REGIONAL SECTOR UPDATE
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Regional Plantations: Maintain Neutral
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El
Ni�o is back.
This time for real!
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- ABM
declared an imminent return of El Nino. Market sentiment should
turn positive with this confirmation.
- Conversely,
the present ample supply of soybean will water down overall
optimism unless weather impacts major soybean producing nations
as well.
- Maintain
NEUTRAL on the sector from a valuation perspective. But
Indonesia and Singapore stocks still provide good trading
opportunities after recent price corrections.
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ECONOMICS
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Index of Services
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Pre-GST
pick up
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- Index
of Services (IOS) rose by +7.1% YoY in 1Q 2015 (4Q 2014: +6.8%
YoY).
- Pre-GST
boosts to services activities like distributive trade,
professional services, and computer & information services.
- We
estimated 1Q 2015 real GDP growth of +6.2% YoY (4Q 2014: +5.8%
YoY).
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RESULTS REVIEW
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Petronas Gas: Maintain Hold
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Margin
boost Shariah-compliant
|
- 1Q15
net profit was ahead of expectations as margins expanded across
all segments.
- 14sen
DPS declared, thus maintaining recent practice of paying out
dividends on a quarterly basis.
- Maintain
HOLD, TP unchanged at MYR24.00; PTG remains a stock with a very
stable earnings profile.
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Dialog Group: Maintain Buy
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In
line; Pengerang to drive growth Shariah-compliant
|
- Stronger
QoQ performance, associates turn around.
- Pengerang
operations (oil, product, LNG terminals, regas plant) to drive
long-term growth.
- Reiterate
BUY and MYR1.90 TP (SOP-based).
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REGIONAL COMPANY UPDATE
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Bumitama Agri: Maintain Buy
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Low
CPO ASPs, weak FFB growth
|
- 1Q core
below on lower-than-expected CPO ASPs & FFB production &
associate losses.
- Expect
strong FFB output in 2H15. Cut EPS by 4-7% for Indonesia�s new
export levy.
- Maintain
BUY with lower SGD1.14 TP from SGD1.30 on unchanged 13x FY16
EPS. Catalysts from FFB output growth.
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MARKET STRATEGY
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Malaysia Strategy: Maintain Neutral
|
FBM
KLCI 30 review
|
- Felda
Global is likely to be out, Westports to feature.
- Negligible
rises in weightings of the other constituent stocks.
- No
change to our stock calls on this matter.
|
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Technicals
|
Broke
critical support at 1,800 level
The FBMKLCI declined 6.88 points to 1,798.61 yesterday, while the
FBMEMAS and FBM100 also closed lower by 45.10 points and 41.38
points, respectively. We expect some very weak buying at the supports
of 1,774 to 1,790, whilst heavy liquidation activities will cap
rebounds at the resistances of 1,798 and 1,824.
Trading idea is a Take profit call on TEOSENG with retracement target
areas at MYR1.61 & MYR1.47.
Click here for full report »
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Other Local News
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Construction:
PDP for LRT3 to be unveiled in July. The Project
Delivery Partner (PDP) for the MYR9b light rail transit 3 (LRT3) will
be unveiled by the first week of July, said Prasarana Malaysia group
managing director Azmi Abdul Aziz. "So far, seven copies of the
application documents were taken up. The deadline for the PDP
submission is 12 noon on June 9. From then, we�ll been a
month to evaluate the submissions. We'll announce the successful PDP
for LRT3 by the first week of July, he said". (Source: The New
Straits Times)
Tenaga: Discussing with 1MDB on stake in Project 3B. Tenaga
Nasional is in discussion with 1Malaysia Development (1MDB) over
acquiring the biggest equity in the 2,000MW coal-fired power plant
known as Project 3B. Energy, Green Technology and Water Minister
Datuk Seri Maximus Ongkili said the ministry was made aware of the
discussion, but no conclusion had been communicated to it thus far.
He said the plan is to take the biggest stake in the project, but
they are still in discussion. (Source: The Edge Financial Daily)
Aeon Credit: To raise up to MYR1b via sukuk. Aeon Credit
Service (M) plans to raise up to MYR1b via the issuance of sukuk to
repay debts, provide financing for its customers based on Islamic
principles, and for working capital. The Bursa Malaysia filing stated
that the utilization of the proceeds from the sukuk murabahah shall
at all times be shariah-compliant. (Source: The Edge Financial Daily)
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Outside Malaysia
|
U.S:
Record revenue boosts April budget surplus to 7-year high as hiring
improved during a month when Americans file tax returns. Revenue
exceeded spending by USD 156.7b last month, compared with a USD
106.9b surplus a year earlier, the Treasury Department said. (Source:
Bloomberg)
U.K: Industrial production rose the most since September as
oil and gas extraction surged and manufacturing increased for a
second month. Output gained 0.5% in March from the previous month,
the Office for National Statistics said. In the first quarter,
industrial output was revised to a 0.1% increase from a 0.1% decline,
though the ONS said the impact on GDP would be "minimal."
(Source: Bloomberg)
China: Adopted the IMF standards for its latest balance of
payments data as the nation seeks to obtain reserve-currency
status for the CNY. The changes, effective this year, include putting
reserve assets under the financial rather than the current account,
according to a statement posted on the State Administration of
Foreign Exchange website. With the adjustment, the country's
first-quarter current-account surplus of USD 78.9b is the same as the
deficit under the financial and capital heads. The authority didn't
give a reason for the shift. (Source: Bloomberg)
Japan: Current-Account surplus widens to biggest in seven years.
Japan's current-account surplus widened to the most since 2008 in
March, helped by an improvement in the trade balance and increased
income from overseas. Japan had a JPY 2.8tr (USD 23b) excess in its
broadest measure of trade, the finance ministry said. (Source:
Bloomberg)
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Key Indices
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Value
|
YTD
(%)
|
Daily
(%)
|
KLCI
|
1,798.6
|
2.1
|
(0.4)
|
JCI
|
5,205.6
|
(0.4)
|
0.6
|
STI
|
3,442.3
|
2.3
|
(0.8)
|
SET
|
1,485.7
|
(0.8)
|
(1.0)
|
HSI
|
27,407.2
|
16.1
|
(1.1)
|
KOSPI
|
2,096.8
|
9.5
|
(0.0)
|
TWSE
|
9,680.7
|
4.0
|
0.2
|
|
|
|
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DJIA
|
18,068.2
|
1.4
|
(0.2)
|
S&P
|
2,099.1
|
2.0
|
(0.3)
|
FTSE
|
6,933.8
|
5.6
|
(1.4)
|
|
|
|
|
MYR/USD
|
3.616
|
3.4
|
0.4
|
CPO (1mth)
|
2,201.0
|
(3.9)
|
1.1
|
Crude Oil (1mth)
|
60.8
|
14.0
|
2.5
|
Gold
|
1,193.9
|
0.8
|
0.8
|
|
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TOP STOCK PICKS
|
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Buy rated large caps
|
|
Price
|
Target
|
Tenaga Nasional
|
|
13.82
|
16.00
|
Sime Darby
|
|
8.95
|
10.20
|
Genting Malaysia
|
|
4.27
|
4.60
|
Gamuda
|
|
5.19
|
6.00
|
SP Setia
|
|
3.45
|
4.07
|
AFG
|
|
4.76
|
5.30
|
Inari
|
|
3.30
|
3.95
|
MBM Resources
|
|
3.40
|
4.20
|
Vitrox
|
|
3.65
|
4.05
|
Axiata
|
|
6.76
|
7.60
|
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