Malaysia Daily, Maybank KE (2015-02-05)

Daily 05 February 2015 RESULTS REVIEW Inari Amertron: Maintain Buy Scaling greater heights  Shariah-compliant 1HFY6/15 earnings beats our and consensus forecasts. Set to accelerate on two short-term catalysts: (i) positive exposure to strengthening USD and (ii) capacity expansion. Forecasts unchanged pending briefing today. Maintain BUY with an unchanged ex-rights TP of MYR3.70 (17x CY15 PER). Click here for full report » COMPANY UPDATE Eco World Development: Downgrade to Hold Seals Pudu Jail deal, finally Neutral on ECW�s latest tripartite agreement to redevelop Pudu Jail (Bukit Bintang City Centre). JV to enhance our post-share split RNAV/shr est. by +27sen. Share price now above our post-share split TP of MYR2.18 (on an unchanged 0.73x P/RNAV peg). Downgrade to HOLD. Click here for full report » Technicals Capped by the 200 SMA line The FBMKLCI rose 21.76 points to 1,803.02 yesterday, while the FBMEMAS and FBM100 also closed higher by 122.46 points and 120.38 points, respectively. We recommend a �Range Trading� stance for the index. Trading idea is a Short-Term Buy on MITRA with upside target areas at MYR1.35 & MYR1.60. Stop loss is at MYR1.00. Click here for full report » Other Local News O&G: Successor for top job at Petronas to be announced soon. Tan Sri Shamsul Azhar Abbas, the president and chief executive officer (CEO) of Petroliam Nasional (Petronas) is being offered a seven-month extension to his contract, according to sources. It is not clear why he is being offered only a seven-month extension but sources said that the Government would make an announcement soon on Shamsul's successor. Shamsul first took the top job at Petronas in 2010 as president and CEO on a three-year contract. He was given a two-year extension, which would expire on Feb 8. (Source: The Star) Dialog: 'Dialog, Vopak to lease storage tanks to BP and Total'. Pengerang Independent Terminals Sdn Bhd, a joint venture vehicle between Dialog Group, the State Secretary of Johor, and Rotterdam-based Royal Vopak NV, has leased its storage tanks to BP plc and Total SA. According to reports, BP has leased more than half of the storage space from Vopak, while Total will use the remainder. (Source: The Edge Financial Daily) Lay Hong: Proposed exercise may dilute QL's stake in firm. Lay Hong has proposed a private placement of up to 15.75m new shares or 30% of the company's enlarged share capital to third party investors, and implement a share issuance scheme for eligible directors and employees. The plans will help the poultry farmer comply with the public shareholding spread as required by Bursa Malaysia, but may dilute QL Resources' stake in the firm. (Source: The Edge Financial Daily) MAHB: Finally issues CPC for klia2 terminal building. Malaysia Airports Holdings (MAHB) has finally issues the certificate of practical completion (CPC) to the joint venture of UEM Construction Sdn Bhd and Bina Puri Sdn Bhd for the main terminal building of the MYR4b klia2 in Sepang. This comes nine months after the opening of the new low-cost carrier terminal on May 2 last year. (Source: The Edge Financial Daily) Outside Malaysia U.S: Services growth helps endure global slowdown in January. The Institute for Supply Management�s non-manufacturing index advanced to 56.7 from a six-month low of 56.5 in December, the Tempe, Arizona-based group said. Figures above 50 signal expansion. Companies added more than 200,000 workers last month, signaling steady labor-market growth, according to another report. (Source: Bloomberg) E.U: Companies stepped up hiring as manufacturing and services activity from Germany to Spain expanded faster than economists estimated. A gauge of employment in both industries rose in January to a level not exceeded since mid-2011, data from London-based Markit Economics showed. A Purchasing Managers' Index increased to 52.6 from 51.4 in December, exceeding a Jan. 23 preliminary reading of 52.2. Measures for Germany, Italy and Spain signaled accelerating growth, while French output shrank for a ninth month. (Source: Bloomberg) Greece: ECB restricts direct cash as reform pledges in doubt. The European Central Bank heaped pressure on Greece's new government by restricting access to its direct liquidity lines, citing concerns about the country's commitment to existing bailout pledges. The decision marks an escalating standoff between Greek politicians and other officials in the euro area. It came hours after new Greek Finance Minister Yanis Varoufakis met ECB President Mario Draghi to garner support for his government's plans to tear up its EUR 240b (USD 272b) rescue package and renegotiate the nation's debt. (Source: Bloomberg) China: Services gauge slips to six-month low as slowdown spreads. A gauge of China's services industry expanded at the weakest pace in six months as a slowdown spreads to areas of the economy that had been outperforming the nation's flagging factories and sagging property market. The Services Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics for January was at 51.8, down from 53.4 a month earlier. Numbers above 50 indicate expansion. (Source: Bloomberg) China: PBOC strengthens CNY fixing to a level that forced appreciation. China's yuan rose the most in a week after the central bank boosted the reference rate to a level that meant the currency had to strengthen in order to stay within its permitted trading band. The People's Bank of China raised the daily fixing by 0.08% to 6.1318 a dollar, which was 2.06% stronger than the closing spot rate on Tuesday. The onshore exchange rate can deviate from the reference rate by a maximum 2%. (Source: Bloomberg) China: Joins global-easing wave with bank reserve ratio cut. China cut the amount of cash banks must set aside as reserves in a bid to boost the supply of loans, as capital outflows and weakness at the nation's factories suggest a slowdown in the world's second-largest economy is deepening. The reserve ratio was lowered by 50 basis points. The level will drop to 19.5%, based on previous statements, while some lenders to rural and small business get bigger reductions. (Source: Bloomberg) .     Key Indices Value YTD (%) Daily (%) KLCI 1,803.0 (3.4) 1.2 JCI 5,315.3 24.4 0.4 STI 3,417.6 7.9 0.3 SET 1,599.8 23.2 (0.2) HSI 24,679.8 5.9 0.5 KOSPI 1,962.8 (2.4) 0.6 TWSE 9,513.9 10.5 0.7 DJIA 17,673.0 6.6 0.0 S&P 2,041.5 10.4 (0.4) FTSE 6,860.0 1.6 (0.2) MYR/USD 3.564 8.8 (0.7) CPO (1mth) 2,193.0 (16.6) 1.8 Crude Oil (1mth) 48.5 (50.8) (8.7) Gold 1,269.0 5.6 (1.0) TOP STOCK PICKS Buy rated large caps Price Target Axiata 7.17 7.60 Tenaga Nasional 14.64 16.00 Sime Darby 9.55 10.20 Genting Malaysia 4.17 4.60 Gamuda 5.10 6.00 AirAsia 2.76 3.00 Westport 3.50 3.60 SP Setia 3.59 3.98 AFG 4.75 5.50 Hartalega 7.51 8.50