Malaysia Daily, Maybank KE (2014-10-17)

Daily 17 October 2014 COMPANY UPDATE Westports Holdings: Maintain Buy Confidence from CMA CGM  Shariah-compliant Expect net positive impact from the proposed O3 and 2M. A defensive growth stock with decent dividend yield of 3.8%. Maintain forecast, BUY and DCF-derived TP of MYR3.30. Click here for full report » Eco World Development: Maintain Buy Going overseas via SPAC  Shariah-compliant Positive on ECW�s latest decision to venture overseas via a SPAC to be led by the former SP Setia senior management. The investment allows ECW to gain exposure to international property markets without overstretching its balance sheet and diverting its focus away from its Malaysian operations. Maintain earnings forecasts but place our MYR6.59 TP under review pending further details. Reiterate BUY. Click here for full report » Top Glove: Maintain Hold Still lack near-term catalysts  Shariah-compliant Various initiatives (R&D) are in place to stay competitive. However, any concrete results will not be immediate. Maintain forecasts, HOLD and TP of MYR4.70 (15x CY15 PER). Click here for full report » RESULTS REVIEW British American Tobacco 3Q14 results marginally above BAT's 3Q14 results exceeded expectations. Sustainable and enhanced crackdown efforts should moderately help offset legal market volume contraction. Maintain SELL with an unchanged DCF-based TP of MYR62 on pricey valuations. Click here for full report » Technicals Plunged below the key 1,769-level The FBMKLCI tumbled 19.07 points to 1,767.77 yesterday, while the FBMEMAS and FBM100 also closed lower by 178.08 points and 150.93 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a Take Profit call on PERISAI with downside target areas at MYR0.905 7 MYR0.55. Click here for full report » Other Local News MAS: Nov 6 D-Day for Malaysia Airlines after Govt investment of MYR17.46b. After having invested MYR17.4b in Malaysia Airlines (MAS) since 2001 and without getting the desired results, the Government is going to the shareholders of the airline on Nov 6 to take the company private. As part of the new plan by Khazanah, the agency will invest MYR6b more, cut 6,000 jobs and migrate the airline�s into a new company which will be operational on July 1 next year. Of the MYR6b, MYR3b will be allocated to the old MAS company where MYR1.4b will be paid to minority shareholders as part of the airline�s delisting exercise. (Source: The Star) MAHB: Big task ahead for MAHB's new chief. Malaysia Airports Holdings' (MAHB) new managing director Datuk Badlisham Ghazali has a major task in hand, taking the helm at a time when passenger traffic at the 39 airports MAHB manages is falling due to tragedies of flights MH370 and MH17. "The first and fourth quarters of the year are traditionally the strongest periods for MAHB, so we do expect to see more movements towards the end of the year", said Badlisham. (Source: The Edge Financial Daily) 7-Eleven: 7-Eleven gets to stay on at Shell Stations. 7-Eleven Malaysia Holdings has received a consent judgment from the Kuala Lumpur High Court, allowing its convenience stores to stay on at 34 Shell stations in the country until June 2016, following a tenancy dispute with Shell Malaysia Trading Sdn Bhd that started in March 2012. (Source: The Edge Financial Daily). Outside Malaysia U.S: Applications for unemployment benefits unexpectedly dropped last week to their lowest level in 14 years as employers avoided trimming staff even as global growth weakens. Jobless claims decreased by 23,000 to 264,000 in the week ended Oct. 11, the fewest since April 2000. There was nothing unusual in the data and no states were estimated, a spokesman said as the figures were released. (Source: Bloomberg) U.S: Industrial production rose in September by the most since November 2012, driven by a surge at utilities and a rebound in manufacturing. The 1% MoM advance in output at factories, mines and utilities exceeded the highest forecast in a Bloomberg survey and followed a 0.2% MoM drop the prior month, the Federal Reserve reported. Utility production was the strongest since May 2012. (Source: Bloomberg) E.U: Started a two-week probe of euro-area governments' draft budgets as a re-emergence of the bloc's debt-crisis nightmare risked undoing its economic recovery. As yields on 10-year securities from Europe's most-indebted nations surge, led by Greece and sweeping up Portugal, Italy and Ireland, the European Commission started a process of picking apart nations' 2015 spending plans, seeking to defuse potential fiscal time-bombs. (Source: Bloomberg) China: Credit growth climbs as targeted easing kicks in. China's broadest measure of new credit rose to a three-month high in September as the central bank's targeted measures to boost liquidity helped spur lending. Aggregate financing was CNY 1.05 tr (USD 171b), the People's Bank of China said in Beijing, compared with the CNY 1.15 tr. New local-currency loans were CNY 857.2b, and M2 money supply grew 12.9% YoY. Foreign reserves were USD 3.89tr at Sept. 30. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,767.8 (5.3) (1.1) JCI 4,951.6 15.8 (0.2) STI 3,154.2 (0.4) (1.4) SET 1,526.2 17.5 (1.4) HSI 22,900.9 (1.7) (1.0) KOSPI 1,918.8 (4.6) (0.4) TWSE 8,633.7 0.3 (0.3) DJIA 16,117.2 (2.8) (0.2) S&P 1,862.8 0.8 0.0 FTSE 6,195.9 (8.2) (0.3) MYR/USD 3.296 0.6 0.5 CPO (1mth) 2,135.0 (18.8) (2.0) Crude Oil (1mth) 82.7 (16.0) 1.1 Gold 1,241.9 3.3 1.4 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 12.50 14.00 Axiata 6.93 7.60 Sime Darby 9.10 10.20 Gamuda 4.80 5.30 UMW O&G 3.24 5.15 AFG 4.68 5.50 Perdana Petroleum 1.53 2.55 Hock Seng Lee 1.79 2.25