Malaysia Daily, Maybank KE (2014-06-11)

Daily 11 June 2014 REGIONAL SECTOR UPDATE Plantations: Neutral Inventory on a rise Strong production and relatively muted exports led to higher inventory in May 2014. CPO price now trades at ~MYR2,400/t on weakened fundamentals, but within our expectations. Maintain 12M NEUTRAL view. Key risk to our view is the return of a strong El Ni�o. Click here for full report » COMPANY UPDATE Eco World Development: Maintain Buy It�s showtime  Shariah-compliant Likely to exceed its MYR2b internal sales target for FY10/14. Sales and profit delivery are key focus for investors over the medium-term. Maintain earnings forecasts, MYR6.40 TP (0.84x P/RNAV). ECW is our top BUY for the property sector. Click here for full report » Other Local News Puncak Niaga: Accepts Selangor government water assets take over. Puncak Niaga said it had accepted in principle the Selangor government�s takeover offer for its 100% equity in Puncak Niaga (M) Sdn Bhd (PNSB) and 70% equity in Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) for a net cash consideration of MYR1.56b. The proposed takeover of PNSB and Syabas by KDEB shall include the takeover of all assets and corresponding liabilities of PNSB in relation to its concession businesses only. (Source: The Star) MAS: To lay out turnaround plan in 6-12 months, says Azman. All options are being considered, including the possibilities of asset or fund injections, declaring bankruptcy or a management reshuffle at the ailing national carrier. (Source: The Edge Financial Daily) Top Glove: New plants will boost yearly capacity to 45b units (43.9b in Oct 2013). With the additional of two new plants, bring the total number to 29. (Source: Business Times) E&O: Penang approves E&O's masterplan for STP phase 2. STP phase two will involve reclamation of 760 acres of man-made islands and 131 acres of the Gurney Drive foreshore, which will be handed over to the state government for infrastructure development. Reclamation to take 3-5 years, and development to take up to 15 years. (Source: The Star) Eco World: To expand to Sydney. ECW acquired 1.18-acre plot of land in Sydney�s main business district, and plans to develop over 300 units of apartment there. ECW targets to grow property sales from a projected MYR2b this year to MYR3b in 2015. (Source: The Star) Star: Maps digital roadmap. Star is taking on a more integrated approach with digital to play a vital role in the coming years. It would broaden its TV platform, starting off with its partnership with Bloomberg TV Malaysia. (Source: The Star) Outside Malaysia Global: World Bank cuts growth forecast after 'bumpy' 2014 start amid weaker outlooks for the U.S., Russia and China, while calling on emerging markets to strengthen their economies before the Federal Reserve raises interest rates. The Washington-based lender predicts the world economy will expand 2.8% this year, compared with a January projection of 3.2%. The U.S. forecast was reduced to 2.1% from 2.8% while outlooks for Brazil, Russia, India and China were also lowered. The setbacks may be temporary: the 2015 estimate for world economic growth was unchanged at 3.4%. (Source: Bloomberg) U.S: Job openings in April climb to highest level since September 2007. The number of positions waiting to be filled in the U.S. rose by 289,000 to 4.46 million in April, the highest since September 2007, the Labor Department reported in Washington. The pace of firing also rose. (Source: Bloomberg) China: Inflation accelerated in May to the fastest pace in four months on food costs, while a decline in factory-gate prices moderated. Consumer prices rose 2.5% YoY, the statistics bureau said. The producer-price index fell 1.4% YoY after a 2% YoY decline the previous month. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,876.6 0.5 0.7 JCI 4,946.1 15.7 1.2 STI 3,293.8 4.0 (0.3) SET 1,469.2 13.1 0.8 HSI 23,315.7 0.0 0.9 KOSPI 2,011.8 0.0 1.1 TWSE 9,222.4 7.1 0.7 DJIA 16,945.9 2.2 0.0 S&P 1,950.8 5.5 (0.0) FTSE 6,873.6 1.8 (0.0) MYR/USD 3.2 (2.1) 0.3 CPO (1mth) 2,386.0 (9.2) (1.0) Crude Oil (1mth) 104.4 6.0 (0.1) Gold 1,253.2 4.3 (0.2) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.76 14.00 Genting Msia 4.29 4.74 HLBK 13.96 16.20 AMMB Holdings 7.20 8.50 Bumi Armada 3.63 4.55 IJM Corp 6.79 7.20 MPHB Capital 1.99 2.42