Malaysia Daily, Maybank KE (2014-04-10)

Daily 10 April 2014 SECTOR UPDATE Property Sector: Maintain Neutral Towering oversupply We remain cautious on Iskandar Malaysia's (IM) medium-term outlook post-site visit last week. Concerns remain on an oversupply situation in IM hotspots due to aggressive launches; we prefer Klang Valley instead. Maintain Neutral; Eco World (ECW MK; Not Rated) could be the new bellweather in the property sector. Click here for full report » Technicals Poised to attack 1,860 again The FBMKLCI rose 3.44 points to close at 1,855.75 yesterday, while the FBMEMAS and FBM100 also closed higher by 32.26 points and 27.53 points, respectively. Due to the KLCI April Futures moving into a small 2.25-points premium against the FBMKLCI, we expect firmer trading towards the higher resistance zone of 1,858 to 1,872, with further local buying activities due to the American markets surging last night. Trading idea is a Short-Term Buy on YEELEE with upside target areas at MYR1.91 & MYR2.13. Stop loss is at MYR1.61. Click here for full report » Other Local News Automotive: Local partner of Great Wall Motor, Go Automobile Manufacturing Sdn Bhd (GAM) gets first EEV license. GAM targets to manufacture 100,000 units a year by 2018. This will involve a total investment of MYR2b over three phases of manufacturing expansion. (Source: The Edge Financial Daily) Materials: BASF, Petronas aroma plant gets final nod. PCHEM and BASF Nederland BV (BASF), a joint venture, have approved the final investment decision for their integrated aroma ingredients complex in Gebeng, Kuantan,Pahang. PCHEM would put in 40% of investment and BASF for the remainder. (Source: The Edge Financial Daily) Consumer: MYR1.5b investments in halal sector targeted. Halal Industry Development Corporation (HDC) is eyeing investments worth MYR1.5b in the local halal sector this year, said Chief Executive Officer Datuk Seri Jamil Bidin.To date, total investments in the sector amounted to MYR14b, including MYR8b for setting up of halal parks. Potential investors are from Japan, Europe and China. (Source: Business Times) Power: Ramping up solar energy�s capacity. 1MDB and TNB are in talks to jointly develop the country�s largest solar power plant. Sources said that 1MDB has proposed to build a 50-megawatt (MW) plant in Kedah. It could cost nearly MYR1b and will also be the largest non-hydro renewable energy plant in Malaysia (Source: Business Times) Oil & Gas: Seadrill sells down stake in SapuraKencana in USD300m sale. Norway�s Seadrill the 2nd largest sharedholder, has sold 230m shares of Sapura Kencana (MYR989m). Total gain from sale is USD165m. Following completion of transaction, Seadrill will continue to own 490m shares or an 8% stake. (Source: The Edge Financial Daily) Outside Malaysia U.S: Federal Reserve plays down own forecasts for rate increase. "Several participants noted that the increase in the median projection overstated the shift in the projections," according to minutes of the March 18-19 meeting of the Federal Open Market Committee. Some expressed concern the rate forecasts "could be misconstrued as indicating a move by the committee to a less accommodative reaction function." (Source: Bloomberg) U.K: Trade deficit narrowed in February as a drop in imports, driven by aircraft, outpaced a decline in exports. The trade gap was GBP 9.1b (USD 15.2b) compared with GBP 9.5b in January, the Office for National Statistics said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,855.8 (0.6) 0.2 JCI 4,921.4 15.1 0.0 STI 3,209.9 1.3 0.2 SET 1,382.0 6.4 0.2 HSI 22,843.2 (2.0) 1.1 KOSPI 1,999.0 (0.6) 0.3 TWSE 8,930.6 3.7 0.5 DJIA 16,437.2 (0.8) 1.1 S&P 1,872.2 1.3 1.1 FTSE 6,635.6 (1.7) 0.7 MYR/USD 3.2 (1.5) (0.4) CPO (1mth) 2,650.0 0.8 1.2 Crude Oil (1mth) 103.6 5.3 1.0 Gold 1,311.8 9.2 0.2 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.90 14.00 Genting Msia 4.24 4.74 HLBK 14.08 16.40 AMMB Holdings 7.14 8.50 Bumi Armada 3.97 5.00 IJM Corp 6.42 6.75 Time dotCom 4.28 4.40 MPHB Capital 1.93 2.42