Malaysia Daily, Maybank KE (2014-04-14)

Daily	14 April 2014
COMPANY UPDATE Gas Malaysia: Maintain Hold A long awaited hike  Shariah-compliant The 20% price hike appears to merely reflect a pass-through of higher gas cost based on 2013 gas volumes. Further hikes would be required in 2015 for GMB to maintain its spreads; this would be the key earnings risk for GMB. Maintain HOLD with a lower TP of MYR3.50 (-40sen). Click here for full report » MARKET STRATEGY MY Strategy Assessing higher OPR impact Our 2015 market earnings estimates will only be marginally shaved, factoring in a 50bps rise in the OPR from 2H14. PLC with the highest negative earnings impact will be Ann Joo; the impact on the rest is, at most, 3.3%. Corporate balance sheets have been strengthening, providing a good cushion against external shocks. Click here for full report » Technicals Market volatility and malaise The FBM KLCI inched down 3.95 points WoW as global volatility emerged and prompted selling last week. The index closed at 1,852.66 last Friday. With the local buying that emerged recently at 1,802, we advise clients to nibble at the support areas of 1,802 to 1,845. The resistance levels of 1,852 and 1,882 will see heavy profit taking activities. Trading idea is a Short-Term BUY on BONIA with upside target areas at MYR5.78 & MYR6.60. Stop loss is at MYR4.51. Click here for full report » Other Local News Petronas: Maximising O&G output. Petronas is focusing on deepwater projects, risk service contracts (RSC) and unconventional gas sources internationally to increase energy supplies and earnings. Petronas is looking at marginal oil fields and unconventional gas sources both in Malaysia and overseas. (Source: Business Times) Dialog: Starts ops in Pengerang. Dialog�s first vessel carrying fuel for petroleum and crude storage facility,phase one, started its oil storage operations on 12 April 2014. Phase one would likely serve well for growing needs for storage capacity in the Asian region. Dialog is also in talks with potential investors for Phase two and three project. (Source: The Star) IJM Corp: Besraya highway extension opens tomorrow. Total investment by IJM for the highway is MYR700m. This is only the construction cost, excluding land cost for Besraya Eastern Extension (BEE) project. Government has allowed extension of eight years of BEE�s concession period. (Source: The Star) Bank Islam: Still keen on Indonesia market. With only penetration of Islamic Banking at about 3-4% in Indonesia, MD Datuk Seri Zukri Samat said that it is underserved. As compared to Malaysia�s 23-24%, there certainly is a lot of business opportunity in Indonesia, given that there is a huge Muslim population in Indonesia. (Source: The Star) Outside Malaysia U.S: Consumer sentiment rises to highest level since July. The Thomson Reuters/University of Michigan preliminary index of sentiment climbed to 82.6 this month from a four-month low of 80 in March. The median estimate in a Bloomberg survey of economists called for the measure to increase to 81. (Source: Bloomberg) E.U: Draghi says stronger Euro could trigger more ECB stimulus. �The strengthening of the exchange rate would require, making our monetary policy stance to remain equally accommodative, it would require further monetary policy accommodation,� European Central Bank, ECB President Mario Draghi said at a press conference in Washington. �The strengthening of the exchange rate requires further monetary stimulus. That�s an important dimension for our price stability.� (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,852.7 (0.8) (0.4) JCI 4,816.6 12.7 1.1 STI 3,198.2 1.0 (0.2) SET 1,389.2 7.0 (0.0) HSI 23,003.6 (1.3) (0.8) KOSPI 1,997.4 (0.7) (0.6) TWSE 8,908.1 3.4 (0.4) DJIA 16,026.8 (3.3) (0.9) S&P 1,815.7 (1.8) (0.9) FTSE 6,561.7 (2.8) (1.2) MYR/USD 3.2 (1.2) 0.4 CPO (1mth) 2,660.0 1.2 0.2 Crude Oil (1mth) 103.7 5.4 0.3 Gold 1,318.4 9.7 (0.0) 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 7.13 8.50 Bumi Armada 3.97 5.00 IJM Corp 6.49 6.75 Time dotCom 4.32 4.40 MPHB Capital 1.92 2.42