Malaysia Daily, Maybank KE (2014-10-15)

Daily 15 October 2014 COMPANY UPDATE Bursa Malaysia: Maintain Hold Capital management potential still 9M14 results should meet expectations. No change to our earnings forecasts and MYR8.00 TP. Maintain HOLD for its capital management potential. Click here for full report » RESULTS REVIEW Top Glove: Maintain Hold Lacking bright prospects  Shariah-compliant FY8/14 results within our expectations but below consensus. Expect below-peers FY14-17 earnings growth on its cautious nitrile capacity expansion and soft demand for latex gloves. Maintain HOLD and TP of MYR4.70 (15x CY 15 PER). Click here for full report » ECONOMICS Singapore GDP Advanced Estimate 3Q 2014 Stabilising after slowdown Preliminary 3Q 2014 real GDP growth was +2.4% YoY and +1.2% QoQ. Manufacturing and services expanded amid weak construction. Maintain our 2014-2015 growth forecast of +3.3% p.a. (2014 YTD: +3.2%; 2013: +4.1%) pending full 3Q 2014 GDP. Monetary Authority of Singapore (MAS) forecasts real GDP growth of +2.5% to +3.5% for 2014. Click here for full report » Technicals Finding some support at 1,790? The FBMKLCI inched down 0.82 points to 1,796.38 yesterday, while the FBMEMAS and FBM100 also closed lower by 12.87 points and 8.56 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a take profit call on THHEAVY with downward target areas of MYR0.575 and MYR0.21 Click here for full report » Other Local News Utilities: Government confirms award of third power plant to 1MDB. The award of 2,000mw combined cycle gas power plant in Melaka to 1MDB, is deemed crucial for the sovereign wealth fund to list its power assets on the local bourse by year-end of sometime early next year. On a separate note, Public Accounts Committee chief Datuk Nur Jazlan Mohamed ducked the issue on the massive MYR42b borrowings of 1MDB that many fear would pose a systematic risk to the country. He noted that 1MDB's was not a pressing matter compared to Auditor-General Report and has yet to make any assessment on 1MDB. (Source: The Edge Financial Daily) Infrastructure: BU-Klang LRT3 project to begin end of next year. The project is expected to cost MYR9b and will serve 300,000 commuters. The length of track is 36km and construction is expected to end of 2015. (Source: Business Times) Oil and Gas: Bumi Armada and HCML to extend MYR3.76b contract execution date. Bumi Armada said the Letter of Intent (LOI) shall terminate on Oct 31, subject to such extension as may be mutually agreed between the two parties. (Source: The Star) FGV: Offer for Asian Plantations turn unconditional. Felda Global Ventures Holdings�s (FGV) voluntary conditional cash offer to acquire Asian Plantations Ltd (APL) for MYR628m has turned unconditional as valid acceptances of the offer are now at 93.9% involving about 44 million shares. MMHE: To raise up to MYR1b from sukuk programme. It plans to raise up to MYR1b from a sukuk programme, which has been assigned a preliminary AA-rating by Malaysia Rating Corp (MARC). Separately, MMHE is allocating a capex of MYR338m and MYR151m for 2014 and 2014, respectively. (Source: The Edge Financial Daily) Outside Malaysia Germany: Cuts growth outlook and investor confidence fell to the weakest level in two years as recession concerns mount in Europe's biggest economy. The Economy Ministry reduced its 2014 economic-growth forecast to 1.2% from 1.8%, and its 2015 prediction to 1.3% from 2%. (Source: Bloomberg) U.K: A surprise drop in inflation to the lowest level in five years may give Mark Carney scope to keep interest rates at a record low for longer. The rate of consumer-price growth declined in September to 1.2% YoY, the least since 2009, as falling oil prices and a stronger pound lowered the cost of imports. The report from the Office for National Statistics underscores the case for the Bank of England governor to maintain emergency policy settings as deterioration in the euro-area economy threatens the U.K.'s expansion. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,796.4 (3.8) (0.0) JCI 4,922.6 15.2 0.2 STI 3,194.4 0.9 (0.2) SET 1,546.8 19.1 0.3 HSI 23,048.0 (1.1) (0.4) KOSPI 1,929.3 (4.1) 0.1 TWSE 8,768.4 1.8 0.7 DJIA 16,315.2 (1.6) (0.0) S&P 1,877.7 1.6 0.2 FTSE 6,392.7 (5.3) 0.4 MYR/USD 3.268 (0.3) 0.2 CPO (1mth) 2,193.0 (16.6) 0.3 Crude Oil (1mth) 81.8 (16.8) (4.5) Gold 1,232.8 2.6 (0.2) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.50 14.00 Axiata 7.05 7.60 Sime Darby 9.15 10.20 Gamuda 4.80 5.30 UMW O&G 3.28 5.15 AFG 4.75 5.50 Perdana Petroleum 1.66 2.55 Hock Seng Lee 1.80 2.25