Malaysia Daily, Maybank KE (2015-06-10)

Daily 10 June 2015 COMPANY UPDATE 7-Eleven Malaysia Holdings: Maintain Hold Fair for now 1Q15 SSSG was 2.4% versus 4.7% in FY14; pipeline expansion on track. We remain cautious on SEM�s near-term earnings outlook, given slower consumer spending post GST. Maintain earnings forecasts and HOLD call with an unchanged TP of MYR1.70. Click here for full report » Gas Malaysia: Maintain Hold A surprise hike, spreads unclear  Shariah-compliant Selling price of gas to increase by 10.3% effective 1 Jul 2015; no details on its cost of gas revealed. Our forecasts are unchanged pending further disclosure from the company on the cost front. Maintain HOLD with an unchanged TP of MYR3.00. Click here for full report » RESULTS PREVIEW SP Setia: Maintain Buy Lumpy recognition in 2Q  Shariah-compliant 2QFY10/15 should see lumpy earnings recognition from its Australia project; in line. FY15 locked-in sales fell short, but unbilled sales remain strong at MYR11.8b. Maintain earnings forecasts, MYR4.07 TP and BUY call. Click here for full report » SECTOR UPDATE Malaysia Gloves Sector: Maintain Overweight Muted impact from gas hike Gas price to increase average 10.3% effective 1 Jul 2015. Muted impact to earnings as gas only accounts for 5-9% of total cost. Maintain earnings forecasts. Maintain OVERWEIGHT on the sector. Top pick is Top Glove, as a laggard play with relatively lower CY16 PE of 15.8x. Click here for full report » Technicals Foreign selling continues The FBMKLCI tumbled 10.40 points to 1,729.05 yesterday, while the FBMEMAS and FBM100 also closed lower by 74.20 points and 71.59 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a Take profit call on GLOMAC with downside target areas at MYR0.80 & MYR0.65. Click here for full report » Other Local News Tanjung Offshore: Bags Petronas job. Tanjung Offshore's unit, Tanjung Offshore Services Sdn Bhd, has secured a MYR250m contract to provide topside maintenance to Petronal Carigali Sdn Bhd's platforms in Sarawak. The contract is for two years with an option to extend for another year. The contract would benefit the company in the near term as the cost for such maintenance had little bearing to global oil prices. (Source: New Straits Times) Bina Darulaman: Bags MYR209.9m Kedah road maintenance job. Property developer and construction firm Bina Darulaman announced that its wholly-owned unit BDB Infrastructure Sdn Bhd has accepted a MYR209.9m contract from Public Works Department of Kedah to maintain state roads in 10 districts in Kedah for three years, starting from today. The contract require the company to maintain the roads in the district of Kota Setar, Padang Terap, Kuala Muda, Sik, Kubang Pasu, Kulim Bandar Baharu, Pendang, Yan and Baling. (Source: The Edge Financial Daily) Malton: To launch Bukit Jalil City serviced apartments. Malton, best known for its Pavilion Kuala Lumpur development, will launch 500 units of serviced apartments within its MYR3.5b Bukit Jalil City project in the next two weeks. Prices will start from MYR775per sq ft. Called "The Park Sky Residence", the serviced apartments are part of Phase 2 of the Bukit Jalil City project, which is a joint venture development with Ho Hup Construction Co on a 50-acre (20.2ha) tract of land. The Park Sky Residence comprises a total of four blocks of serviced apartments, housing 1,098 units. (Source: The Edge Financial Daily) Outside Malaysia U.S: Job openings in April outpace hiring for first time on record. A record number of help-wanted pushed job openings above hires for the first time ever, signaling wage pressures will be on the horizon. The number of private-industry positions waiting to be filled jumped to 4.89 million, the most in data back to December 2000, from 4.63 million in March, the Labor Department reported. That outpaced the number of workers hired, which dropped to 4.67 million from 4.76 million. (Source: Bloomberg) E.U: 1Q 2015 growth in the euro area was driven by exports and private consumption. Gross domestic product rose 0.4% in the three months through March after expanding a revised 0.4% in the previous three months, the European Union's statistics office said, confirming a May 13 estimate. Household consumption increased 0.5%, investment climbed 0.8% and exports were up 0.6%. (Source: Bloomberg) China: Consumer prices rose at a slower pace in May and factory-gate deflation extended a record stretch of declines, underscoring tepid demand at home and abroad. The consumer-price index increased 1.2% YoY last month, according to China's National Bureau of Statistics. That compared with the 1.5% YoY increase in April. The producer-price index fell 4.6% YoY, extending declines of more than three years. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,729.1 (1.8) (0.6) JCI 4,899.9 (6.3) (2.3) STI 3,295.1 (2.1) (0.8) SET 1,492.3 (0.4) (1.1) HSI 26,989.5 14.3 (1.2) KOSPI 2,064.0 7.7 (0.1) TWSE 9,191.9 (1.2) (1.9) DJIA 17,764.0 (0.3) (0.0) S&P 2,080.2 1.0 0.0 FTSE 6,753.8 2.9 (0.5) MYR/USD 3.753 7.3 (0.5) CPO (1mth) 2,305.0 0.6 (0.6) Crude Oil (1mth) 60.1 12.9 3.4 Gold 1,176.8 (0.6) 0.2 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 13.20 16.00 Axiata 6.44 7.60 Genting Malaysia 4.22 4.60 Gamuda 4.90 6.00 SP Setia 3.35 4.07 MBM Resources 3.48 4.20 Inari Amertron 3.44 4.05 Vitrox 3.48 4.05