Malaysia Daily, Maybank KE (2015-04-20)

Daily 20 April 2015 COMPANY UPDATE MPHB Capital: Maintain Hold Little happening for now Hoping to conclude insurance sale by mid-June, Rawang JV to kick off soon. Cash at holding co about 58sen/share post-MPI sale but any distribution hinges on compliance with capital requirements. HOLD maintained � little catalyst for now; SOP-based TP lowered to MYR2.20 from MYR2.25. Click here for full report » IGB REIT: Maintain Hold Slow and steady While we like IGBR for its strong earnings resilience, the trust lacks of near-term growth catalysts. Raise FY15-17 earnings forecasts by 6-8%; IGBR offers 5.5% yield (net) for FY15 vs. retail M-REIT�s 4.9%. Maintain HOLD with a new MYR1.45 DCF-based TP (+12sen). Click here for full report » British American Tobacco: Maintain Hold U-turn on pricing, again Cigarette prices revert to pre-GST pricing. Neutral on industry volumes but expect a net negative impact to BAT's earnings as it absorbs the GST. Maintain HOLD but with a lower TP of MYR63 (-MYR1). Click here for full report » ECONOMICS Singapore Exports, Mar �15 NODX surged in March Non-oil Domestic Exports (NODX) unexpectedly surged by +18.5% YoY in March 2015. Led by strong rebound in pharmaceuticals and electronics exports. But the surge may well be the result of backorders being executed due to extended business closure over the Lunar New Year period which fell in Feb 2015. Click here for full report » Technicals DJIA volatility. FBMKLCI stability The FBM KLCI inched up 1.55 points WoW to close at 1,845.86, as some local and foreign nibbling activities took place last week. The support levels of 1,800 and 1,845 will be areas to buy. Take profit at the resistance areas of 1,848 to 1,896. Buy on dips, as the index has broken above and sustained above the key 1,831 resistance level. Trading idea is a Short-Term Buy on SLP with upside target areas at MYR1.11 & MYR1.23. Stop loss is at MYR0.84. Click here for full report » Other Local News DRB Hicom: JV to produce, sell Lotus in China. DRB-Hicom Bhd's wholly-owned subsidiary Proton Holdings Bhd and Lotus Group International Ltd have entered into a joint venture with Goldstar Heavy Industrial Co Ltd to produce and sell Lotus branded passenger cars in China. DRB-Hicom said the total investment in the joint venture entity will increase from RMB2.7b (MYR1.61b) during the initial stage to RMB10b (MYR5.97b) for the second stage. Proton, Lotus and Goldstar will each own a 40%, 10% and 50% in the joint venture company. (Source: The Sun) OSK Property: Aims to maintain MYR1b GDV launches this year. OSK Property said about 20% to 30% of the GDV would be from the ongoing Sungai Petani development in Kedah. Besides Sungai Petani, we plan to launch high-end properties in Shah Alam and Cyberjaya this year. Also, OSK Property pointed out that the company had an undeveloped land bank of 1,600 acres with MYR7b in GDV. (Source: The Star) Tiong Nam: Plans multi-storey warehouse and more automation within three to five years. Tiong Nam said the pipeline is a technologically advanced five-storey warehouse with one million sq ft, and facilities that allow for trucks to be parked on top of the building. Tiong Nam is looking to have one in either Shah Alam or Johor Baru. The capital expenditure can be MYR100m. (Source: The Star) Teo Seng: Malaysia's egg consumption to grow at 3% to 5%. It expects per capita egg consumption in Malaysia to grow 3% to 5% this year from the current level of about 36.5 million eggs per day. The average prices of eggs has remained stable for the past six months at about 35sen and is projected to remain at this level for the remaining year. It plans to allocate MYR200m over the next four to five years to increase its egg production to 5.2million eggs per day, up 62.5% from the current 3.2million eggs per day. (Source: The Edge Financial Daily) Maybank: Eyes MYR100m sales of ASB at MSAM 2015. Maybank aims to boost Amanah Saham Bumiputera (ASB) sales by 20% to MYR100m at the Malaysian Unit Trust Week 2015 from MYR86m last year. Besides providing facilities for the public to invest or open ASB accounts, Maybank is also targeting to sell 2,000 credit and debit cards, and 2,000 takaful and 2,000 insurance policies at the event. (Source: The Edge Financial Daily) Outside Malaysia U.K. House prices rise to record as property shortage worsens. The average price rose 1.6% from March to GBP 286,133 (USD 428,000), reflecting a 4% plunge in the number of new sellers so far this year compared to 2014, the property website operator said. Values in London rose 2.5% Property price gains are overshadowing other improvements in the cost of living, with data Friday showing wage gains outstripped inflation for a fifth month. All major political parties have promised to do more to alleviate strains in the housing market with less than three weeks to go before the May 7 general election. (Source: Bloomberg) China: Steps up economy help with reduced bank reserve ratios. China's leaders swung into stimulus mode, cutting the amount of cash lenders must set aside as reserves by the most since the global financial crisis just days after a report showed the slowest economic growth in six years. The reserve-requirement ratio will be lowered 1 percentage point effective April 20, the People's Bank of China said on its website, the second reduction this year and the largest since November 2008. The level will decline to 18.5%, still high by global standards, based on previous statements. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,845.9 (1.1) (0.1) JCI 5,410.6 26.6 (0.2) STI 3,525.2 11.3 (0.2) SET 1,566.9 20.6 (0.2) HSI 27,653.1 18.7 (0.3) KOSPI 2,143.5 6.6 0.2 TWSE 9,570.9 11.1 (0.9) DJIA 17,826.3 7.5 (1.5) S&P 2,081.2 12.6 (1.1) FTSE 6,994.6 3.6 (0.9) MYR/USD 3.624 10.6 (0.8) CPO (1mth) 2,184.0 (16.9) 0.5 Crude Oil (1mth) 55.7 (43.4) (1.7) Gold 1,204.2 0.2 0.5 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.44 16.00 Sime Darby 9.27 10.20 Genting Malaysia 4.47 4.60 Gamuda 5.24 6.00 Westport 4.07 4.50 SP Setia 3.49 4.07 AFG 4.80 5.30 Hartalega 8.28 8.50 Inari 3.49 3.95 MBM Resources 3.34 4.20 Vitrox 3.65 4.05 Axiata 7.02 7.60