Malaysia Daily, Maybank KE (2014-05-02)

Daily 02 May 2014 SECTOR UPDATE MY Banking Sector: Neutral Not in vogue just yet Subdued interest in Malaysian banks at this stage due to premium valuations and the country's austerity drive. NEUTRAL on the sector, top banking picks continue to be AMMB, HL Bank and HLFG. Consider MPHB Capital as a mid-cap deeply discounted financial services play � BUY with an RNAV TP of MYR2.42. Click here for full report » MY Banking Sector: Maintain Neutral Loan growth continues to moderate Industry loan growth slipped to 10.2% YoY in Mar 2014 versus 10.7% YoY in Feb 2014 and 11.0% in Jan 2014. 3M MA loan applications trend still point to downward momentum in the coming months. Still NEUTRAL on the banking sector; BUYs are AMMB, HL Bank and HLFG. BUY on MPHB Capital as well. Click here for full report » RESULTS REVIEW IGB REIT: Maintain Hold No surprises 1Q14 net profit was in line. No change to earnings forecasts and DCF-based MYR1.24 TP. Lacks of strong pipeline assets to re-rate; maintain HOLD. Click here for full report » Quill Capita Trust: Maintain Hold Earnings on track 1Q14 net profit in line. Maintain earnings forecasts pending completion of Platinum Sentral acquisition. Maintain HOLD with an unchanged DCF-based TP of MYR1.16. Click here for full report » Technicals Larger discount over index The FBMKLCI advanced 12.18 points to close at 1,871.52 on Wednesday, while the FBMEMAS and FBM100 also closed higher by 63.74 points and 64.61 points, respectively. We recommend a �Nibble on Dips� stance for the index. Trading idea is a Take Profit call on MRCB with downside target areas at MYR1.50 & MYR1.45. Click here for full report » Other Local News O&G: ExxonMobil installs Tapis R platform. ExxonMobil Exploration and Production Malaysia Inc, an ExxonMobil subsidiary, announced the successful installation of the Tapis R topsides offshore platform.Tapis R is one of the largest offshore platforms in Southeast Asia and is a key component of the Tapis Enhanced Oil Recovery (EOR) project. (Source: Business Times) MAHB: New role for LCCT. MAHB to spend up MYR40m to MYR200m to transform LCCT in Sepang into a global cargo and logistics hub. Investment will depend on the requirements of the hub. (Source: Business Times Nestle: Sees slower sales volume. Nestle expects its sales this year to be largely driven by pricing growth as volume growth slows amid a flat food and beverage market. (Source: The Edge Financial Daily) KianJoo: Set to postpone May 23 EGM on disputed takeover. The key reason is that circular to shareholders which is required to be sent to them at least 21 calendar days before May 23, is not ready yet. This meeting is being convened to vote on MYR1.47b takeover that will wipe out and trace of its founding See family. (Source: The Edge Financial Daily) Outside Malaysia U.S: Consumer spending surged in March by the most in almost five years as warmer weather brought shoppers back to auto-dealer lots and malls. Household purchases, which account for about 70% of the economy, climbed 0.9%, the most since August 2009, after a 0.5% gain in February that was larger than previously estimated, Commerce Department figures showed. (Source: Bloomberg) U.S: Manufacturing picked up in April after consumer spending surged the prior month, showing the U.S. economy is poised to lift off in the second quarter. The Institute for Supply Management's factory index rose to 54.9, the strongest so far this year, from 53.7 in March, figures from the Tempe, Arizona, group showed. Readings above 50 indicate expansion. (Source: Bloomberg) U.K: Manufacturing grew more than economists forecast in April as output surged to an eight-month high and exports increased. A Purchasing Managers' Index advanced to 57.3 from 55.8 in March, Markit Economics said in a statement. A level above 50 indicates expansion. The report adds to evidence that the U.K. recovery is broadening beyond consumer spending, after data this week showed factory production expanded the fastest in four years in the first quarter. (Source: Bloomberg) China: Manufacturing grew less than economists estimated in April, underscoring weakness in the world's second-biggest economy from exports to construction. The Purchasing Managers' Index was at 50.4, the National Bureau of Statistics and China Federation of Logistics and Purchasing said. March's reading was 50.3. (Source: Bloomberg) Japan: Auto market fell to the lowest since December 2012 after Japan raised its consumption tax for the first time 17 years, according to industry figures released. In the run-up to the levy being increased 3 percentage points to 8% on April 1, sales had surged for seven straight months. More broadly, the figures may foreshadow the extent of the consumer backlash resulting from the higher taxes Prime Minister Shinzo Abe imposed to counter the world's biggest debt burden. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,871.5 0.2 0.7 JCI 4,840.1 13.2 0.4 STI 3,264.7 3.1 0.8 SET 1,414.9 8.9 0.2 HSI 22,134.0 (5.0) (1.4) KOSPI 1,961.8 (2.5) (0.2) TWSE 8,791.4 2.1 (0.9) DJIA 16,580.8 0.0 0.3 S&P 1,884.0 1.9 0.3 FTSE 6,780.0 0.5 0.1 MYR/USD 3.3 (0.3) 0.2 CPO (1mth) 2,691.0 2.4 0.0 Crude Oil (1mth) 99.7 1.3 (1.5) Gold 1,291.6 7.5 (0.3) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.90 14.00 Genting Msia 4.22 4.74 HLBK 14.00 16.40 AMMB Holdings 7.18 8.50 Bumi Armada 4.00 5.00 IJM Corp 6.38 6.75 MPHB Capital 1.95 2.42