Malaysia Daily, Maybank KE (2015-04-24)

Daily 24 April 2015 MARKET STRATEGY Malaysia Strategy: Maintain Neutral Shariah investing gets a boost EPF�s Shariah-compliant retirement savings option will create the largest Shariah fund ever. Bursa�s ESG Index will draw attention to Shariah stocks too, as 2/3 of the index constituents are Shariah-compliant. These developments support our view that Shariah stocks will continue to re-rate over the longer term; stay invested. Click here for full report » RESULTS PREVIEW Tenaga Nasional: Maintain Buy Title of report  Shariah-compliant We estimate TNB�s 2QFY15 core net profit at about MYR1.8b (+64% YoY, -20% QoQ), 31% of our FY15 forecast. Further improvement in fuel mix, as both coal and hydro�s proportion of generation increased sequentially. Reiterate BUY with an unchanged MYR16.00 TP. Click here for full report » COMPANY UPDATE Perdana Petroleum: Maintain Buy A prime GO target Cut 2015 earnings by 20%, largely on contracts disruption for 2 vessels � Sovereign and Odyssey. Major shareholder Dayang recently upped its stake to 29.9% (+1.3%) � another 3.1% would trigger a GO. Reiterate BUY with an unchanged MYR1.70 TP based on unchanged 10x 2016 PER peg. Click here for full report » RESULTS REVIEW Pavilion REIT: Maintain Buy A good start 1Q15 realised net profit of MYR60.5m (+7% YoY) was within our and consensus� expectations. Growth catalysts from visible pipeline of prime assets and favourable rental income growth. Maintain BUY with an unchanged DCF-based TP of MYR1.70. Click here for full report » ECONOMICS Singapore CPI, Mar 2015 Headline Deflation, Core Inflation Headline deflation of -0.3% YoY in Mar 2015 (Feb 2015: -0.3% YoY). Core inflation (CPI ex-accommodation and private road transport) of +1.0% YoY (Feb 2015: +1.3% YoY). Maintain our 2015 headline inflation rate forecast of 0%-1.0%. Click here for full report » Technicals On a minor consolidation mode The FBMKLCI declined 8.69 points to 1,846.08 yesterday, while the FBMEMAS and FBM100 also closed lower by 47.35 points and 46.01 points, respectively. We recommend a �Nibble on Dips� stance for the index. Trading idea is a Short-Term Buy on LCTH with upside target areas at MYR0.545 & MYR0.65. Stop loss is at MYR0.42. Click here for full report » Other Local News Aviation: No change to MAS staff downsizing plan, says Khazanah chief. Khazanah would still maintain the estimated 6,000 job cuts at this juncture. At this juncture, for MAS, in order to make it work, we have to adhere to the ideal number of workers of 14,000 as we rationalize our fleet size and routes, said Khazanah. (Source: The Star) WCT Holdings: Fixes issues price at MYR1 per share. This is at a discount of 42.86% of its theoretical ex-rights price of MYR1.75. The group also fixed the exercise price of the warrants E at MYR2.08 per warrant representing a premium of 18.86%. (Source: Malaysian Reserve) EcoWorld: To list Malaysia's first property SPAC in 3Q 2015. The group expects to receive Securities Commission Malaysia�s approval by June this year and for it to list in 3Q. When asked whether the group is facing difficulties in getting approval, it said yes, as they are the pioneers. There is a lot of regulatory compliance that EcoWorld has to follow, said Eco World. (Source: The Edge Financial Daily) WZ Satu: Eyes doubling of net profit for its financial year ending Aug 31. The company posted a substantial jump in net profit to MYR11.68m for the 16 month consolidated financial period ended August 2014.. WZ Satu foresees its mining segment to continue its trend of contributing to 50% of the company's earnings for the rest of the year. As for its civil engineering and construction division, WZ Satu remains bullish. It has MYR300m in work orders and MYR1.2b of tenders in hand. (Source: The Edge Financial Daily) GHL Systems: To provide payment facilitator services to CIMB. Under the agreement, GHL will seek to acquire between 3,000 and 4,000 merchants on behalf of CIMB Bank in the first year. It earns its revenue from terminal rental and merchant discount rates, which will continue as long as GHL signs up merchants for card acceptance as a third party acquisition (TPA) with CIMB Bank. (Source: The Edge Financial Daily) AirAsia: Leases another aircraft to India operation. It has leased another aircraft - an Airbus A320-200 - to its 49% owned joint-venture company AirAsia (India) Pte Ltd. The six-month agreement was for USD1.92m (MYR6.99m). Also, it had over the last five months leased two other aircraft to AirAsia India, which is also owned by Tata Sons Ltd (30%) and Telestra Tradeplace Pvt Ltd (21%), for USD29.88m (MYR108.7m). (Source: The Star) Outside Malaysia U.S: Sales of new homes fell in March from seven-year high, a sign progress in the industry will be halting. Sales dropped 11.4% to a four-month low 481,000 annualized pace, Commerce Department figures showed. Support for the housing market coming from better job growth and low mortgage rates is being countered by a limited supply of available homes and still-tight lending standards, creating a situation where improvement in the industry may be fitful in the months ahead. (Source: Bloomberg) U.S: Claims hovering near 15-year low signal payroll rebound. An average 284,500 workers a week filed claims for jobless benefits over the past month, according to Labor Department data. The 282,500 average reached in early April was the lowest since June 2000. (Source: Bloomberg) France: Growth in private sector almost stalled in April in a sign of renewed weakness in the euro area's second-largest economy. A Purchasing Managers Index for the service and manufacturing industries dropped to 50.2 from 51.5 in March, London-based Markit Economics said. The reading is barely above the 50-point mark that divides expansion from contraction, which was for an increase to 51.8. (Source: Bloomberg) China: Manufacturing gauge fell to a 12-month low in April, suggesting government efforts to cushion a slowdown are yet to revive the nation's factories. The preliminary Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics was at 49.2. Numbers below 50 indicate contraction. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,846.1 (1.1) (0.5) JCI 5,436.2 27.2 (0.0) STI 3,502.8 10.6 0.2 SET 1,544.8 19.0 (0.5) HSI 27,827.7 19.4 (0.4) KOSPI 2,173.4 8.1 1.4 TWSE 9,797.5 13.8 1.9 DJIA 18,058.7 8.9 0.1 S&P 2,112.9 14.3 0.2 FTSE 7,053.7 4.5 0.4 MYR/USD 3.624 10.6 0.3 CPO (1mth) 2,174.0 (17.3) (0.2) Crude Oil (1mth) 57.7 (41.3) 2.8 Gold 1,194.0 (0.6) 0.6 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.48 16.00 Sime Darby 9.25 10.20 Genting Malaysia 4.36 4.60 Gamuda 5.23 6.00 Westport 4.23 4.50 SP Setia 3.48 4.07 AFG 4.76 5.30 Hartalega 8.15 8.50 Inari 3.42 3.95 MBM Resources 3.37 4.20 Vitrox 3.75 4.05 Axiata 6.98 7.60