Malaysia Daily, Maybank KE (2015-03-24)

Daily 24 March 2015 COMPANY UPDATE SapuraKencana Petroleum: Maintain Buy Much of the negatives priced in Cut FY16-17 core earnings forecasts by 33%-35%, largely on earnings cut at energy and drilling operations. Risk-reward turning attractive; negatives largely priced in. Maintain BUY with a revised SOP-TP of MYR2.80 (-26%). Click here for full report » REGIONAL SECTOR UPDATE Regional Plantations: Maintain Neutral Short term pain, long term gain? Indonesia�s new export levy proposal to fund its biodiesel subsidies is short term negative for Indonesian planters. But should Indonesia succeeds in implementing its ambitious B15 programme, there is potential upside to CPO price. Stay NEUTRAL on the sector. Top BUYs in the region are BAL, FR, GENP, SOP and SIME. SELL IOI Corp for its steep valuati Click here for full report » ECONOMICS Singapore CPI, Feb 2015 Deflation stays Headline inflation down -0.3% YoY in Feb 2015 (Jan 2015: -0.4% YoY). Core inflation rate (CPI ex-accommodation and private road transport) rose +1.3% YoY (Jan 2015: +1.0% YoY). Maintain our 2015 inflation forecast at 0%-1.0% range. Click here for full report » Technicals The index still remains range bound The FBMKLCI fell 7.80 points to 1,795.85 yesterday, while the FBMEMAS and FBM100 also closed lower by 41.00 points and 40.29 points, respectively. We expect some nibbling at the supports of 1,774 to 1,790, whilst heavy liquidation activities may cap rebounds at the resistances of 1,795 and 1,815. Trading idea is a Short-Term Buy on KAREX with upside target areas at MYR4.64 & MYR5.28. Stop loss is at MYR3.98. Click here for full report » Other Local News Transportation: The implementation of the new fares for express bus and rail services has been postponed, while the new increase fare for taxis can continue to the implemented, says Minister in the Prime Minister's Department Nancy Shukri. She said the decision to postpone the implementation of the new fares for express bus and rail services to a date which to be announced later was made by the Cabinet during its meeting last Friday. Hence, the new fares for taxis which took effect immediately as announced on March 19 will continue to be implemented. (Source: Bernama) Aviation: MAS' biggest union puts pressure on Khazanah. The Malaysian Airlines System Employees' Union Peninsular Malaysia (Masue) has joined several smaller unions in pushing Khazanah Nasional to abort a move to cut 6,000 jobs as set out in the latter's MYR6b recovery plan. Six trade unions led by International Transport Federation Malaysia Council secretary-general Tan Sri Zainal Rampak have brought up issues affecting MAS employees to the International Transport Workers Federation (ITF) in London and the International Labour Organisation (ILO) in Geneva and has sought PM Datuk Seri Najib Razak's intervention to stop the plan. (Source: The Edge Financial Daily) MMC Corp: Seeking project partners for LRT3. MMC Corp is looking for partners to bid for the MYR9b Klang Valley light right transit Line 3 (LRT3) project according to company officials. MMC is interested in either being the project delivery partner (PDP) or bidding for the construction package. A recent news report that Prasarana Negara had short-listed six groups for the role of PDP for LRT3 also mentioned that tenders for the PDP contract could be dished by June, while construction could start by year-end. (Source: The New Straits Times) Perdana Petroleum: Dayang closer to privatising Perdana Petroleum? Dayang Enterprise Holdings could be moving forward with its plan to privatise Perdana Petroleum after upping its stake in the oil and gas player recently to 29.88% from 28.62% on Nov 6, 2014 bring it closer to the mandatory general offer (MG) threshold of 33.3%. Dayang has acquired another 11.5 million shares in the open market from March 16 to 18. (Source: The Edge Financial Daily) IHH Healthcare: Buys 51% stake in India hospital. IHH Healthcare has bought a 51% stake in India-based Continental Hospitals Ltd for 2.82 billion rupees (MYR166.7m). The principal activity of Continental Hospitals is delivering primary, secondary, tertiary and quaternary healthcare services. (Source: The New Straits Times) Outside Malaysia U.S: Sales of existing homes are short of last year's pace. The real-estate market in the U.S. has gotten off to an inauspicious start in 2015, with sales falling short of last year's pace as a dearth of properties drives prices up. Purchases of existing homes rose 1.2% in February to a 4.88 million annual rate from January's nine-month low of 4.82 million, the National Association of Realtors reported. A total of 4.94 million houses were sold in 2014, fewer than in the prior year. (Source: Bloomberg) U.S: Fed's Fischer says rate rise probably warranted by end-2015. Federal Reserve Vice Chairman Stanley Fischer said raising interest rates from near zero "likely will be warranted before the end of the year" and subsequent increases probably won't be uniform or predictable. "A smooth path upward in the federal funds rate will almost certainly not be realized" as the economy encounters shocks such as the surprise plunge in oil prices, Fischer, said in remarks to the Economic Club of New York. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,795.9 (3.8) (0.4) JCI 5,437.1 27.2 (0.1) STI 3,410.1 7.7 (0.1) SET 1,520.0 17.0 (0.7) HSI 24,494.5 5.1 0.5 KOSPI 2,036.6 1.3 (0.0) TWSE 9,758.1 13.3 0.1 DJIA 18,116.0 9.3 (0.1) S&P 2,104.4 13.9 (0.2) FTSE 7,037.7 4.3 0.2 MYR/USD 3.663 11.8 (2.0) CPO (1mth) 2,188.0 (16.7) 0.9 Crude Oil (1mth) 47.5 (51.8) 3.8 Gold 1,181.9 (1.6) 0.7 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.24 16.00 Sime Darby 9.29 10.20 Genting Malaysia 4.10 4.60 Gamuda 5.17 6.00 Westport 3.66 3.80 SP Setia 3.40 4.07 AFG 4.73 5.30 Hartalega 8.18 8.50 Inari 3.33 3.95 MBM Resources 3.26 4.20 Vitrox 3.40 4.05