Malaysia Daily, Maybank KE (2015-03-17)

Daily 17 March 2015 COMPANY UPDATE DiGi.Com: Maintain Hold A change of guards  Shariah-compliant COO Albern Murty becomes CEO effective Apr 2015, replacing Lars-Ake Norling, who becomes CEO of DTAC in Thailand. Having spent over a decade in various roles at Digi, Albern is well-poised to continue Digi�s drive for mobile internet leadership. Digi�s track record in execution and earnings delivery has been exemplary, but appears to have been largely priced-in. Maintain HOLD with an unchanged TP of MYR6.10. Click here for full report » WCT Holdings Bhd: Maintain Buy Proposes rights and free warrants  Shariah-compliant Proposed rights with free warrants to raise working capital. Potential TP dilution is small and still offers decent upside. We recommend shareholders to subscribe. Maintain BUY. Click here for full report » KNM Group: Maintain Buy JV with Hansol EME for RE projects  Shariah-compliant This 40:60 KNM-Hansol EME JV offers KNM a hand into the latter�s renewable energy (RE) technology. Expect more strategic technology tie-ups for RE works. No change to our earnings forecasts. Maintain BUY; MYR1.00 TP (0.6x EV/backlog) under review. Click here for full report » Eversendai Corp: Maintain Buy Another sizeable MYR246m win  Shariah-compliant Won two new jobs worth MYR246m in Saudi Arabia, lifting outstanding orderbook to MYR1.8b. Strong jobflows YTD and bright prospect will drive earnings rebound in FY15-16. Maintain BUY and TP of MYR0.87 (12x FY15 PER). Click here for full report » REGIONAL SECTOR UPDATE Regional Plantations: Maintain Neutral 4.5% CPO export tax in April Malaysia will impose a 4.5% CPO export tax this April 2015 in its bid to help refiners boost exports of processed palm oil. Positive for downstream operators in Malaysia - FGV, IOI, KLK, Sime, SOP, GENP, Wilmar, and Mewah Int�l. Losers are the purer upstream players. Top BUYs in the region are BAL, FR, GENP, SOP and SIME. SELL IOI Corp for its steep valuation. Click here for full report » Technicals Narrow range trading for now The FBMKLCI fell 1.21 points to 1,780.54 yesterday, while the FBMEMAS and FBM100 also closed lower by 24.09 points and 20.93 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a Take Profit call on UMWOG with downside target areas at MYR2.00 & MYR1.52. Click here for full report » Other Local News IPO: Weststar reviews listing plan. Malaysian helicopter operator Weststar Aviation Services is said to be reviewing its listing plan due to lower crude oil prices and market uncertainties. Weststar is now looking at an IPO either in the third or fourth quarter of this year as compared to initial plans of listing on the Main Market of Bursa Malaysia between March and June of this year. The IPO could raise more than MYR1.4b. (Source: The New Straits Times) Water: Third extension of SPA agreed on. Puncak Niaga Holdings (PNHB) has announced that the disposal of its water assets to Pengurusan Air Selangor Sdn Bhd (Air Selangor) has been extended for a third time by another month to April 9, 2015. PNHB chief operating officer, Datuk Syed Danial Syed Ariffin said the extension was agreed to enable the pending issues related to the water asset transfer between the Selangor and federal government to be resolved. (Source: The Edge Financial Daily) IJM Corporation: Deputy CEO Soam to take over helm. IJM Corp deputy chief executive officer (CEO) Datuk Soam Heng Choon will take over the helm of the group from April 6 this year, replacing Datuk Teh Kean Ming, who is retiring on April 5. Datuk Soam started his career with the group in 1989 and was appointed deputy CEO and deputy MD on June 7, 2013. (Source: The Edge Financial Daily) Eastern & Oriental: Unit completes MYR309m UK land deal. It's unit, Eastern & Oriental Property (UK) Ltd (EOP UK) has completed its MYR308.9m (GBP57m) acquisition of a 0.48ha freehold site in Hammersmith in West London. The land could be possibly used for creating Grade A office space and residential units subject to relevant authority approvals. (Source: The New Straits Times) Outside Malaysia U.S: China lead in treasury holdings narrows to below USD 1b. China's holdings of U.S. government debt declined for a fifth straight month in January, as Japan pulled within range of regaining its status as the biggest foreign holder of Treasuries. China held USD 1.2391tr of Treasuries as of January, USD 5.2b lower than a month earlier, according to U.S. Treasury Department data. Japan increased its ownership by USD 7.7b to USD 1.2386 tr. (Source: Bloomberg) U.S: Confidence among homebuilders declines to eight-month low. Confidence among U.S. homebuilders unexpectedly fell in March to an eight-month low as prospective buyers were in little rush to shop for properties ahead of the busier spring selling season. The National Association of Home Builders/Wells Fargo sentiment gauge dropped to 53 from 55 in February, figures from the Washington-based group showed. (Source: Bloomberg) U.S: Factory cutbacks in February held back growth as a port slowdown, rising dollar and bad weather hurt the U.S. economy. The 0.2% decrease in factory output followed a revised 0.3% drop in January, according to Federal Reserve figures. Delays at West Coast ports have disrupted supplies, while sluggish growth in foreign markets and a rising dollar that makes American products more expensive may be slowing exports. U.S. consumer spending, supported by job and wage gains, will be needed to underpin activity at factories, which are often considered economic bellwethers. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,780.5 (4.6) (0.1) JCI 5,435.3 27.2 0.2 STI 3,376.0 6.6 0.4 SET 1,515.6 16.7 (1.7) HSI 23,949.6 2.8 0.5 KOSPI 1,987.3 (1.2) 0.1 TWSE 9,512.9 10.5 (0.7) DJIA 17,977.4 8.5 1.3 S&P 2,081.2 12.6 1.4 FTSE 6,804.1 0.8 0.9 MYR/USD 3.704 13.1 0.3 CPO (1mth) 2,209.0 (15.9) (2.7) Crude Oil (1mth) 43.9 (55.4) (2.1) Gold 1,157.1 (3.7) (0.0) TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.62 16.00 Sime Darby 9.26 10.20 Genting Malaysia 4.07 4.60 Gamuda 5.17 6.00 Westport 3.55 3.80 SP Setia 3.38 4.07 AFG 4.75 5.30 Hartalega 8.06 8.50 Inari 3.25 3.95 MBM Resources 3.28 4.20 Vitrox 3.33 4.05