 2015, down from a projection of 3.4% in June, according to the lender's semiannual Global Economic Prospects report, released in Washington. The report adds to signs of a growing disparity between the U.S. and other major economies while tempering any optimism that a plunge in oil prices will boost output. Risks to the global recovery are "significant and tilted to the downside," with dangers including a spike in financial volatility, intensifying geopolitical tensions and prolonged stagnation in the euro region or Japan. (Source: Bloomberg) U.K: Inflation rate fell to the lowest in almost 15 years in December, which will force Governor Mark Carney to write the Bank of England's first open letter explaining why prices are rising too slowly. Consumer-price growth weakened to 0.5% from 1% in November, the Office for National Statistics said. That's the lowest since May 2000. A separate report showed factory-gate prices recorded their biggest annual drop in five years. (Source: Bloomberg) Italy: Industrial output rose more than expected in November, boosting optimism that the euro region's third-biggest economy may start recovering from its longest recession on record. Production increased 0.3% MoM from October, when it stalled, national statistics office Istat said. Output fell 1.8% YoY when adjusted for working days. (Source: Bloomberg) China: Export machine remained a prop for the world's second-biggest economy as overseas shipments climbed more than economists estimated last month. Exports rose 9.7% YoY in December while imports fell 2.4% YoY, leaving a trade surplus of USD 49.61b, the customs administration said in Beijing. (Source: Bloomberg) Japan: Japanese corporate bankruptcies fell in 2014 to the lowest level since the final year of Japan's asset bubble, as a government request for banks to alter loan conditions for smaller firms helped companies stay afloat. Business failures slid 10.4% YoY in 2014 to 9,731 cases, the fewest since 1990, Tokyo Shoko Research Ltd. said in Tokyo. There were no bankruptcies among listed firms last year for the first time in 24 years. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,748.9 (6.3) 0.8 JCI 5,214.4 22.0 0.5 STI 3,341.1 5.5 (0.1) SET 1,535.0 18.2 0.2 HSI 24,216.0 3.9 0.8 KOSPI 1,917.1 (4.7) (0.2) TWSE 9,231.8 7.2 0.6 DJIA 17,613.7 6.3 (0.2) S&P 2,023.0 9.4 (0.3) FTSE 6,542.2 (3.1) 0.6 MYR/USD 3.595 9.7 0.8 CPO (1mth) 2,375.0 (9.6) 0.0 Crude Oil (1mth) 45.9 (53.4) (0.4) Gold 1,230.6 2.4 (0.2) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 13.96 16.00 Axiata 7.07 7.60 Sime Darby 9.40 10.20 Genting Malaysia 4.02 4.60 Gamuda 5.02 6.00 Westport 3.32 3.60 SP Setia 3.35 3.98 AFG 4.80 5.50 Hartalega 7.01 8.50