Monday, January 29, 2018

FW: Indonesia's CPI Outlook January 2018

Monthly Inflation:” Fueled by rising foodstuffs prices”

CPI Review

Consumer Price Index (CPI) in December 2017 increased due to the rising prices of foodstuffs, cigarette, and transportation tariff. Monthly inflation reached 0.71% m-o-m, higher from 0.20% m-o-m in the preceding month. Based component, the inflation was posted by the foodstuffs component increased by 2.26% m-o-m, the transportation, communication, and financial services component experienced rose by 0.75% m-o-m, and the prepared food component rose by 0.30% m-o-m. Furthermore, the clothing component rose by 0.13% m-o-m and the housing component experienced rose by 0.17% compared to preceding month. Moreover, the medical care component increased by 0.18% m-o-m and the education component increased by 0.07% m-o-m.

Inflation in the foodstuffs component in December 2017 mainly stemmed from higher prices of rice, fish, eggs, chicken meat, red pepper, tomato, chili, salted fish, spinach, green mustard, and carrots. We believe the price increase in these products were mainly due to

a. Lower domestic supply

b. Higher domestic demand

Meanwhile, inflation in the transportation, communication, and financial services component in December 2017 came primarily from higher prices of air freight tariff, train fares, inter-city transportation tariff, and gasoline. Inflation in the prepared foods component in December 2017 mainly stemmed from higher prices of rice with meals, cigarette, white cigarette, and filter cigarette.

Furthermore, inflation in the education, recreation and sports component in December 2017 still mainly stemmed from higher prices of courses/training sub-sector. Inflation in the clothing component in December 2017 still came primarily from higher prices of man clothing sub-sector.

Meantime, inflation in the housing component in December 2017 came primarily from higher prices of household fuel and servant wages. Inflation in the medical care component in November 2017 came primarily from higher price of medicines sub-sector.

On a yearly basis, inflation remains in check with the upward trend still intact, as the inflation slightly increased to 3.61% y-o-y in December 2017 compare 3.30% y-o-y in the previous month. Furthermore, year to date inflation in January–December 2017 reached 3.61% higher than 3.02% for the same time frame in 2016.

CPI Outlook

We expect inflationary pressures still increase in January 2018. This is mainly fueled by rising foodstuffs prices. The foodstuffs prices experience increase, such as rice, red pepper, cayenne pepper, chicken meat, beef, egg, fish, salted fish, wheat flour, and milk. In addition, the increase in cigarette excise tax, toll tariff, non subsidized fuel prices, and car prices were also add to inflationary pressure this month. Meanwhile, deflationary pressure is caused by the decrease in airplane fares, train fares, hotel rates, and inter-city transportation tariff. Based on these factors, we expect the consumer price index in January 2018 will reach 0.80% m-o-m, higher than 0.71% m-o-m in December 2017. However, we expect the yearly inflation rate in January 2018 will decrease to 3.43% y-o-y from 3.61% y-o-y in December 2017. Looking ahead, we also expect inflation may reach 3.50% y-o-y by the end of 2018.

Meanwhile, we also expect core inflationary pressures also increase in January 2018. The pressure comes from the increase in price of cigarette excise tax, car prices, toll road tariffs, housing rent, housing contract, and servant wages. We expect core inflation in January 2018 may reach 0.42% m-o-m higher than 0.13% m-o-m in December 2017. Nevertheless, we expect the yearly core inflation in January 2018 will decrease to 2.81% y-o-y from 2.95% y-o-y in the previous month. Forward looking, we also expect core inflation may reach 3.00% by the end of 2018.

Regards,

Juniman

Chief Economist

PT Bank Maybank Indonesia Tbk

Sentral Senayan III, 8th Floor

Jl. Asia Afrika No. 8, Gelora Bung Karno

Jakarta 10270, Indonesia

Tel : +62 21 29228888 Ext.29682

Fax : +62 21 29228849

Juniman@maybank.co.id

This message is intended only for the use of the person to whom it is expressly addressed and for the purpose of the subject of this e-mail and may contain information that is confidential and legally privileged. If you are not the intended recipient, you are hereby notified that any use, reliance on, reference to, review, disclosure or copying of the message and the information it contains for any purpose is prohibited. If you have receive this message in error, please notify the sender by reply e-mail of the misdelivery and delete all its contents. Opinions, conclusions and other information in this message that do not relate to the official business of Bank Maybank Indonesia shall be understood as neither given nor endorsed by it

FW: [Maybank] Still Room For USD/Asia To Go Lower?

Still Room For USD/Asia To Go Lower?

FX Asia Fortnightly
by Saktiandi Supaat

FX Research


	The past two weeks have seen broad USD weakness that has weighed on USD/Asians. Leading the way was the MYR followed by the THB and JPY. Bringing up the rear once again was the PHP (falling 1.8% YTD) that remained under pressure from its deteriorating current account deficit. Gains in ASEAN FX were by more than 1.5% YTD (with the exception of the PHP). Aside from market positioning for further upside to Asian FX underpinned by the synchronous global recovery, healthy foreign portfolio ...

Saktiandi Supaat	(65) 6320 1379	saktiandi@maybank.com.sg
Leslie Tang	(65) 6320 1378	leslietang@maybank.com.sg


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FW: RHB | Economic Research - Tracking The World Economy, ASEAN Economies And The Semiconductor Cycle

Economic Research			29 January 2018
Global News
Economic Update
Tracking The World Economy, ASEAN Economies And The Semiconductor Cycle Global growth outlook more positive on US tax cut boost US economic prospects improve with tax cut boost, and gradual policy tightening still on track for the US Federal Reserve (US Fed) Japan: Growth outlook firming Eurozone: Firing on all cylinders China: Economic growth surprised on the upside in 4Q, but may be offset partly by government policy tightening Indonesia: Stronger growth in 2018 as election year approaches Malaysia: GDP to sustain into 2018 after surging this year The Philippines: Growth set to moderate in 2018 on easing household spending Singapore: Economic growth to slow, but not too severe Thailand: Robust domestic demand and infrastructure investment to drive new era of 4% growth Technology sector indicators signal strong momentum for global trade Economist: Arup Raha \| +65 6232 3896 Peck Boon Soon \| +603 9280 2163 Vincent Loo Yeong Hong \| +603 9280 2172 Ng Kee Chou \| +603 92802179 Rizki Fajar \| +6221 2970 7207 Aris Nazman Maslan\| +603 9280 2184

*To access our recent reports please click on the links below:* Tracking Global News: 25 Oct 2017 25 July 2017 25 April 2017 18 January 2017
Economics Team
Arup Raha	Group Chief Economist	arup.raha@rhbgroup.com		+65 6232 3896
Peck Boon Soon	Chief ASEAN Economist	bspeck@rhbgroup.com		+603 9280 2163
Vincent Loo Yeong Hong	Malaysia, Vietnam	vincent.loo@rhbgroup.com		+603 9280 2172
Ng Kee Chou	Singapore, Thailand	ng.kee.chou@rhbgroup.com		+603 9280 2179
Rizki Fajar	Indonesia, Philippines	rizki.fajar@rhbgroup.com		+6221 2970 7065
Aris Nazman Maslan	Malaysia, Vietnam	mohd.aris.nazman@rhbgroup.com		+603 9280 2184

FW: MARC AFFIRMS ITS AA-IS RATING ON JIMAH EAST POWER'S RM8.98 BILLION SUKUK MURABAHAH

P R E S S A N N O U N C E M E N T

FOR IMMEDIATE RELEASE

MARC AFFIRMS ITS AA-_ISRATING ON JIMAH EAST POWER’S RM8.98 BILLION SUKUK MURABAHAH

MARC has affirmed its rating of AA-_IS on Jimah East Power Sdn Bhd’s (JEP) outstanding RM8.98 billion Sukuk Murabahah with a stable outlook.

The affirmed rating incorporates predictable project cash flows, a manageable repayment profile that matches JEP’s availability-based revenue structure under the power purchase agreement (PPA) and the credit strength of project sponsors Tenaga Nasional Berhad (TNB) (70%), Mitsui & Co., Ltd (Mitsui) (15%) and The Chugoku Electric Power Co., Ltd (Chugoku) (15%). The rating is moderated by risks associated with ultra-supercritical technology as well as completion and construction cost overrun risks. The rating agency also notes adequate contract arrangements against pre- and post-commissioning risks.

JEP was established to develop, design, construct and operate a 2x1,000-megawatt (MW) ultra-supercritical coal-fired power plant in Jimah, Negeri Sembilan under a 25-year PPA with TNB. The scheduled commercial operation date (COD) of unit 1 is on June 15, 2019 while unit 2’s is on December 15, 2019. The engineering, procurement and construction (EPC) consortium undertaking the lump sum turnkey contract consists of Japan’s IHI Corporation (IHI), and Toshiba Corporation (Toshiba); South Korea’s Hyundai Engineering & Construction Co. Limited (Hyundai E&C) and Hyundai Engineering Co. Limited (Hyundai Engineering); Ishi Power Sdn Bhd (Ishi Power) and TOS Energy Malaysia Sdn Bhd (TOS Energy).

In July 2017, Toshiba underwent a corporate restructuring which resulted in the creation of four separate business entities. All of the group’s existing domestic and international power generation projects are now under the purview of Toshiba Energy Systems & Solutions Corporation (TESSC). In line with this new development, Toshiba has confirmed the novation of its scope of works under the EPC contract to TESSC. MARC welcomes the fact that Toshiba’s existing project management team for JEP has been retained by TESSC. A corporate guarantee letter, which is a crucial prerequisite for the consent of other EPC consortium members and JEP towards the novation, is expected to be finalised by end-1Q2018.

Notwithstanding this, the overall project construction progress is deemed satisfactory as actual plant construction progress is at 67.68% against a planned progress of 66.05%. MARC, however, notes that the transmission works and lines are behind schedule due to delays in the civil ground improvement works and land acquisition process. MARC is of the view that the solid track record of the EPC contractors in power plant construction would support a timely completion. Additional comfort is also derived from the liquidated damages (LD) provision under the EPC contract which will sufficiently address the LD penalty under the PPA and loss of income arising from a delay in achieving the scheduled completion.

As at August 31, 2017, the project sponsors have provided a total capital of RM1.7 billion against the total expected contribution of RM2.7 billion to achieve the scheduled project completion by end-2019 while project costs have marginally increased to RM11.63 billion. MARC takes comfort that project sponsors have provided a supplemental undertaking to fund project cost overruns equivalent to 2.5% of the EPC contract price. In addition, project sponsors will also provide exchange supplemental capital contribution to cover project cost overruns due to variances in exchange rates from the assumed base rates during the construction period. Such an undertaking is exercisable only if the Sukuk Murabahah and the project sponsors’ capital contribution are fully exhausted and insufficient to meet the project costs. To further mitigate foreign exchange risk, JEP has also entered into short-term forward contracts to manage its exposure to the US dollar and Japanese yen.

Under the base case cash flow projection, JEP is expected to achieve minimum and average finance service cover ratios (FSCR) with cash balances of 1.25 times and 1.33 times respectively during the sukuk tenure. MARC’s sensitivity analysis demonstrates that the project FSCR would remain above the covenanted level of 1.25 times in the event of a six-month project completion delay or mild-to-moderate performance breaches. The rating agency views the likelihood of a persistent unplanned outage as low given the participation of IHI and Toshiba as technical support providers to plant operator TNB Repair and Maintenance Sdn Bhd (TNB Remaco). Operations and maintenance (O&M) risk is further addressed by the LD provisions under the O&M agreement that would partially cover the loss of income in the event of performance breaches. Mitigating potential cash flow mismatch risk during the initial operating period due to a delay in the commencement of plant operations are the timely receipt of LD from the EPC contractor and pre-commission insurance claims.

The stable outlook reflects MARC’s expectations that JEP will continue to deliver satisfactory construction progress on the project power plant within the allocated budget and the project sponsors will inject the capital requirement as per the financing structure in a timely manner.

Contact: David Lee, +603-2717 2955/ david@marc.com.my.

January 29, 2018

[This announcement is available on MARC’s corporate homepage at http://www.marc.com.my]

--- DISCLAIMER ---

This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.

IMPORTANT NOTICE:
The information contained in this email and/or any attachment hereto is strictly confidential and privileged. If you are not the intended recipient, and/or have received this email in error, you must not copy, disseminate or disclose the contents of this message and/or any attachment to any other person. Please notify the sender and delete this message and any attachment from your system. Malaysian Rating Corporation Berhad (“MARC”) accepts no liability in respect of prohibited and unauthorised use by an unintended addressee or recipient. Any opinion, view or other information in this message and/or any attachment hereto which does not relate to the official business of MARC is that of the individual sender. Although this email and/or any attachment is believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus-free and MARC accepts no responsibility for any loss or damage arising in any way from the use thereof.

FW: RHB FIC Credit Markets Weekly - 29/1/18

29 January 2018

Credit Markets Weekly

BNM Raised OPR 25bps; ECB and BoJ Maintained Benchmark Rates.

SUMMARY:

¨ MYR Credit Market: BNM raised OPR by 25bps bringing the current level to 3.25%, as part of normalisation plan. Following a more hawkish statement made in its Nov meeting, the BNM MPC raised its policy rates a further 25 bps to 3.25%; The week also saw the weakening of the USD, as the DXY index continued to push below 90 to the benefit of EM Asia; With the result of the BNM announced and the 15y MGS which closed over the week, govvie trade volumes rose up to MYR12.9bn, ahead of the MYR11.87bn 3-month weekly average. Following the OPR adjustment last week, OPR is likely to stay pat at 3.25% in 2018.

¨ Corporate News – RAM Ratings downgraded the rating of Projek Smart Holdings Sdn Bhd to A1/Neg; MARC Ratings affirmed the AAA/Sta rating on both Berjaya Land Berhad’s (BLand); RAM Rating reaffirmed the C2/Sta rating of Lebuhraya Kajang-Seremban Sdn Bhd’s (LEKAS) Junior Sukuk; RAM Ratings has reaffirmed the AA1/Sta ratings of YTL Corporation Berhad (YTL Corp); RAM Ratings has reaffirmed the AA1/Sta ratings of YTL Power International Berhad (YTL Power); RAM Rating reaffirmed the AA3/Sta rating of Perbadanan Kemajuan Negeri Selangor (PKNS); MARC has affirmed its AA-_IS/Sta rating on MMC Corporation Berhad (MMC); MARC also affirmed its AAA-_IS/Sta rating on PETRONAS Dagangan Berhad (PDB); RAM Ratings has reaffirmed the AA3/Sta rating of Jimah Energy Ventures Sdn Bhd (JEV); RAM Ratings has reaffirmed the A1/Sta rating of Special Power Vehicle Berhad (SPV).

¨ APAC USD Credit Market: US Treasuries bear flattened ahead of FOMC meeting. Focus of the market was mostly on the first major central bank meetings in 2018, led by Bank of Japan and European Central Bank. Though muted action was broadly anticipated, both showed little signs of tightening due to struggling inflation growth. USTs fell to new lows led by shorter end of the curve.

¨ Rating Actions - Fitch has upgraded Fufeng Group Ltd. (Fufeng) to BBB-/Sta from BB+/Sta; Fitch has also upgraded Yingde Gases Group Co. Ltd. (Yingde) to B/Sta from CCC+/Pos; Moody’s has upgraded Emeco Holdings Ltd. rating from Caa1/Pos to B3/Sta; Fitch upgrades the rating of Development Bank of the Philippines to (DBP) to BBB/Sta and the rating of Land Bank of the Philippines (LBP) to BBB-/Sta; Moody’s downgraded Wharf (Holdings) Limited to BBB/Sta from A- /Neg*; Fitch assigned BB-/Sta rating on Central China Real Estate Limited (CCRE); Fitch published a B/Sta rating on Gangtai Group Co. Ltd; Fitch assigned a B-/Sta rating on Rhodium Resources Pte Ltd.; Moody’s assigned a B1/Sta rating to Golden Energy and Resources Ltd. (GEAR); Moody’s has assigned a B2/Pos rating on Landsea Green Properties Co. Ltd. (Landsea).

Table 1: Index Weekly Movements

Indices	26-Jan	19-Jan	Weekly Chg (bps)
iTraxx AxJ 5y IG	63.4	63.1	0.3
SOR 2y (%)	1.47	1.52	-5
SOR 5y (%)	1.89	1.91	-2
Malaysia 5y CDS	55.4	55.4	0
MGS 3y (%)	3.35	3.35	0
MGS 5y (%)	3.59	3.54	5
MGS 7y (%)	3.91	3.92	-2
MGS 10y (%)	3.89	3.93	-4
AAA 5y Spread* (bps)	73	77	-4
AAA 10y Spread* (bps)	77	75	2
AA 5y Spread* (bps)	103	107	-4
AA 10y Spread* (bps)	111	109	2

Source: Bloomberg, BNM, RHBFIC *MYR-denominated bonds

FW: MARC AFFIRMS ITS AAA(bg) AND AAA(fg) RATINGS ON PREMIER MERCHANDISE'S RM600 MILLION MTN PROGRAMME

P R E S S A N N O U N C E M E N T

FOR IMMEDIATE RELEASE

MARC AFFIRMS ITS AAA_(bg) AND AAA_(fg)RATINGS ON PREMIER MERCHANDISE’S RM600 MILLION MTN PROGRAMME

MARC has affirmed its AAA_(bg) and AAA_(fg) ratings on Premier Merchandise Sdn Bhd’s (Premier Merchandise) RM300 million 7-year Medium-Term Notes (MTN) Programme (Tranche 1) and RM300 million 9-year MTN Programme (Tranche 2) respectively with a stable outlook. Tranche 1 and Tranche 2 are guaranteed by Malayan Banking Berhad (Maybank) and Danajamin Nasional Berhad (Danajamin) respectively. The ratings reflect the credit strength of Maybank and Danajamin on which MARC maintains a financial institution rating of AAA/stable and a financial insurer strength rating of AAA_(fg)/stable respectively.

As an investment holding company, Premier Merchandise’s credit strength is underpinned by dividend flow from its two indirect key subsidiaries: 7-Eleven Holdings Berhad (7-Eleven) and Singer (Malaysia) Sdn Bhd (Singer), both of which are held through wholly-owned intermediate company Berjaya Retail Berhad (BRetail). BRetail reduced its stake in 7-Eleven to 31.6% from 50.9% while its borrowings rose sharply to RM498.2 million at end-2016. MARC views that the lower dividend expectation going forward and higher group borrowings have weakened Premier Merchandise’s credit profile. Apart from dividend income, Premier Merchandise relies on repayment of advances from its holding company to partly meet its debt obligations. As at end-2016, Premier Merchandise’s net receivables from its related parties stood at RM156.5 million.

In 9M2017, 7-Eleven’s performance had been affected by high operating and finance costs, offsetting sales growth: against improved sales of RM1.64 billion (9M2016: RM1.58 billion), pre-tax profit declined 25.3% y-o-y to RM43.9 million. In line with its expansion to 2,207 stores as at end-September 2017 (9M2016: 2,057 stores), working capital requirements have increased, which have been partly funded by higher borrowings. 7-Eleven’s borrowings rose to RM186.0 million from RM115.7 million between 2016 and 9M2017. MARC notes that 7-Eleven had also utilised proceeds from the increased borrowings to undertake a buyback of its own shares from the market.

Singer, which sells consumer durables and motorcycles as well as provides hire purchase and consumer financing, recorded a 33.3% y-o-y increase in pre-tax profit to RM23.9 million despite a slight revenue decline of 2.0% y-o-y to RM336.7 million in 9M2017 (9M2016: RM18.0 million; RM343.5 million). The company had reduced its number of stores, resulting in savings in administrative expenses, and incurred lower impairment on its hire purchase and equal payment receivables portfolio during 9M2017. Singer had paid dividends of RM40.0 million in 2016, afforded through internally generated funds and proceeds from block discounting of its receivables during the period. The dividends from Singer boosted BRetail’s dividend income to RM70.2 million in 2016 (2015: RM32.6 million). Notwithstanding this, BRetail’s reliance on dividend income to partly meet its financial obligations would come under increased pressure following its reduced stake in 7-Eleven and the increased financing obligations at the convenience store operating level. During the period under review, the increase in BRetail’s borrowings translated into a debt-to-equity ratio of 0.41 times as of 9M2017 (9M2016: 0.32 times).

Premier Merchandise received RM193.4 million in dividends which were entirely used to pay dividends to its shareholders. It has an outstanding RM100 million under each rated programme as at end-October 2017, well below the programme limit of RM110 million for Tranche 1 and RM280 million for Tranche 2 in January 2018.

Notwithstanding Premier Merchandise’s standalone risk factors, noteholders are insulated from the downside risk related to its credit profile by the guarantees provided by Maybank and Danajamin. Any change in the supported ratings or ratings outlook would be primarily driven by changes in the credit strength of the guarantors.

Contacts: Saifuruddin Othman, +603-2717 2945/ saifuruddin@marc.com.my; Taufiq Kamal, +603-2717 2951/ taufiq@marc.com.my.

January 29, 2018

[This announcement is available in MARC’s corporate homepage at http://www.marc.com.my]

--- DISCLAIMER ---

FW: [Maybank IB] Today's Research - Malaysia

header

COMPANY
RESEARCH


Tenaga Nasional \| Relatively routine Chi Wei Tan

SECTOR
RESEARCH


Regional Plantations \| Indonesia wins anti-dumping case against EU \| NEUTRAL Chee Ting Ong

Malaysia Aviation \| End to 'extra' fees? Mohshin Aziz

MACRO
RESEARCH


Regional \| ASEAN Equities Party Still On but now it's Slow Dance Nik Ihsan Raja Abdullah

NEWS


Outside Malaysia

Other News

COMPANY RESEARCH

Malaysia

Results Review

Tenaga Nasional (TNB MK)
by Chi Wei Tan


Share Price:	MYR15.84
Target Price:	MYR16.00
Recommendation:	Hold


Relatively routine

1QFY12/17 (Sep-Nov 2017) earnings were in-line, with Tenaga over-recovering on generation costs. Management guided for dividends in 4MFY12/17 as per policy. Maintain HOLD with an unchanged MYR16.00 TP. In our view, the market will need some time to digest both the new RP2 earnings step-down and the 1H18 subsidy funding.

FYE Dec (MYR m)	FY15A	FY16A	FY17E	FY18E
Revenue	43,286.8	44,531.5	63,143.5	48,768.0
EBITDA	13,921.8	14,794.2	20,860.8	15,477.4
Core net profit	7,050.7	7,725.8	9,320.1	6,615.0
Core FDEPS (sen)	124.9	136.9	164.0	116.4
Core FDEPS growth(%)	29.9	9.6	19.8	(29.0)
Net DPS (sen)	29.0	32.0	82.4	58.4
Core FD P/E (x)	12.7	11.6	9.7	13.6
P/BV (x)	1.9	1.7	1.5	1.5
Net dividend yield (%)	1.8	2.0	5.2	3.7
ROAE (%)	13.5	14.8	16.9	11.0
ROAA (%)	6.2	6.2	6.8	4.6
EV/EBITDA (x)	6.6	6.5	5.4	7.3
Net debt/equity (%)	33.3	32.6	38.3	36.4

Chi Wei Tan

(603) 2297 8690

chiwei.t@maybank-ib.com

SECTOR RESEARCH

RN: Regional Plantations

Indonesia wins anti-dumping case against EU | NEUTRAL
by Chee Ting Ong

Sector Note


	Despite a potential ban on palm biodiesel use in EU from 2021, there is a near-term positive sentiment uplift as Indonesia has won a biodiesel dispute against the EU at the WTO that may see a revival of its biodiesel exports to the EU in a couple of months. Coupled with recent low palm oil-gas oil (POGO) price spread, this will be supportive of CPO price. We maintain our NEUTRAL call on the sector with selected BUYs on IOI (trading), SOP and BAL.

Chee Ting Ong

(603) 2297 8678

ct.ong@maybank-ib.com

MY: Malaysia Aviation

End to 'extra' fees?
by Mohshin Aziz

Sector Note


	The Sun Daily today, citing unnamed source, states that Malaysia Aviation Commission will put to an end the many 'extra charges' that are imposed by the airlines. This includes fees imposed for using credit card and klia2 fees. There are also other unspecified charges that are being reviewed by MAVCOM. If this article is true, AirAsia and AirAsia X could be impacted in the short-term. However, we believe both airlines will eventually raise their ticket prices to claw back the 'lost' revenues.

Mohshin Aziz

(603) 2297 8692

mohshin.aziz@maybank-ib.com

MACRO RESEARCH

RN: Regional Traders' Almanac

ASEAN Equities Party Still On but now it's Slow Dance
by Nik Ihsan Raja Abdullah

Technical Research


	Recent rally lifted MXSO Index above the 61.8% Fibonacci level. The upward trajectory was so strong that the index also took out two other key resistances at 863.40 and 905.50. At the moment, the bull does seem intact, but intermittent profit taking could take place backed by bearish divergence in smaller timeframe chart. We peg our resistance at 969.60 while support is at 863.40.

Nik Ihsan Raja Abdullah	(603) 2297 8694	nikmohdihsan.ra@maybank-ib.com
Tee Sze Chiah	(603) 2082 6858	szechiah.t@maybank-ib.com

NEWS

Outside Malaysia:

E.U: Closes in on fresh trade deal as Trump puts up barriers. Europe is approaching the next stop in its global market-opening drive aimed at countering U.S. President Donald Trump's protectionist tilt. Top officials from the European Union will meet with the Mercosur group of Argentina, Brazil, Paraguay and Uruguay on Jan. 30 in Brussels to gauge the prospects for a free-trade deal that would follow ground-breaking commercial pacts with Japan and Canada. The EU-Mercosur talks began almost two decades ago, faltered and were re-started in 2010. Trump's move into the White House a year ago with his "America First" agenda prompted an EU push to wrap up the negotiations, which advanced before getting hung up last month over the politically sensitive issues of agriculture and cars. (Source: Bloomberg)

E.U: Euro Area looks strong but weak inflation as economy powers on into 2018. The euro area is set to start the new year the way it ended the old: the economy is strong but inflation is weak. The region's fastest growth in a decade will be confirmed this week in a burst of data that should also show economic confidence at the highest since the currency bloc's early days, unemployment at a post-crisis low, and manufacturing continuing to boom. Yet inflation, the key metric for the European Central Bank, will probably be the slowest in a year. (Source: Bloomberg)

Indonesia: Asks India to reconsider palm oil import duty hike. Rising import duties of vegetable oils will affect shipments of Indonesian palm oil to India, Cabinet Secretariat says in statement on its website, citing President Joko Widodo. Lower exports from Indonesia will curb India's ability to meet its growing needs, Widodo, known as Jokowi says. India is Indonesia's biggest buyer of palm oil. (Source: Bloomberg)

Crude Oil: Holds gains near 3-year high as funds raise bullish bets. Hedge funds reported record wagers on continued price increases for both U.S. and global oil benchmarks, along with gasoline and diesel. Iran Oil Minister Bijan Namdar Zanganeh says USD60/bbl is a "good" price; higher prices will encourage output of more expensive oil such as shale, and then prices will drop and OPEC will lose market share, according to state-run Iranian Students News Agency. (Source: Bloomberg)

Other News:

Cypark: Wins MYR260.5m solar plant job in Negeri Sembilan. The group won a contract worth RM260.51 million for works related to a large-scale solar photovoltaic plant in Negeri Sembilan. It accepted a conditional letter of award from Cove Suria S/B, and will effectively work on the 30MW plant situated in Empangan Kelinchi. (Source: The Edge Financial Daily)

Pesona Metro: Gets MYR161.86m construction job from Sime Darby. The group has received a MYR161.86m contract from Sime Darby Property (Subang) S/B for the construction of a property project in Subang Jaya. The letter of award is for main building works for the proposed development of 30-storey serviced apartments. The project is for a duration of 39 months commencing from January 30, 2018. (Source: The Sun Daily)

Melati Ehsan: Sells land to Kimlun for MYR68m. The group is disposing of 47 vacant detached lots and 30 leasehold building lots in Shah Alam to Kimlun Corp for MYR68.41m cash. Melati Ehsan said proceeds derived from the proposed disposal will be utilised as working capital and the estimated gain from the exercise is MYR1.15m. (Source: The Sun Daily)

GFM Services: Acquires KPMD to boost order book to MYR1.5b. The group proposed purchase of KP Mukah S/B (KPMD), which holds a university concession, will raise its order book to MYR1.5b while generating stable cashflow. The integrated facilities management services provider inked a conditional share sale agreement today with property developer Kumpulan Parabena S/B for the 100% acquisition of KP Mukah for MYR130m. (Source: The Edge Financial Daily)


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