Malaysia Daily, Maybank KE (2015-06-23)

Daily 23 June 2015 ACQUISITIONS / DISPOSAL Ta Ann: Maintain Buy Replacement landbank  Shariah-compliant Entered into 2 new NCR projects (total 16,917ha) to replace 3 previous NCR projects (total 23,412ha) signed in 2012. Muted earnings impact but affects future planting plans. Undervalued. Maintain BUY at unchanged TP of MYR5.90. Click here for full report » COMPANY UPDATE BIMB Holdings: Maintain Buy Alternative exposure to STMB  Shariah-compliant Stripping STMB�s current market cap from BIMB�s market cap values Bank Islam at just 1.1x P/BV for 14% ROE. SOP for BIMB nudged higher to MYR4.80 (+10sen) on new fair value of MYR3.75 for STMB based on 4% dividend yield. BUY BIMB for alternative exposure to STMB. Click here for full report » Carlsberg Brewery Malaysia: Maintain Hold Some near-term headwinds CAB�s volumes in 2Q15 should see a pick-up QoQ post trade destocking exercise in 1Q15. Expect Singapore operations to be challenging for FY15 on recent guideline changes. Maintain HOLD but lower DCF-TP to MYR13.20 (-40sen). Click here for full report » Axis REIT: Maintain Hold Buys industrial buildings in Klang The latest purchase in Klang is yield accretive, backed by long-term triple net lease with step-up features. Raise FY16/17 EPU by 3.0%/2.9% to factor in the purchase. Maintain HOLD; nudge DCF-based TP to MYR3.40 (+5sen). Click here for full report » ECONOMICS External Reserves, June 2015 Drop 1H June after Apr-May rise Malaysia's external reserves fell to MYR390.2b or USD105.3b in 1H June 2015. Equity flows and MGS bond yields point to net portfolio outflows this month. Culminating into pressure on Ringgit so far this month Click here for full report » Technicals A minor rebound is under way The FBMKLCI rose 10.99 points to 1,732.76 yesterday, while the FBMEMAS and FBM100 also closed higher by 72.24 points and 70.84 points, respectively. We recommend a �Range Trading� stance for the index. Trading idea is a short-term buy on SAM with upside target areas at MYR5.30 & MYR6.40. Stop loss is at MYR4.48. Click here for full report » Other Local News Maxis: Issues first series of sukuk murabahah. Maxis has issued the first series of its sukuk murabahah of MYR840m in nominal value pursuant to its unrated sukuk murabahah programme. The tenure is for 10 years from the issue date. The country's largest mobile phone operator plans to raise as much as MYR5b from a 30-year sukuk for its capital expenditure (capex) and debt refinancing. The unrated sukuk murabahah programme would be available 30 years from the date of the first issuance, which should be made within two years of approval. (Source: The Star) Felda Global Ventures: To make foray into Vietnam's consumer market. Felda Global Ventures Holdings (FGV), has teamed up with Vietnam's Kinh Do Corp (KDC) and regional logistics solutions provider, Indo Trans Logistics Corp (ITL), to make foray into Vietnam's specialty oils and palm-based consumer market. FGV and the two parties yesterday signed a memorandum of business exploration (MOBE) to explore the formation of a new joint venture (JV) company. The JV company will focus on production, sales, marketing and distribution of specialty oils and palm-based consumer package goods for the Vietnamese market. (Source: The Sun Daily) China Automobile Parts: Puts HK Exchange listing plan on hold. China Automobile Holdings (CAP) has put its plan for listing on the Main Market of the Hong Kong Stock Exchange, due to the economic slowdown in China. The company was in the midst of discussions with its Hong Kong-based investment adviser , and all information pertaining to the proposed exercise would be disclosed later. (Source: The Edge Financial Daily) Tenaga Nasional: Expected to raise stake in Jimah power plant. Tenaga Nasional (TNB) will likely buy IMDB's 75% stake in the existing Jimah power plant in Negeri Sembilan. The national utility is expected to take the next move of buying the stake once it has sealed the deal to take over 1MDB's Jimah East power plant, which is also known as Project Track 3B (Track 3B). (Source: New Straits Times) Outside Malaysia U.S: First-time buyers drive home sales to best since 2009. Closings on existing houses, which usually occur a month or two after a contract is signed, rose 5.1% to a 5.35 million annualized rate, the National Association of Realtors said. First-time buyers accounted for 32% of purchases during the month, matching the highest share since September 2012. Lower down-payment requirements from government-sponsored enterprises, rising rents and a brighter employment picture are persuading more Americans to become homeowners. The prospect of higher borrowing costs as the Federal Reserve considers raising rates may also be spurring fence-sitters to move forward, an additional boost to a housing market that�s been short on momentum. (Source: Bloomberg) Greece: Given 48 hours to reach deal as EU leaders weigh debt. European leaders gave Greek Prime Minister Alexis Tsipras's government 48 hours to make the final push needed to satisfy creditors and end a five-month standoff over aid that risks splitting the euro. Leaders from Greece's 18 fellow euro-zone countries agreed that Tsipras's government was finally getting serious about striking a deal after it submitted a set of reform measures that began to converge with the terms demanded by creditors. They agreed to step up the pace of negotiations to secure a breakthrough on Wednesday that leaders can sign off at the end of the week. (Source: Bloomberg) China: Beige Book says retail and property fueling recovery. Companies are doing better than the official data shows, and deflation risks may have peaked, according to the China Beige Book survey, published by New York-based CBB International. The economy is rebalancing as central and southwest regions outperform, the report said. The findings follow official data for May from industrial output to credit growth that suggested a slowdown is stabilizing after monetary easing and government efforts to bolster provincial finances. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,732.8 (1.6) 0.6 JCI 4,959.3 (5.1) (0.5) STI 3,315.1 (1.5) 0.4 SET 1,504.1 0.4 0.8 HSI 27,080.9 14.7 1.2 KOSPI 2,055.2 7.3 0.4 TWSE 9,341.8 0.4 1.3 DJIA 18,119.8 1.7 0.6 S&P 2,122.9 3.1 0.6 FTSE 6,825.7 4.0 1.7 MYR/USD 3.733 6.7 (0.3) CPO (1mth) 2,205.0 (3.8) (1.2) Crude Oil (1mth) 59.7 12.0 0.1 Gold 1,186.0 0.1 (1.2) TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 13.10 16.00 Axiata 6.49 7.60 Genting Malaysia 4.21 4.60 Gamuda 4.98 6.00 SP Setia 3.25 4.07 MBM Resources 3.49 4.20 Inari Amertron 3.34 4.05 Vitrox 3.39 4.05