Malaysia Daily, Maybank KE (2015-03-12)

Daily 12 March 2015 ECONOMICS BNM Annual Report 2014 Official growth forecast in detail Official real GDP growth forecast of 4.5%-5.5% reaffirmed. Maintain our 2015 growth forecast of 4.5%. Key difference between official and our forecasts is public consumption. Click here for full report » SECTOR UPDATE Malaysia Banking: Maintain Neutral A resilient banking system The banks proved resilient under adverse scenario simulations, with CET1 holding up above 7%. Household debt (HH) under control with HH debt/GDP rising just marginally to 87.9% end-2014 from 86.7% end-2013. NEUTRAL on sector; BUY AFG, HL Bank, HLFG and RHB. Click here for full report » RESULTS REVIEW SP Setia: Maintain Buy Stronger earnings ahead  Shariah-compliant 1QFY10/15 net profit of MYR101m (+5% YoY) was in line. Expect stronger earnings from 2Q onwards on lumpy profit recognition from its Australian project. Maintain earnings forecasts, MYR4.07 TP (0.73x P/RNAV). BUY. Click here for full report » RESULTS PREVIEW Top Glove: Upgrade to Buy To play catch up  Shariah-compliant Expect better 2QFY8/15 results on margin expansion. Raising FY8/15-17 EPS forecasts by 5-7% p.a. on lower latex cost assumption. Upgrade to BUY with a higher TP of MYR5.95 (+29%) as we also re-peg to mean valuations. Click here for full report » Technicals Next stop for the index is 1,770 The FBMKLCI tumbled 11.57 points to 1,778.16 yesterday, while the FBMEMAS and FBM100 also closed lower by 82.04 points and 79.13 points, respectively. In terms of market breadth, the gainer-to-loser ratio was 322-to-522 while 296 counters were unchanged. A total of 2.51b shares were traded valued at MYR2.24b. Trading idea is a Take profit call on Berjaya Food with weaker support and clear downward target areas of MYR2.47, MYR2.33 and MYR1.89. Click here for full report » Other Local News IPO: Qualitas Healthcare prepares for USD150m IPO. Qualitas Healthcare Corp has started investor education for its initial public offering (IPO), which is expected to raise about USD150m (MYR556.5m). The premarketing will end on March 24 with IPO proceeds to be used for strategic investment, acquisitions and general corporate purposes. (Source: The Edge Financial Daily) Oil & Gas: Petronas offers USD7b bond. Petroliam Nasional (Petronas) is offering the second-largest US dollar bond from Asia as the state owned oil firms borrowing costs soar to the highest in a year. Petronas is marketing notes in the US currency with four different maturities and expected to reach USD7b (MYR25.97b) according to sources familiar with the matter. (Source: The Edge Financial Daily) Utilities: 1MDB moved USD1.1b Cayman funds to S'pore bank. Prime Minister Datuk Seri Najib Razak has revealed that the USD1.103b balance claimed by 1MDB from its investments in Cayman Islands is being kept in the form of US dollar denominated currency at BSI Bank Ltd Singapore (BSI Singapore). The decision to use a bank in Singapore was to facilitate withdrawal transactions since approval is needed from Bank Negara Malaysia (BNM) for every transaction conducted above MYR50m. (Source: The Edge Financial Daily) Hap Seng Consolidated: Plans MYR640.8m share disposal. Hap Seng Consolidated intends to dispose of 49.6m shares representing 100% of Hap Seng Capital Ltd for SGD240m (MYR640.8m), which will be expected to give rise to a gain of about MYR513.9m for the financial year ending December 31. It's unit, Hap Seng Realty Sdn Bhd also plans to acquire a 14-storey retail and office tower block to be known as Menara Hap Seng KK in Sabah, being built on a parcel of leasehold land for MYR395m. (Source: The New Straits Times) Outside Malaysia U.K: Factory output unexpectedly fell in January as computer and electronics production plunged. Output fell 0.5% after a 0.1% increase in December, the Office for National Statistics said. The weakness reflected a 9.5% drop in electronics - the biggest in 13 years - after a surge in December because of a large defense industry contract. (Source: Bloomberg) China: Factory production data shows weakest start in 6 years. China's industrial output, investment and retail sales growth missed analysts' estimates in January and February, suggesting more stimulus is needed to boost the world�s second-largest economy. Factory production rose 6.8% YoY in the two-month period, the National Bureau of Statistics said in Beijing. Retail sales advanced 10.7% YoY, while fixed-asset investment increased 13.9% YoY. (Source: Bloomberg) Thailand: Unexpectedly cut its key interest rate for the first time in a year, joining a wave of global monetary easing as the central bank cited weakening growth prospects and risks from China's slowdown. The Bank of Thailand cut its one-day bond repurchase rate to 1.75%, with monetary policy committee members voting four-to-three in favor, it said in Bangkok. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,778.2 (4.8) (0.6) JCI 5,419.6 26.8 (0.8) STI 3,378.6 6.7 (0.6) SET 1,543.8 18.9 0.8 HSI 23,718.0 1.8 (0.7) KOSPI 1,980.8 (1.5) (0.2) TWSE 9,523.2 10.6 (0.1) DJIA 17,635.4 6.4 (0.2) S&P 2,040.2 10.4 (0.2) FTSE 6,721.5 (0.4) 0.3 MYR/USD 3.703 13.0 (0.2) CPO (1mth) 2,286.0 (13.0) 2.1 Crude Oil (1mth) 48.2 (51.1) (0.2) Gold 1,158.2 (3.6) (0.4) TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.64 16.00 Sime Darby 9.25 10.20 Genting Malaysia 4.07 4.60 Gamuda 5.13 6.00 Westport 3.65 3.80 SP Setia 3.37 4.07 AFG 4.69 5.30 Hartalega 8.06 8.50 Inari 3.20 3.95 MBM Resources 3.15 4.20 Vitrox 3.28 4.05