Malaysia Daily, Maybank KE (2015-03-03)

Daily 03 March 2015 MARKET STRATEGY MY Strategy: NEUTRAL 4Q report card: Ending on a soft note 2014 core net profit growth in negative territory: -2.0% for the KLCI, -1.3% for our research universe. KLCI core earnings growth forecasts little changed at 6.6%/ 9.0% for 2015/2016; growth risks remain on the downside. No change to our KLCI target; aviation sector downgraded; we continue to advocate a defensive strategy into 2Q15. Click here for full report » SECTOR UPDATE Malaysia Banking: NEUTRAL Starting off on a softer note Loan growth slipped to 8.6% YoY in Jan 2015 � HH loan application trend marginally positive. Industry LDR hit new high of 87.3%; keeping a wary eye on non-residential property financing asset quality. NEUTRAL on the sector; BUY AFG, HL Bank, HLFG and RHB. Click here for full report » COMPANY UPDATE Eversendai Corp: Maintain Buy Sizeable MYR269m win in Qatar  Shariah-compliant Sizable MYR269m arches and visitors centre job in Doha, Qatar to lift outstanding orderbook to MYR1.9b. New wins YTD has been rapid, job pipeline is looking bright; this could drive earnings rebound in FY15-16. Maintain BUY and TP of MYR0.80 (12x FY15 PER). Click here for full report » Technicals Some index weakness may set in The FBMKLCI fell 4.08 points to 1,817.13 yesterday, while the FBMEMAS and FBM100 also closed lower by 52.55 points and 46.22 points, respectively. We recommend a �Range Trading� stance for the index. Trading idea is a Take profit call on FGV with downside target areas at MYR2.09 & MYR1.58. Click here for full report » Other Local News Maybank: IB appoints Fad'l Mohamed as deputy CEO. Maybank Investment Bank has appointed Maestro Capital Sdn Bhd founder Fad'l Mohamed as its deputy CEO. Fad'l was previously the managing director of Maestro Capital. (Source: The Edge Financial Daily) Sime Darby: Unit adds 135,000ha to total landbank. Sime Darby Plantation has added 135,000ha in Papau New Guinea to its landbank, bringing its total to almost one million hectares spread out over five countries. This followed the completion of its acquisition of New Britain Palm Oil Ltd (NBPOL) yesterday. (Source: The New Straits Times) Plenitude: Proposes takeover of Nomad Group for MYR278.84m. The property developer has proposed a takeover offer of The Nomad Group for MYR1.25 a share or MYR278.84m via an issuance of 111.53m Plenitude shares at an issue price of MYR2.50 per share. The proposed acquisition is expected to be completed by the second quarter of this year and would see the delisting of Nomad Group if the takeover is successful. (Source: The Edge Financial Daily) Pesona Metro Holdings: JV clinches MYR172m road project. Pesona Metro and its joint-venture partners have secured a MYR172.2m roadworks project which is expected to take 36 months to complete, effective from March 17. The project stretches from Merapoh to Kampung Kubang Rusa and lies along the Central Spine Road highway Package 3 linking Gua Musang in Kelantan to Kampung Relong in Pahang. (Source: The Star) Outside Malaysia U.S: Manufacturing expanded in February at the weakest pace in a year, limited by weaker growth abroad and a work slowdown at West Coast ports. The Institute for Supply Management�s index dropped to 52.9, the lowest since January 2014, from 53.5 a month earlier, the Tempe, Arizona-based group�s report showed. Readings above 50 indicate growth. (Source: Bloomberg) U.S: Consumer purchases adjusted for inflation rose in January, a sign the plunge in gasoline prices is helping boost the biggest part of the U.S. economy. The 0.3% increase followed a 0.1% drop the prior month, a Commerce Department report showed. So-called nominal spending, which doesn't take into account changes in price, declined 0.2%, more than estimated, while incomes grew 0.3% for a second month. (Source: Bloomberg) E.U: Consumer prices fell less than economists forecast last month, offering some relief to the European Central Bank as it prepares to put its unprecedented bond-buying program into action. The annual rate of inflation in the 19-nation bloc stood at minus 0.3% in February, according to data published by the European Union's statistics office. Unemployment fell to 11.2% in January, the lowest since April 2012, according to revised Eurostat data. (Source: Bloomberg) S.Korea: Inflation slowed to the weakest pace in more than 15 years amid declining energy-import costs and softness in domestic demand. Consumer prices rose 0.5% in February from a year earlier, Statistics Korea said. Prices were unchanged from the previous month, versus projections for a 0.2% gain. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,817.1 (2.7) (0.2) JCI 5,477.8 28.2 0.5 STI 3,403.9 7.5 0.0 SET 1,582.1 21.8 (0.3) HSI 24,887.4 6.8 0.3 KOSPI 1,996.8 (0.7) 0.6 TWSE 9,601.4 11.5 (0.2) DJIA 18,288.6 10.3 0.9 S&P 2,117.4 14.6 0.6 FTSE 6,940.6 2.8 (0.1) MYR/USD 3.631 10.9 0.7 CPO (1mth) 2,381.0 (9.4) 2.6 Crude Oil (1mth) 49.6 (49.6) (0.3) Gold 1,206.8 0.4 (0.5) TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.66 16.00 Sime Darby 9.38 10.20 Genting Malaysia 4.07 4.60 Gamuda 5.29 6.00 Westport 3.48 3.80 SP Setia 3.48 4.07 AFG 4.77 5.30 Hartalega 7.97 8.50 Inari 3.06 3.95 MBM Resources 3.30 3.50 Vitrox 3.26 4.05