Malaysia Daily, Maybank KE (2015-06-17)

Daily 17 June 2015 RESULTS PREVIEW Top Glove: Maintain Buy Find safety here  Shariah-compliant Expect strong 3QFY8/15 results on higher sales volume. Positive operating environment to sustain earnings growth. Raising FY8/15-17 EPS by 12-14% and TP to MYR6.70 (+13%; 17x CY16 PER). Maintain BUY. Click here for full report » COMPANY UPDATE Boustead Plantations: Maintain Buy More disposals, higher DPS possible  Shariah-compliant Two more land disposals worth MYR94m send positive vibes as BPlant�s asset monetisation is likely a recurring feature. Upside to our 2015�s 4sen DPS. A 6sen DPS is possible with the disposals, translating to 4.5% net dividend yield. Maintain earnings forecasts for now. BUY with unchanged RNAV-TP of MYR1.65. Rich land value limits downside. Click here for full report » RESULTS REVIEW Astro Malaysia: Maintain Hold Results in line, operations weaker Earnings in line but operating numbers (i.e. subscribers, ARPU) were slightly weaker. Astro blames the 6% GST but believes it will not last long. Maintain estimates, HOLD call and MYR3.26 TP for now. Click here for full report » Technicals Sell the index on rebounds The FBMKLCI inched up by 0.08 points to 1,722.24 yesterday, while the FBMEMAS and FBM100 closed lower by 15.73 points and 15.14 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a Take Profit call on MUHIBAH with downside target areas at MYR2.16 & MYR1.91. Click here for full report » Other Local News Aviation: A380 leasing deal between MAS and Turkish carrier fails to materialise. Turkish Airlines has confirmed a StarBiz article last month that it did not enter any agreement to lease two A380s from Malaysia Airlines (MAS). In fact, it was not even keen on it. Turkish Airlines was not interested in leasing these superjumbos as it prioritised adding routes over raw capacity. (Source: The Star) SapuraKencana: Eyes MYR5b more jobs a year. SapuraKencana is looking at securing additional MYR5b worth of new jobs every year to sustain its growth. This is on top of the oil and gas (O&G) services provider's current order book of MYR25.1b, which provides about MYR5b worth of jobs annually. "We are now actively bidding for new projects worth MYR24b within and outside the country." SapuraKencana is believed to have secured a USD280m (MYR1.1b) job contract in India�s Mumbai recently, pushing the company closer to the MYR10b mark. (Source: New Straits Times) UEM Sunrise: Seeks London, Melbourne land to buffer Iskandar risk. UEM Sunrise wants to acquire land in the United Kingdom and Australia after a glut of high-rise homes in the southern region, where the Malaysian developer is the biggest land-owner, dents demand. UEM Sunrise plans to sell some plots in the 550,000-acre (222,577ha) Iskandar Malaysia in Johor to expand elsewhere. It is keen to start with small developments in London and will look for land in Melbourne. Malaysian developers are grappling with slow demand after the goods and services tax started in April, as well as tighter lending and government measures to cool the property market. (Source: The Edge Financial Daily) Mudajaya: Plans to sell power assets in India, Malaysia. Mudajaya Group, which is involved in construction, engineering and running power plants, is looking to dispose of its power generation assets � power plants in India and Malaysia. Mudajaya intends to focus on its construction and property development segments. Sources said Mudajaya was likely to be disposing of the 1,440MW coal-fired IPP project in India as the project had been facing a lot of delays. (Source: The Star) Brahim: To diversify business interests. Brahim's Holdings will reduce its revenue dependency from the airline catering business up to 50% within the next three years from over 90% of the company's topline. The company is aggressively pursuing non-airline catering business following the conclusion of the new agreement with Malaysia Airlines (MAS). "The agreement allows us to pursue non-airline catering business. This was not allowed previously." Brahim's is also in talks with a few other parties to expand its non-airline catering business, including acquiring a chain restaurant business. (Source: The Sun Daily) IJM: Unit gets extension on Kuantan Port concession. IJM Corp 60%-owned unit Kuantan Port Consortium Sdn Bhd (KPC) has been granted an extension on its concession to operate Kuantan Port, together with the development and operation of a new deep-water terminal (NDWT) adjacent to it. IJM said KPC has executed a new privatisation agreement with the government and Kuantan Port Authority for the concession, which will commence from June 1. (Source: The Edge Financial Daily) Outside Malaysia U.S: Builders started most homes in past two months since 2007. Housing starts totaled 1.04 million at an annualized rate following April's revised 1.17 million pace, capping the best back-to-back readings since the last two months of 2007, the Commerce Department reported. Permits for future projects climbed to the highest level in almost eight years, indicating activity might pick up. The data show the residential real estate market was sustaining gains after sporadic advances earlier in the year that reflected bad weather and a slump in overall U.S. growth. Hiring momentum and bigger paychecks amid still-cheap borrowing costs are brightening Americans' moods and could lift home purchases in the second half of 2015. (Source: Bloomberg) E.U: Car sales rose at the slowest pace in six months in May as buyers' concerns about unemployment and the Greek sovereign debt crisis held back demand at Volkswagen AG and Renault SA. Registrations increased 1.4% to 1.15 million vehicles from 1.14 million a year earlier, the Brussels-based European Automobile Manufacturers' Association, or ACEA, said. Five-month sales rose 6.7% to 6 million autos. (Source: Bloomberg) Germany: Investor confidence fell for a third month in a sign that risks from a Greek debt default to bond-market turbulence are stoking uncertainty in Europe's largest economy. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, slid to 31.5 in June from 41.9 in May. That's the lowest level since November. (Source: Bloomberg) U.K: Inflation rate rose back above zero in May, ending the economy's brush with deflation after just one month. Consumer prices rose an annual 0.1% after falling 0.1% in April, the Office for National Statistics said. Core inflation accelerated to 0.9% from 0.8%, missing economists' estimate for 1%. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,722.2 (2.2) 0.0 JCI 4,872.6 (6.8) 0.7 STI 3,298.1 (2.0) (0.8) SET 1,503.3 0.4 0.1 HSI 26,566.7 12.5 (1.1) KOSPI 2,028.7 5.9 (0.7) TWSE 9,212.8 (1.0) (0.5) DJIA 17,904.5 0.5 0.6 S&P 2,096.3 1.8 0.6 FTSE 6,710.1 2.2 (0.0) MYR/USD 3.751 7.3 (0.2) CPO (1mth) 2,289.0 (0.1) 1.6 Crude Oil (1mth) 60.0 12.6 0.8 Gold 1,183.8 (0.0) 0.7 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 13.22 16.00 Axiata 6.47 7.60 Genting Malaysia 4.21 4.60 Gamuda 5.00 6.00 SP Setia 3.32 4.07 MBM Resources 3.47 4.20 Inari Amertron 3.27 4.05 Vitrox 3.30 4.05