Malaysia Daily, Maybank KE (2015-06-11)

Daily 11 June 2015 REGIONAL SECTOR UPDATE Regional Gaming: Maintain Neutral Will MERS break the camel�s back? MERS outbreak in S.Korea. Similar to SARS as it is moderately contagious and highly fatal. Losers are S.Korean and Philippine (to a lesser extent) casino operators. Marginal winners are Macau casino operators. All will lose if MERS spreads across Asia. Maintain NEUTRAL. No change in calls and TPs yet. Our only two BUY calls are GENM and Travellers. Click here for full report » Regional Plantations: Maintain Neutral Surprisingly strong May CPO output Record CPO production in May 2015, which offset a rebound in exports, led to higher Malaysian palm oil stockpile. El Nino worries and improved CPO price competitiveness vis-�-vis soyoil will sustain near term demand of palm oil. No change in forecasts, calls. Still NEUTRAL on the sector. Click here for full report » Technicals A low volume weak rebound The FBMKLCI advanced 6.58 points to 1,735.63 yesterday, while the FBMEMAS and FBM100 also closed higher by 28.50 points and 29.43 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a Take Profit call on IFCAMSC with downside target areas at MYR1.14 & MYR1.07. Click here for full report » Other Local News Bina Puri: Eyes LRT3, MRT2 infrastructure packages. The construction company is expecting to submit the papers for the tender process next year. Previously, Bina Puri had tendered for infrastructure on MRT1, but was not short-listed as the company was busy with other projects then, such as the low-cost carrier terminal klia2. Currently, Bina Puri�s construction division contributes to 80% of its total revenue. The company aims to reduce its dependence on the construction division by beefing up its property development division. (Source: The Edge Financial Daily) Matrix Concepts: Invites investments in Sendayan parks. Negeri Sembilan's Matrix Concepts Holdings hopes more investors will set up manufacturing facilities at its Sendayan TechValley (STV) and Sendayan TechPark (STP) high-tech industrial parks in Seremban. Both STV adn STP have a collective GDV od MYR550m comprising of 125.55ha of net saleable industrial land. The company had attracted MYR4b worth of foreign direct investments (FDIs) since 2010 and expects the amount to rise over time. "We want to attract more local and foreign corporations to invest in our industrial properties". (Source: New Straits Times) Zecon: To develop UTM centre. Zecon is set to invest MYR250m to develop Koperasi Universiti Teknologi Malaysia (UTM) commercial centre along the Skudai-Pontian highway and next to Taman Desa Skudai. The project is expected to be completed in five to 10 years. The 1.626ha development comprises a 373-room four-star hotel, 330 units of serviced apartments, commercial space and a car park for 800 vehicles. The construction company will be financed via internally generated funds and bank loans. (Source: New Straits Times) Daya Materials: Faces massive dilution. Daya Materials (DMB) shareholders will see a massive dilution on shareholding and earnings per share (EPS) following a bond conversion that results in issuing 840 million new shares, which is equivalent to half of the company's existing share capital. Bursa Malaysia had approved the issue of new shares. The convertible bonds were issued to Siem Offshore Rederi AS (Sora), which sold an offshore subsea construction vessel, Siem Daya 1 (SD1) to DMB, as payment settlement. (Source: The Edge Financial Daily) Outside Malaysia U.S: Wages increased in first quarter by most since 2006, indicating American companies are having to offer bigger paychecks to attract skilled workers. The Labor Department's Employer Costs for Employee Compensation report showed average pay for all civilian workers climbed 4.2% YoY to USD 22.88 an hour. That compares with a 4% YoY gain in the fourth quarter and is the strongest since July-September 2006. (Source: Bloomberg) Germany: Said to consider offering Tsipras staggered deal on aid. Chancellor Angela Merkel's government may be satisfied with Greece committing to at least one economic reform sought by creditors to open the door to bailout funds, according to two people familiar with Germany's position. While the Germans still insist on a package of steps that includes higher taxes, state asset sales and less generous retirement benefits, they may settle for a clear commitment by the Greek government to a measure up front to unlock aid, said the people, who asked not to be identified discussing the government's negotiating stance. (Source: Bloomberg) U.K: Industrial output in April rises more than forecast on oil surge. Manufacturing unexpectedly contracted amid a decline in pharmaceuticals. Total production increased 0.4% MoM from March, the Office for National Statistics said.. Oil and gas extraction jumped 8.7%, the biggest increase in more than a year. Factory output fell 0.4%. (Source: Bloomberg) Thailand: Central bank held its benchmark interest rate after the government signaled borrowing costs may be low enough following two unexpected cuts.The Bank of Thailand held its one-day bond repurchase rate at 1.5%, with monetary policy committee members voting unanimously in favor, it said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,735.6 (1.5) 0.4 JCI 4,933.6 (5.6) 0.7 STI 3,325.8 (1.2) 0.9 SET 1,504.0 0.4 0.8 HSI 26,687.6 13.1 (1.1) KOSPI 2,051.3 7.1 (0.6) TWSE 9,298.5 (0.1) 1.2 DJIA 18,000.4 1.0 1.3 S&P 2,105.2 2.2 1.2 FTSE 6,830.3 4.0 1.1 MYR/USD 3.734 6.8 (0.5) CPO (1mth) 2,279.0 (0.5) (1.1) Crude Oil (1mth) 61.4 15.3 2.1 Gold 1,186.2 0.2 0.4 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 13.30 16.00 Axiata 6.46 7.60 Genting Malaysia 4.20 4.60 Gamuda 4.98 6.00 SP Setia 3.36 4.07 MBM Resources 3.51 4.20 Inari Amertron 3.49 4.05 Vitrox 3.48 4.05