Malaysia Daily, Maybank KE (2014-06-04)

Daily 04 June 2014 RESULTS PREVIEW Berjaya Auto: Maintain Buy Expect a roaring finish  Shariah-compliant Lifted FY14-16 core earnings forecasts by 20-23% on stronger margins outlook from better sales mix & lower cost of sales. BAuto is our preferred auto play, on strong product line-up, earnings growth and undemanding valuations. Reiterate BUY and new top end of the Street TP of MYR2.90, pegged to unchanged 12x CY15 PER, offering 44% upside. Click here for full report » ECONOMICS Subsidy Rationalisation Fuel subsidy review next...? Government reportedly in the midst of overhauling the present "blanket" fuel subsidy mechanism. Moving to a "targeted" system to reduce the subsidy bills, cut leakages and curb smuggling. New fuel subsidy system could be implemented as soon as 1 Sep 2014. Click here for full report » SECTOR UPDATE MY Plantations: Maintain Neutral 1Q14 Results Round Up 1Q14 plantation earnings were a mixed bag with 44% inline, 33% above, and 23% below expectations. Although still preliminary at this juncture, we see flattish to slightly lower QoQ upstream earnings in 2Q14. Maintain 12M NEUTRAL view. Key upside risk is the return of a strong El Nino. Click here for full report » Technicals Sell this low volume rebound The FBMKLCI rose 8.30 points to 1,872.55 yesterday, while the FBMEMAS and FBM100 rose 65.45 points and 66.07 points, respectively. We recommend a �Take Profit� stance for the index. Trading idea is a Take profit call on IOIPG with downside target areas at MYR2.39 & MYR2.24. Click here for full report » Other Local News AirAsia X: To spend MYR2.1b as capex. CEO Azran Osman Rani said AirAsia X will allocate at least MYR2.1b in 2014 as capex to acquire seven new Airbus A330-300 aircraft. To date, it has received three aircrafts, on track to settling aircraft orders AirAsia X committed to. (Source: Business Times) Eversendai: To apply for listing reclassification. This is given the fact that it has ventured into oil and gas industry. It has established the O&G division last year, as part of strategic plans to double its revenue to MYR2b by 2017. It has scored three contracts worth MYR605m in the O&G industry. (Source: Business Times) E&O: Tham ready to extend E&O role. Tham, MD of E&O buys 9.9per cent stake from Sime Darby, ditches 'retirement' plan. He believes he can contribute significantly as he goes about releasing the company's full potential. (Source: Business Times) Supermax: Future growth in Russia and Asia. In Asia, Supermax will also focus on India and China. The construction of the group's 10th and 11th plants in Meru, Klang, was 95 per cent completed and the first batch of the lines was expected to be commissioned in the 3Q this year. (Source: The Star) Outside Malaysia E.U: Inflation slowed more than forecast in May, cranking up pressure on the European Central Bank to deploy measures as soon as this week to kindle prices and drive growth. The rate fell to 0.5% YoY from 0.7% YoY in April, the European Union's statistics office said. The rate has been less than half the ECB's target for eight months. (Source: Bloomberg) China: Rate swap slides to one-year low on targeted easing bet. China's benchmark interest-rate fell to the lowest level in a year after the government said it will loosen reserve requirements for some banks. The State Council has decided to "appropriately" lower reserve-requirement ratios for banks that have extended a certain amount of loans to rural borrowers and small companies, it said May 30 after a meeting led by Premier Li Keqiang. The People's Bank of China will set up a re-lending facility for smaller companies and has set this year's quota at CNY 50 (USD 8b), state broadcaster China Central Television reported May 31. (Source: Bloomberg) Thailand: Consumer confidence rose to 70.7 in May from 67.8 in April, University of the Thai Chamber of Commerce said in statement. Thai military imposed martial law 2 days before seizing power in a coup May 22, and a curfew is in place nationwide. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,864.3 (0.1) (0.5) JCI 4,912.1 14.9 0.4 STI 3,302.2 4.3 0.2 SET 1,440.9 11.0 1.8 HSI 23,081.7 (1.0) 0.0 KOSPI 2,002.0 (0.5) 0.4 TWSE 9,075.9 5.4 0.0 DJIA 16,743.6 1.0 0.2 S&P 1,925.0 4.1 0.1 FTSE 6,864.1 1.7 0.3 MYR/USD 3.2 (1.4) 0.5 CPO (1mth) 2,422.0 (7.8) (0.2) Crude Oil (1mth) 102.5 4.1 (0.2) Gold 1,243.9 3.5 (0.5) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.06 14.00 Genting Msia 4.22 4.74 HLBK 13.88 16.20 AMMB Holdings 7.24 8.50 Bumi Armada 3.59 4.55 IJM Corp 6.78 7.20 MPHB Capital 2.03 2.42