Malaysia Daily, Maybank KE (2014-08-06)

Daily 06 August 2014 INITIATING COVERAGE Boustead Plantations: Buy (New) Plantation estates for free, anyone  Shariah-compliant Initiate with a BUY with a SOP-TP of MYR2.16; +37% upside. Boustead Plantations (BPLANT) trades at approximately half its RNAV of MYR3.08/sh; it is deep in value. ~60k ha estates are for free as current share price merely reflects the value of ~11k ha with development potential. Click here for full report » RESULTS REVIEW Malaysia Marine & Heavy Engineering: Maintain Buy In line; changes in methods  Shariah-compliant 1H14 results within our expectation, below consensus. New profit recognition, from �milestone billing� to �square method� cuts our FY15/16 earnings forecasts by 49%/43%. We change our valuation methodology to backlog-based; TP raised to MYR4.60 (+9%), on 2.9x EV/ backlog. Maintain BUY. Click here for full report » Hartalega: Maintain Buy High take-up for new capacity  Shariah-compliant 1QFY3/15 earnings (+16% QoQ, -9% YoY) within expectations. We are positive on its expansion plan, especially since existing customers have lent support to demand. Maintain BUY and TP of MYR7.30 (19x mid-2016 PER). Click here for full report » Technicals A miniscule late rise on the index The FBMKLCI inched up 0.89 points to 1,876.69 yesterday, while the FBMEMAS and FBM100 also rose by 2.71 points and 2.45 points, respectively. We recommend a �Nibble on Dips� stance for the index. Trading idea is a short-term buy call on MFLOUR with MYR2.29 & MYR2.43. Stop loss is at MYR1.78. Click here for full report » Other Local News Infrastructure: Selangor water deal intact. The Selangor water restructuring master policy agreement will not be affected even without the participation of Syarikat Pengeluar Air Selangor Holdings Bhd (Splash), says Pengurusan Aset Air Bhd (PAAB). PAAB chief executive officer Datuk Ahmad Faizal Abdul Rahman said Splash only managed one water treatment plant compared with Puncak Niaga Holdings Bhd which managed 27 treatment plants and Syarikat Bekalan Air Selangor Sdn Bhd distributed water to all areas in Selangor. (Source: The Star) Banking: RHB Asset Management aims to raise MYR200m from latest offering. RHB Investment Bank's wholly owned unit RHB Asset Management Sdn Bhd aims to raise MYR200m from its latest offering, the RHB-OSK Pre-IPO and Special Situation Fund 2. RHB Investment managing director and chief executive officer Mike Chan said the fund, structured as a close-ended unit trust fund with a charter life of five years, will act as a feeder fund to the US dollar denominated RHB-OSK pre-initial public offer (IPO) and special situation fund launched in Singapore in April. (Source: The Edge Financial Daily) AXIS REIT: To expand portfolio to MYR2b in 2H14. Axis Real Estate Investment Trust Managers Bhd (AXIS-REIT) plans to buy five assets in the second half of this year (2H14), which would bump up its assets under management (AUM) to MYR2.02b, up 27.36% from the MYR1.59b it recorded in 1H14. The REIT now plans to acquire two more industrial facilities, one each in Johor and Prai (Penang) at MYR153m and MYR38m respectively. The company is said it is expecting to raise approximately MYR280m in a placement exercise, which will involve 83.6m units during early October. (Source: The Edge Financial Daily) Protasco: O&G venture falls through. Protasco has called off its venture into the onshore marginal oilfield development in Indonesia. The company announced yesterday that its amended sale and purchase agreement (SPA) to acquire a 63% stake in Indonesia-based oil and gas company PT Anglo Slavic Indonesia (ASI) from PT Anglo Slavic Utama (ASU) had lapsed. PT ASI indirectly holds the rights to develop and produce oil and gas in the Kuala Simpang Timur (KST) field in Aceh, Indonesia. The KST oilfield is stated to have 14.2m barrels of recoverable reserves with the probability that 90% of the reserves can be recovered. (Source: The Edge Financial Daily) Outside Malaysia U.S: Services in July expand at fastest pace since 2005. The Institute for Supply Management�s non-manufacturing index increased to 58.7, exceeding the highest estimate in a Bloomberg survey of economists, from the prior month�s 56. Readings greater than 50 indicate expansion. (Source: Bloomberg) E.U: Euro-Area services grew less than initially estimated in July. Markit Economics's Purchasing Managers Index rose to 54.2 from 52.8 in June, below the 54.4 reading published on July 24. A composite index of services and manufacturing increased to 53.8, also lower than previously estimated. (Source: Bloomberg) U.K: Services expand at fastest pace in eight months. Markit Economics said its Purchasing Managers' Index for services, the biggest part of the economy, jumped to 59.1 from 57.7 in June, exceeding the median forecast for a reading of 58. That's the highest since November and the 19th straight month above the 50 level that divides expansion from contraction. (Source: Bloomberg) India: Rajan holds rates for third meeting in inflation fight. India's central bank left interest rates unchanged for a third straight meeting as retail inflation slowed and Prime Minister Narendra Modi released food stocks to offset the risk of higher prices from a weak monsoon. Governor Raghuram Rajan kept the benchmark repurchase rate at 8%, the Reserve Bank of India said in a statement in Mumbai. (Source: Bloomberg) Indonesia: Growth slows on exports in challenge to Widodo. Indonesia's economic growth eased to the slowest since 2009 as exports and government spending fell, underscoring the challenge to President-elect Joko Widodo as he prepares to lead the world's fourth-most populous nation. Gross domestic product rose 5.12% YoY in the three months ended June 30. The increase was less than a revised 5.22% YoY pace in the first quarter. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,876.7 0.5 0.0 JCI 5,109.1 19.5 (0.2) STI 3,327.7 5.1 0.3 SET 1,529.0 17.7 0.6 HSI 24,648.3 5.8 0.2 KOSPI 2,066.3 2.7 (0.7) TWSE 9,141.4 6.2 (2.0) DJIA 16,429.5 (0.9) (0.8) S&P 1,920.2 3.9 (1.0) FTSE 6,682.5 (1.0) 0.1 MYR/USD 3.2 (2.7) (0.4) CPO (1mth) 2,328.0 (11.4) (0.6) Crude Oil (1mth) 97.4 (1.1) (0.9) Gold 1,291.4 7.5 (0.0) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.38 14.00 Axiata 6.97 7.60 Sime Darby 9.51 10.30 Genting Msia 4.35 4.70 Gamuda 4.35 5.30 UMW O&G 4.01 5.15 AFG 5.00 5.50 Perdana Petroleum 1.87 2.55 Hock Seng Lee 1.88 2.25