SECTOR FOCUS OF THE DAY
Transport Sector: Facing various headwinds NEUTRAL
We are NEUTRAL on the transportation sector over the next 12 months. While there are plenty of opportunities in store for players, particularly, in the tourism and e-commerce space, we are mindful of various headwinds such as the increased regulatory risk on the back of the change in the political landscape following the 14th general election (GE14), potential dial-back of certain major initiatives by the preceding administration and rising fuel costs.
Our top pick for the sector is AirAsia (BUY, FV: RM3.63). AirAsia is a good proxy to the growing low-cost air travel market in the region, underpinned by rising per capita incomes and a young demographic. Its strong market presence (in terms of the number of routes, and frequencies for each route) enables it to compete effectively against its rivals (both low-cost and full-service). It has struck a chord with investors with its plans to monetise some of its auxiliary businesses and assets, including its leasing arm and ground handling unit, which could translate to special dividend payouts to shareholders.
QUICK TAKES
MSM Malaysia: Minimal impact from gas tariff hike SELL
Plantation Sector: EU to withdraw demand for ban on palm biodiesel NEUTRAL
RETAIL RESEARCH
Stocks On Radar: Inari Amertron, Eversendai Corporation, Sunway Construction, YTL Power International
ECONOMIC HIGHLIGHT
US: Fed features multiple instances of more hawkish language
NEWS HIGHLIGHTS
Construction Sector: New tender for rail project
Supermax: Gets Japanese licence for contact lens business
Plantation Sector: CPO futures hit two-year low
Property Sector: Battersea Power Station deal above board
DISCLAIMER:
The information and opinions in this report are prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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