Malaysia Daily, Maybank KE (2015-04-13)

Daily 13 April 2015 COMPANY UPDATE AirAsia Bhd: Maintain Hold Looking beyond 1Q15 Challenging 1Q15 priced in. Better outlook from 2Q15 onwards, in line with statements from other Asian airline CEOs. Upgrade to BUY (from HOLD) with an unchanged target price of MYR2.65; valuation is now attractive. Click here for full report » Malayan Banking: Not Rated DRP price fixed at MYR8.70 DRP price fixed at MYR8.70/share, a 5.2% discount to its 5-day ex-dividend VWAMP. DRP discount in line with average of 5.1% over past five DRPs. CET1 still healthy at more than 11%, assuming 85% reinvestment rate. Click here for full report » ECONOMICS Industrial Production (IP), Feb 2015 Sustained positive momentum Industrial production growth was sustained but moderated in Feb 2015. Jan-Feb 2015 figure suggests 1Q 2015 real GDP growth should have remained above +5% YoY. Our full-year 4.5% GDP growth forecast implies sub-5% growth in the subsequent quarters. Click here for full report » REGIONAL SECTOR UPDATE Regional Plantations: Maintain Neutral Better-than-expected March output Malaysia's Mar 2015 stockpile was higher-than-expected, but initial export estimates for Apr 2015 give hope to an export recovery. Keep a close watch on possible El Nino development, which may lift CPO price. Stay NEUTRAL on the sector. Click here for full report » Technicals FBMKLCI headed up to 1,858 & beyond The FBM KLCI inched up 9.79 points WoW to close at 1,844.31, as some local and foreign nibbling activities took place last week. Volume remained low from 1.80b to 1.99b shares. Trading idea is a Short-Term Buy on EATECH with upside target areas at MYR0.735, MYR0.80, MYR0.97 and MYR1.06. Stop-loss is at MYR0.59. Click here for full report » Other Local News Healthcare: Melaka medical centre gearing for expansion. Mahkota Medical Centre Melaka is investing about MYR200m to build a new 500 bed hospital block. CEO said the new block, on a parcel of land adjacent to the existing 270 bed hospital building, will be ready in two to four years. The hospital, owned by Health Management International Ltd, a company listed on the Singapore Exchange, has more than 300,000 patients annually, with more than 30% of them foreigners, mainly from Indonesia. (Source: The Edge Financial Daily) Selangor Properties: Plans MYR825m launches in 2015. Selangor Properties is focusing on organic growth and plans to launch two property projects in the Klang Valley with an estimated total gross development value (GDV) of MYR825m in this calendar year. COO Chong Koon San said the first project includes 38 units of semi-detached homes priced above MYR1.8m and 24 units of bungalows priced above MYR2m in Bukit Permata, Gombak with a GDV of MYR125m. The second project is a high-end 105-unit condominium in Damansara Heights with an estimated GDV of MYR700m that is targeted to launch in December 2015. (Source: The Sun) Ewein: Eyes next Tanjong Pinang project. It is now developing its first property project valued at MYR800m at Bandar Tanjong Pinang, Penang in a joint venture with Consortium Zenith BUCG Sdn Bhd (CZBUCG). It is looking to bag the next parcel of land measuring 4.29 acres the latter will be offering for development there. It expects the next project to be up for grabs in the second half of this year. (Source: The Edge Financial Daily) Manufacturers sales in Feb 2015 moderated to MYR52.1b, reflecting a decrease of -2.6% YoY (Jan 2015: +2.8% YoY). Sales value fell sharply by -9.0% MoM in Feb 2015 (Jan 2015: +1.6% MoM) coinciding with the shorter working month being compounded by extended business closure due to Lunar New Year festivities. The drop was dragged by weak sales performance of "Petroleum, Chemical, Rubber & Plastic Products" segment which fell -12.4% YoY in Feb 2015 (Jan 2015: -2.3% YoY) in line with weaker global crude oil prices. Sales of "E&E" on the other hand remained unchanged at +6.9% YoY for a second month. Exports oriented sales contacted by -4.0% YoY (Jan 2015: +1.9% YoY) whilst domestic oriented sales moderated to +0.4% YoY (Jan 2015: +4.1% YoY). Salaries and wages increased to +7.2% YoY in Feb 2015 compared to +4.4% YoY recorded a month earlier, with payout totaling MYR 3.0b. Employment growth within the sector improved to +0.9% YoY in Feb 2015 (Jan 2015: +0.6% YoY). (Source: DOS Malaysia; MIB) Outside Malaysia U.K. Industrial output barely rises as oil and gas declines. U.K. industrial production barely rose in February as an increase in manufacturing output was offset by a drop in oil and gas. Total production gained 0.1% as energy output declined 3.8%, the Office for National Statistics said. Manufacturing rose 0.4% amid higher car output. (Source: Bloomberg) Greece: Unemployment falls as industrial production jumps 1.9%. Greek unemployment fell and industrial production rose the most in three months, as the cash-strapped government continues to press for new aid money. The unemployment rate slipped to 25.7% in January from 25.9% in December. While the decline was modest, it still marks the lowest rate in 2 1/2 years. The 1.9% annual increase in industrial production in February followed a 0.2% decline in January. (Source: Bloomberg) S. Korea: Outlook raised by Moody's on better debt management. South Korea's credit outlook was raised to positive from stable by Moody's Investors Service Inc., which cited improved public debt management. The rating was affirmed at Aa3, the fourth-highest level. Improved debt management at public corporations, lower vulnerability to global financial market shocks and a track record of fiscal prudence were the main drivers of the change, the ratings agency said in a statement. The nation's ability to cope with volatility in capital flows is bolstered by its current account surpluses, Moody's said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,844.3 (1.2) (0.3) JCI 5,491.3 28.5 (0.2) STI 3,472.4 9.6 0.3 SET 1,547.8 19.2 0.2 HSI 27,272.4 17.0 1.2 KOSPI 2,087.8 3.8 1.4 TWSE 9,617.7 11.7 0.5 DJIA 18,057.7 8.9 0.6 S&P 2,102.1 13.7 0.5 FTSE 7,089.8 5.0 1.1 MYR/USD 3.671 12.1 1.0 CPO (1mth) 2,120.0 (19.3) 0.6 Crude Oil (1mth) 51.6 (47.5) 1.7 Gold 1,203.7 0.2 0.3 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.50 16.00 Sime Darby 9.27 10.20 Genting Malaysia 4.42 4.60 Gamuda 5.19 6.00 Westport 4.07 4.50 SP Setia 3.45 4.07 AFG 4.78 5.30 Hartalega 8.35 8.50 Inari 3.34 3.95 MBM Resources 3.33 4.20 Vitrox 3.44 4.05