Malaysia Daily, Maybank KE (2015-05-11)

Daily 11 May 2015 COMPANY UPDATE AMMB Holdings: Maintain Hold Subdued growth prospects We forecast loan growth of 3% in FY16 (flat in FY15) but NIM to compress further. Our 3% net profit growth and 11.7% ROE forecasts for FY16 lag management�s targets of 6-10% growth and 14% ROE. Dividend yield of almost 4% provides support but with muted growth prospects, we maintain our HOLD call (MYR6.90 TP). Click here for full report » SECTOR UPDATE Oil & Gas Services: Maintain Overweight HK roadshow feedback Investors were generally sector neutral as expected, but receptive to event-driven ideas, undervalued big cap names. Perdana Petroleum, BArmada, Yinson, SAKP, KNM and Ezion gained most interests. Reiterate OVERWEIGHT. Sector has de-rated, recovery in sight with attractive valuations. Click here for full report » Technicals Firmer Dow, unsteady FBMKLCI The FBM KLCI inched down 10.62 points WoW to close at 1,807.65, as some foreign selling activities persisted. The support levels of 1,770 and 1,805 may be areas to nibble. Liquidation at the resistance areas of 1,807 to 1,867 will cap rebounds. Trading idea is a Short-Term Buy on HHGROUP with upside target areas at MYR0.695 & MYR0.77. Stop loss is at MYR0.54. Click here for full report » Other Local News Oil & Gas: Petronas to scale down exploration. Petroliam Nasional (Petronas) is said to be scaling down its exploration activities by June in view of the soft crude oil prices, while maintaining its current production level. A source close to the matter said Petronas will not retract current jobs that are contracted with the national oil firm, but it will not start any new drilling jobs for the time being. The source also said no timeline has been given as to how long Petronas will hold off on its exploration activities. (Source: The Edge Financial Daily) Sime Darby: Unlocking value in NBPOL deal. Sime Darby Plantation is heading for exciting times as it integrates with New Britain Palm Oil Ltd (NBPOL) and works on all fronts of the palm oil value chain, especially in Europe, Papua New Guinea and Solomon Islands. The company wants to focus on producing high value-added products, enhancing sales and marketing as well as improving the supply chain to enhance its competitiveness, said managing director Datuk Franki Anthony Dass. (Source: The New Straits Times) MCT: Plans to launch REIT earliest by 2020. MCT plans to form a real estate investment trust (REIT) at the earliest by 2020. The REIT would acquire properties MCT has developed, including shopping malls and hotels. The REIT is part of the integrated property developer's long-term strategy to generate a recurring income stream, contributing some 30% of its net profit. The remaining 70% will be derived from its core property development business. (Source: The Edge Financial Daily) Outside Malaysia China: Opens stimulus tap wider with third interest-rate cut. China's central bank cut interest rates for the third time in six months as it steps up support for an economy grappling with a debt overhang and property slump. The People's Bank of China will reduce the one-year lending rate 0.25 percentage point to 5.1%, and cut the one-year deposit rate by the same amount to 2.25%, effective Monday, the central bank said on its website. The deposit-rate ceiling will be expanded to 150% of the benchmark from 130%, it said. (Source: Bloomberg) China: Auto retail sales climb at slowest pace in five months as weaker economic expansion hurt demand for big-ticket purchases. Retail deliveries of cars, multipurpose and sport utility vehicles climbed 6.2% YoY to 1.61 million units in April, the China Passenger Car Association said. It's the slowest pace of growth since November. (Source: Bloomberg) Germany: Industry output falls as economic risks highlighted. German industrial production unexpectedly declined in March in a sign that Europe's largest economy remains vulnerable to global economic weakness. Output, adjusted for seasonal swings and inflation, fell 0.5% MoM after stagnating in February, data from the Economy Ministry in Berlin showed. Production rose 0.1% YoY. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,807.70 2.6 0.1 JCI 5,182.20 -0.9 0.6 STI 3,452.00 2.6 0.6 SET 1,510.50 0.9 0.8 HSI 27,577.30 16.8 1.1 KOSPI 2,085.50 8.9 -0.3 TWSE 9,692.00 4.1 -0.1 DJIA 18,191.10 2.1 1.5 S&P 2,116.10 2.8 1.3 FTSE 7,046.80 7.3 2.3 MYR/USD 3.599 2.9 0.1 CPO (1mth) 2,146.00 -6.3 -0.5 Crude Oil (1mth) 59.4 11.5 0.8 Gold 1,188.40 0.3 0.3 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 13.98 16 Sime Darby 9.03 10.2 Genting Malaysia 4.31 4.6 Gamuda 5.17 6 SP Setia 3.45 4.07 AFG 4.77 5.3 Inari 3.29 3.95 MBM Resources 3.44 4.2 Vitrox 3.65 4.05 Axiata 6.62 7.6