Malaysia Daily, Maybank KE (2015-04-22)

Daily 22 April 2015 COMPANY UPDATE NCB Holdings: Maintain Buy At the inflexion point  Shariah-compliant 1Q15 results to be lifted by strong throughput (+12% YoY). Share price has yet to reflect the imminent rebound in earnings and potential tariff hike. Maintain BUY and TP of MYR3.00 (1x FY14 P/BV). Click here for full report » IJM Corporation: Maintain Buy The Light is on!  Shariah-compliant The Light Commercial phase is set to kick off with a strong partner at MYR3b cost and phase 1 would complete in 2018. Positive to earnings including potential gain from land sale, construction works and recurring earnings from the assets. Earnings forecasts unchanged. BUY at MYR7.80 RNAV-TP. Click here for full report » Eco World Development: Maintain Hold Sealing Batu Kawan land deal  Shariah-compliant Positive on ECW�s latest land purchase in Batu Kawan. Estimated RNAV enhancement of 15sen/share; it should start contributing to earnings from FY18 onwards. Lower FY16/17 earnings forecasts by 9%/8% after factoring in interest costs on the land. We however raise our RNAV-based TP to MYR1.95 (+11sen; on unchanged 0.73x P/RNAV). HOLD. Click here for full report » SECTOR UPDATE Malaysia Banking: Maintain Neutral R&R loans to be impaired R&R loans in CCRIS will now have to be treated as impaired. No immediate impact on banks, given that the guideline only affects new R&R loans from 1 Apr 2015, but banks have to increase vigilance over asset quality. NEUTRAL on the sector; BUY AFG, HL Bank and HLFG. Click here for full report » Technicals Broke 1,858. FBMKLCI to trend higher The FBMKLCI rose 14.14 points to 1,862.80 yesterday, while the FBMEMAS and FBM100 also closed higher by 82.79 points and 83.57 points, respectively. We recommend a �Buy on Dips� stance for the index. Trading idea is a Short-Term Buy on Hovid with upside target areas at MYR0.585 & MYR0.68. Stop loss is at MYR0.46. Click here for full report » Other Local News Oil & Gas: Petronas to see USD500m cost savings. Cost savings should be made with the commissioning of world's first floating LNG facility that is slated for 1Q16 and not building a full on-shore LNG facility (180km pipeline that could cost MYR500m). Also, Petronas won't need to build a jetty or berth that could cost another USD150m. After 10 to 15 years when the gas field is depleted PFLNG1 will move to another field and Petronas won�t have to scrap anything. (Source: The Edge Financial Daily) Infrastructure: Construction of MRT project reaches 61.9%. MRT Corp said the construction of the tunnel for the Sungai Buloh-Kajang line has also been completed and the underground work, including the building of stations, has reached 76%, which exceeded target of 74%. (Source: The Edge Financial Daily) Petronas Chemicals: Gears up for 80%-85% plant utilization rate in a bid to drive sales volume. In 2014, plant utilization rate was 80% compared with 78% in 2013, and with the latest Sabah Ammonia Urea (SAMUR) plant due for commission next year, PCG's utilization rate could hit beyond 85% from 2016. On the SAMUR project in Sipitang, Sabah and the Refinery and Petrochemical Integrated Development (RAPID) in Pengerang, Johor, PCHEM said they are progressing well, with SAMUR being 90% completed and RAPID progressing as planned. (Source: The Star) Matrix Concepts: Buys Puchong land, aims for over MYR500m GDV. It has proposed to acquire a 5.8 acre (2.35ha) land cum approved residential development project in Puchong, Selangor for MYR95m. Matrix Concepts said the new land is located beside SetiaWalk, and the group intends to enhance the development project�s residential density with a GDV of more than MYR500m. (Source: The Edge Financial Daily) Yee Lee: Takes over Red Bull distributorship from F&N. It will be the sole distributor of the drinks in Malaysia from Aug 1, 2015. The agreement sees the appointment of Yee Lee as the exclusive distributor to market, distribute and sell Red Bull Gold, Red Bull Sugarfee, and Red Bull Bottle energy drinks in Malaysia. (Source: The Edge Financial Daily) CIMB: CIMB Thai Bank Q1 net profit down on higher provisions. It reported a 70% drop year-on-year (yoy) in consolidated net profit to THB130.6m (MYR14.65m) for the first quarter ended March 31, 2015. The higher provisions are reflective of a weaker environment leading up from the slower economic conditions. Nevertheless, compared with the fourth quarter of 2014, net profit increased 47.1% from THB88.8m (MYR9.96m), illustrating better abilities to cope with extended slower economic conditions, said CIMB. (Source: The Star) MAHB : Set up committee to monitor recently-acquired airport. It has set up an integration steering committee to ensure an appropriate integration of its recent acquisition, Istanbul Sabiha Gokcen Airport (ISG) and LGM Havalimani (LGM), into the group. The committee shall be formed as a sub-committee to MAHB board of directors with an objective to facilitate the integration and rationalization activities of ISG and LGM. Also, it shall report directly to MAHB board. (Source: New Straits Time) Outside Malaysia Germany: Investor confidence unexpectedly fell for the first time in six months, signaling that the uncertainty induced by Greece's debt crisis may be weighing on Europe's largest economy. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, fell to 53.3 in April from 54.8 in March. (Source: Bloomberg) China: Cabinet takes steps to support jobs after growth slows. China's economic slowdown is prompting Premier Li Keqiang to take steps to support job creation, backing up a pledge last month. Pressure on employment is rising and China's policies must become more proactive, according to a government statement after a State Council meeting led by Li. The cabinet announced measures including more tax breaks and subsidies to some enterprises that hire. (Source: Bloomberg) Japan: Trade balance swings to first surplus since 2012. Japan's exports exceeded imports in March for the first time in almost three years, providing support for an economy struggling with weak domestic spending. The trade surplus was JPY 229.3b (USD 1.9b), the finance ministry said. It was the first surplus since June 2012. Japan's imports of fossil-fuels jumped after the 2011 Fukushima disaster led to the closure of all the nation's nuclear power plants. Oil's more than 40% price drop in the past 12 months has cut that bill, while a weaker yen has boosted the value of exports. (Source: Bloomberg) India: Banks passing on Rajan cuts to supercharge lending revival. Bank lending in India is seen rebounding from near the lowest since 2009 amid forecasts for the world's fastest economic growth and as lenders begin passing on this year's two interest-rate cuts to consumers. Loans grew 12.64% in the 12 months ended April 3, the most since July, central bank data show. Reserve Bank of India Governor Raghuram Rajan said at the April 7 policy review that he will wait for the passing on of benchmark rate cuts in January and March before easing further. State Bank of India answered his call by reducing lending rates the same day. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,862.8 (0.2) 0.8 JCI 5,460.6 27.8 1.1 STI 3,508.6 10.8 0.2 SET 1,569.4 20.8 0.6 HSI 27,850.5 19.5 2.8 KOSPI 2,144.8 6.6 (0.1) TWSE 9,534.0 10.7 (0.2) DJIA 17,949.6 8.3 (0.5) S&P 2,097.3 13.5 (0.1) FTSE 7,062.9 4.7 0.2 MYR/USD 3.635 11.0 0.3 CPO (1mth) 2,203.0 (16.2) 0.6 Crude Oil (1mth) 55.3 (43.9) (2.0) Gold 1,198.9 (0.2) (0.1) TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.50 16.00 Sime Darby 9.35 10.20 Genting Malaysia 4.45 4.60 Gamuda 5.23 6.00 Westport 4.09 4.50 SP Setia 3.55 4.07 AFG 4.78 5.30 Hartalega 8.20 8.50 Inari 3.49 3.95 MBM Resources 3.38 4.20 Vitrox 3.79 4.05 Axiata 7.02 7.60