Malaysia Daily, Maybank KE (2015-05-15)

Daily 15 May 2015 RESULTS REVIEW IOI Corporation: Maintain Hold Worst quarter in years, hit by forex  Shariah-compliant 3QFY6/15 hit by huge forex translation losses. Forex aside, core net profit of MYR145m disappointed on low output, ASP. While we expect a recovery in 4QFY6/15, we cut FY6/15 core net profit by 13% on lower FFB output and CPO ASP. Limited catalyst. HOLD with a lower TP of MYR3.85. May face selling pressure if it drops off SC Shariah list at month end. Click here for full report » Inari Amertron: Maintain Buy Small blip, as expected  Shariah-compliant 3QFY6/15 earnings down QoQ, but within our expectation, beat street�s. Catalysts: Stronger orders for RF related products and new product outsourcing, both from Avago group of companies. Reiterate BUY with unchanged MYR4.05 TP (16x CY16 PER). Click here for full report » Media Prima: Maintain Hold Challenging start to the year 1Q15 results were below expectations. Weak performance in all business segments. HOLD call and MYR1.90 TP on 1.3x FY15 P/BV under review. Click here for full report » UMW Oil & Gas: Downgrade to Sell Below expectations;D/G to SELL  Shariah-compliant 1Q15 results a negative surprise; likely to see a short-term knee-jerk reaction. Rough prospects ahead. Cut FY15/16/17 earnings forecasts by 23%/21%/21%, on lower DCR expectations and utilisation overall. Downgrade to SELL; cut TP to MYR1.85 on a 10% discount to replacement value (previously on a 10% discount to SOP. Click here for full report » REGIONAL COMPANY UPDATE Singapore Airlines: Maintain Hold FY15 below, but showing potential FY14 below ours as associates disappointed. Management sounds cautious ― as always, but we think FY16 outlook is much better than previous years. Maintain HOLD with unchanged target price of SGD12, pending analyst briefing later today. Click here for full report » Technicals Creeping up ahead of the weekend The FBMKLCI gained 4.53 points to 1,807.55 yesterday, while the FBMEMAS and FBM100 also closed higher by 26.06 points and 25.36 points, respectively. We recommend a �Range Trading� stance for the index. Trading idea is a Short-term buy on EATECH with upside target areas at MYR1.07 & MYR1.33. Stop loss is at MYR0.87. Click here for full report » Other Local News Construction: Prasarana wins 2nd Mecca metro job. Prasarana Malaysia, the owner and operator of the country's public transport system, has won a three-year contract to manage the Mecca metro system in Saudi Arabia. Prasarana will handle the operations and maintenance of the Al Mashaaer Al Mugaddasah Metro Line, which forms part of the Mecca Metro that operates during the haj season. (Source: The New Straits Times) Cliq Energy: Extends time for Kazakhstan acquisition. Cliq Energy and vendor Phystech Firm LLP have mutually agrees a one month extension for Phystech to execute the business transfer agreement (BTA) between itself and the special purpose vehicle (SPV) to transfer its assets for the production of hydrocardons at oilfield blocks at the Karazhanbas Northern Deposit in the Kazakhstan, contractual obligations and certain existing employees to the SPV. (Source: The Sun Daily) Zelan: Eyes more Pengerang jobs. MMC Corp's 39.25%-owned Zelan, which has yet to secure any projects this year, is actively participating in tenders for local construction projects, including those for the Pengerang Integrated Petroleum Complex (PIPC) project in Pengerang, Johor. Zelan's order book currently stands at MYR1.1b, which should last the group until 2017 said managing director Adnan Mohammad. (Source: The Edge Financial Daily) Outside Malaysia U.S: Jobless claims fall as 4-week average at 15-year low. Fewer Americans filed applications for unemployment benefits last week, pushing the average over the past month to the lowest level in 15 years and underscoring labor-market strength. Jobless claims decreased by 1,000 to 264,000 in the seven days ended May 9, a Labor Department report showed. The four-week average, a less- volatile measure, was the lowest since April 2000. (Source: Bloomberg) U.S: Wholesale prices showed broad-based retreat in April, indicating inflation is well-contained as Federal Reserve officials weigh when to raise the benchmark interest rate. The 0.4% drop in the producer-price index followed a 0.2% gain in March that was the first increase in five months, a Labor Department report showed. Over the past 12 months, wholesale prices fell 1.3%, the most in records dating back to 2010. (Source: Bloomberg) Germany: Economy slowed more than forecast at the start of the year as domestic demand struggled to make up for a drag from trade, while France benefited from a cyclical recovery. German GDP rose 0.3% QoQ in the first quarter after expanding 0.7% QoQ in the previous three months. (Source: Bloomberg) Philippines: Held its benchmark interest rate for a fifth straight meeting as the prospect of faster economic growth this year reduces the need for monetary stimulus. Bangko Sentral ng Pilipinas kept the rate it pays lenders for overnight deposits at 4%, it said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,807.6 2.6 0.3 JCI 5,246.1 0.4 0.0 STI 3,455.8 2.7 0.1 SET 1,497.4 (0.0) 0.1 HSI 27,286.6 15.6 0.1 KOSPI 2,120.3 10.7 0.3 TWSE 9,610.8 3.3 (1.2) DJIA 18,252.2 2.4 1.1 S&P 2,121.1 3.0 1.1 FTSE 6,973.0 6.2 0.3 MYR/USD 3.581 2.4 (0.4) CPO (1mth) 2,199.0 (4.0) 0.4 Crude Oil (1mth) 59.9 12.4 (1.0) Gold 1,219.1 2.9 2.1 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 13.88 16.00 Sime Darby 9.02 10.20 Genting Malaysia 4.32 4.60 Gamuda 5.21 6.00 SP Setia 3.44 4.07 AFG 4.80 5.30 Inari 3.32 3.95 MBM Resources 3.40 4.20 Vitrox 3.62 4.05 Axiata 6.79 7.60