Affin Daily Insight (LV) - 5 May 2014 - CIMB / ALAM / ECONOMY - ASEAN OUTLOOK / ECONOMY - US OUTLOOK / DMR

Top Calls

Company Update � CIMB Group (ADD, maintain) - Regional outlook stabilizing, looking to a stronger 2H14 We maintain our ADD rating on CIMB Group at a price target of RM7.75, based on an a Gordon-growth derived P/BV multiple of 1.56x, with an underlying FY15E ROE of 13.6%. In our view, the stabilizing regional outlook, driven by lower volatility and currency risks, coupled with management�s mitigative measures to stem NIM compression, will be CIMB�s key earnings drivers for FY14-16 and sustain the share price. Nonetheless, we continue to look for potential surprises such as: i) recovery in mark-to-market losses and higher trade volumes; ii) improvement in the cost-to-income ratio from our current forecast of 56% for FY14; and iii) a pick-up in deal flow. On 1QFY14 outlook, the domestic market is still the key driver, with approval rates for mortgages still on an uptrend. 1QFY14 NIM outlook appears mores stable for Malaysia, Singapore and Thailand, while funding cost pressure remains in Indonesia.

Other Calls

Flash Note � Alam Maritim (BUY, maintain) - Alam secures RM248m contract

Economy - ASEAN Outlook - Weekly Wrap (25 Apr - 2 May 2014) - BI is likely to leave policy rate unchanged this week

Economy - US Outlook - Weekly Wrap (28 Apr - 2 May 2014) - US GDP to recover in 2Q14, consumption led growth

Debt Market Research - Sustained buying interest, better NFP, lower UST with CT10�s dipping below 2.60%

Morning News & Market Summary

For important disclosures, please refer to the Disclosure section at the end of the individual linked research reports.

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