Malaysia Daily, Maybank KE (2015-01-16)

Daily 16 January 2015 COMPANY UPDATE MISC: Maintain Buy Logistics arm yet to be sold  Shariah-compliant The proposed disposal of its small logistics operation has been terminated; no material impact. Expect strong 4Q14 earnings, driven by petroleum segment. Maintain BUY and SOP-derived TP of MYR8.00. Click here for full report » RESULTS PREVIEW Media Prima: Maintain Hold Restructuring for the next upcycle Earnings may fall short in 4Q14 and remain flattish in 2015 and 2016. That said, cost saving initiatives are in full swing. Trim earnings 3-10% but near-term dividends may surprise positively. Maintain HOLD with a trimmed TP of MYR1.90 from MYR2.07. Dividend yields of >5% p.a. should limit downside risk. Click here for full report » RESULTS REVIEW Pavilion REIT: Maintain Hold Rent hikes drive earnings FY14 net profit of MYR232m (+9% YoY) and DPU of 8.0 sen (+8% YoY) were in-line. Fine-tune our FY15-17 earnings forecasts by -0.3�0.4% post actual FY14 results. FY15 net profit growth will continue to be supported by positive rental reversion. Maintain HOLD with an unchanged MYR1.49 DCF-based TP. Click here for full report » Technicals Yet another boring trading day The FBMKLCI gained 2.99 points to 1,745.00 yesterday, while the FBMEMAS and FBM100 also closed higher by 25.41 points and 19.96 points, respectively. We recommend a �Take Profit� stance for the index. Trading idea is a Short-Term Buy on HOMERIZ with upside target areas at MYR1.13 & MYR1.24. Stop loss is at MYR0.85. Click here for full report » Other Local News Utilities: Ananda Krishnan in talks for key stake in 1MDB's USDB3b IPO. Malaysia�s second-richest man, Ananda Krishnan, is in talks with state firm 1MDB to become a cornerstone investor in a long-delayed, USD3b listing of its power assets, according to sources. An investment by Krishnan would be a major boost for cash-strapped 1MDB, both in funding and inspiring confidence among other potential initial public offering investors. (Source: Business Times) Automotive: Perodua eyes 6.3% sales growth this year. Perodua is targeting its total sales units to grow to 208,000 units this year from 195,000 units in 2014, driven by continued demand for its newly launched models. (Source: The Edge Financial Daily) SapuraKencana Petroleum: SKP to rejoin SC syariah list with USD2.3b Islamic loan. Through its wholly-owned subsidiary SapuraKencana TMC Sdn Bhd (SKTMC), signed equivalent Islamic facility to convert a portion of its existing conventional multi-currency facility (MCF) borrowings into a facility based on the syariah principle of Murabahah with 11 local, regional and international banks. With the completion of this transaction, SKP is said to be on track to return to SC syariah list. (Source: The Edge Financial Daily) Ivory Properties Group: To sell land in Penang for MYR150m. It is planning to dispose 21.78ha of freehold land in Penang to Jesselton Peak Sdn Bhd for MYR150m. The proceeds from the proposed disposal are expected to be used for the settlement of bank borrowings from CIMB and working capital, said Ivory Properties Group. (Source: The Star) Outside Malaysia Germany: Economy grew at the fastest pace in three years in 2014 and posted a third consecutive fiscal surplus as it overcame a mid-year stagnation. GDP rose 1.5%, compared with a 0.1% gain in 2013, the Federal Statistics Office said. The economy expanded about a quarter of a percent in the three months through December, the office said. At EUR 11.9b (USD 13.9b), the government's budget surplus was 0.4% of GDP, the second-highest since German reunification in 1990. (Source: Bloomberg) China: Caps smallest reserves gain since 2000 as capital ebbs. China's foreign-exchange reserves capped the smallest annual gain since 2000 as signs of capital outflows mounted in recent months, underscoring scant anticipation of currency gains this year. The world's largest reserves stockpile unexpectedly fell to USD 3.84t at the end of December, for a second straight quarterly drop, a People's Bank of China report showed. (Source: Bloomberg) China: Credit growth jumps as shadow banking stages comeback. China's shadow banking industry staged a comeback in December as equity investors and local governments contributed to a surge in credit, underscoring challenges for a central bank trying to revive growth without exacerbating risks. Aggregate financing was CNY 1.69t (USD 273b), the People's Bank of China said. (Source: Bloomberg) India: Reserve Bank of India governor Raghuram Rajan cut interest rates in an unscheduled review to revive growth in Asia's third-largest economy after inflation eased. Rajan lowered the benchmark repurchase rate to 7.75% from 8%, he said in a statement, the first reduction since May 2013. (Source: Bloomberg) S. Korea: Central bank kept its benchmark interest rate unchanged at a record low for a third month as it assesses the impact of slumping oil prices and currency volatility. The Bank of Korea held the seven-day repurchase rate at 2%, it said in a statement in Seoul. (Source: Bloomberg) S. Korea: Central bank cut its forecasts for consumer prices and economic expansion this year following a policy meeting at which it kept the benchmark interest rate unchanged at a record low. Inflation will slow to 1.9%, from a previous estimate of 2.4%, Governor Lee Ju Yeol said after the bank held the seven-day repurchase rate at 2%. GDP is expected to ease to 3.4%, compared with an earlier projection of 3.9%. (Source: Bloomberg) Indonesia: Central bank kept its main interest rate unchanged for a second straight month, as a persistent decline in oil prices reduces pressure for monetary tightening to cool inflation. Bank Indonesia Governor Agus Martowardojo and his board left the reference rate at 7.75%, the central bank said. The authority kept the rate it pays lenders on overnight deposits, known as the Fasbi, unchanged at 5.75%. (Source: Bloomberg) Australia: Employers boosted payrolls in November and December by the most in any two-month period in the past eight years, reducing pressure on the central bank to cut already record-low interest rates. The number of people employed advanced by 37,400 in December following a revised 45,000 increase in November, making the biggest two-month gain since December 2006. The jobless rate dropped to 6.1% in December from 6.2% the previous month, the statistics bureau said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,745.0 (6.5) 0.2 JCI 5,188.7 21.4 0.6 STI 3,338.8 5.4 0.4 SET 1,523.4 17.3 0.0 HSI 24,350.9 4.5 1.0 KOSPI 1,914.1 (4.8) 0.0 TWSE 9,165.1 6.4 (0.2) DJIA 17,320.7 4.5 (0.6) S&P 1,992.7 7.8 (0.9) FTSE 6,498.8 (3.7) 1.7 MYR/USD 3.564 8.8 (0.8) CPO (1mth) 2,373.0 (9.7) 0.5 Crude Oil (1mth) 46.3 (53.0) (4.6) Gold 1,250.0 4.0 1.7 TOP STOCK PICKS Buy rated large caps Price Target Axiata 7.07 7.60 Sime Darby 9.40 10.20 Genting Malaysia 4.02 4.60 Gamuda 5.02 6.00 Westport 3.32 3.60 SP Setia 3.35 3.98 AFG 4.80 5.50 Hartalega 7.01 8.50