Malaysia Daily, Maybank KE (2015-06-15)

Daily 15 June 2015 COMPANY UPDATE Felda Global Ventures: Maintain Hold A puzzling deal  Shariah-compliant FGV�s proposed acquisition of a 37% non-controlling stake in Eagle High for USD680m is expensive at ~USD17,400/ha. We make no change to our earnings forecasts, imputing the possibility that the deal will not go through. Maintain HOLD with an unchanged TP of MYR1.94 on 16x 2016 PER peg. But expect some short term selling pressure. Click here for full report » Technicals Index is trending down clearly The FBMKLCI inched down by 0.39 points to 1,734.37 last Friday, while the FBMEMAS and FBM100 closed higher by 6.73 points and 8.75 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a SMRT with downside target areas at MYR0.36 & MYR0.29. Click here for full report » Other Local News Oil & Gas: Petronas goes ahead with Canada project. A Petroliam Nasional (Petronas)-led group of companies elected to proceed worth a CAD36b (MYR109.6b) natural gas shipping project on Canada's Pacific Coast with conditions, marking the first investment decision in the nascent industry. The liquefied natural gas (LNG) project still needs British Columbia lawmakers to endorse a deal on royalties and taxes that government signed with Pacific NorthWest LNG, the developer. It also needs to pass a federal environmental review. (Source: New Straits Times) UEM: Eyes more highway jobs in Indonesia. UEM Group, the construction arm of Khazanah Nasional, plans to expand its highway concession business in Indonesia after winning President Joko "Jokowi" Widodo approval for completing the country's longest toll road project ahead of schedule. The 116.8km Cikopo-Palimanan stretch was open to traffic at midnight on Sunday. PT Lintas Marga Sedaya, in which UEM Group has 55% stake, is the concession holder for 35 years. The MYR3.53b project was awarded in 2006, but it took more than six years to complete land acquisitions and the required approvals before construction works started in 2013. (Source: The Star) Alam Maritim: To up vessel utilisation. Alam Maritim Resources, which is bidding for MYR2.5b to MYR3b worth of projects, is confident of increasing its vessel utilisation rate to 73% to 75% this year from 71% in 2014. "It's a marginal increase because our utilisation rate in 2014 was affected by the dry docking (overhaul) of 10 vessels and this year we have seven vessels to go so that would be another year of impact on our bottom-line." (Source: The Sun Daily) Tenaga Nasional: To buy RE from Comintel. Tenaga Nasional (TNB) has entered into a renewable energy power purchase agreement with Comintel Corp that will convert biomass (solid waste) into renewable energy and supply back to TNB for 16 years from May 31, 2015. TNB and Comintel's sub-subsidiary, Comintel Green Technologies Sdn Bhd (CGT), signed the agreement last Friday. "Barring any unforeseen circumstances, starting from the feed-in tariff commencement date, the annual revenue contribution is approximately MYR6.67m." (Source: The Sun Daily) Outside Malaysia U.S: Consumer sentiment climbed more than forecast in June as Americans were the most upbeat about their wage prospects in seven years. The University of Michigan preliminary consumer sentiment index increased to 94.6, topping all estimates in a Bloomberg survey of economists, from a final reading of 90.7 in May that was the lowest in six months. Consistent labor-market improvement has helped buoy consumers' attitudes even as costs at the gas pump rise from the cheapest rates since 2009. Further job gains and bigger paychecks should brighten moods and help underpin the household spending that makes up the largest part of the economy. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,734.4 (1.5) (0.0) JCI 4,935.8 (5.6) 0.1 STI 3,353.9 (0.3) 0.2 SET 1,508.2 0.7 (0.4) HSI 27,280.5 15.6 1.4 KOSPI 2,052.2 7.1 (0.2) TWSE 9,301.9 (0.1) (0.0) DJIA 17,898.8 0.4 (0.8) S&P 2,094.1 1.7 (0.7) FTSE 6,784.9 3.3 (0.9) MYR/USD 3.761 7.5 0.4 CPO (1mth) 2,254.0 (1.6) (0.9) Crude Oil (1mth) 60.0 12.6 (1.3) Gold 1,181.6 (0.2) 0.2 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 13.24 16.00 Axiata 6.44 7.60 Genting Malaysia 4.24 4.60 Gamuda 5.00 6.00 SP Setia 3.33 4.07 MBM Resources 3.50 4.20 Inari Amertron 3.45 4.05 Vitrox 3.50 4.05