Malaysia Daily, Maybank KE (2015-04-17)

Daily 17 April 2015 COMPANY UPDATE UMW Oil & Gas: Downgrade Hold Limited upside; D/G to HOLD  Shariah-compliant A lessee's market for the next 12-18 months - challenging. Cut 2015 net profit by 20% on lower operating days and DCRs for the 5 jack-up rigs (JUs); consensus overly optimistic. SOP-based TP trimmed to MYR2.55 (-2%). D/G to HOLD. Click here for full report » Eco World Development: Maintain Hold Strengthening foothold in the north  Shariah-compliant Emerging as one of the largest land owners in Batu Kawan; we are positive, in anticipation of a boom there. Estimated RNAV enhancement of 16sen/share and net profit contribution of MYR113m p.a. from FY18 or FY19 onwards. Maintain FY15/16/17 earnings forecasts for now. HOLD with an unchanged TP of MYR1.84 (0.73x P/RNAV). Click here for full report » Technicals Range bound, albeit with an upward bias The FBMKLCI advanced 7.81 points to 1,847.94 yesterday, while the FBMEMAS and FBM100 also closed higher by 64.24 points and 61.80 points, respectively. We recommend a �Nibble on Dips� stance for the index. Trading idea is a Short-Term Buy on GTRONIC with upside target areas at MYR6.30 & MYR7.00. Stop loss is at MYR5.44. Click here for full report » Other Local News Oil and Gas: Petronas' new appointment. Petroliam Nasional (Petronas) has appointed Md Arif Mahmood as executive vice-president and chief executive officer of its downstream business effective since yesterday. He takes over the post previously held by Datuk Wan Zulkiflee, who is Petronas president and group CEO. Meanwhile, Adif Zulkifli has been promoted to Md Arif�s former post. (Source: The Star) MRCB: Wins MYR1.25b KVDT job. Malaysia Resources Corp (MRCB) has won a MYR1.25b job for phase 1 of the Klang Valley Double Track (KVDT) rehabilitation project. MRCB will partner little known DMIA Sdn Bhd to rehabilitate the 40km stretch from Rawang to Salak South in Sungai Besi. MRCB had entered into a share-swap agreement with DMIA on April 1, where it will transfer to the latter its 100 per cent equity in Lotus Terrain Sdn Bhd, which will undertake the construction work of the KVDT rehabilitation project. The Rawang-Salak South rehabilitation work is expected to be completed over three years. (Source: New Straits Times) RHBCap: To sell insurance arm? RHBCap, which is undertaking a major corporate restructuring, may dispose of or reduce its interest in its insurance arm, RHB Insurance, to further unlock value in the group. The insurance arm contributed only 3% of the group's earnings. The disposal of the insurance arm will facilitate profit growth and better drive capital and tax efficiency moving forward. RHBCap would undertake a reorganization exercise with its banking arm RHB Bank acquiring from the former its entire equity interest in RHB Investment Bank, RHB Insurance and the assets and liabilities of the operating subsidiaries of the group. The total disposal consideration would be determined later. (Source: The Star) Outside Malaysia U.S: Jobless claims hold below 300,000 for sixth week. The Labor Department report showed jobless claims increased by 12,000 to 294,000 in the week ended April 11. (Source: Bloomberg) U.S: Small home starts gain shows lack of U.S. construction vigor. Housing starts rose less than forecast in March from the weakest pace in more than a year, underscoring a lack of vigor in homebuilding that held back the U.S. economy. Work began on 926,000 houses at an annualized rate, up 2% from February when bad winter weather prompted a 15.3% plunge, figures from the Commerce Department in Washington showed. Starts were less than the most pessimistic estimate in a Bloomberg survey of economists and reflected slowdowns in the West and South. (Source: Bloomberg) Asia: Rush to China's bank pushes U.S., Japan to speed trade talks. China's success in lining up 57 countries for a new infrastructure bank is piling pressure on the U.S. and Japan to advance a Pacific trade deal seen as critical for the allies to remain a center of gravity in Asia. U.S. and Japan negotiators huddled in Tokyo this week, aiming to reach agreement on their portion of the 12-member Trans Pacific Partnership before Prime Minister Shinzo Abe meets President Barack Obama late this month. TPP's prospective members, which don�t include China, have missed a series of deadlines since the U.S. announced its participation in 2009. (Source: Bloomberg) Australia: Jobless rate unexpectedly fell in March. Unemployment dropped to 6.1% from a revised 6.2% in February, as the number of people employed rose 37,700, the statistics bureau said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,847.9 (1.0) 0.5 JCI 5,420.7 26.8 0.0 STI 3,531.6 11.5 0.3 SET 1,570.0 20.9 1.4 HSI 27,739.7 19.0 0.6 KOSPI 2,139.9 6.4 1.3 TWSE 9,656.9 12.1 0.2 DJIA 18,105.8 9.2 0.4 S&P 2,105.0 13.9 0.4 FTSE 7,060.5 4.6 (0.2) MYR/USD 3.654 11.5 (1.3) CPO (1mth) 2,173.0 (17.3) 1.2 Crude Oil (1mth) 56.7 (42.4) 6.4 Gold 1,198.6 (0.3) 0.5 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.54 16.00 Sime Darby 9.27 10.20 Genting Malaysia 4.59 4.60 Gamuda 5.24 6.00 Westport 4.14 4.50 SP Setia 3.47 4.07 AFG 4.78 5.30 Hartalega 8.35 8.50 Inari 3.46 3.95 MBM Resources 3.39 4.20 Vitrox 3.57 4.05 Axiata 7.02 7.60