Malaysia Daily, Maybank KE (2015-05-19)

Daily 19 May 2015 COMPANY UPDATE BIMB Holdings: Upgrade To Buy Higher value for STMB, U/G to BUY  Shariah-compliant Attaching a higher FV to STMB (STMB MK, Not Rated) of MYR17.80, assuming 4.5% dividend yield target. This raises our SOP for BIMB to MYR4.70 from MYR4.40, even after lowering target P/BV for Bank Islam to 1.7x from 1.8x (supported by ROE of 14%). Upgrade BIMB to BUY (20% upside). As one of only two Shariah compliant FIs, there is scarcity value. Click here for full report » Padini: Downgrade To Hold Biting the (GST) bullet; D/G HOLD  Shariah-compliant Padini faces risk of lower profits as it is absorbing the entire GST while maintaining product prices. We lower FY15-17 EPS by 4-15% on weaker margins from GST impact and additional promotional activities. Downgrade to HOLD (from BUY) with a lower MYR1.35 TP (-45sen) in view of the challenging retail market. Click here for full report » SECTOR UPDATE Malaysia Property: NEUTRAL Post-GST survey Cautious buying mood prevails. Policy easing unlikely. Financing remains as the key issue. The sector lacks of strong re-rating catalysts. Maintain NEUTRAL, only BUY is SP Setia (SPSB). Click here for full report » RESULTS REVIEW Cahya Mata Sarawak: Maintain Buy 1Q15: Solid growth  Shariah-compliant 1Q15 results, with strong 48% YoY growth, were in line. Will continue to ride on robust construction activities in Sarawak Earnings forecasts unchanged, but BUY call/TP under review. Click here for full report » ECONOMICS Singapore Exports, Apr '15 Up but expect volatility ahead NODX growth normalized in Apr 2015 after a volatile 1Q 2015 But fall in Non-Oil Re-Exports (NORX) amid lower NODX to major markets like US and China hint at volatile trade numbers ahead No change in our full-year NODX growth forecast of 2%-3% (2014: -0.7%) Click here for full report » Technicals A strong late afternoon surge The FBMKLCI gained 11.58 points to 1,823.50 yesterday, while the FBMEMAS and FBM100 also closed higher by 77.77 points and 78.94 points, respectively. In terms of market breadth, the gainer-to-loser ratio was 465-to-342 while 301 counters were unchanged. A total of 2.20b shares were traded valued at MYR1.78b. Our short-term buy pick is EWEIN with upside targets of MYR0.78 and MYR0.955 as well as clear upward target areas of MYR1.01, MYR1.15 and MYR1.34. Stop-loss is at MYR0.76. Click here for full report » Other Local News Oil&Gas: Petronas Rapid project start-up in mid-2019. Petroliam Nasional USD16b (MYR57b) Refinery and Petrochemicals Integrated Development (Rapid) project in Pengerang, Johor, will be delayed by about six months from the anticipated start-up of early 2019. Its president and chief executive officer Datuk Wan Zulkiflee Wan Ariffin said the refining and petrochemical complex will see its start-up mid-2019. �We have awarded all the infrastructure and the refinery contracts to reputable engineering, procurement and construction (EPC) contractors, however, have yet to be fully awarded although the cracker package has been given out� said Wan Zulkiflee. (Source: The New Straits Times) Maybank: Hives off PNG operations for MYR418m. Malayan Banking (Maybank) is exiting Papua New Guinea (PNG) by hiving off its entire equity stake in Maybank (PNG) Ltd (MPNG) and Maybank Property (PNG) Ltd to Kina Ventures Ltd for MYR418m. Maybank president and chief executive officer Datuk Abdul Farid Alias said the decision to dispose of its PNG operations was a result of regular strategic reviews to �re-prioritise� its capital and resources, with the intention of focusing its growth agenda on target regions where it can achieve the best returns from its investments. (Source: The Edge Financial Daily). QL Resources: Blocks dilution of stake in Lay Hong. QL Resources successfully defended its shareholding in Lay Hong from being diluted by blocking resolutions to grant share issuance scheme (SIS) options to Lay Hong�s executive directors at the latter�s extraordinary general meeting yesterday. Lay Hong managing director Yap Hoong Chai and three executive directors Yeap Weng Hong, Yap Chor How, and Yeap Fock Hoong who had to abstain from voting, were all denied the SIS options during the meeting. (Source: The Edge Financial Daily) Outside Malaysia U.S: Confidence among homebuilders unexpectedly fell in May, reflecting cooling sales and slower buyer traffic, a sign the residential real-estate market will take time to gain momentum. The National Association of Home Builders/Wells Fargo sentiment gauge dropped to 54 this month from 56 in April, figures from the Washington-based group showed. Readings greater than 50 mean more respondents report good market conditions. (Source: Bloomberg) U.K: Asking prices for London homes fell the most in nine months in May as concern about potential property-tax changes before the election cooled demand. Prices dropped 2.3% from April - led by top-priced Kensington and Chelsea -- and were up 1.5% YoY, property website operator Rightmove said. That's the smallest annual gain in more than four years. Nationally, prices slipped 0.1%, the first decline in a May since the last general election in 2010. (Source: Bloomberg) China: Home prices dropped in fewer cities last month as demand got a boost from the removal of property curbs and three interest-rate cuts since November. New-home prices fell in 47 of the 70 cities tracked by the government from a month earlier, the National Bureau of Statistics said, compared with declines in 49 in March. Prices rose in 18 cities, including Beijing and Shanghai, six more than last month, and were unchanged in five, according to the statement on the website. (Source: Bloomberg) Crude Oil: Saudi March oil exports reach 9-year high in market push. Saudi Arabia shipped more crude in March than in any month since November 2005 as the world's biggest oil exporter battled for market share amid a global glut. The kingdom exported 7.9 million barrels a day of crude, up 548,000 barrels a day from February, according to figures published Monday on the website of the Joint Organisations Data Initiative. Iraq, the largest producer in OPEC after Saudi Arabia, shipped 2.98 million barrels a day in March, the most since at least January 2007 when it began submitting data to the initiative known as JODI. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,823.5 3.5 0.6 JCI 5,237.8 0.2 0.2 STI 3,459.6 2.8 (0.1) SET 1,510.4 0.9 (0.1) HSI 27,591.3 16.9 (0.8) KOSPI 2,113.7 10.3 0.3 TWSE 9,606.1 3.2 0.3 DJIA 18,298.9 2.7 0.1 S&P 2,129.2 3.4 0.3 FTSE 6,968.9 6.1 0.1 MYR/USD 3.569 2.0 0.1 CPO (1mth) 2,189.0 (4.5) (0.5) Crude Oil (1mth) 59.4 11.6 (0.4) Gold 1,225.5 3.5 0.1 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.30 16.00 Sime Darby 8.99 10.20 Genting Malaysia 4.26 4.60 Gamuda 5.21 6.00 SP Setia 3.46 4.07 AFG 4.78 5.30 Inari 3.51 3.95 MBM Resources 3.45 4.20 Vitrox 3.60 4.05 Axiata 6.75 7.60