Malaysia Daily, Maybank KE (2014-06-20)

Daily 20 June 2014 RESULTS REVIEW SapuraKencana Petroleum: Maintain Buy Results on track  Shariah-compliant 1QFY1/15 core net profit is in line; 2.35sen DPS is a positive surprise. Secures another 2 EPCIC contracts worth a total MYR1.3b, bringing the backlog to MYR30b. Maintain BUY and MYR5.30 SOP-based TP. Click here for full report » COMPANY UPDATE Oldtown: Maintain Buy New distributors to drive growth  Shariah-compliant Stable F&B earnings growth from outlet expansion and price hike/streamlined product offerings to preserve margins. New distributors appointed and are expected to contribute to FMCG product penetration. Maintain BUY with an unchanged TP of MYR2.67, based on 21x CY15 PER. Click here for full report » SECTOR UPDATE MY Automotive Sector: Maintain Overweight 2014 TIV growth forecast on track May's vehicle sales volume remains healthy at 56k units. Our 2014 TIV forecast of 675k units (+3% YoY) is unchanged. Maintain OVERWEIGHT. BAuto is our top BUY in the sector. Click here for full report » Technicals Re-testing 1,889 soon The FBMKLCI rose 4.90 points to 1,881.48 yesterday, while the FBMEMAS and FBM100 gained 35.21 points and 31.52 points, respectively. In terms of market breadth, the gainer-to-loser ratio was 469-to-366, while 330 counters were unchanged. A total of 2.04b shares were traded valued at MYR1.75b. Most major Asian bourses rose toward 6-year highs after the US Federal Reserve said interest rates would remain low for some time as American economic growth rebounds. Click here for full report » Other Local News Plantation: Seven, including four Malaysians, set sights on NBPO. Apart from FGV, sources said the other Malaysian companies are Sime Darby, KLK and IOI Corp. The others are two plantation groups from Indonesia and Singapore's Wilmar International Ltd. The Indonesian companies are the Sinar Mas group and RGE Group, said sources. (Source: The Star) Eversendai to bid for MYR12b jobs worldwide. Based on past experience, the group achieve 20% success rate, EVSD said. (Source: The Star) UMW Holdings: To allocate MYR2.7b for capex this year. This is an 80% rise from the MYR1.5b it spent last year. The O&G division�s capex allocation is MYR1.9b, automotive about MYR400m and the equipment division MYR250m.(Source: The Star) MAS: Najib said possibility of closure does not arise for now. Closure does not arise for now as a decision has not been made on its direction and the financial implications on the government. (Source: The Edge Financial Daily) Astro: MYR500m home shopping channel. Astro is expected to launch a home shopping channel by end of the year. The pay-TV operator said the new channel was expected to contribute MYR500m to the group�s top-line in five years. (Source: The Star) Kimlun: To launch second project in Medini Iskandar with GDV of MYR420m by end of the year. The two-phase project will consist of about 800 units of SOHO (small office, home office) and some retails properties sited on 13.6ha of freehold land. (Source: The Star) Brahim: In talks to dispose of sugar venture. Through its 60% owned subsidiary Admuda Sdn Bhd, the group holds the license to produce sugar for Sabah & Sarawak and had actually configured plans to complete a MYR150m sugar refinery plant in the Demak Laut Industrial Park in Sarawak by 2015. However, as more licenses are being given out to beverage companies to import sugar, this has resulted them buying less from local refiners. Brahim said the refinery plant project may be less feasible now. (Source: The Edge Financial Daily) Outside Malaysia U.S: Home sales seen dropping for first time in four years, the Mortgage Bankers Association said in its forecast. The MBA lowered its outlook to 5.28 million homes � a decline of 4.1% from the previous year. The industry group also said mortgage lending for purchases would total USD 595b this year, down 8.7% from 2013, and the first retreat in three years, according to MBA projection. (Source: Bloomberg) U.S: Leading economic indicators rise for fourth month, showing the economy will gain momentum following a slowdown at the start of 2014. The Conference Board's gauge, a measure of the outlook for the next three to six months, increased 0.5% after a 0.3% gain in April, the New York-based group said. (Source: Bloomberg) U.K: Retail sales fell for the first time in four months in May as a World Cup boost failed to offset a slump in demand at food stores. Sales including auto fuel declined 0.5% MoM from April, the Office for National Statistics said. Food sales slid 2.4% MoM after surging the previous month during the Easter holiday. Sales at other retailers jumped 2.2% MoM, helped by demand for replica football jerseys before the World Cup tournament that started this month. (Source: Bloomberg) Philippines: The central bank raised the rate it pays on special deposit accounts to curb liquidity and price pressure, even as it kept its benchmark interest rate unchanged for a 13th meeting. Bangko Sentral ng Pilipinas raised the rate on SDAs to 2.25% effective immediately, according to a statement. It kept the rate it pays lenders for overnight deposits at a record-low 3.5 %. (Source: Bloomberg) Vietnam: Central bank devalued the dong for the first time in a year to help spur exports and vowed to ensure the stability of the currency as tension rises over a Chinese oil rig in disputed waters. The State Bank of Vietnam devalued the dong by weakening its reference rate for the currency by 1% to VND 21,246 per dollar, according to a statement on its website. The change, allows the dong to fluctuate as much as 1% on either side of the central bank's fixing. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,881.5 0.8 0.3 JCI 4,864.3 13.8 (0.5) STI 3,269.0 3.2 (0.2) SET 1,461.9 12.6 0.7 HSI 23,167.7 (0.6) (0.1) KOSPI 1,992.0 (1.0) 0.1 TWSE 9,316.8 8.2 0.4 DJIA 16,921.5 2.1 0.1 S&P 1,959.5 6.0 0.1 FTSE 6,808.1 0.9 0.4 MYR/USD 3.2 (1.9) (0.6) CPO (1mth) 2,467.0 (6.1) (0.7) Crude Oil (1mth) 106.4 8.1 0.4 Gold 1,320.4 9.9 3.3 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.82 14.00 Genting Msia 4.21 4.74 HLBK 13.96 16.20 AMMB Holdings 7.15 8.50 Bumi Armada 3.69 4.55 IJM Corp 6.68 7.20 MPHB Capital 2.00 2.42