Malaysia Daily, Maybank KE (2014-08-13)

Daily 13 August 2014 COMPANY UPDATE Media Chinese International: Maintain Hold Waiting for the inflexion point Adex growth will be suppressed over the next two years but significant newsprint cost savings are in the offing. Trim EPS estimates by 4-11%. That said, MCIL may be Shariah compliant again and there is alot of scope to raise dividends. Maintain HOLD call but with a trimmed TP by 10% to MYR0.92 on an unchanged 10x CY14 PER. Click here for full report » RESULTS REVIEW Nestle Malaysia: Maintain Hold Expect a catch-up in 2H14  Shariah-compliant 1H14 results slower than normal due to higher marketing expenses and commodity prices. Price increases should however allow Nestle to play catch-up in 2H14. Maintain HOLD with an unchanged DCF-based TP of MYR64. Click here for full report » ECONOMICS Singapore GDP Final 2Q 2014 Slightly better vs. advanced estimates Final 2Q 2014 GDP came in better than advanced estimates, while 1Q 2014 numbers were revised upwards. Our full-year growth forecast is cut to +3.3% from +3.7%. Official real GDP growth forecast adjusted to 2.5%-3.5% from 2.0%-4.0% Click here for full report » Technicals Inched up slowly and gingerly The FBMKLCI inched up by 1.07 points to 1,850.39 yesterday, while the FBMEMAS and FBM100 also closed higher by 14.59 points and 9.02 points, respectively. We recommend a �Range Trading� stance for the index. Trading idea is a Short-Term Buy call on GUOCO with upside target areas at MYR2.05 & MYR2.38. Stop loss is at MYR1.62. Click here for full report » Other Local News Sime Darby: Sime-led consortium settles costs for Bakun dam works. Sime Darby Bhd has signed a deal with China�s Sinohydro Corp, WCT and MTD Capital to settle all costs under the Malaysian-China Hydro Joint Venture (MCHJV) for the CW2 Package of the main civil works of the controversial Bakun Hydroelectric Project (CW2 contract) in Sarawak. Sime Darby won the bid to build the dam as the lead partner in the MCH JV consortium for MYR1.79b in September 2002. (Source: The Edge Financial Daily) Puncak Niaga: Bids for Kepong incinerator job. Puncak Niaga Holdings is understood to have entered the fray to bid for the controversial waste-to-energy incinerator in Taman Beringin in Kepong, Selangor, said to cost MYR800m. Sources say Puncak Niaga had submitted a bid to undertake the proposed incinerator project in an international tender opened a few days ago and is expected to close in three months. The winner for the Kepong project could possibly stand to sign a 30-year concession with the government. (Source: The Edge Financial Daily) CME: To partner Aussie firms in AUD112m project. CME Group has proposed a JV with two Australian companies to develop two parcels of contiguous freehold land in Western Australia with an estimated gross development value (GDV) of AUD112m (MYR331.42m). The companies are Ruark Properties Pty Ltd and Central Park (QLD) Pty Ltd, which are principally involved in property development. The group said the land, measuring 15,784 sq m, is in the local government area of Mandurah, one of the most vibrant regional cities in Western Australia and 75km south of the Perth Central Business District. (Source: The Edge Financial Daily) Grand-Flo: Targets 50pc income from property arm. Tracking solutions provider Grand-Flo Bhd hopes to generate half of its revenue from a new venture in property development by next year. Grand-Flo group president and managing director Derrick Tan said its new venture will be driven by the acquisition of Penang-based property developer Innoceria Sdn Bhd. Grand-Flo received shareholders� nod for the acquisition of a 50% plus one share of Innoceria for MYR15m. Innoceria holds the rights to develop the MYR220m Vortex Business Park, comprising mainly commercial and light industrial buildings. (Source: Business Times) Muhibbah: Awarded MYR30m deal. Muhibbah Engineering (M) has received a letter of award to provide materials to build a central processing platform at Vestigo�s Tembikai oilfield located offshore Terengganu worth about MYR30m. The contract commences immediately and is expected to be completed in 2015. (Source: The Star) Outside Malaysia Germany: Investor confidence fell to the lowest level since 2012 as the crisis in Ukraine and a sluggish euro-area recovery damp the outlook for Europe's largest economy. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, dropped to 8.6 in August from 27.1 in July. This was the eighth consecutive monthly decline and the biggest in more than two years. (Source: Bloomberg) U.K: Food sales by value dropped the most in at least 5 1/2 years in the three months through July because of price cuts by supermarkets, the British Retail Consortium said. Food sales at stores open at least 12 months plunged 3.5% YoY, the London-based trade group said in a report compiled with KPMG LLP. That's the biggest since the series began in December 2008. (Source: Bloomberg) Japan: Economy shrinks the most since 2011 quake on sales tax. Gross domestic product shrank an annualized 6.8% in the three months through June, the Cabinet Office said. Unadjusted for price changes, the economy decreased at an annualized pace of 0.4%. (Source: Bloomberg) India: Consumer-price inflation quickened more than estimated adding pressure on central bank Governor Raghuram Rajan to keep interest rates elevated even after factory output slowed. The consumer-price index rose 7.96% YoY in July, compared with an upwardly revised 7.46% YoY in June, the Statistics Ministry said. Industrial production rose 3.4% YoY in June compared with a revised 5% YoY in May. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,850.4 (0.9) 0.1 JCI 5,132.4 20.1 0.4 STI 3,303.4 4.3 (0.1) SET 1,520.3 17.1 0.0 HSI 24,689.4 5.9 0.2 KOSPI 2,041.5 1.5 0.1 TWSE 9,163.1 6.4 (0.1) DJIA 16,560.5 (0.1) (0.1) S&P 1,933.8 4.6 (0.2) FTSE 6,632.4 (1.7) (0.0) MYR/USD 3.2 (2.4) (0.1) CPO (1mth) 2,228.0 (15.2) (0.1) Crude Oil (1mth) 97.4 (1.1) (0.7) Gold 1,312.4 9.2 0.3 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.08 14.00 Axiata 6.97 7.60 Sime Darby 9.49 10.30 Genting Msia 4.30 4.70 Gamuda 4.30 5.30 UMW O&G 4.07 5.15 AFG 4.90 5.50 Perdana Petroleum 1.86 2.55 Hock Seng Lee 1.93 2.25