Malaysia Daily, Maybank KE (2014-10-16)

Daily 16 October 2014 COMPANY UPDATE Berjaya Auto: Maintain Buy Pedal to the metal  Shariah-compliant A fast-growing new kid on the block with the balance sheet to expand regionally, riding on Mazda�s revitalised brand. Favourable near-term catalysts: new model launches, production capacity expansion and favourable forex. Our forecasts are unchanged. Maintain BUY with unchanged TP of MYR3.50 (12x CY15 PER), with positive earnings bias. Click here for full report » UEM Sunrise: Maintain Hold Reducing exposure in Nusajaya  Shariah-compliant Management is turning cautious on the short-term outlook of the Iskandar Malaysia (IM) property market. Focus will shift to landed properties (namely affordable landed) and overseas projects over the short term. Lower our RNAV estimates by 7%; consequently, we lower our RNAV-based TP by 11% to MYR1.87. HOLD. Click here for full report » Technicals Local market fell on forced selling The FBMKLCI fell 9.54 points to 1,786.84 yesterday, while the FBMEMAS and FBM100 also closed lower by 84.72 points and 72.57 points, respectively. In terms of market breadth, the gainer-to-loser ratio was 211-to-657 while 262 counters were unchanged. A total of 2.04b shares were traded valued at MYR2.17b. Trading idea is a take profit call on MHB with downward target areas of MYR2.41 and MYR3.01 Click here for full report » Other Local News Infrastructure & Property: LRT3 boom for mass housing. More high-density residential developments are expected to mushroom between Bandar Utama and Klang in Selangor, spurred by the proposed third light rail transit (LRT3) line, benefiting some developers who own land in the area. Construction of LRT3 is expected to begin by the end of next year while tenders will be called in June. The MYR9b project will begin from the Bandar Utama Mass Rapid Transit (MRT) station, which is under construction. There will be 26 stations along the route, 10 park-and-ride stations and four integrated stations, which will connect the MRT, LRT Kelana Jaya line, RapidKL's Bus Rapid Transit and KTM Komuter services. (Source: Business Times) AirAsia X: To take delivery of 8 jets next year. These jets will expand AAX's fleet to 31 aircraft by the end of next year from 23 now. CEO also mentioned that AirAsia X might consider resuming flights to Europe depending on the economic situation there when 'demand exceeds supply'. (Source: The Star) SP Setia: Appoints new directors. S P Setia has appointed Tan Sri Alauddin Md Sheriff and Datuk Seri Mohd Noor Yaacob its new non-executive directors. S P Setia said Alauddin, 69, was the former Chief Judge of Malaya who also sits on the board of directors of Affin Holdings and Malakoff Corp while Mohd Noor Yaacob, 60, is currently the president of Road Engineering Association of Malaysia. (Source: The Star) QL: On its 'attractive' MYR3.50 offer price for Lay Hong. Lay Hong has not traded at or above MYR3.50 for 12 years, since 2002, and that it has low liquidity. QL said the voluntary general offer (VGO) came about after Lay Hong�s major shareholders, led by the Yap family, voted at the AGM against the re-election of its sole board representative without any explanation or prior known conflict. QL is aware that it could have saved money by accumulating shares in the open market until it triggers a mandatory general offer but has chose not to do that as it would have compromised everything that QL stands for. (Source: The Star) Outside Malaysia U.S: Retail sales dropped more than forecast in September, reflecting a broad-based pullback that signaled consumers took a breather. The 0.3% MoM decrease followed a 0.6% MoM August gain that was the biggest in four months, Commerce Department figures showed. (Source: Bloomberg) U.S: Wholesale prices unexpectedly fell in September for the first time in a year, propelled by a drop in fuel costs that continues into this month, Labor Department figures showed. The 0.1% MoM decrease in the producer price index was the first decline since August 2013. The so-called core measure, which strips out volatile food and fuel, was unchanged. (Source: Bloomberg) U.K: Unemployment fell more than forecast to the lowest in six years, which also pointed to a cooling in the strength of the labor market. The jobless rate based on International Labor Organization methods dropped to 6% in the three months through August from 6.2% in the quarter through July. The data also showed that jobless claims fell the least since April 2013 in September and the economy created jobs at the slowest pace in more than a year in the latest quarter. (Source: Bloomberg) S. Korea: The Bank of Korea cut its benchmark interest rate to a four-year low as Governor Lee Ju Yeol risks spurring capital outflows in his effort to bolster the economy. The central bank lowered the seven-day repurchase rate to 2% from 2.25%, the second reduction in two months, and downgraded its estimates for growth and inflation. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,786.8 (4.3) (0.5) JCI 4,962.9 16.1 0.8 STI 3,198.7 1.0 0.1 SET 1,547.4 19.1 0.0 HSI 23,140.1 (0.7) 0.4 KOSPI 1,925.9 (4.2) (0.2) TWSE 8,655.5 0.5 (1.3) DJIA 16,141.7 (2.6) (1.1) S&P 1,862.5 0.8 (0.8) FTSE 6,211.6 (8.0) (2.8) MYR/USD 3.278 0.1 0.3 CPO (1mth) 2,178.0 (17.1) (0.7) Crude Oil (1mth) 81.8 (16.9) (0.1) Gold 1,242.0 3.4 0.7 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.50 14.00 Axiata 7.07 7.60 Sime Darby 9.15 10.20 Gamuda 4.81 5.30 UMW O&G 3.23 5.15 AFG 4.74 5.50 Perdana Petroleum 1.66 2.55 Hock Seng Lee 1.84 2.25