Malaysia Daily, Maybank KE (2015-06-22)

Daily 22 June 2015 COMPANY UPDATE KNM Group: Maintain Buy Building a war chest  Shariah-compliant SGD300m MTN programme to support its renewable energy development and RAPID works. Transformation into a renewable energy play is a key catalyst to a re-rating and perception change. Maintain BUY and MYR1.00 (0.6x EV/backlog). Click here for full report » SECTOR UPDATE Malaysia Automotive: Maintain Neutral Uninspiring recovery May 2015 TIV recovered to 51.3k units (+13% MoM) after a 33% nosedive in Apr, immediately post GST implementation. Our 2015 TIV forecast of 660k units (-1% YoY) is unchanged. Maintain NEUTRAL with no near-term re-rating catalyst just yet. BUYs are MBM and BAuto. HOLD UMWH and TCM. Click here for full report » Malaysia Media: Maintain Neutral May 2015 adex: Marginal rebound May 2015 total gross adex eased 7% YoY or 4ppts less than in Apr 2015. 5M15 total gross adex also eased 7% YoY. This indicates a partial recovery in consumer and adex sentiment after the 6% GST was implemented on 1 Apr 2015. Maintain our 2015 total gross adex forecast of -8% for now. Maintain NEUTRAL on the Malaysian media sector. Click here for full report » ECONOMICS Malaysia CPI, May 2015 Inching higher post-GST Inflation rate in May 2015 picked up further to +2.1% YoY (Apr 2015: +1.8% YoY) since GST introduction on 1 Apr 2015. Mainly on higher costs of food and non-alcoholic beverages (FNAB) and housing, water, electricity, gas & other fuels (HWEGOF). Post-GST (Apr-May 2015) inflation rate so far is +2.0% YoY (1Q 2015: +0.7% YoY). Maintain our 2015 inflation forecast at 2.5%-3.5% (official forecast: 2.0%-3.0%). Click here for full report » Technicals A weaker tone today The FBMKLCI gained 3.65 points to 1,721.77 last Friday, while the FBMEMAS and FBM100 also closed higher by 19.40 points and 15.12 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a Take profit call on UMWOG with downside target areas at MYR1.62 & MYR1.51. Click here for full report » Other Local News Transportation: Three outfits said to be on shortlist for LRT3 PDP. The 3 outfits understood to be front runners are the Naza TTDI- CSR Zhuzhou JV, MRCB- George Kent JV and UEM Group with the 3 said to have the most attractive bids. However, Prasarana has noted that evaluation is still ongoing and that no front runners have been identified yet. The appointment of the PDP is likely to be done soon with the construction of the LRT3 to commence late this year as per schedule of the Land Transport Commission. (Source: The Edge Financial Daily) Tenaga Nasional: Receives letter of invitation from Energy Commission. Tenaga Nasional (TNB) has received a letter of invitation from the Energy Commission (EC) to submit its proposal pertaining to the takeover of 1Malaysia Development (1MDB) 70% stake in the MYR11b Jimah East (Project 3B) coal power plant. EC in consultation with the government has accepted TNB's participation as the lead developer in the project for the development of 2x1000MW coal fired power plant in Jimah in consortium with Mitsui Co. Ltd (Mitsui). 1MDB owns 70% while Mitsui controls 30% of the project. The project is scheduled for commissioning in stages from Oct 1, 2018. (Source: The Sun Daily) Tenaga Nasional: Forced outages at six plants test national grid. Unplanned outages at three power plants triggered Tenaga Nasional (TNB) issuance of an "orange warning"- an emergency call for all electricity generators to be on full alert. The three other power plants suffered forced outages after the orange warning. At the peak of the incident, the national utility drew some 300MW of electricity from the Electricity Generating Authority of Thailand for about three hours to fill the supply gap. While TNB denied that the outages resulted in load-shedding, the incident tested the grid�s reserve margin and its ability to cope with such emergencies. (Source: The Edge Financial Daily) Gamuda: Gamuda & partners bid for Singapore land. A consortium comprising Gamuda, Evia Real Estate (7) Pte Ltd and Maxdin Pte Ltd has placed a tender worth SGD345.86m (MYR962.5m) to potentially develop a 99-year leasehold plot of land in Toa Payoh, Singapore. The top five tenderers' bid prices are within a close range of 4% and we are merely 1% above the second highest bid. It will be Gamuda's first foray into property development in Singapore if they were awarded the tender. (Source: The Sun Daily) Outside Malaysia E.U: IMF warns no leeway on payment as Merkel urges Greece to bow. IMF chief Christine Lagarde said Greece won�t be given a grace period if it fails to make a payment at the end of the month as Chancellor Angela Merkel said there's still time to reach a deal on aid. Lagarde, whose policies were labeled "criminal" last week by Prime Minister Alexis Tsipras, said that Greece will immediately be considered in default unless it pays about EUR 1.5b (USD1.7b) due to the fund on June 30. "It will be in default - it will be in arrears vis-a-vis the IMF, yes, on July 1," Lagarde said at a press conference in Luxembourg to discuss the deadlock over Greece. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,721.8 (2.2) 0.2 JCI 4,985.0 (4.6) 0.8 STI 3,301.0 (1.9) 0.0 SET 1,491.5 (0.4) (1.1) HSI 26,760.5 13.4 0.2 KOSPI 2,047.0 6.9 0.2 TWSE 9,218.4 (1.0) 0.0 DJIA 18,016.0 1.1 (0.6) S&P 2,110.0 2.5 (0.5) FTSE 6,710.5 2.2 0.0 MYR/USD 3.744 7.0 0.9 CPO (1mth) 2,232.0 (2.6) 0.1 Crude Oil (1mth) 59.6 11.9 (1.4) Gold 1,200.3 1.3 0.4 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 12.86 16.00 Axiata 6.50 7.60 Genting Malaysia 4.15 4.60 Gamuda 5.00 6.00 SP Setia 3.27 4.07 MBM Resources 3.49 4.20 Inari Amertron 3.28 4.05 Vitrox 3.35 4.05