Malaysia Daily, Maybank KE (2015-04-16)

Daily 16 April 2015 SECTOR UPDATE Malaysia Gaming - NFO: Neutral GST playing out as expected NFOs have absorbed the 6% GST without cutting prize payouts, causing EPS to be negatively impacted by e.10%. Industry lotto sales recorded in the two weeks after 1 Apr 2015 eased 4% compared to the two weeks before. We had anticipated the above. Maintain earnings estimates, HOLD calls and TPs on BST and MAG. Still NEUTRAL. Click here for full report » RESULTS REVIEW CapitaMalls Malaysia Trust: Downgrade Hold Closing in 1Q15 net profit was in line; we remain cautious on SWP on declining occupancy rate and negative rental reversion. Lowering FY15/16/17 EPU estimates by 6%/5%/5% post inclusion of TCM; acquisition is yield dilutive, we estimate. DCF-based TP is lowered to MYR1.55 (-5 sen). Downgrade to HOLD as total return is <10%. Click here for full report » ECONOMICS Goods & Services Tax (GST) Early Impact Assesment Evidence of pre-GST spending rush. But mixed impact on prices. Maintain our real GDP growth (2015: 4.5% vs 2014: 6%) and inflation rate (2015: 3%-4% vs 2014: 3.2%) forecasts. Click here for full report » China GDP 1Q 2015 Further growth slowdown Real GDP growth slowed to +7% YoY and +1.3% QoQ in 1Q 2015 (4Q 2014: +7.3% YoY; +1.5% QoQ). Further policy stimulus, especially monetary easing and banking measures looks imminent. Maintain our full-year forecast of +7%. Click here for full report » Technicals Narrow range bound index trading The FBMKLCI inched up by 0.52 points to 1,840.13 yesterday, while the FBMEMAS and FBM100 also closed higher by 28.83 points and 19.43 points, respectively. We recommend a �Nibble on Dips� stance for the index. Trading idea is a Short-Term Buy on IFCAMSC with upside target areas at MYR1.71 & MYR2.37. Stop loss is at MYR1.34. Click here for full report » Other Local News Telecommunications: Broadband package fees to drop. Fees for mobile internet broadband packages will drop an average 14% while basic fixed packages will be lowered by as much as 57%, said the Ministry of Communications and Multimedia Malaysia. (Source: The Edge Financial Daily) Ecoworld: Lands Penang deal. Eco World Development Group has won the rights to develop the 190ha site in Batu Kawan on mainland Penang. The property group was notified last week of the Penang government's decision to award the tender, which was put out via a request for proposal by the Penang Development Corp two years ago. Eco World is expected to pay MYR1.2b for the land. As the winning bidder, Eco World will have to develop a golf course on 60ha of the total 190ha plot. (Source: The New Straits Times) Petronas Dagangan: Plans MYR500m capex.Petronas Dagangan (PetDag), a 69.86% unit of Petroliam Nasional (Petronas), has planned a capital expenditure of MYR500m this year, the same as last year, to spur sales in its retail and commercial segments, said managing director and chief executive officer Mohd Ibrahimnuddin Mohd Yunus. He said, "The capex that we have allocated will be used to enhance our retail segment through increasing out stations as well as unlocking strategic values in the commercial division by focusing on aviation, diesel and fuel oil segments". (Source: The Edge Financial Daily) Outside Malaysia Global: IMF warns of rising risks as USD hits Emerging Markets. Risks to the global financial system are rising, as emerging markets face a squeeze from the strong U.S. dollar and weak commodity prices, the IMF said. While the strengthening greenback and lower oil prices are boosting the world recovery, the changing landscape is putting pressure on countries and firms that export crude and other commodities, the International Monetary Fund said in its semiannual Global Financial Stability Report. (Source: Bloomberg) U.S: Manufacturing struggles with USD rising, oil falling. American factories produced more cars in March and little else as a strong dollar hampered exports and the plunge in oil prices cut into spending on new equipment. The 0.1% gain in manufacturing output marked the first advance in four months and followed a 0.2% February decrease. (Source: Bloomberg) U.S: Japan snaps China's six-year run as top holder of treasuries. Japan overtook China as the top foreign holder of U.S. government debt for the first time since the global financial crisis amid signs of economic and policy shifts in Asia's two largest economies. Japan owned USD 1.2244tr of U.S. debt, compared with USD 1.2237tr for China as of February, according to Treasury Department data released. Japan's holdings fell USD14.2b from the preceding month and China�s dropped by USD 15.4b. (Source: Bloomberg) U.S: Homebuilder sentiment rose for first time in five months as prospective buyers returned to the market and sales climbed. The National Association of Home Builders/Wells Fargo sentiment gauge increased to 56, the highest since January, from a revised 52 in the previous month, the Washington-based group reported. Readings above 50 mean more respondents said conditions were good. (Source: Bloomberg) E.U: ECB keeps rates on hold as Draghi assurance on QE path awaited. The European Central Bank kept interest rates unchanged at record lows as it focuses on a bond-buying program to bolster the improving euro-area economy. The 25-member Governing Council left the main refinancing rate at 0.05%. The deposit rate and the marginal lending rate stayed at minus 0.2% and 0.3%, respectively. Almost six weeks into its EUR 1.1tr (USD 1.2tr) quantitative-easing plan, the ECB is claiming some early successes as the economy picks up and lending recovers. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,840.1 (1.4) (0.1) JCI 5,414.5 26.7 (0.6) STI 3,540.0 11.8 1.6 SET 1,547.8 19.2 0.0 HSI 27,618.8 18.5 (1.4) KOSPI 2,120.0 5.4 1.0 TWSE 9,540.1 10.8 (1.3) DJIA 18,112.6 9.3 0.8 S&P 2,106.6 14.0 0.7 FTSE 7,096.8 5.2 0.5 MYR/USD 3.706 13.1 (0.1) CPO (1mth) 2,150.0 (18.2) 1.2 Crude Oil (1mth) 56.4 (42.7) 8.6 Gold 1,202.6 0.1 0.3 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.40 16.00 Sime Darby 9.22 10.20 Genting Malaysia 4.55 4.60 Gamuda 5.16 6.00 Westport 4.12 4.50 SP Setia 3.46 4.07 AFG 4.74 5.30 Hartalega 8.25 8.50 Inari 3.43 3.95 MBM Resources 3.40 4.20 Vitrox 3.59 4.05