Malaysia Daily, Maybank KE (2015-03-05)

Daily 05 March 2015 REGIONAL SECTOR UPDATE Regional Plantation: Maintain Neutral Biodiesel holds the key Speakers, at POC2015, provided a wide range of CPO price forecasts between MYR1,940/t and MYR2,500/t. Implementation of biodiesel mandates would be key determinant of 2015 CPO price. Our Top BUYs are Bumitama Agri, First Resources, Genting Plantations, Sarawak Oil Palms, Sime Darby. SELL IOI Corp. Click here for full report » SECTOR UPDATE Malaysia Banking: Maintain Neutral BNM issues reverse repo BNM issued MYR760m 1-month reverse repos at 3.31%; this being the second measure aimed at improving liquidity. Should help to ease funding pressure but the extent would depend on size of future issuances and frequency. Stay NEUTRAL on sector. BUY AFG, HL Bank, HLFG and RHB. Click here for full report » COMPANY UPDATE WCT Holdings Bhd: Maintain Buy Prospects turning positive  Shariah-compliant Construction orderbook prospects improving with active tendering. Positive on its 2015 property launch strategy that are mostly in the Klang Valley and consists of medium cost properties. REIT-ing to unlock the value of its retail malls to proceed. Reiterate BUY with a lower MYR1.90 TP (-14%). Click here for full report » MBM Resources: Maintain Buy Proxy to Perodua�s growth  Shariah-compliant A cheaper and purer exposure to Perodua�s strong near-term growth prospects. Trim FY15/16/17 net profit forecasts by 6%/7%/7% on slower recovery from OMI and weaker vehicle sales. Reiterate BUY with a higher TP of MYR4.20 (+20%) as we roll forward valuations to FY16 at unchanged target PER of 9x. Click here for full report » Technicals Impending FBMKLCI drop The FBMKLCI gained 4.29 points to 1,825.54 yesterday, while the FBMEMAS and FBM100 also closed higher by 20.88 points and 24.73 points, respectively. We recommend a �Take Profit� stance for the index. Trading idea is a Take profit call on GASMSIA with downside target areas at MYR2.41 & MYR2.12. Click here for full report » Other Local News Utilities: 1MDB to resubmit Edra IPO plan. 1MDB president and executive director Arul Kanda said yesterday it is revising the listing documents and will resubmit hem to the Securities Commission (SC).The delay follows material changes that had occurred in-line with the completion of a comprehensive review of 1MDB's overall operations, including the proposed conversion of an advance by 1MDB into MYR2b of equity in Powertek Investment Holdings Sdn Bhd, an operating subsidiary of Edra. (Source: The New Straits Times) SapuraKencana Petroleum: Mokhzani and Yeow resign from SapuraKencana. Tan Sri Mohkzani Mahathir and his close associate, Yeow Kheng Chew have both resigned from the board of SapuraKencana Petroleum yesterday. Mohkzani was said to step down from his position as vice-chairman due to personal reasons. (Source: The Edge Financial Daily) CIMB Group Holdings: Cuts 168 jobs overseas. CIMB Group has slashed a total of 168 jobs from its overseas operations this year in a bid to improve its cost-to-income ratio, which stood at a high of 59.1% in the year ended December 31 2014. The job cuts are mostly in the investment banking business including operations from Australia, Singapore, Hong Kong, Taiwan, South Korea and India. (Source: The New Straits Times) Outside Malaysia E.U: Business activity expanded in each of the euro area's four largest economies for the first time in almost a year, signaling that a fragile recovery is slowly becoming more sustained. A Purchasing Managers Index for the manufacturing and services industries across the region rose to a seven-month high of 53.3 in February from 52.6 the previous month, London-based Markit Economics said. (Source: Bloomberg) U.K: Services unexpectedly cool as companies see costs rise. U.K. services growth unexpectedly slowed last month, according to a report that also showed a strengthening of businesses costs and wage bills. Markit Economics said its Purchasing Managers' Index fell to 56.7 from 57.2 in January. The report contrasts with manufacturing and construction surveys earlier this week that were stronger than analysts had anticipated. Markit said the three indexes suggest the economy will grow 0.6% this quarter, after a 0.5% expansion at the end of 2014. (Source: Bloomberg) India: Reserve Bank of India Governor Raghuram Rajan cut interest rates in an unscheduled move days after the government agreed for the first time to give the central bank a legal mandate to target inflation. Rajan, citing weakness in Asia�s third-largest economy, lowered the benchmark repurchase rate by a quarter percentage point to 7.5%, the second such move this year. (Source: Bloomberg) Australia: Economy expanded slower than forecast in the final three months of last year, underscoring the central bank's decision to renew its policy easing cycle. Fourth-quarter gross domestic product advanced 0.5% from the previous three months, when it rose a revised 0.4%. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,825.5 (2.2) 0.2 JCI 5,448.1 27.5 (0.5) STI 3,415.5 7.8 (0.2) SET 1,562.8 20.3 0.0 HSI 24,465.4 5.0 (1.0) KOSPI 1,998.3 (0.6) (0.2) TWSE 9,621.7 11.7 0.2 DJIA 18,096.9 9.2 (0.6) S&P 2,098.5 13.5 (0.4) FTSE 6,919.2 2.5 0.4 MYR/USD 3.649 11.4 0.4 CPO (1mth) 2,378.0 (9.5) (0.5) Crude Oil (1mth) 51.5 (47.6) 2.0 Gold 1,204.4 0.2 (0.3) TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.72 16.00 Sime Darby 9.34 10.20 Genting Malaysia 4.18 4.60 Gamuda 5.30 6.00 Westport 3.60 3.80 SP Setia 3.51 4.07 AFG 4.78 5.30 Hartalega 8.00 8.50 Inari 3.13 3.95 MBM Resources 3.30 4.20 Vitrox 3.19 4.05