Malaysia Daily, Maybank KE (2015-01-20)

Daily 20 January 2015 SECTOR UPDATE Malaysia Plantations: Maintain Neutral Sarawak's turn to be hit by flood Sarawak�s flood is also seasonal. If situation worsens, this could be next catalyst for near term CPO price. Stay Neutral on the sector. Top BUYs in Malaysia are GENP, Sime, SOP and TSH. SELL: IOI Corp. Click here for full report » RESULTS REVIEW Axis REIT: Maintain Hold Below expectations FY14 core net income of MYR81m (-3.8% YoY) was below ours and consensus� expectations. Shave FY15-16 earnings by 3-3.5% after increasing operating expenses estimates. Maintain HOLD; lowered DCF-based TP to MYR3.37 (previously MYR3.40). Click here for full report » Quill Capita Trust: Maintain Hold Within expectations FY14 net income of MYR34m (-1% YoY) within expectations. FY14�s profit was mainly affected by higher costs; we remain cautious on QCT�s outlook due to challenging office rental market. Maintain HOLD; nudged TP to MYR1.16 (DCF) following marginal FY15-16 earnings adjustment post full-year results. Click here for full report » Technicals Gearing up for 1,770 re-test? The FBMKLCI advanced 9.74 points to 1,753.31 yesterday, while the FBMEMAS and FBM100 also closed higher by 70.93 points and 67.54 points, respectively. We recommend a �Nibble on Dips� stance for the index. Trading idea is a Short-Term Buy on SCGM with upside target areas at MYR2.37 & MYR2.90. Stop loss is at MYR1.93. Click here for full report » Other Local News Plantation: MPOB expects demand for CPO to rise. This is due to the depreciation of the ringgit and tax exemption given by the government. Its Chairman Datuk Ar Wan Khair-il Anuar Wan Ahmad said the situation would encourage higher exports of the commodity, resulting in lower inventory level and higher CPO prices. (Source: Business Times) Eastern & Oriental: Buys london office towers for MYR309m. E&O's wholly-owned subsidiary, Hammersmith Properties Ltd, last Friday signed a property sales contract with Gems Hammersmith (Luxembourg) Sarl. The agreement was to acquire Landmark House and Thames tower, which sit on 1.2acres in Hammersmith Bridge Road. There is a total net internal area of 135,448 sq ft between Landmark House and Thames Tower. This prime freehold parcel in the established commercial hub of Hammersmith represents a significant refurbishment or redevelopment opportunity for E&O in the future. (Source:The Edge Financial Daily) Sanichi Technology: Sanichi to gain MYR40m from maiden property foray. Sanichi is expected to reap a pre-tax gain of MYR40m from its maiden mixed use property development in Klebang, Melaka, which will be launched in March. (Source: The Edge Financial Daily) Outside Malaysia Denmark: Central bank cut its interest rates on certificates of deposit by 15 basis points to minus 0.2%. The bank also cut its lending rate by the same amount to 0.05%, it said in a statement. (Source: Bloomberg) Korea: Government holds firm on growth forecast as BOK cuts. South Korea's Finance Ministry plans to stick with its growth forecast for this year, putting it at odds with the central bank on the outlook for Asia's fourth-largest economy. The government stands by its December projection for gross domestic product to expand 3.8% in 2015, Vice Finance Minister Joo Hyung Hwan said in an interview in Seoul. The differing views partly reflect a divergence of opinion on the likely impact of government policies, Joo said on Jan. 16, a day after the Bank of Korea cut its estimate to 3.4%. (Source: Bloomberg) Indonesia: Pushes Pertamina revamp in state enterprise reform. Indonesia will overhaul national oil company PT Pertamina as the government seeks to improve the management of state-owned enterprises and deliver infrastructure projects after slashing fuel subsidies. A plan for Pertamina to take over oil importing from its offshore trading unit, Petral, will increase domestic oversight of the company's energy purchases, Rini Soemarno, the state-owned enterprises minister, said in a Jan. 16 interview. The removal of gasoline subsidies at the start of 2015 will also reduce opportunities for irregular transactions, she said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,753.3 (6.1) 0.6 JCI 5,152.1 20.5 0.1 STI 3,307.7 4.4 0.2 SET 1,535.4 18.2 1.2 HSI 23,738.5 1.9 (1.5) KOSPI 1,902.6 (5.4) 0.8 TWSE 9,174.1 6.5 0.4 DJIA 17,511.6 5.6 0.0 S&P 2,019.4 9.3 0.0 FTSE 6,585.5 (2.4) 0.5 MYR/USD 3.572 9.0 0.4 CPO (1mth) 2,342.0 (10.9) (0.3) Crude Oil (1mth) 48.7 (50.5) 0.0 Gold 1,276.8 6.3 1.5 TOP STOCK PICKS Buy rated large caps Price Target Axiata 7.01 7.60 Sime Darby 9.30 10.20 Genting Malaysia 3.85 4.60 Gamuda 5.02 6.00 AirAsia 2.79 3.00 Westport 3.55 3.60 SP Setia 3.55 3.98 AFG 4.70 5.50 Hartalega 7.05 8.50