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

Daily 03 April 2015 SECTOR UPDATE Malaysia Banking: Maintain Neutral LCR guidelines issued Meeting minimum 70% LCR requirement not an issue, most banks have >100%. Unlikely to significantly ease retail deposit competition though, due to tight liquidity and deposit mix restructuring. NEUTRAL on the sector; BUY AFG, HL Bank, HLFG and RHB. Click here for full report » ACQUISITIONS / DISPOSAL Cahya Mata Sarawak: Maintain Buy Acquiring Sacofa  Shariah-compliant We are positive on the acquisition; the strategic asset would enhance CMS� recurring income base. Potential FY15-17 net profit enhancements of 4-7.9%. Earnings forecasts and TP under review. Reiterate BUY. Click here for full report » COMPANY UPDATE Star Publications: Maintain Hold Unsure about this �Avenger�  Shariah-compliant 64%-owned Cityneon effectively bought the exclusive rights to exhibit Marvel's The AVENGERS S.T.A.T.I.O.N.. Purchase consideration is >SGD19m. Cityneon will undertake a rights issue which will require Star to inject SGD10.2m. EPS accretion may not be material. Maintain estimates, HOLD call and MYR2.65 TP till we get more earnings clarity. Click here for full report » Technicals A good weekend close looks likely The FBMKLCI advanced 5.66 points to 1,831.97 yesterday, while the FBMEMAS and FBM100 also closed higher by 47.35 points and 44.12 points, respectively. We recommend a �Nibble on Dips� stance for the index. Trading idea is a Short-Term Buy on WPRTS with upside target areas at MYR4.25 & MYR4.55. Click here for full report » Other Local News Aviation: Weststar wins MYR370m job. Weststar Aviation Services Sdn Bhd (WAS), which is planning a listing on Bursa Malaysia this year, has won a new contract worth MYR370m to provide helicopter transportation services for a five-year period starting yesterday. This new contract bring its order book of contracts to MYR8.4b. The listing will be later this year, according to sources. (Source: The Star) Aviation: Khazanah stays the course on 6,000 MAS job cuts. Things have gone so far now that the plan is irreversible and the job cuts will start at the top, sources said. Some management changes are expected, as Christoph Mueller assumes the post of managing director and group CEO of MAS on May 1. Unlike his predecessors, it is understood that Mueller has been given a free hand to run the airline's operations and turn it around within three years. (Source: The Edge Financial Daily) Utilities: Malaysia to issue sukuk to repay 1MDB debt. Malaysia's government will begin meeting investors to discuss a potential US dollar-denominated sovereign sukuk, as it looks to repay 1MDB's debt. No details on the size and tenor of the issue were provided, but sources with knowledge of the deal previously told Reuters that it would be up to USD2b with a maturity of more than 5 years. (Source: The Edge Financial Daily) Telco: To cut broadband rates by more than 6%. The details of the reduction will be announced this month. Minister of Communications and Multimedia, Datuk Seri Shabery Cheek said that this reduction would help cushion the impact of the 6% imposed under the Goods and Services Tax (GST). (Source: The Star) Faber Group: Recent hospital support services contract is worth MYR3.07b. Faber Group, which will soon change its name to UEM Edgenta, said one of the concession agreements entered into on March 11 this year between its subsidiary and the government, has a contract value of MYR307.32m per annum. The job entails the provision of HSS at contract hospitals in Perak, Penang, Kedah and Perlis. (Source: The Edge Financial Daily) UMW Holdings: Trims 2015 Toyota sale target to 90,000 units. UMW Holdings' 51% owned unit, UMW Toyota Motor Sdn Bhd, has reduced its target from 100,000 to 90,000 on weaker first-quarter sales and challenging operating environment. (Source: The Edge Financial Daily) Outside Malaysia U.S: Trade gap shrinks to five-year low as imports slump. The trade deficit in the U.S. shrank in February to the lowest level in more than five years as a labor dispute at West Coast ports contributed to the weakest reading on purchases from abroad since 2011. The gap, which measures the difference in the value between imports and exports, narrowed by USD 7.2b to USD 35.4b, lower than the lowest forecast of economists surveyed by Bloomberg and the smallest since October 2009, the Commerce Department reported in Washington. Imports contracted 4.4%, the biggest slump since February 2009, when the economy was still in the recession. (Source: Bloomberg) Japan: BOJ is said to be confident inflation is on track. Bank of Japan policy makers remain confident that inflation is on track to meet their target, even after the latest monthly reading showed price gains stalling, said people familiar with discussions inside the bank. As officials analyze data ahead of the policy board's first April meeting next week, weight is being given to higher wages, a tightening labor market and company profits to help drive a virtuous cycle in the economy, according to the people, who asked not to be named because the talks are private. Prices have been more or less in line with the BOJ's January outlook, they said. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,832.0 (1.9) 0.3 JCI 5,456.4 27.7 (0.2) STI 3,453.8 9.0 0.2 SET 1,532.2 18.0 0.4 HSI 25,275.6 8.4 0.8 KOSPI 2,029.1 0.9 0.0 TWSE 9,600.3 11.5 1.0 DJIA 17,763.2 7.2 0.4 S&P 2,067.0 11.8 0.4 FTSE 6,833.5 1.3 0.4 MYR/USD 3.670 12.0 (0.7) CPO (1mth) 2,154.0 (18.0) 0.6 Crude Oil (1mth) 49.1 (50.1) (1.9) Gold 1,204.5 0.2 1.7 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.30 16.00 Sime Darby 9.31 10.20 Genting Malaysia 4.23 4.60 Gamuda 5.14 6.00 Westport 4.05 3.80 SP Setia 3.44 4.07 AFG 4.78 5.30 Hartalega 8.50 8.50 Inari 3.34 3.95 MBM Resources 3.40 4.20 Vitrox 3.31 4.05