Malaysia Daily, Maybank KE (2015-03-04)

Daily 04 March 2015 SECTOR UPDATE Malaysia Banking: NEUTRAL A year of fund raising Core net profit growth cut to 7% in 2015 from 9%, 4% growth excluding CIMB. Sector ROE to decline to 12.8% from 13.5%. Primary challenge is liquidity, NIM compressing further this year. Potential MYR5b cash calls from HL Bank, HLFG & RHB. Still NEUTRAL. BUY AFG, HL Bank, HLFG and RHB. Click here for full report » COMPANY UPDATE Lafarge Malaysia: Maintain Hold Unexciting for now Earnings ahead could be better on resumption of production. Lacks solid catalyst and stock trades at +1SD to mean; however, it is supported by a DY of 3.4%. Maintain HOLD and TP of MYR9.30 (22x FY16 PER). Click here for full report » Star Publications: Downgrade to HOLD Exercising caution  Shariah-compliant 2015 YTD adex sentiment has been markedly weak. Re-rating catalyst from FTA TV stations may not materialise. Maintain SOP-based TP of MYR2.65 but downgrade to HOLD. Click here for full report » Technicals Higher volume churning at lofty levels The FBMKLCI gained 4.12 points to 1,821.25 yesterday, while the FBMEMAS and FBM100 also closed higher by 13.17 points and 15.65 points, respectively. We recommend a �Range Trading� stance for the index. Trading idea is a Take profit call on BRAHIMS with downside target areas at MYR1.00 & MYR0.88. Click here for full report » Other Local News Tenaga Nasional: To submit application for Project 4A to EC. TNB is in the midst of its due diligence process and will submit its application for the 4A power plant project in Johor to the Energy Commission (EC) by March 15. TNB is finalising the costs and details before submitting to the EC according to president and CEO, Datuk Seri Azman Mohd. (Source: The Edge Financial Daily) Telekom Malaysia: To establish USD750m sukuk. TM has received approval from the Securities Commission Malaysia to establish a multi-currency sukuk programme of up to USD750m (MYR2.71b) in nominal value to manage its fundraising requirements and to have an alternative access to debt funding, in addition to conventional bank borrowings. (Source: The Edge Financial Daily) Genting Malaysia: Buys luxury Crystal Cruises for USD550m. It's associate, Genting Hong Kong Ltd (GHK) has entered into an agreement to acquire leading luxury cruise line Crystal Cruises Inc from Nippon Yusen Kabushiki Kaisha of Japan for USD550m (MYR1.99b) in cash. The acquisition will be funded via a combination of internally generated funds and borrowings and will be the second cruise brand under GHK, after its wholly owned Star Cruises Ltd. (Source: The Edge Financial Daily) Time dotCom: Signs MoU with TM for SKR1M. It's wholly-owned subsidiary, TT dotCom Sdn Bhd has signed a memorandum of understanding with Telekom Malaysia (TM) to construct and develop the Sistem Kabel Rakyat 1 Malaysia (SKR1M), a new submarine cable stretching 3,500km that will connect peninsular Malaysia with Sabah and Sarawak. Both parties will proceed with the tender exercise to determine their preferred technology partner to supply, deliver and implement the SKR1M network as well as negotiate the terms for the construction and maintenance agreement (C&MA) during the MoU period. (Source: The Star) Outside Malaysia U.K: Construction growth unexpectedly accelerated for a second month in February, led by a strengthening in homebuilding. Markit Economics said its Purchasing Managers' Index rose to 60.1, the highest in four months, from 59.1 in January. It fell to a 17-month low of 57.6 in December. (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 1,821.3 (2.4) 0.2 JCI 5,474.6 28.1 (0.1) STI 3,422.1 8.0 0.5 SET 1,562.8 20.3 (1.2) HSI 24,702.8 6.0 (0.7) KOSPI 2,001.4 (0.5) 0.2 TWSE 9,605.8 11.5 0.0 DJIA 18,203.4 9.8 (0.5) S&P 2,107.8 14.0 (0.5) FTSE 6,889.1 2.1 (0.7) MYR/USD 3.633 10.9 0.2 CPO (1mth) 2,389.0 (9.1) 0.3 Crude Oil (1mth) 50.5 (48.7) 1.9 Gold 1,208.1 0.5 (0.7) TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.66 16.00 Sime Darby 9.32 10.20 Genting Malaysia 4.17 4.60 Gamuda 5.30 6.00 Westport 3.54 3.80 SP Setia 3.48 4.07 AFG 4.79 5.30 Hartalega 8.00 8.50 Inari 3.15 3.95 MBM Resources 3.29 3.50 Vitrox 3.23 4.05