Wednesday, February 24, 2016

[Maybank IB] Today's Research - Malaysia













Genting Bhd | Decent end to 2015
Samuel Yin Shao Yang







Hong Leong Bank | MSS costs feature in 2Q results
Desmond Ch'ng







Hong Leong Financial Group | 1H results within expectations
Desmond Ch'ng







Inari Amertron | Marginally below expectations
Ivan Yap







Globetronics Technology | Record profit; no surprises
Ivan Yap







Gas Malaysia | Further clarity required
Chi Wei Tan







SP Setia | Results likely to be strong
Wei Sum Wong







Kossan Rubber Industries | Cautious on forex scare
Yen Ling Lee







Harbour-Link Group | Proxy to infra growth in Sarawak
Yen Ling Lee







Nestle Malaysia | FY15 results in line
Liew Wei Han







Padini | 2QFY16 within expectations
Kevin Wong







MSM Malaysia | 4Q15 results in line
Liew Wei Han







Tan Chong Motor | Below expectations
Ivan Yap







UMW Oil & Gas | Kitchen sinking 4Q15
Thong Jung Liaw









break





Malaysia Automotive | Less new cars for CNY?
Ivan Yap









break





Singapore | Headline still sub-zero
Suhaimi Ilias







Malaysia | Index edged up slowly
Lee Cheng Hooi








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COMPANY RESEARCH





Rating Change





Genting Malaysia (GENM MK)
by Samuel Yin Shao Yang





Share Price:
MYR4.36
Target Price:
MYR4.55
Recommendation:
Hold




4Q15 outperformed but revised GITP budget negatively surprised

4Q15 results and dividends outperformed our expectations. Going forward, we are sanguine on Genting UK (GENUK) and Resorts World Bimini (RWB). In fact, we gather that RWB may finally break-even soon. That said, we are taken aback by the revised Genting Integrated Tourism Plan (GITP) budget. Therefore, we trim our earnings estimates by 4% and TP by 4% to MYR4.55. At this juncture, we are unsure if such a large investment will be worthwhile. Cut from BUY to HOLD.



FYE Dec (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
8,229.4
8,395.9
9,677.2
11,087.6
EBITDA
2,247.6
2,153.5
2,768.9
3,173.1
Core net profit
1,358.1
1,256.4
1,390.7
1,599.3
Core EPS (sen)
23.9
22.2
24.5
28.2
Core EPS growth (%)
(20.8)
(7.4)
10.6
15.0
Net DPS (sen)
6.5
7.1
7.9
9.0
Core P/E (x)
18.2
19.7
17.8
15.5
P/BV (x)
1.5
1.3
1.2
1.2
Net dividend yield (%)
1.5
1.6
1.8
2.1
ROAE (%)
8.6
7.1
7.1
7.8
ROAA (%)
6.7
5.2
5.0
5.6
EV/EBITDA (x)
9.7
11.5
8.4
7.3
Net debt/equity (%)
net cash
0.1
net cash
net cash


Samuel Yin Shao Yang








TP Revision





Genting Bhd (GENT MK)
by Samuel Yin Shao Yang





Share Price:
MYR8.10
Target Price:
MYR8.90
Recommendation:
Buy




Decent end to 2015

4Q15 results were within our expectation. 2015 was marred by low VIP hold rates, bad debts, low FFB output and high production cost. In 2016, we are hopeful all the aforementioned will turnaround for the better. Resorts World Bimini (RWB) may even break-even in md-2016. While we are taken aback by the larger Genting Integrated Tourism Plan (GITP) budget, our SOP-based TP is trimmed by only 2% to MYR8.90. Maintain BUY call. There is more upside potential if 21%-owned TauRX is listed.



FYE Dec (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
18,216.5
18,100.4
19,368.0
21,874.1
EBITDA
6,627.5
5,685.4
6,793.8
8,524.9
Core net profit
1,777.4
1,524.2
1,785.4
2,670.6
Core FDEPS (sen)
46.2
40.9
43.4
63.2
Core FDEPS growth(%)
1.5
(11.5)
6.1
45.8
Net DPS (sen)
4.0
3.5
3.7
5.4
Core FD P/E (x)
17.5
19.8
18.7
12.8
P/BV (x)
1.1
0.9
0.9
0.8
Net dividend yield (%)
0.5
0.4
0.5
0.7
ROAE (%)
6.8
5.1
5.3
7.5
ROAA (%)
2.5
1.9
2.0
2.9
EV/EBITDA (x)
7.3
7.9
7.0
5.6
Net debt/equity (%)
net cash
net cash
net cash
net cash


Samuel Yin Shao Yang








Results Review





Hong Leong Bank (HLBK MK)
by Desmond Ch'ng





Share Price:
MYR13.08
Target Price:
MYR14.40
Recommendation:
Buy




MSS costs feature in 2Q results

While BOC continues to be a drag on group earnings, HL Bank’s domestic operations continue to expand at a decent pace with stable loan growth and margins, as well as strong asset quality. Having completed its rights issue, the group is also one of the most well-capitalized in the industry. We maintain a BUY on HL Bank with a lower TP of MYR14.40 (MYR14.59 previously) on a 2016 P/BV target of 1.4x (ROE: 10.2%) after adjusting our earnings forecasts.



FYE Jun (MYR m)
FY14A
FY15A
FY16E
FY17E
Operating income
4,039.1
4,066.9
4,365.2
4,609.8
Pre-provision profit
2,246.8
2,253.1
2,498.6
2,769.4
Core net profit
2,102.3
2,233.2
2,094.8
2,198.4
Core EPS (MYR)
1.23
1.31
1.09
1.05
Core EPS growth (%)
12.8
5.9
(16.2)
(3.7)
Net DPS (MYR)
0.41
0.41
0.34
0.35
Core P/E (x)
10.6
10.0
12.0
12.4
P/BV (x)
1.7
1.5
1.3
1.3
Net dividend yield (%)
3.1
3.1
2.6
2.7
Book value (MYR)
7.73
8.93
9.73
10.18
ROAE (%)
15.3
14.3
11.1
10.2
ROAA (%)
1.3
1.3
1.1
1.1










Results Review





Hong Leong Financial Group (HLFG MK)
by Desmond Ch'ng





Share Price:
MYR14.14
Target Price:
MYR16.30
Recommendation:
Buy




1H results within expectations

Based on current price levels, HLFG’s 64% stake in HL Bank is valued at MYR17.3b, which is 7% higher than HLFG’s market cap of MYR16.2b. This implies that HLFG is still a cheaper entry into HL Bank, and that there is little value that the market is attaching to HLFG’s insurance businesses. We prefer HLFG (BUY) to HL Bank with a slightly higher SOP-based TP of MYR16.30 (+10sen).



FYE Jun (MYR m)
FY14A
FY15A
FY16E
FY17E
Operating income
4,549.2
4,490.9
4,732.2
4,990.3
Pre-provision profit
2,583.1
2,490.7
2,503.8
2,956.0
Core net profit
1,706.9
1,576.2
1,604.0
1,624.0
Core FDEPS (MYR)
1.63
1.51
1.54
1.55
Core FDEPS growth(%)
14.7
(7.7)
1.8
1.2
Net DPS (MYR)
0.38
0.38
0.32
0.33
Core FD P/E (x)
8.7
9.4
9.2
9.1
P/BV (x)
1.3
1.1
1.0
1.0
Net dividend yield (%)
2.7
2.7
2.3
2.3
Book value (MYR)
10.90
12.45
13.74
14.83
ROAE (%)
15.8
12.8
11.1
9.9
ROAA (%)
0.9
0.8
0.8
0.7










Results Review





Inari Amertron (INRI MK)
by Ivan Yap





Share Price:
MYR3.39
Target Price:
MYR4.15
Recommendation:
Buy




Marginally below expectations

Blip in RF division in 2Q-3QFY6/16 is temporary as smartphone players rationalise their existing stockpile in preparation for new launches. Whilst there are some downside risk to earnings from this, we keep our forecasts unchanged pending an analyst briefing today. Inari’s outlook remains intact with potential new job win following its latest plant acquisition. Maintain BUY; MYR4.15 TP (17x CY17 PER) is unchanged.



FYE Jun (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
793.7
933.1
1,344.6
1,397.8
EBITDA
134.8
187.3
259.0
291.1
Core net profit
102.8
151.5
206.5
221.2
Core EPS (sen)
11.3
16.3
21.3
22.8
Core EPS growth (%)
138.9
43.9
30.5
7.1
Net DPS (sen)
6.8
8.9
8.5
9.1
Core P/E (x)
29.9
20.8
15.9
14.9
P/BV (x)
11.9
5.9
5.0
4.1
Net dividend yield (%)
2.0
2.6
2.5
2.7
ROAE (%)
49.4
38.1
34.4
30.3
ROAA (%)
23.6
22.7
22.2
20.2
EV/EBITDA (x)
15.6
11.9
12.1
10.5
Net debt/equity (%)
6.7
net cash
net cash
net cash










Results Review





Globetronics Technology (GTB MK)
by Ivan Yap





Share Price:
MYR5.53
Target Price:
MYR7.35
Recommendation:
Buy




Record profit; no surprises

Globetronics achieved yet another record earnings in 2015 as growth in the sensor division outweighs weakness in the rest; within expectations. Our forecasts are unchanged; 2016 will be a year of two halves with a weak 1H to be offset by a strong 2H after the launch of the 3D-imaging sensor. Recent share price weakness is an opportunity to add. Maintain BUY with an unchanged TP of MYR7.35 on 17x CY17 PER target.



FYE Dec (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
355.0
343.7
414.5
524.5
EBITDA
108.6
97.5
125.0
157.4
Core net profit
64.4
71.3
92.6
121.5
Core FDEPS (sen)
22.9
25.3
32.8
43.1
Core FDEPS growth(%)
20.7
10.4
29.6
31.2
Net DPS (sen)
23.0
23.0
29.6
38.8
Core FD P/E (x)
24.1
21.8
16.8
12.8
P/BV (x)
5.5
5.2
5.0
4.8
Net dividend yield (%)
4.2
4.2
5.4
7.0
ROAE (%)
23.0
24.4
30.4
38.6
ROAA (%)
18.5
20.0
25.3
31.6
EV/EBITDA (x)
9.7
17.0
11.2
9.0
Net debt/equity (%)
net cash
net cash
net cash
net cash










Results Review





Gas Malaysia (GMB MK)
by Chi Wei Tan





Share Price:
MYR2.47
Target Price:
MYR2.70
Recommendation:
Buy




Further clarity required

FY15 net profit came in below expectations primarily due to a MYR18m impairment charge (of receivables) in 4Q15. The impairment is sizable when compared to previous years (usually below MYR0.5m p.a.), and thus requires some explanation. Our forecasts, rating and TP are largely unchanged for now, pending clarification from management.



FYE Dec (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
2,773.5
3,619.0
4,633.8
5,501.2
EBITDA
258.1
191.0
226.8
237.5
Core net profit
167.6
106.2
128.1
128.6
Core EPS (sen)
13.1
8.3
10.0
10.0
Core EPS growth (%)
(2.2)
(36.7)
20.7
0.3
Net DPS (sen)
13.1
8.3
10.0
10.0
Core P/E (x)
18.9
29.9
24.7
24.7
P/BV (x)
3.1
3.3
3.3
3.3
Net dividend yield (%)
5.3
3.3
4.0
4.1
ROAE (%)
16.6
10.7
13.2
13.2
ROAA (%)
10.2
5.5
5.8
5.3
EV/EBITDA (x)
14.6
14.9
13.4
13.0
Net debt/equity (%)
net cash
net cash
net cash
net cash










Company Update





SP Setia (SPSB MK)
by Wei Sum Wong





Share Price:
MYR2.89
Target Price:
MYR3.76
Recommendation:
Buy




Results likely to be strong

SP Setia’s (SPSB) FY15 results, to be released on 25 Feb, could surprise on the upside. The group is also on track to meet its 14MFY15 sales target of MYR4b. We adjust our FY15/16/17 earnings forecasts by +19%/ +20%/-4%. Our RNAV-TP is however trimmed to MYR3.76 (-10sen, on 30% discount to RNAV) due to a larger share base. Reiterate BUY for its earnings defensiveness.



FYE Dec (MYR m)
FY13A
FY14A
FY15E
FY16E
Revenue
3,060.5
3,810.1
6,868.3
4,559.3
EBITDA
673.3
1,107.6
1,511.0
1,003.0
Core net profit
417.9
376.0
873.2
538.4
Core EPS (sen)
17.9
14.9
33.2
20.5
Core EPS growth (%)
(7.7)
(17.2)
123.7
(38.3)
Net DPS (sen)
10.6
9.7
19.9
12.3
Core P/E (x)
16.1
19.5
8.7
14.1
P/BV (x)
1.0
0.9
0.9
0.9
Net dividend yield (%)
3.7
3.4
6.9
4.3
ROAE (%)
8.7
6.6
14.5
8.5
ROAA (%)
3.8
2.9
6.1
3.6
EV/EBITDA (x)
13.8
10.1
6.9
11.0
Net debt/equity (%)
41.4
32.5
31.8
39.5










Rating Change





Kossan Rubber Industries (KRI MK)
by Yen Ling Lee





Share Price:
MYR6.75
Target Price:
MYR6.50
Recommendation:
Hold




Cautious on forex scare

4Q15 results within expectations and we maintain our earnings forecasts. However, we reduce our TP to MYR6.50 (-36%) as we lower our PER target to its mean of 16x on 2017 EPS given the volatility in forex. Downgrade Kossan to HOLD (from BUY) but advocate investors to accumulate if there is further sell-down as fundamentals of the company remain sound.



FYE Dec (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
1,299.3
1,635.9
1,925.8
2,230.8
EBITDA
247.9
343.2
391.4
445.0
Core net profit
143.8
203.3
229.7
259.4
Core EPS (sen)
22.5
31.8
35.9
40.6
Core EPS growth (%)
5.4
41.4
13.0
12.9
Net DPS (sen)
7.0
12.7
18.0
20.3
Core P/E (x)
30.0
21.2
18.8
16.6
P/BV (x)
5.4
4.4
3.9
3.5
Net dividend yield (%)
1.0
1.9
2.7
3.0
ROAE (%)
19.0
22.7
22.1
22.3
ROAA (%)
12.1
14.8
14.6
14.6
EV/EBITDA (x)
12.0
17.4
11.3
10.0
Net debt/equity (%)
11.2
1.7
5.9
7.3










Results Review





Harbour-Link Group (HALG MK)
by Yen Ling Lee





Share Price:
MYR2.81
Target Price:
MYR3.65
Recommendation:
Buy




Proxy to infra growth in Sarawak

Stronger 2QFY6/16 results was within expectations, driven by its logistics business. Maintain earnings forecasts, but there could be earnings upside if Baleh hydro-dam kicks-off. Additionally, its proposed corporate exercises (bonus issue, free warrants) are sweeteners to investors (entitlement in mid-Mar 2016). Maintain BUY with an unchanged RNAV-based TP of MYR3.65.



FYE Jun (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
457.6
507.0
584.8
601.3
EBITDA
75.3
97.4
127.0
117.8
Core net profit
33.4
48.2
58.5
56.1
Core EPS (sen)
18.4
26.5
32.2
30.8
Core EPS growth (%)
9.0
44.2
21.5
(4.2)
Net DPS (sen)
2.5
5.5
6.4
6.2
Core P/E (x)
15.3
10.6
8.7
9.1
P/BV (x)
2.2
1.8
1.7
1.5
Net dividend yield (%)
0.9
2.0
2.3
2.2
ROAE (%)
15.5
18.9
20.0
17.1
ROAA (%)
7.2
9.0
9.8
8.9
EV/EBITDA (x)
5.3
5.1
4.0
3.9
Net debt/equity (%)
16.1
net cash
net cash
net cash










Results Review





Nestle Malaysia (NESZ MK)
by Liew Wei Han





Share Price:
MYR74.58
Target Price:
MYR73.00
Recommendation:
Hold




FY15 results in line

Despite flat revenue growth, NESZ’s FY15 earnings growth (+7% YoY) was supported by more favourable raw material prices, lower taxes, and cost saving initiatives. A final DPS of 110sen and a special of 20sen was a surprise. Into FY16, domestic operations could remain challenging on weaker consumer sentiment. However, this could be partially buffered by growing export sales. We maintain HOLD on NESZ but raised our DCF-TP to MYR73.00 (from MYR68.80) on rolling forward valuations.



FYE Dec (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
4,808.9
4,838.0
5,128.2
5,528.2
EBITDA
837.2
886.0
968.7
1,033.2
Core net profit
550.4
590.7
614.7
654.0
Core EPS (sen)
234.7
251.9
262.1
278.9
Core EPS growth (%)
(2.0)
7.3
4.1
6.4
Net DPS (sen)
235.0
260.0
259.5
276.1
Core P/E (x)
31.8
29.6
28.5
26.7
P/BV (x)
22.5
24.7
24.5
24.2
Net dividend yield (%)
3.2
3.5
3.5
3.7
ROAE (%)
69.1
79.5
86.4
91.1
ROAA (%)
25.1
24.7
24.0
24.2
EV/EBITDA (x)
19.4
19.8
18.4
17.2
Net debt/equity (%)
20.4
47.4
42.9
36.1










Results Review





Padini (PAD MK)
by Kevin Wong





Share Price:
MYR2.18
Target Price:
MYR2.00
Recommendation:
Hold




2QFY16 within expectations

2QFY6/16 results were within our expectations but above consensus’. The higher YoY and QoQ earnings were mainly driven by aggressive promotions, Christmas shopping and new outlets’ contribution. A third interim net DPS of 2.5sen was in line. Maintain HOLD with an unchanged MYR2.00 TP (pegged to 10.5x CY16 PER) and CY16 net yield of 4.6%.



FYE Jun (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
866.3
977.9
1,262.9
1,399.4
EBITDA
147.6
145.3
194.8
215.7
Core net profit
90.9
80.2
120.1
132.1
Core EPS (sen)
13.8
12.2
18.3
20.1
Core EPS growth (%)
6.5
(11.8)
49.7
10.0
Net DPS (sen)
11.5
10.0
10.0
10.0
Core P/E (x)
15.8
17.9
11.9
10.9
P/BV (x)
3.7
3.5
3.1
2.7
Net dividend yield (%)
5.3
4.6
4.6
4.6
ROAE (%)
23.9
20.2
27.7
26.6
ROAA (%)
16.8
13.7
18.5
17.8
EV/EBITDA (x)
8.0
4.6
6.2
5.4
Net debt/equity (%)
net cash
net cash
net cash
net cash










Results Review





MSM Malaysia (MSM MK)
by Liew Wei Han





Share Price:
MYR4.70
Target Price:
MYR5.30
Recommendation:
Hold




4Q15 results in line

FY15 results were within expectations. 8% growth in FY15 earnings were mainly supported by lower raw material costs, amid flat revenue growth (+1%). A final DPS of 14sen takes FY15 DPS to 26sen (DPR: 65%), in line. Into 2016, if raw sugar costs continue to creep up, MSM may face some margin pressure as it could be more challenging to pass on price increases in view of the overall softer environment. Maintain our forecasts, HOLD call and TP of MYR5.30 (14x FY16 PER).



FYE Dec (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
2,281.5
2,307.3
2,400.9
2,443.6
EBITDA
383.4
389.6
448.2
491.8
Core net profit
257.0
276.6
264.8
251.8
Core EPS (sen)
36.6
39.3
37.7
35.8
Core EPS growth (%)
1.5
7.6
(4.2)
(4.9)
Net DPS (sen)
24.0
26.0
22.6
21.5
Core P/E (x)
12.9
11.9
12.5
13.1
P/BV (x)
1.7
1.6
1.5
1.5
Net dividend yield (%)
5.1
5.5
4.8
4.6
ROAE (%)
13.5
13.9
12.6
11.5
ROAA (%)
11.0
10.6
8.8
7.1
EV/EBITDA (x)
9.6
9.7
9.0
8.9
Net debt/equity (%)
10.4
14.8
33.3
48.0










Results Review





Tan Chong Motor (TCM MK)
by Ivan Yap





Share Price:
MYR2.41
Target Price:
MYR2.60
Recommendation:
Hold




Below expectations

TCM’s 4Q15 core results came in the red for the first time, marred by higher imported component costs (~27%-30% of COGS) due to a weaker MYR. We cut our FY16/17 forecasts to account for softer sales and higher costs. As a result, our TP is marginally lowered to MYR2.60 (-2%) based on an unchanged 0.6x FY16 NTA peg, which reflects the challenging outlook ahead. Valuations are fair at 0.6x P/BV; maintain HOLD.



FYE Dec (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
4,760.6
5,716.7
6,435.6
6,776.7
EBITDA
330.7
302.4
238.2
306.4
Core net profit
68.6
51.7
43.0
88.7
Core EPS (sen)
10.5
7.9
6.6
13.6
Core EPS growth (%)
(76.6)
(24.6)
(16.8)
106.1
Net DPS (sen)
6.0
5.0
5.0
5.0
Core P/E (x)
22.9
30.4
36.6
17.7
P/BV (x)
0.6
0.6
0.6
0.6
Net dividend yield (%)
2.5
2.1
2.1
2.1
ROAE (%)
2.5
1.9
1.5
3.1
ROAA (%)
1.4
1.0
0.8
1.7
EV/EBITDA (x)
9.7
10.0
11.0
8.4
Net debt/equity (%)
37.0
45.5
36.2
33.3










Results Review





UMW Oil & Gas (UMWOG MK)
by Thong Jung Liaw





Share Price:
MYR1.05
Target Price:
MYR1.16
Recommendation:
Buy




Kitchen sinking 4Q15

While the kitchen sinking exercise was expected in 4Q15, the core loss was higher than earlier anticipated. The outlook for rigs is tough and UMWOG is expected to remain in the red but this bearish sentiment has been priced in, in our view. Our earnings forecasts are unchanged. We reiterate our non-consensus trading BUY call with a lower TP of MYR1.16 (-7%) as we roll forward our valuations to 2016 on unchanged 1x EV/replacement value peg.



FYE Dec (MYR m)
FY14A
FY15A
FY16E
FY17E
Revenue
1,014.9
839.5
781.7
781.5
EBITDA
412.8
259.0
151.5
150.7
Core net profit
248.5
(51.9)
(135.8)
(127.2)
Core EPS (sen)
11.5
(2.4)
(6.3)
(5.9)
Core EPS growth (%)
49.3
nm
nm
nm
Net DPS (sen)
100.0
0.0
0.0
0.0
Core P/E (x)
9.1
(43.7)
(16.7)
(17.8)
P/BV (x)
0.7
0.7
0.7
0.7
Net dividend yield (%)
95.2
0.0
0.0
0.0
ROAE (%)
8.2
(1.6)
(4.1)
(4.0)
ROAA (%)
5.2
(0.8)
(1.8)
(1.8)
EV/EBITDA (x)
14.9
20.7
34.6
34.5
Net debt/equity (%)
33.7
90.3
91.9
94.1







SECTOR RESEARCH






Sector Note
by Ivan Yap


Less new cars for CNY?





Jan 2016 TIV plummeted 36% MoM and 12% YoY to 44.6k units (lowest in the last 47 months) as consumers had frontloaded purchases prior to price hikes beginning Jan 2016. Our 2016 TIV forecast of 645k units (-3% YoY) is unchanged. For now, sector valuations are just about fair (14.7x CY16 PER). BAuto is our only BUY call.









MACRO RESEARCH






Economics Research
by Suhaimi Ilias


Headline still sub-zero





Headline CPI continued to decline in Jan 2016 by -0.6% YoY (Dec 2015: -0.6% YoY) while core inflation stays in positive territory at +0.4% YoY (Dec 2015: +0.3% YoY). MAS adjusted their headline inflation forecast for 2016 to between -1.0% and 0.0% (from -0.5% and 0.5% previously) while maintaining the core inflation forecast at +0.5-1.5%. Our headline inflation rate forecast for 2016 stays at +0.5%.












Technical Research
by Lee Cheng Hooi


Index edged up slowly





AFG – On a very firm Wave 3 and 5 surge. FBMKLCI – Index edged up slowly. Supports of 1,656 and 1,677 will be areas to buy. Resistances of 1,680 and 1,700 may cap any rebound.







NEWS


Outside Malaysia:

U.S: Consumer confidence sinks to seven-month low in February as households grew more concerned about the outlook for the economy and jobs, sending their inflation forecast to a nine-year low. The Conference Board’s sentiment index slid to 92.2 this month, from a revised 97.8 in January, the New York-based private research group said. The survey reflected responses received through Feb. 11, the day the Standard & Poor’s 500 Index sank to an almost two-year low. (Source: Bloomberg)

U.S: Sales of existing homes in January rise to second-highest since 2007, indicating the industry will keep prospering. Closings, which usually take place a month or two after a contract is signed, advanced 0.4% to a 5.47 million annual rate, the National Association of Realtors reported. Prices climbed from January 2015 as the number of dwellings on the market fell. (Source: Bloomberg)

Brazil: Inflation unexpectedly jumps to highest since 2003. Brazil’s annual inflation surprised analysts by accelerating in the month through mid-February after the central bank refrained from raising borrowing costs and the government proposed loosening its fiscal targets. Annual inflation as measured by the IPCA-15 index unexpectedly quickened to 10.84% YoY -- its highest level since November 2003 -- from 10.74% YoY, the national statistics agency said. (Source: Bloomberg)

Germany: Investment and domestic consumption led economic growth in the final quarter of 2015 as an external slowdown weighed on trade. Capital investment rose 1.5% in the three months through December, up from a revised 0.1% the previous quarter, the Federal Statistics Office in Wiesbaden said. Government spending jumped 1%, after 0.5% previously. Growth in private spending slowed to 0.3% from 0.6%. Net trade dragged on the economy as imports rose and exports fell. GDP expanded 0.3%. The investment gain may signal that rock-bottom interest rates and record-low unemployment are persuading companies to bolster their capacity to take advantage of rising domestic consumption. (Source: Bloomberg)





Other News:

Fitch affirms Malaysia at ‘A-‘ with stable outlook. Fitch Ratings has affirmed Malaysia’s long-term foreign-and-local-currency issuer default ratings (IDR) at “A-“ and “A” respectively, with stable outlooks. The stable outlooks reflect its assessment that upside and down-side risk to the ratings are currently broadly balanced. However, it warned that factors that could lead to a negative rating action are a sustained deterioration in fiscal discipline and the public finances, leading to a sharper rise in government debt rations than Fitch current expects. Fitch also pointed out that Malaysia’s governance is a weakness relative to other sovereigns in the “A” rating range. (Source: The Edge Financial Daily)

Yong Tai: Construction of Impression City in Melaka to begin in 3Q. Phase 1 of Impression City which spans 117 acres, mostly comprising retail and commercial properties is likely to begin construction in the third quarter of the year. The 10-year project will be developed in 11 phases which have a total GDV of MYR5.4b and expected to generate a profit margin of 20%. (Source: The Edge Financial Daily)

Mitrajaya: Bags MYR157.3m job. Its subsidiary, Pembinaan Mitrajaya Sdn Bhd has been awarded a MYR157.3m deal by Putrajaya Homes Sdn Bhd for the construction and completion of 800 units of public apartments “Perumahan Pejawat Awam 1 Malaysia” inclusive of two blocks of multi-level car park and common facilities at Precint 17, Putrajaya. The contract runs for 36 months and is expected to be completed by Feb 22, 2019. (Source: The Sun Daily)


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