Malaysia Daily, Maybank KE (2015-02-24)

Daily 24 February 2015 RESULTS PREVIEW AirAsia X Bhd: Maintain Sell FY14 to be the weakest on record Forecast FY14 core net loss of MYR404m to be the weakest ever, but in line with expectations. Focus on Company�s strategy and initiatives to turnaround. Maintain SELL, with an unchanged target price of MYR0.49. Click here for full report » COMPANY UPDATE MISC Bhd: Maintain Buy Injection of new LNG Carriers  Shariah-compliant Positive on PETRONAS� injection of 5 new LNG vessels and extension of the Puteri Class LNG time charter contracts. Raising our FY16-17 EPS by 0.5% and 7% for the newbuilds. Maintain BUY and SOP-derived TP of MYR8.70. Click here for full report » RESULTS REVIEW UMW Oil & Gas: Maintain Buy Dragged down by higher taxes  Shariah-compliant FY14 pretax profit was in line but core earnings were below expectations, skewed by higher-than-expected taxes. Forecasts unchanged pending analyst briefing today. Maintain BUY with an unchanged SOP-based TP of MYR3.45. Click here for full report » Nestle Malaysia: Maintain Hold FY14 results below expectations  Shariah-compliant FY14 results fell short at 92%/93% of our/consensus estimates. Miss was mainly due to slower-than expected-sales, higher than expected A&P expenses in 4Q and a stronger USD. Maintain HOLD with a higher DCF-based TP of MYR68.00 (MYR63.60 previously) on rolling forward valuations and lower beta assumption. Click here for full report » Perdana Petroleum: Maintain Buy No surprises, an M&A target FY14 results within our expectations but below street�s. An M&A candidate � major shareholder Dayang may be keen to raise its stake beyond the current 28.6%. Reiterate BUY with an unchanged MYR1.70 TP based on unchanged 10x 2016 PER. Click here for full report » ECONOMICS Singapore Budget 2015 A �Structural & Social� Budget Budget 2015 is all about addressing structural-economic and socio-economic issues Hence measures to enhance skills, boost productivity alleviate cost pressures and strengthen social security. Budget deficit of SGD6.7b or -1.7% of GDP in FY2015 (FY2014: SGD0.13b or -0.03% of GDP) Click here for full report » Singapore CPI, Jan �15 Third month in deflation Headline inflation fell further by -0.4% YoY in Jan 2015 (Dec 2014: -0.1% YoY). Core inflation rate (CPI ex-accommodation and private road transport) stayed subdued at +1.0% YoY (Dec 14: +1.5% YoY). Revised our 2015 inflation forecast to 0%-1.0% range from 1.0% previously. Click here for full report » Technicals The FBMKLCI gained 1.52 points to 1,809.39 yesterday, while the FBMEMAS and FBM100 also closed higher by 17.76 points and 19.12 points, respectively. In terms of market breadth, the gainer-to-loser ratio was 431-to-379 while 290 counters were unchanged. A total of 2.47b shares were traded valued at MYR1.84b. Trading idea is a Short-Term call on Latitude with very firm supports of MYR5.12 and MYR5.86 as well as clear upward target areas of MYR6.15, MYR7.80 and MYR8.68. Click here for full report » Other Local News O&G: Third O&G supply base riding high. The Tok Bali Supply Base in Pasir Puteh, Kelantan, which will begin operations in April to support oil and gas (O&G) activities off the state�s coast, is expected to attract up to MYR1b worth of investments in the next three years. (Source: The Star) Aviation: MAS unions to stage mass protests? Union members of troubled Malaysian Airline System (MAS) are expected to stage a mass protest that may disrupt the country's air travel in a last-ditch attempt to get the national carrier's largest shareholder Khazanah Nasional to scrap its plan to cull some 6,000 jobs, said sources close to the matter. (Source: The Edge Financial Daily) Plantations: Malaysian palm oil price drops after holiday. Malaysian palm oil futures fell to their lowest level in 2-1/2 weeks on Monday when the market reopened after the Lunar New Year holiday as losses in rival soyoil markets plus sluggish export demand outweighed a drop in the ringgit. (Source: The Star) Outside Malaysia U.S: The Fed's own data show manufacturers don't share its optimism. Manufacturers, miners and utility companies don't seem as optimistic as monetary policy makers are that 2015 will be a markedly better year for the economy. Industrial producers are scaling back their expansion plans for this year even as Fed officials forecast faster economic growth. Industrial companies will raise capacity by 1.8% in 2015, the smallest increase since 2011, after boosting it 3.1% in 2014, the Fed said in its Feb. 18 release on production. (Source: Bloomberg) U.S: Home sales drop as lack of supply drives up prices. Broad-based price increases put more properties out of reach for American homebuyers in January, becoming the latest hurdle preventing a more robust recovery in residential real estate. Purchases of existing houses dropped 4.9% from December to a 4.82 million annualized rate, the least since April, figures from the National Association of Realtors showed. (Source: Bloomberg) Germany: Business confidence rises as QE outweighs Greece. German business confidence rose for a fourth month as faster economic growth and optimism over European Central Bank stimulus outweighed fears of a worsening Greek crisis. The Ifo institute's business climate index, based on a survey of 7,000 executives, advanced to 106.8 in February from 106.7 in January. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,809.4 (3.1) 0.1 JCI 5,403.3 26.4 0.1 STI 3,421.3 8.0 (0.4) SET 1,593.9 22.7 (0.6) HSI 24,836.8 6.6 0.0 KOSPI 1,968.4 (2.1) 0.4 TWSE 9,529.5 10.7 0.0 DJIA 18,116.8 9.3 (0.1) S&P 2,109.7 14.1 (0.0) FTSE 6,912.2 2.4 (0.0) MYR/USD 3.642 11.1 (0.2) CPO (1mth) 2,247.0 (14.5) (2.4) Crude Oil (1mth) 49.5 (49.8) (1.8) Gold 1,193.3 (0.8) (0.9) TOP STOCK PICKS Buy rated large caps Price Target Axiata 7.17 7.80 Tenaga Nasional 14.82 16.00 Sime Darby 9.53 10.70 Genting Malaysia 4.18 4.60 Gamuda 5.15 6.00 AirAsia 2.78 2.94 Westport 3.50 3.80 SP Setia 3.54 4.07 AFG 4.80 5.30 Hartalega 7.55 8.50