Bintai Kinden : Bintai Kinden unit wins RM74mil job from Myanmar firm Leon Fuat : Leon Fuat open to increasing public shareholding spread PRG : PRG eyes global opportunities via Hong Kong listing Chin Hin Group : Chin Hin to raise up to RM61.2m

STOCK OCUS OF THE DAY

CIMB Group : Formalises partnership with China Galaxy Securities            HOLD

We are downgrading our call on CIMB Group Holdings, to HOLD from BUY, after the strong-run up in share price. Our fair value of RM6.70/share is maintained based on FY18 ROE of 10.4%, leading to an unchanged P/BV of 1.2x. The group announced that it has entered into a share purchase agreement with China Galaxy Securities (CGS) to formalise its strategic partnership with the latter in stockbroking business. It will dispose of 50.0% equity in CIMB Securities International Pte Ltd (CSI), the holding company of CIMB's overseas stockbroking business, consisting of institutional, retail equity brokerage, equities research and associated securities business to CGS.

CIMB and CGS will become 50:50 shareholders in CSI to operate the ex-Malaysia stockbroking business in India, Indonesia, Singapore, Thailand, Hong Kong, South Korea, India, the UK and USA. The 50.0% equity in CSI will be disposed of for SG$167mil (RM515mil). The purchase consideration was arrived at based on a 1.3 times multiple on CSI's book value as at 31 December 2015 of SG$256.9mil. This amount could still be adjusted depending on the outcome of audit. The disposal of the 50.0% equity of its stockbroking business to CGS is expected to lower CIMB Group's CI ratio by 100 to 150bps. Cost savings will only be realised starting in FY18. Our CI ratio assumptions of 49.5% and 49.0% in FY18 and FY19 respectively have already factored in the cost savings from this strategic tie-up with CGS. We make no changes to our forecast and maintain our ROE expectation of 9.2%/10.4%/10.7% for FY17/18/19 respectively.

Others :

Genting Malaysia : No impact from tourism tax  SELL

Felda Global : Uncertainties ahead                           SELL

STOCKS ON RADAR

Paramount Corporation, Willowglen MSC,Unisem,Luxchem Corporation

ECONOMIC HIGHLIGHT

Australia : Room for 25bps cut

NEWS HIGHLIGHTS

Bintai Kinden : Bintai Kinden unit wins RM74mil job from Myanmar firm

Leon Fuat : Leon Fuat open to increasing public shareholding spread

PRG : PRG eyes global opportunities via Hong Kong listing

Chin Hin Group : Chin Hin to raise up to RM61.2m