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

Daily 11 November 2014 COMPANY UPDATE SP Setia: Upgrade to Buy New-found catalysts  Shariah-compliant Overseas earnings to start featuring, boosting SPSB� medium-term outlook. Stronger earnings base should mitigate uncertainties from the departure of senior management. Upgrade to BUY with a higher TP of MYR3.98. Potential asset injection by PNB could add 41sen to our RNAV/share. Click here for full report » TSH Resources: Maintain Buy Optimizing operations  Shariah-compliant Estate management system implemented to enhance productivity and long term sustainability. Dry weather at Central Kalimantan for ~60 days but rain has resumed. Impact on production could be minimal. TSH�s robust production growth would be supported by its young tree age profile and efficient management. Reiterate BUY at unchanged MYR2.45 TP (adjusted for bonus issue). Click here for full report » REGIONAL SECTOR UPDATE Plantations: Neutral Trading opportunity till 1Q15 Malaysia�s October 2014 stockpile remains under control; the market is now concern about palm oil supply growth in 2015. Expect palm oil to make a seasonal price recovery, trending higher to MYR2,600/t by end-1Q15. Investors should position for a short term trade. BUY First Resources, Bumitama Agri, Sime Darby, Swk Oil Palms, Ta Ann and TSH Resources for earnings recovery play. Click here for full report » Technicals Index remains volatile and unstable The FBMKLCI gained 3.74 points to 1,827.93 yesterday, while the FBMEMAS and FBM100 also closed higher by 4.73 points and 11.43 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 MYR0.725 & MYR0.43. Click here for full report » Other Local News MAHB: MAHB plans MYR1.32b rights issue for Turkish airport. Malaysia Airports Holdings has proposed a 1-for-5 rights issue to raise MYR1.32b to fund the acquisition of the remaining 40% stake in Turkish airport ventures, Istanbul Sabiha Gokcen Uluslararasi Havalimani Yatirim Yapim Ve Isletmeleri Ticaret Ve Turizm AS. (Source: The Edge Financial Daily) IOI Properties: IOI Prop to raise MYR1b for capex among others. IOI Properties Group has proposed to undertake a rights issue of new shares to raise about MYR1.03b for capital expenditure, investment opportunities and working capital purposes. The property group said the proposed rights issue involved 539.84m shares at an issue price of MYR 1.90 apiece. (Source: The Star) QL Resources: To return 'accepted' shares if deal off. Having gained acceptances of only 1.6% as of Nov 3 from Lay Hong shareholders, QL Resources' offer has failed to gain the traction that the Chia Family, who are the major shareholders of the company, was hoping for. If the offer falls through, QL Resources may well return the "accepted" shares to the respective shareholders. (Source: The Edge Financial Daily) Outside Malaysia U.S: Joins EU in sanctions threat as Russia says economy hurting. The U.S. and the U.K. joined the European Union in threatening to tighten sanctions against Russia, which said that the measures imposed so far will help prevent its economy from growing next year. Speaking minutes apart, U.K. Prime Minister David Cameron and U.S. State Department spokeswoman Jen Psaki blamed Russia for continuing to arm separatist rebels in eastern Ukraine, where a cease-fire has crumbled over the past week. Russian President Vladimir Putin, who briefly met his U.S. counterpart Barack Obama at a summit in Beijing, has denied military involvement in the conflict. (Source: Bloomberg) China: Factory- gate prices fell for a record 32nd month in October and consumer prices remained subdued, raising pressure on policymakers to bolster the world's second-largest economy as disinflation spreads. The producer-price index dropped 2.2 % from a year earlier, the National Bureau of Statistics said in Beijing, compared with the median projection of a 2% decline in a survey of analysts by Bloomberg News. Consumer prices rose 1.6% and the rate was unchanged from the prior month and matched economists' estimates. (Source: Bloomberg) China & S. Korea: Reach trade deal as Xi, Park meet in Beijing. China and South Korea concluded talks for a free trade pact that will boost shipments between Asia's largest and fourth-largest economies. China will immediately eliminate duties on USD 8.7b worth of annual trade when the agreement goes into force, and end duties on USD 45.8b of Korean exports over 10 years, Korea's trade ministry said. Korea will maintain import tariffs on 60% of agriculture and fisheries imports from China. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,827.9 (2.1) 0.2 JCI 4,965.4 16.2 (0.4) STI 3,301.0 4.2 0.4 SET 1,567.3 20.7 (0.7) HSI 23,744.7 1.9 0.8 KOSPI 1,958.2 (2.6) 0.9 TWSE 9,050.0 5.1 1.5 DJIA 17,613.7 6.3 0.2 S&P 2,038.3 10.3 0.3 FTSE 6,611.3 (2.0) 0.7 MYR/USD 3.331 1.7 (0.5) CPO (1mth) 2,205.0 (16.1) 0.6 Crude Oil (1mth) 77.4 (21.4) (1.6) Gold 1,151.5 (4.2) (2.2) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 13.10 16.00 Axiata 7.00 7.60 Sime Darby 9.64 10.20 Gamuda 5.16 6.00 UMW O&G 3.22 5.15 AFG 4.68 5.50 Perdana Petroleum 1.47 2.48 Hock Seng Lee 1.89 2.25