FW: AmBank Research - Building Material : Steel: Bolstered by strong demand OVERWEIGHT, 6 Nov 2017

 

 

SECTOR FOCUS OF THE DAY       

Building Material : Steel: Bolstered by strong demand                                    OVERWEIGHT

 

We recently attended the Malaysian Iron and Steel Industry Federation (MISIF) conference to gain insights into the latest developments in the global, regional and domestic steel industries.

 

The World Steel Association (WSA) has a positive global steel outlook backed by the upturn in the global economy. Based on the WSA’s October 2017 short-range outlook, the global steel demand is expected to grow by 2.8%/1.6% to 1.62bil MT and 1.65bil in FY17F/FY18F driven mainly from China, India and the Asean market. However, steel demand from China is expected to slow down from FY18 onwards as the country‘s GDP growth is expected to decelerate to 6.2% in FY18 (vs. 6.6% in FY17F), according to the IMF.

 

We reckon our view on the steel industry is in line with the WSA’s view as: 1) we forecasted steel to trend marginally upwards by 0.5%/1.0% in FY17F/FY18F, underpinned by economic growth in some regions particularly in emerging market; and 2) we believe steel demand from China would remain subdued at the current level and partly mitigated by fiscal policies in the infrastructure projects, real estates and sales segments. We maintain our OVERWEIGHT stance in this sector with BUY recommendations on Ann Joo Resources (FV: RM3.86) and CSC Steel Holdings (FV: RM2.14).

 

 

Others :

MISC : One-off offshore boost with seasonal tanker fillip                                              HOLD

 

QUICK TAKE

Plantation Sector : News flow for week 31 October to 3 November                          NEUTRAL

 

 

STOCKS ON RADAR

Lion Industries,Power Root,CAB Cakaran,Prinsiptek Corporation

 

 

ECONOMIC HIGHLIGHT

Malaysia : Exports to remain strong

 

 

 

NEWS HIGHLIGHTS

Plantation Sector : Sabah snubs MSPO

Banking Sector : MBSB and AFB expected to ink merger deal today

Pintaras Jaya : Confident jobs will pile up

Dolphin : Eyes turnaround with new business model

 

 

 

 

DISCLAIMER:

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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