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COMPANY UPDATE
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Sarawak Oil Palms: Maintain Buy
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Under-researched,
undervalued Shariah-compliant
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- We
recently hosted SOP on non-deal roadshows in KL and Singapore, and
met over 20 fund managers.
- We expect
SOP to deliver 12% 2013-16 CAGR in FFB output, with its young
palms to drive near-term earnings.
- Maintain
BUY with a new MYR6.90 TP(+10sen) on unchanged 15x 2015 PER;
FY14-16 core net profits raised by 0.6%-1.8%.
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MISC Bhd: Maintain Buy
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Sells
logistics operation Shariah-compliant
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- The
MYR250m sale value implies 1x BV and 15x 2013 PER.
- Marginal
impact to earnings. This non-core business accounted for sub-2% of
group pretax profit in 2013.
- Maintain
Buy and MYR7.20 SOP target price.
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Glomac: Maintain Hold
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Strengthening
foothold in Johor Shariah-compliant
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- We are
positive on Glomacss latest land acquisition in Kulai.
- Maintaining
earnings forecasts, TP pending further details.
- Our TP is
MYR1.20 (0.6x P/RNAV; MYR2.00 RNAV); HOLD.
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Technicals
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Price
volatility emerges
The FBM KLCI rebounded 15.36 points WoW as some local buying emerged
just above 1,800 last week. The market moved up against the wild
gyrations of the global markets.
The index closed at 1,820.48 last Friday, as volume turned down to
1.21b to 1.75b shares traded.
Click here for full report »
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Other Local News
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Oil
& Gas: Petronas sets aggressive targets for overseas ops as local
production dwindles. Datuk Wee Yiaw Hin, the executive
vice-president of exploration and production, has set his team up for
some aggressive targets. Among them are average production growth of
3.5% per year up to 2020 and a reserve replacement ratio (RRR) of 1.1
times. RRR is the amount of oil and gas added to a company�s proven
reserves versus what it produces during the year. A ratio of 1.1
indicates that Petronas has a good balance between hydrocarbons
produced and discovered. Petronas achieved a RRR of 1.3 times in 2013.
(Source: The Star)
Automotive: Naza ready for AP-less market. The Naza group is
ready for a market without the approved permit (AP) system, whether in
2015 or 2020 as it already owns franchises and has a firm platform in
place, according to Naza joint-group executive chairman Datuk Wira SM
Faisal SM Nasimuddin. The status of APs in Malaysia continue to be in
limbo, eight years after it was first announced that it would
eventually be phased out. Under the recently unveiled National
Automotive Policy (NAP), the issue of AP abolishment was still
unresolved, with the government saying that more time was needed to
study the issue. (Source: The Star)
Banking: Reclassifying Islamic banking deposits. Islamic banks
are transitioning into what many consider as the most difficult part of
the Islamic Financial Service Act (IFSA) 2013. Before the IFSA, all
deposits with an Islamic bank were guarantee by Perbadanan Insurans
Deposit Malaysia. Under the new Act, there will be no guarantee for all
money that is going into what is classified as an investment account � a mudarabah,
musyarakah and wakalah. Bank Negara Malaysia (BNM) has given the banks
two years to make the transition. (Source: The Edge Financial Daily)
Media: Adex rises 15.8% on positive sentiment. Continued
positive sentiment saw year-to-date (YTD) February 2014 advertising
expenditure (adex) rising 15.8% to MYR1.96b from MYR1.70b in the
previous corresponding period. According to Nielsen Malaysia�s data, the
YTD adex growth for 2014 was led by cinemas and pay TV, which rose 65.1%
and 30.1% respectively. The product/service categories with the highest
ad spend in the first two months of the year were local government
institutions, cinema and movie advertising, fast-food outlets, haircare
products and women�s facial care.
The top three advertisers were Unilever, Nestle and movie
producer/distributor MM2 Entertainment, which was ranked 676th a year
ago. (Source: The Star)
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Outside Malaysia
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U.K:
Posts larger-than-forecast deficit in February as government
spending increased at its fastest annual pace for almost a year.
Expenditure exceeded revenue by GBP 9.3b (USD 15.3b), compared with GBP
9.2b a year earlier, the Office for National Statistics said in London.
(Source: Bloomberg)
Thailand: Central bank cuts 2014 GDP growth forecast to 2.7% from 3%.
Bank of Thailand cuts 2014 GDP forecast for 4th time since Oct. as
political unrest reduced local demand and tourism. Latest estimate
compares with 3% prediction on Jan. 22. Central bank in July last year
estimated 2014 growth at 5% before cutting forecasts. (Source:
Bloomberg)
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Key Indices
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Value
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YTD
(%)
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Daily
(%)
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KLCI
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1,820.5
|
(2.5)
|
0.1
|
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JCI
|
4,700.2
|
10.0
|
0.0
|
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STI
|
3,073.4
|
(3.0)
|
0.5
|
|
SET
|
1,360.5
|
4.8
|
(0.1)
|
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HSI
|
21,436.7
|
(8.0)
|
1.2
|
|
KOSPI
|
1,934.9
|
(3.8)
|
0.8
|
|
TWSE
|
8,577.2
|
(0.4)
|
(0.2)
|
|
|
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DJIA
|
16,302.8
|
(1.7)
|
(0.2)
|
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S&P
|
1,866.5
|
1.0
|
(0.3)
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FTSE
|
6,557.2
|
(2.8)
|
0.2
|
|
|
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MYR/USD
|
3.3
|
1.0
|
0.3
|
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CPO (1mth)
|
2,822.0
|
7.4
|
(1.5)
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Crude Oil (1mth)
|
99.5
|
1.1
|
0.0
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Gold
|
1,334.7
|
11.1
|
0.5
|
|
|
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TOP STOCK PICKS
|
|
|
|
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Buy rated large caps
|
|
Price
|
Target
|
|
Tenaga
|
|
11.92
|
14.00
|
|
Genting Msia
|
|
4.26
|
4.74
|
|
HLBK
|
|
14.00
|
16.40
|
|
AMMB Holdings
|
|
7.05
|
8.50
|
|
Bumi Armada
|
|
3.87
|
5.00
|
|
IJM Corp
|
|
5.98
|
6.75
|
|
Time dotCom
|
|
3.85
|
4.40
|
|
MPHB Capital
|
|
1.82
|
2.42
|
|
Cahya Mata Swak
|
|
9.72
|
10.50
|
|
|
|
|
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