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

Daily 05 May 2014 REGIONAL SECTOR UPDATE Regional Oil & Gas: Maintain Overweight Growing and maturing The FPSO and jack-up (JU) rig markets remain robust but deepwater rig rates are experiencing short-term weakness. Local content and cost management are growing trends. Our Top Picks are Bumi Armada, Yinson in the FPSO space; UMWOG, Perisai and PV Drilling in the JU drilling segment. Click here for full report » RESULTS REVIEW Westports Holdings: Maintain Buy Sustainable strong volume  Shariah-compliant 1Q14 results within expectations with record high volume. P3 alliance concerns offset by strong volume growth. Maintain BUY with unchanged DCF-based TP of MYR2.70; decent dividend yield of 4.2%. Click here for full report » ECONOMICS ASEAN Exports & Currencies Translation vs Transmission ASEAN exports strengthened so far this year. But it was more of "translation effect" from weaker currencies amid modest "transmission effect" from firmer external demand. Based on our econometric analyses, no support to the "conventional wisdom" that weaker currencies boost exports and improve trade balances. Click here for full report » Technicals Still afloat at lofty zones The FBM KLCI inched up 8.10 points WoW on some minor buying activities last week. The index closed at 1,869.08 last Friday, as volume turned down from 2.20b to 1.15b shares traded. Trading idea is a Short-Term Buy call on MITRA with upside target areas at MYR0.81 & MYR0.88. Stop loss is at MYR0.63. Click here for full report » Other Local News UMW-OG: Eyes 20 jobs worth MYR1.9b. Deals are in various stages of bidding, some in surveying stages while others in negotiations. 60% of the contracts which UMW-OG are bidding are short-term while 40% are long-term. (Source: The Edge Financial Daily) Yinson: To use rights proceeds to bid for jobs, repay banks. Yinson plans to utilize part of the MYR600m raised from the rights issue for working capital, including bid for new contracts and repayment of bank borrowings. (Source: The Star) MAHB: Plan airport cities. MAHB hopes to increase its non-aeronautical revenue to 55% from 50% now by 2020. It plans to achieve this by developing cities around the klia in Sepang under a six-year business plan dubbed Runway to Success 2020. (Source: Business Times) GENP: Genting Plantations' RSPO membership suspended. GENP is targeting to complete its filing for new planting procedure (NPP) certification as required by the Roundtable of Sustainable Pail Oil (RSPO) by end of this month, following suspension of its membership dated April 15, 2014. (Source: The Edge Financial Daily) Outside Malaysia U.S: April payroll gain shows broadest advance in two years. The 288,000 increase in employment marked the biggest upside surprise since February 2012 and followed a 203,000 rise the prior month, Labor Department figures showed. An index measuring the share of industries hiring climbed to 67, the highest level since January 2012. The jobless rate dropped to 6.3%, the lowest since September 2008. (Source: Bloomberg) E.U: Euro-Area unemployment holds near record as manufacturing gains. The jobless rate was 11.8% in March, a level reached in December and just off a record of 12% last year, the European Union's statistics office in Luxembourg said. Meanwhile, a Purchasing Managers' Index rose to 53.4 in April from 53 a month earlier, Markit Economics said. The gauge has been above 50, indicating expansion, for 10 months. (Source: Bloomberg) U.K: Construction slows to six-month low as flood work cools. U.K. construction growth slowed to the weakest pace in six months in April as some civil engineering companies reported less work related to flood-relief efforts. A Purchasing Managers' Index declined to 60.8 from 62.5 in March, Markit Economics said. Britain had its wettest winter for almost 250 years with some parts of England experiencing floods that bolstered rebuilding and repair work earlier this year. (Source: Bloomberg) Indonesia: China slowdown weighs on export outlook, Basri says. China's economic slowdown is weighing on the outlook for Indonesia's exports even as the Southeast Asian nation's trade balance improves, Finance Minister Chatib Basri said. "What we need to watch carefully is the slowdown in China," Basri said May 2 in an interview with Bloomberg News in Astana, Kazakhstan, where he is attending the Asian Development Bank's annual meeting. The slower pace of growth in Asia's largest economy is the biggest concern for Indonesia's exports this year, he said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,869.1 0.1 (0.1) JCI 4,838.8 13.2 (0.0) STI 3,252.6 2.7 (0.4) SET 1,421.5 9.5 0.5 HSI 22,260.7 (4.5) 0.6 KOSPI 1,959.4 (2.6) (0.1) TWSE 8,867.3 3.0 0.9 DJIA 16,512.9 (0.4) (0.4) S&P 1,881.1 1.8 (0.1) FTSE 6,822.4 1.1 0.6 MYR/USD 3.3 (0.3) 0.0 CPO (1mth) 2,660.0 1.2 (1.2) Crude Oil (1mth) 99.8 1.4 0.0 Gold 1,286.2 7.0 (0.4) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.90 14.00 Genting Msia 4.22 4.74 HLBK 13.98 16.40 AMMB Holdings 7.19 8.50 Bumi Armada 3.99 5.00 IJM Corp 6.38 6.75 MPHB Capital 1.97 2.42