Malaysia Daily, Maybank KE (2015-02-10)

Daily 10 February 2015 RESULTS REVIEW Dialog Group: Maintain BUY 1HFY6/15 results in line  Shariah-compliant Domestic and overseas divisions registered strong QoQ growth; wrote off MYR20m at 32%-owned Balai RSC in 2Q15. Pengerang operations (oil, product, LNG terminals, regas plant) to drive long-term growth. Reiterate BUY and MYR1.90 TP (SOP-based). Click here for full report » DiGi.com: Maintain HOLD Still delivering  Shariah-compliant FY14 EBITDA and net profit in line with ours and consensus expectations. Digi's track record with earnings delivery has been exemplary, but this appears to have been priced in after a strong run-up in 2014. Maintain HOLD, TP raised marginally to MYR6.10 (+10sen). Click here for full report » COMPANY UPDATE CIMB Group Holdings: Maintain HOLD To close Australian operations Closure of the Australian operations not a surprise, for it was one of the high cost IB centres. Will have to cut about MYR300m from IB this year. HOLD maintained, TP of MYR5.70 on FY15 P/BV peg of 1.2x Click here for full report » Sime Darby: Maintain BUY Hastens takeover of NBPOL  Shariah-compliant Sime has shortened the offer period to the shareholders of NBPOL by ~1 month. It is a step closer to complete this acquisition as we do not anticipate any further hurdles. Maintain BUY, unchanged TP of MYR10.70 on 18x 2016 PER. Click here for full report » Perdana Petroleum: Maintain BUY Earlier dry-docks to skew earnings Cut 2014-16 EPS estimates by 7%-18% on higher opex (earlier dry-docking works for three OSVs) and lower utilisation. Lower TP by 6% to MYR1.70 post earnings adjustments on an unchanged 10x 2016 PER peg. A GO candidate; major shareholder Dayang's stake at Perdana is now at 28.6%. Click here for full report » Eversendai Corp: Maintain HOLD Wins MYR120m job in Malaysia  Shariah-compliant A new MYR120m warehouse job in Penang lifts outstanding order book to MYR1.7b. Expect more domestic jobs in 2015, offsetting the weaker job prospects in Middle East. Maintain HOLD and our MYR0.54 TP is under review. Click here for full report » REGIONAL SECTOR UPDATE Regional Plantations: Maintain NEUTRAL Fairly decent biodiesel subsidy Indonesia's parliament budget committee approved IDR4,000/liter biodiesel subsidy. The approval is said to be for 1.7m KL of subsidized volume with total subsidy estimated at ~IDR6.8tr (or USD0.5b). Top BUYs in the region are Bumitama Agri, First Resources, Genting Plantations, Sarawak Oil Palms and Sime Darby. SELL IOI Corp for its steep valuation. Click here for full report » Technicals Trend remains uncertain The FBMKLCI fell 1.67 points to 1,811.58 yesterday, while the FBMEMAS closed higher by 2.58 points but the FBM100 closed lower by 1.71 points. We recommend a �Range Trading� stance for the index. Trading idea is a short-term buy on GAB with upside target areas at MYR14.01 & MYR14.12. Stop loss is at MYR12.42 Click here for full report » Other Local News O&G: Wan Zulkiflee to take over as Petronas CEO. Datuk Wan Zulkiflee Wan Ariffin will replace Tan Sri Shamsul Azhar Abbas as Petroliam Nasional (Petronas) president and chief executive officer whose contract expired yesterday. In a statement posted on the website of the Prime Minister�s office yesterday, Prime Minister Datuk Seri Najib Razak said Wan Zulkiflee's appointment is effective from April 1, 2015 to March 31, 2018. (Source: The Edge Financial Daily). Banking: New BNM rules to improve banks' net interest margins. Banks could see some easing of the requirement to build up their retail deposit base under a new Bank Negara Malaysia (BNM) ruling that governs the way local banks should account for certain deposits and other items on their balance sheet. (Source: The Edge Financial Daily). IHH: 'IHH, TPG vie for control of India's Global Hospitals'. IHH Healthcare and United States private equity firm TPG Capital Management LP are vying to buy a controlling stake in India's Global Hospitals in a deal that would value the privately-owned chain at USD350m (MYR1.31b), said two people with direct knowledge of the matter. (Source: The Edge Financial Daily) Outside Malaysia Germany: Posted a record current-account surplus in 2014, setting the stage for renewed international calls to address its economic imbalances. The surplus rose to EUR 215.3b (USD 244b) last year from EUR 189.2b in 2013, the Federal Statistics Office said. That�s equal to 7.4% of the country's gross domestic product, and exceeds the EUR 176.7b China logged. (Source: Bloomberg) Greece: Said to seek EUR 10b leeway in bridge accord. Greece will seek short-term financing as it tries to stave off a funding crunch while buying time to push its creditors to ease austerity demands. Greece's Finance Minister Yanis Varoufakis will present a proposal at a meeting of euro area finance ministers in Brussels that will ask for an EUR 8b increase in the stock of Treasury Bills the country is allowed, said a government official who asked not to be named as the negotiations are confidential. It will also seek the disbursement of EUR 1.9b of profits that euro area central banks made on their Greek bonds holdings. (Source: Bloomberg) Japan: Reported a sixth straight monthly surplus in its broadest measure of trade in December, aided by stronger exports and a lower energy bill. The current-account balance was in a surplus of JPY 187.2b (USD 1.6b), swinging from a JPY 679.9b deficit a year earlier, the finance ministry said. (Source: Bloomberg) Japan: Reaped record income last year from investments overseas, highlighting one upside to the shift in production offshore that has undercut its economy. The surplus from direct investment and foreign securities increased 9.7% to JPY 18.07t (USD 152b), the biggest in data back to 1985, inflated by a weaker yen and fed by revenue from the world's largest foreign net asset position, according to the finance ministry. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,811.6 (3.0) (0.1) JCI 5,348.5 25.1 0.1 STI 3,418.0 7.9 (0.4) SET 1,601.8 23.3 (0.7) HSI 24,521.0 5.2 (0.6) KOSPI 1,947.0 (3.2) (0.4) TWSE 9,421.5 9.4 (0.4) DJIA 17,729.2 7.0 (0.5) S&P 2,046.7 10.7 (0.4) FTSE 6,837.2 1.3 (0.2) MYR/USD 3.560 8.7 0.6 CPO (1mth) 2,294.0 (12.7) (1.5) Crude Oil (1mth) 52.9 (46.3) 2.3 Gold 1,241.4 3.3 (1.9) TOP STOCK PICKS Buy rated large caps Price Target Axiata 7.17 7.80 Tenaga Nasional 14.82 16.00 Sime Darby 9.53 10.20 Genting Malaysia 4.18 4.60 Gamuda 5.15 6.00 AirAsia 2.78 3.00 Westport 3.50 3.60 SP Setia 3.54 3.98 AFG 4.80 5.50 Hartalega 7.55 8.50