Malaysia Daily, Maybank KE (2014-08-11)

Daily 11 August 2014 ACQUISITIONS / DISPOSAL Malaysian Airline System: Accept Offer Khazanah Privatisation Offer  Shariah-compliant Khazanah Nasional has announced its privatisation offer of MYR0.27 to buy out MAS and take it private. MAS management is amenable to this offer, could possibly be concluded by 4Q 2014. We advise shareholders to take up the offer which is fair; it is 8% higher than our SOP valuation of MYR0.25. Click here for full report » INITIATING COVERAGE Icon Offshore Berhad: Buy (New) Riding the wave�s crest  Shariah-compliant Initiate coverage with a BUY and MYR2.00 TP (15x 2015 PER). One of the largest pure play OSV operators in Malaysia with a fleet size of 32 units. 3-year net profit CAGR of 30%, driven by improved utilisation and expected expansion in fleet to 39 units by 1Q16. Click here for full report » RESULTS REVIEW Petronas Gas: Maintain Hold Solid profit delivery  Shariah-compliant 1H14 core net profit was in line with expectation at 50% of ours and 49% of consensus full year forecasts This should allay recent undue concerns over PTG�s earnings-delivery capabilities. Maintain HOLD, TP unchanged at MYR23.50. Click here for full report » Technicals Further autumn malaise The FBM KLCI tumbled 23.47 points WoW to close at 1,839.87, as heavy and persistent selling activities led the index down severely after President Obama ordered airstrikes against Iraqi militants. With the selling that emerged from 1,896.23, we advise clients to sell at the resistance areas of 1,839 to 1,896. Trading idea is a Take Profit call on MAXIS with downside target areas at MYR6.07 & MYR5.64. Click here for full report » Other Local News Mah Sing: Plans MYR3.4b projects in KL and Penang, to be developed over next five years. Two projects would be in Penang and two would be in Kuala Lumpur. Group CEO said despite stringent bank loan conditions which had caused the property market to slow down, the group's sales had remained buoyant. Also, Mah Sing doesn�t expect pricing to soften as their projects are located in prime locations. (Source: The Star) Petronas awards 11 major PIC contracts. Petroliam Nasional Bhd (Petronas) is moving on a steady course forward for its Pengerang Integrated Complex (PIC) project in Johor with the recent award of eleven major contracts. Of the total, five were engineering, procurement, construction and commissioning contracts for the refinery and steam cracker component of the project. (Source: Business Times) Ho Hup: On track to recognize maiden revenue from Malton JV. Ho Hup could be in for a bumper profit for 2QFY14 as the maiden contribution from the JV with Malton has started flowing into its property development division. Channel checks show that shop offices at Pavilion 2 have been fully sold out, generating sales of MYR403.2m. Based on the 18% which Ho Hup enjoys under JV, it is expected to recognize MYR72.6m in revenue in 2Q. (Source: The Edge Financial Daily) Outside Malaysia U.K: House prices rise to record as property sales surge. Values rose 0.6% MoM from June and were up 9.9% YoY, pushing the average price to GBP 270,636 (USD 456,000). About 90,000 properties were sold, marking a 21 % YoY surge over the past year. (Source: Bloomberg) China: Has record trade surplus in July as exports accelerate. Overseas shipments increased 14.5% YoY, the Beijing-based customs administration said. Imports dropped 1.6% YoY, leaving a trade surplus of USD 47.3b, bigger than all analyst estimates. (Source: Bloomberg) Singapore: Sees growth as much as 3.5% as Lee reviews strategies. Singapore Prime Minister Lee Hsien Loong narrowed the government's forecast for economic growth this year and said the country must review its strategies as its needs evolve. The Southeast Asian nation's growth domestic product will probably expand 2.5% to 3.5% this year, Lee said in a televised message. The range is narrower than a previous prediction of 2% to 4%. The economy grew 3.5% in the first half, the leader said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,839.9 (1.5) (1.5) JCI 5,053.8 18.2 (0.3) STI 3,288.9 3.8 (0.8) SET 1,520.3 17.1 (0.1) HSI 24,331.4 4.4 (0.2) KOSPI 2,031.1 1.0 (1.1) TWSE 9,086.0 5.5 (0.5) DJIA 16,553.9 (0.1) 1.1 S&P 1,931.6 4.5 1.2 FTSE 6,567.4 (2.7) (0.5) MYR/USD 3.2 (2.0) 0.0 CPO (1mth) 2,291.0 (12.8) (1.1) Crude Oil (1mth) 97.7 (0.8) 0.3 Gold 1,309.6 9.0 (0.2) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.98 14.00 Axiata 6.94 7.60 Sime Darby 9.41 10.30 Genting Msia 4.29 4.70 Gamuda 4.29 5.30 UMW O&G 3.99 5.15 AFG 4.84 5.50 Perdana Petroleum 1.87 2.55 Hock Seng Lee 1.90 2.25