Malaysia Daybreak | 3 October 2013

REGIONAL DAILY December 26, 2012

MALAYSIA Malaysia Daybreak | 3 October 2013

Key Metrics ▌What’s on the Table… —————————————————————————————————————————————————————————————————————— FBMKLCI Index IOI Corporation - IOI launches takeover offer for Unico-Desa Plantations 1,850 While we like the cost savings and yield enhancement potential for 1,800 Unico-Desa’s estates, we are neutral on IOI Corp’s acquisition and MGO for 1,750 Unico-Desa as it will not be earnings accretive in the near term due to the 1,700 current low CPO price. We keep our earnings forecasts pending the outcome 1,650 of the conditional MGO that IOI is making at RM1.17 per share, after buying a 1,600 39.6% stake. Also intact are our SOP-derived target price and Trading Buy call, 1,550 which is underpinned by its property demerger exercise in 4Q13. Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Mudajaya Group - Coal comfort for India IPP ——————————————————————————— FBMKLCI Worries about securing coal supply for the group's 26%-owned IPP in India can 1770.35 1.32pts 0.07% finally be put to rest. Yesterday's announcement wraps up the long-overdue OCT Futures NOV Futures 1768.5 - (-0.11%) 1768.5 - (1.00%) coal supply agreement for the entire 1,440MW facility. Execution now focuses ——————————————————————————— on commissioning the plant in 1Q14. Our target price is intact, pegged to an Gainers Losers Unchanged unchanged 40% RNAV discount. The Indian IPP constitutes 17% of RNAV. We 380 368 323 ——————————————————————————— anticipate a strong re-rating as past delays in the signing of coal supply have Turnover been an overhang on the stock. The short-term outlook now shifts to a potential 1899.31m shares / RM1587.282m domestic power plant job award. This news, potential new regional IPP 3m avg volume traded 1680.92m shares 3m avg value traded RM1999.70m ventures and job wins are catalysts in 2H. Maintain Outperform. ——————————————————————————— Regional Indices Alpha Edge - Keep an eye on Korea’s KOSPI FBMKLCI FSSTI JCI SET HSI 1,770 3,153 4,388 1,409 22,984 South Korea’s KOSPI chart looks very interesting. The index has been trading ———————————————————————————————— sideways for the past two years and a breakout above 2,057pts would be very Market Indices Close % chg YTD % chg bullish. We have been looking for a major peak in the MAxJ last month but we FBMKLCI 1,770.35 0.1 4.8 are not so sure now. The weekly MACD and RSI technical indicators look FBM100 12,053.60 0.1 6.6 FBMSC 15,268.50 (0.1) 33.0 bullish with the recent resistance trendline breakout. The S&P500 looks like a FBMMES 5,485.80 (0.7) 30.2 rising bearish wedge formation and both its weekly and daily technical Dow Jones 15,133.14 (0.4) 15.5 NASDAQ 3,815.02 (0.1) 26.3 indicators remain negative. FSSTI 3,152.58 (0.9) (0.5) FTSE-100 6,437.50 (0.3) 9.2 Hang Seng 22,984.48 0.5 1.4 JCI 4,387.60 1.0 1.6 ▌News of the Day… KOSPI 1,999.47 0.0 0.1 —————————————————————————————————————————————————————————————————————— Nikkei 225 14,170.49 (2.2) 36.3 • IOI Corp launched takeover of Unico-Desa Plantations at RM1.17/share PCOMP 6,362.26 2.7 9.5 SET 1,408.99 0.1 1.2 • Automotive industry set to achieve the 640,000 industry sales in 2013, says MAA Shanghai 2,174.67 0.7 (4.2) • IJM Land chalked up RM787m in sales for its London Royal Mint Gardens project Taiwan 8,216.52 0.4 6.7 • Felda Malaysia is now substantial shareholder of Brahim's Holdings with 5.2% stake Top Actives • Westports Holdings has fixed the IPO price for its shares at RM2.50 per share Close % chg Vol. (m) MEDIA SHOPPE 0.170 (5.6) 217.6 • ECB voted to keep the bank's key "refi" refinancing rate steady at 0.50% GREEN PACKET 0.620 6.9 46.8 • US ADP payrolls said 166,000 net new jobs generated in the private sector last month MALAYSIAN AIRLINE 0.340 (1.4) 45.3 INS BIOSCIENCE 0.030 (40.0) 33.3 KARAMBUNAI CORP 0.105 0.0 28.9 AT SYSTEMATIZATION 0.185 8.8 28.0 ASTRAL SUPREME 0.225 0.0 27.0 TIGER SYNERGY 0.230 (2.1) 25.1

Economic Statistics Close % chg US$/Euro 1.3580 0.01 RM/US$ (Spot) 3.2280 (0.23) RM/US$ (12-mth NDF) 3.2771 0.16 OPR (% ) 2.99 0.34 BLR (% , CIMB Bank) 6.60 0.00 GOLD ( US$/oz) 1,316 0.01 WTI crude oil US spot (US$/barrel) 104.10 2.02 CPO spot price (RM/tonne) 2,303 0.39 ———————————————————————————————————————— Terence WONG CFA T (60) 3 20849689 E [email protected]

Sources: CIMB. COMPANY REPORTS IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Sources: CIMB. COMPANY REPORTS Daybreak Malaysia October 3, 2013

Global Economic News… ADB tipped Asia’s GDP to grow 6% this year, compared with its earlier forecast of 6.6%. Growth in 2012 was 6.1%, as slower growth in China and India, and uncertainty over the US Federal Reserve's stimulus programme are hurting Asia's economic momentum. It also raised its inflation forecast for the region to 3.6% from 3.5% earlier. (AFP, Reuters)

The US Treasury said that the government shutdown did not affect its position and it would still run out of funds on 17 Oct without a debt ceiling hike. (AFP)

The US ADP payrolls firm said that 166,000 net new jobs were generated in the private sector last month (159,000 in Aug), below what analysts had expected and too low to meaningfully lower the jobless rate.

Australia posted a trade deficit of A$815m (US$762m) in Aug, almost half the A$1.4 billion shortfall recorded in Jul. The narrowing deficit was supported by a 3% gain in the value of exports, which offset a 1% rise in imports driven by higher demand for food, drink and clothes from overseas. (WSJ)

The Singapore PMI held at 50.5 for a second month in Sep, driven by new orders and new export orders along with a higher production output. The key electronics sector dipped 1 point from the previous month to 50.3 in Sep and was lower than analysts’ expectations of 51. (CNA)

The ECB voted to keep the bank's key "refi" refinancing rate steady at an all-time low of 0.50%. (AFP)

Malaysian Economic News… Asia-Pacific's most high-tech 10,000 kilometre underwater fibre-optic cable project in Cherating here which will link Malaysia and Japan is expected to be fully completed by June 2014. Communications and Multimedia Minister Datuk Seri Ahmad Shabery Cheek said the estimated RM1.9bn (USD600m) project would not only benefit internet users nationwide but also draw foreign investors. "The cable system will provide a speed of up to 3.4 tbps (terabit per second) using the Dense Wavelength Division Multiplexing technology to upgrade transmission facilities in a flexible and borderless manner. (Bernama)

The halal industry is great market to explore with two billion Muslim consumers globally and potential sales of US$2.1trn, said Rural and Regional Development Minister Datuk Seri Shafie Apdal. Malaysia had the advantage and capabilities to drive the halal sector as the country has the experience, infrastructure and institutions to develop and nurture the industry to a higher level, he said. (Bernama)

A total of 3,200 units of houses under the People's Housing Programme (PPR) and 3,500 units of affordable houses have been planned to be built in Melaka over the next five years. State executive councillor (Exco) for Housing, Local Government and Environment Datuk Ismail Othman said the PPR scheme involved 2,800 units of terrace houses and the Sungai Putat 2 flats project which will offer 400 units. The affordable housing scheme which would privatised would offer units with sizes between 850 and 1,200

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square feet with the ceiling price at RM150,00, he said during the state assembly sitting. (Bernama)

Petronas has contributed RM732bn to the government since its inception in 1974 until the financial year ended Dec 31, 2012, the Dewan Rakyat was told Wednesday. Of the total, accumulated dividend was RM278bn, proceeds from petroleum (RM124bn), income tax (RM310bn) and export duty (RM20bn), Prime Minister Datuk Seri Najib Tun Razak said. (Bernama)

Internet and mobile banking in the country is showing potential to grow further in tandem with the increasing sophistication of the financial services sector. Deputy Finance Minister Datuk Ahmad Maslan said the financial services sector, notably banking, requires technological advancement to facilitate transactions. As of June 2013, there are a total of 14.6m subscribers of internet banking in the country, comprising 14.3m individuals and 300,000 corporate subscribers.  "This gives 49.1% of penetration of our population," Ahmad said. The number of subscribers to mobile banking has reached 3.25m, with the penetration rate of 10.9% of population and 7.6% of all mobile subscribers, he said. (Bernama)

Malaysia achieved 'full employment' when the unemployment rate in the country dropped to 3% in the second quarter of this year, said Human Resources minister Datuk Richard Riot Jaem. He said based on International Labour Organisation standards, any country with an unemployment rate of less than four percent would be regarded as having attained full employment.  He said as of August this year, 422,248 people had registered as active job seekers at the Labour department, of which 233,065 were graduates and the rest, non graduates. "From the total figure, 155,299 had been placed in the public and private sector," he said in response to Datuk Hasbullah Osman (BN-Gerik) at the Dewan Rakyat Wednesday. (Bernama)

The government has never guaranteed 1Malaysia Development Bhd (1MDB)'s bonds and loans amounting to RM38bn, says Prime Minister Datuk Seri Najib Tun Razak. He said the government only guaranteed RM5bn of its loans. "Besides this, 1MDB has not received any government guarantee for the rest of its loans," said Najib, who is also Finance Minister, in a written reply to Lim Guan Eng (DAP-Bagan) in Parliament Wednesday.  Najib said the government had injected RM1m in 1MDB, a wholly-owned strategic company, when it was incorporated. Najib said 1MDB's investments were generally strategic and done on a government to government basis.  One project undertaken by the 1MDB Group is the RM26bn Tun Razak Exchange visioned to create a global financial district of international standing. He said the project was now in its second phase of construction and marketing. "Power assets like Powertek Bhd and Kuala Langat Power Plant Sdn Bhd are also expected to contribute to the nation's economic growth," said Najib. (Bernama)

The new Airbus Customer Services facility will put Malaysia on the international map as a centre for specialised aerospace engineering services, Prime Minister Datuk Seri Najib Tun Razak said Wednesday. The centre to be located adjacent to the Sepang Aircraft Engineering (SAE) facility represents an expansion of the manufacturer's global network of offices

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providing 24/7 specialised major aircraft engineering and repair services. Existing offices offering these services are located in Toulouse, Hamburg, Wichita and Beijing.  Malaysia is among the three leading countries in the Asia Pacific for maintenance, repair and overhaul (MRO) centre for services. The hanger is a joint venture between Airbus and SAE, and marking an expansion of its footprints in South East Asia. (Bernama)

Malaysia and China are expected to sign several economic pacts and memoradum of understandings (MoUs) during China's President's Xi Jin-Ping state visit here, his first since assuming office in March. President Xi will have a bilateral talk with Prime Minister Datuk Seri Najib Razak. The two leaders will witness the signing of several major economic agreements and MoUs, including a five-year programme for economic and trade cooperation until 2017.  Others include MoU between 1Malaysia Development Bhd's and Exim Bank of China, as well as an MoU to establish the China-Malaysia Qinzhou Industrial Park, and an agreement to establish a joint council for the park and the Malaysia-China Kuantan Indsutrial park. (NST)

Political News… President Barack Obama has scrapped a visit to Malaysia due to the US government shutdown, PM Datuk Seri Najib Razak said yesterday. Obama was to deliver an address in Malaysia on Oct 11 as part of a four-country swing through Southeast Asia. (Financial Daily)

A faction within the MCA yesterday alleged inconsistencies in the party's accounts, asking party leader Datuk Seri Dr Chua Soi Liek to "come clean" on the matter. MCA Safeguard Party Assets Committee chairman Datuk Yew Teong Lock said The Star, which is owned by the party, had paid out more than RM759m in dividends since the party took over the reigns in 2010.  He said that as MCA owns 42% of shares in the publication, the party's share of the dividend should be RM319m instead of the RM107m stated by Chua. He also questioned the sale of a plot of land in Bangi to property developer Mah Sing Group for RM8m when the party was supposed to be flush with cash. (Sun)

The Opposition Pakatan Rakyat has demanded that the government form a high level panel to investigate the wrong doings uncovered by the Auditor General (AG) Report. DAP secretary general Lim Guan Eng said the panel should ttake over from the "powerless" public accounts committee. "We propose the panel to be made up of DPM Tan Sri Muhyiddin Yassin, Opposition leader Datuk Seri Anwar Ibrahim and the AG himself," he said. (Malaysian Reserve)

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Corporate News… IOI Corporation Bhd has launched a RM1bn takeover of Unico-Desa Plantations Bhd at RM1.17 a share. It said on Wednesday its unit IOI Plantations Bhd had acquired 339m Unico shares or 39.55% for a RM396.63m cash consideration. “Following the completion of the acquisition, IOI Plantations shareholdings in Unico has exceeded 33% of the voting shares in Unico,” IOI Corp added.  IOI Corp said IOI Plantation was obligated to extend a mandatory take-over offer to acquire all the remaining Unico shares amounting to 518.11m Unico shares or 60.45% at RM1.17 per offer share or RM606.18m. (StarBiz) Please refer to our note for details.

UMW Toyota Motor Sdn Bhd, which launched the all-new Toyota Vios yesterday, is confident of selling up to 36,000 units of the best selling model next year, its top executive said. Its president Datuk Ismet Suki is confident that the new Vios would do better than the average sales of 30,000 units it has consistently generated since 2008. Since its introduction in 2003, the Vios has become the best-selling car in the non-national small passenger car segment. As of August this year, sales of the Vios reached 265,000 units.  On its Budget 2014 wishlist, Ismet said: "We like the government to continue with the hybrid (car) incentives for the completely-built-up and completely-knocked-down units and quickly announce the long-awaited National Automotive Policy. "We also hope the government reconsiders the reinvestment allowance and the abolishment of the open approved permit." (Sun)

UMW Oil & Gas Corp Bhd, a Malaysian offshore and drilling services firm, set a tight IPO bookbuilding range thanks to strong demand from cornerstone investors, a source with direct knowledge of the process told Reuters on Wednesday. This values the IPO at up to RM2.36bn (US$729.63m), the largest in Malaysia so far this year. This IPO comes on top of the US$680m flotation by Westports Holdings Bhd, operator of the country's busiest port.  The source, who was not authorised to speak to the media said IPO bookbuilding range was set at RM2.70-RM2.80 per share, coming a day before the firm officially launches its prospectus to investors on Thursday.  Sources had earlier told Reuters that up to 17 cornerstone investors have been recruited by UMW Oil & Gas, taking up 61% of the total institutional tranche. That is nearly double that of the Felda Global – the largest Malaysian IPO last year. (Reuters)

The doors are now wide open for the potential entry of SP Setia's Tan Sri Liew Kee Sin into Focal Aims Holdings after the latter accepted his eldest son's takeover bid. Focal Aims on Tues announced that it ahd accepted the offer by Liew Tian Xiong and Eco World Development Sdn Bhd to buy a 65% stake at RM1.40 per share. (BT)

Koperasi Permodalan Felda Malaysia Bhd has become the substantial shareholder of Brahim's Holdings with 5.2% stake in the latter. The cooperative subscribed to 10.74 million of the catering player's shares via a private placement in early Sep. (BT)

Lembaga Tabjung Haji has exited troubled break maker Silver Bird Group ahead of a proposed regularisation scheme that could turn out highly dilutive to the existing major shareholders. The exit by the pilgrimage fund leaves Tan Sri

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Vincent Tan's Berjaya Corp and Koperasi Permodlan Felda Malaysia as the two remaining largest shareholders of Silver Bird with an 18.13% and 12.7% stake respectively. (Financial Daily)

IJM Land has chalked up RM787m in sales for its maiden project in London, the Royal Mint Gardens. Royal Mint Gardens comprises the first phase of a 2.7-acre mixed development project. Some 75% of the 254 apartments of 387 sq ft to 1,431 sq ft have been sold. The residences have indicative selling prices of £465,000 to £1.85m/unit. CEO/MD Datuk Soam Heng Choon said the buyers were mainly from Malaysia and Britain who liked the project’s strategic Zone 1 location and the branding of IJM Land. “We believe this momentum will continue with the project’s upcoming launch in Singapore and Hong Kong,” he added. IJM Land targets sales of more than RM2bn for FY14. (StarBiz)

Time dotCom Bhd expects to recoup its RM180m investment from its partly-owned fibre optic cable linking Malaysia and Japan in six to seven years. Time dotCom executive director and chief executive Afzal Abdul Rahim said the company expects to achieve 55% capacity for the fibre optic cable, the Asia Pacific Gateway, six months after it is ready by 2015.  "We are talking to several global telecommunications carriers which are interested to use our services and later on, we will look at linking with India and Europe," said Afzal. The 10,000km fibre optic cable is shared between Malaysia and nine other countries. The Gateway cost RM1.8bn and consist of several consortium companies, in which Time dotCom has a 10 per cent stake. The fibre optic highway is among several highways traversing the ocean linking with Japan and the US fibre optic network, called the Unity highway.  He added the Gateway will also position Malaysia specifically Kuantan as a hub for internet connectivity for users from countries like Thailand, Vietnam and Indo China. "This new fibre optic link hopefully will hopefully boost critical mass to Malaysia as a transit hub for internet traffic and level the playing field between fibre optic gateway operators." (BT)

Maxis Bhd’s new solution, Business Kit, targets micro and small enterprises, said head of enterprise solutions, Shanti Jusnita Johari. Shanti said the new solution offered small and medium enterprises (SMEs) a combination of telephone line for their office, Internet and mobile connectivity. “The companies that are suitable for this plan include those in retail and food and beverages.  The product also allows entrepreneurs to expand their business through cloud-based marketing solutions,” she said at the launch of Business Kit at the SME Business Conference 2013. (Starbiz)

The Tapis Enhanced Oil Recovery (EOR) project is moving a step closer to production with the significant completion of the main central processing facility called Tapis-R topsides. The project will see the oil production from the ageing Tapis field increase from the current estimated 5,000 bpd to a maximum output of 25,000-35,000 bpd by 2017. The EOR is a 50:50 participation between ExxonMobil Exploration & Production Malaysia Inc and Petronas Carigali. (Malaysian Reserve)

Despite the slowdown in the first half, the automotive industry is set to achieve the 640,000 total industrial volume (TIV) this year, according to the Malaysian Automotive Association (MAA). The confidence level is still there as consumers are still willing to buy motor vehicles and industry players are still launching new models into the market,” said MAA president Datuk Aishah

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Ahmad at the Kuala Lumpur International Motor Show 2013 (KLIMS13) exhibitors roundtable yesterday.  She said car sales had been impacted in the first half due to speculation of prices coming down, but it picked up in the second half with July recording the highest monthly TIV in four years. “There would be growth, and we have achieve more than 5% growth this year, up to August,” she said.  On the upcoming budget, she hopes that the Government would maintain the tax exemption status on hybrid vehicles, which is expiring by year-end. “Our automotive industry is a policy-driven industry, and many factors could impact sales like the increase of hire purchase interest rates or more stringent lending guidelines. The industry is a important barometer to the economy, as it expands and contracts in tandem with the economy,” she said. (Starbiz)

Westports Holdings Bhd, after completing its bookbuilding process, has fixed the retail and institutional price for its shares at RM2.50 per share for its upcoming IPO. The shares could be subject to stabilising action, either within 30 days of the commencement of trade or once the stabilising manager Maybank Investment Bank Bhd had bought an aggregate of 81.3m shares, representing up to 10% of the total number of shares offered.  Westports, set to list on 18 October, currently has nine cornerstone investors which have taken up 340m shares. The nine investors are AIA Bhd, Hong Leong Assurance Bhd, Hwang Investment Management, KWAP, RHB Investment Management, PNB, EPF, Genesis Investment Management and Utilico Emerging Market Ltd. (Financial Daily)

Malaysia Airlines expects to rake in RM20m in transactions at the Malaysia International Travel Mart Travel Fair 2013 (MITM 2013) from Oct 4-6, 2013. MAS recorded RM150m and RM100m in transactions at the MATTA fairs in March and September, respectively. Its Regional Senior Vice President Malaysia, Muzammil Mohamad, said the transactions, however, were expected to be lower than at the MATTA fairs in March and September due to the lack of available seats this year and the early purchases for next year’s packages. (KiniBiz)

Malaysia Airlines (MAS) was voted Asia's Leading Airline at the World Travel Awards 2013 (WTA), beating 11 other major full-service carriers at WTA's Asia and Australasia award ceremony. The WTA, into its 20th year now, is based on votes by travel industry peers and customers. Earlier this year, MAS won the Skytrax World Airline Awards for five-star airlines and for the Best Signature Airline Dish, in addition to the people's choice awards for Malaysia, the Putra Brand Awards (BT).

Mudajaya's 26%-owned associate RKM Powergen has signed a coal supply agreement with South Eastern Coalfields Ltd. This is for the supply of coal for phase 2 (3x360MW) of the 4x360MW coal-fired thermal power plant in Ucchpinda, Chhattisgarh, India. The 20-year supply contract is extendable. RKM will purchase 4.6m MT of coal p.a. from the supplier at US$25/MT. This will be domestic coal (Grade F) with a gross calorific value of 3,300-3600Kcal/kg. (BMSB)

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THE response to Malindo Air's flights to Jakarta and Bali has been very encouraging that the airline has plans to increase the frequencies to both destinations from once a day currently. CEO Chandran Rama-murthy said more flights between Kuala Lumpur and the two cities will ensure more convenient travel for both business and leisure travellers. (BT)  Separately, Ngurah Rai Denpasar Airport general manager Efferson Siregar said the airport is currently undergoing a Rp3trn airport expansion. "This is to cater to the ever-increasing flights and passengers pouring into Bali. Currently, the airport has only one runway, it handles 23 incoming and outgoing flights every hour," he said, adding that the airport expansion is expected to be completed by May 2014. (BT)

Airbus is set to increase its presence in Malaysia with the expansion of its joint venture maintenance unit, Sepang Aircraft Engineering (SAE). The new SAE hangar, which specialised in the maintenance and overhaul of Airbus single aisle aircraft, would have a floor area of 13,000 sq m and was capable of accommodating three A320 Family aircraft for major maintenance checks. The new Airbus Customer Service Centre, to be located adjacent to SAE, represented an expansion of the manufacturer’s global network of offices providing specialised major aircraft engineering and repair services aroud the clock. The Malaysian centre would provide employment for over 100 skilled engineers and mechanics. (BT)

Petronas has contributed RM732bn to the government since its inception in 1974 until the financial year ended 31 Dec 2012, the Dewan Rakyat was told today.  Of the total, accumulated dividend was RM278bn, proceeds from petroleum (RM124bn), income tax (RM310bn) and export duty (RM20bn), Prime Minister Datuk Seri Najib Razak said.  "Petronas has actually contributed a substantive amount to the government since its establishment in 1974," said Najib, who is also the Finance Minister, in his written reply to Nga Kor Ming (DAP-Taiping).  Nga had asked Najib to give a one-by-one account of Petronas' contribution to the government since the inception of the national oil corporation since 1974 till now. (Bernama)

The government agreed to pay RM432m in compensation to two foreign contractors for losses incurred in the problem-plagued Bakun Dam, an audit has revealed. The compensation is a rare acknowledgement of problems in a controversial project that Transparency International once labelled a "Monument to Corruption". The report submitted to Parliament on Tuesday said two contractors suffered delays of up to four years in civil engineering works, causing their costs to spike. The contractors were French-based Alstom and the Impsa-Malaysia. (BT)

Fraser & Neave Holdings Bhd's subsidiary, F&N Dairies (M) Sdn Bhd, expects to double its dairy exports to 40% from its total output by 2018. This would translate into RM400m worth of its dairy exports within the five-year period. The company is confident of achieving the target with its RM370m new facility in Pulau Indah, here, which has the maximum capacity of 1.5m cans a day and which is 30% more than the capacity of its previous factory in Petaling Jaya, Selangor.  The Pulau Indah facility is F&N's second dairy plant. Its first facility is the F&N Dairies Thailand in Rojana, which started operating in 2009. The new plant has an initial capacity of about 500m cans of condensed and

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evaporated milk per year. It also produces 5.4m litres of sterilised milk annually. The operations of F&N Dairies in Thailand and Malaysia have a combined capacity of 5m cans a day, making it Asean's biggest canned milk producer. (BT)

LBS Bina Group Bhd has acquired the entire equity interest in Lamdeal Investment Ltd, via subsidiary Dragon Hill Corp Ltd, for US$1 (RM3.21) only. It said it exercised its rights under the Option Agreement and Supple-mentary Option Agreement dated April 8, 2004 and March 20, 2006 respectively to acquire Lamdeal. Lamdeal is an investment party to a racing circuit project where it, together with its joint-venture partner in China, had formed a Sino-foreign cooperative joint-venture entity in 1992, known as Zhuhai International Circuit Ltd (ZICL) to jointly develop and operate China’s first professional racing track, the 264-acre Zhuhai International Circuit (ZIC). ZICL is a 60%-owned subsidiary of Lamdeal.  The group also announced to Bursa Malaysia that the management agreement dated April 8, 2004 between Dragon Hill and Lamdeal, which was no longer required, had been terminated. ZIC is located next to the Lakewood Golf Club and a 197-acre land earmarked for mixed development. The group noted its investments in the club and the development land were sold recently for HK$1.65bn. (Starbiz)

Aeon Co (M) Bhd has entered into a sale and purchase agreement with Aeon REIT Investment Corp (J-REIT) to dispose of an 18.2% stake in the AEON Taman Universiti mall and land in Johor Baru for RM20m. Aeon Co said the transaction will allow it to enjoy synergistic benefits with J-REIT. Aeon Co will retain the balance 81.8% stake. (BT)

AmInvestment Bank, for the third time, was honoured as the Most Outstanding Islamic Investment Bank at the recent Kuala Lumpur Islamic Finance Forum (KLIFF) Awards 2013. AmInvestment Bank director and head of Islamic Markets Datuk Mohd Effendi Abdullah received the award from Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar. The bank previously won the award in 2007 and 2010. (BT)

AZRB has signed a JV agreement with Malaysian Harvest Sdn Bhd and Primary Horizon Sdn Bhd to set up a JV company, Peninsular IFM Sdn Bhd. The JV company will provide integrated facilities management services for buildings or facilities or certain projects undertaken by the JV parties. (BT)

Ahmad Zaki Resources Bhd (AZRB) has entered into a joint-venture (JV) agreement with Malaysian Harvest Sdn Bhd and Primary Horizon Sdn Bhd to set up a joint-venture company, Peninsular IFM Sdn Bhd. AZRB said the JV company would provide integrated facilities management services for buildings or facilities or certain projects undertaken by the JV parties The company said the JV company would be funded by equity injection by the JV parties. AZRB will hold 34% stake in Peninsular IFM and Malaysian Harvest and Primary Horizon 33% each. (Starbiz)

Consortium Zenith BUCG Sdn Bhd will sign a preliminary agreement with the Penang government this Sunday to carry out feasibility studies and detailed design works for the proposed Penang undersea tunnel, which reportedly will cost RM6.3bn.

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 "This is the prelude to the major road and tunnel works that we will execute after we have submitted the feasibility studies and after it has been approved," Zenith BUCG chairman Datuk Zarul Ahmad said.  "The main agreement will come after we receive this approval, then we will proceed with the detailed design and detailed environmental impact assessment. Once this is approved, we will start construction," he added.  This Sunday, Zenith BUCG will also sign an agreement with China Railway Construction Corp International for a detailed design of the project, engineering, procurement and construction of the major roads and tunnels. (Financial Daily)

Felda's £98m (RM497m) purchase of a London serviced apartment complex is now being investigated by anti-graft officials and could derail its chairman Tan Sri Isa Samad's chances in the Umno vice-presidential race.  The Malaysian Insider understands there is also growing disquiet in Umno over the hefty price paid by Felda Investment Corp UK Properties for the Grand Plaza Service Apartments in London's Bayswater suburb.  "The price tag is the talk among Umno people because it is very expensive and it isn't something that Felda should venture into," an Umno warlord told The Malaysian Insider.  "There has been enough controversies over the FGVH listing, so we don't need another cause for the opposition to use," he added, referring to the Felda Global Ventures Holdings public listing last year.  It is also learnt that the Malaysian Anti-Corruption Commission (MACC) is looking into the matter to see if there is any element of corruption in the deal that was sealed on September 4. Sources said the MACC is working with others to investigate the matter. (The Malaysian Insider)

Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas will see Malaysian Palm Oil Board (MPOB) Sarawak next week to resolve complaints about differing prices of fresh fruit bunches (FFBs). “MPOB will investigate the matter because this (problem) not only happens here (Sarawak). It has been brought up in Parliament too. MPOB will look into the matter as soon as possible, especially on getting a transparent system of valuation,” Uggah said. (Borneo Post)

The government has been told to take back at least RM11.6m from Telekom Malaysia, after the Auditor-General (A-G) detailed a laundry list of “improper payments” and “unreasonable expenses” incurred in the development of the Malaysian Emergency Response System (MERS) 999. The figure does not include an RM25.88m lump sum payment made out to TM by the Information, Communication and Culture Ministry, which the auditor in his 2012 report said could not be verified but was given ministry approval. (Malay Mail Online)

RAM Rating Services is expected to downgrade the ratings of Lebuhraya Kajang-Seremban Sdn Bhd’s (LEKAS) Junior Sukuk rating upon completion of refinancing exercise. RAM Ratings said LEKAS is in the midst of concluding a debt refinancing exercise in respect of its RM785m Senior Sukuk, after which RAM Ratings will no longer have a rating obligation on the facility. Post refinancing, the Junior Sukuk will be downgraded to C2/Stable/- (from B1/Negative/-) which reflects a very low likelihood of LEKAS meeting the scheduled repayments and the financing instrument’s subordinated position. (StarBiz)

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UDA Holdings Bhd, which will hold a simultaneous launch of six new housing and commercial projects, U4RIA, on Oct 5, expects total gross development value to exceed RM184.01 m. In a statement on Wednesday, UDA said the Land Property Showcase will be held at its offices of its subsidiaries in Bandar Tun Hussein Onn (Cheras); Bertam, Kepala Batas (Penang); Kangar (Perlis); Bandar Baru UDA (Johor Bahru); Paka, Dungun and Kuala Terengganu (Terengganu). (Bernama)

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BMSB: Changes in shareholdings

SOURCES: BMSB

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BMSB: Off-market transactions

Notes:CN-Crossing deal on board lots MN-Married deal on board lots MO-Married deal on odd lots SOURCES: BMSB

BMSB: Dividends

SOURCES: BMSB

BMSB: Proposed cash calls & trading of rights…

SOURCES: BMSB

BMSB: New Listing Company Issue price No of shares Listing sought Tentative Public Issue Offer for sale Private placement listing date WESTPORTS HOLDINGS 2.50 - 813,190,000 - Main Market 18-Oct-13 SOURCES: BMSB

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Corporate Actions October 2013

SUN MON TUE WED THU FRI SAT

1 2 3 4 5 External Trade

6 7 8 9 10 11 12 External Reserves IPI, Manufacturing Top Glove 4Q Umno Youth and Sales Puteri elections

13 14 15 16 17 18 19 Hari Raya Qurban Umno supreme council elections

20 21 22 23 24 25 26 External Reserves CPI Budget 2014

27 28 29 30 31 Money Supply, PPI

Source: Company, BNM, DOS, CIMB estimates

SOURCES: Company, BNM, DOS, CIMB estimates

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Corporate Actions November 2013

SUN MON TUE WED THU FRI SAT

1 2

3 4 5 6 7 8 9 Awal Muharram MPC External Trade

10 11 12 13 14 15 16 IPI, Manufacturing GDP, BOP Sales, External Reserves

17 18 19 20 21 22 23 CPI External Reserves

24 25 26 27 28 29 30 Money Supply, PPI

Source: Company, BNM, DOS, CIMB estimates

SOURCES: Company, BNM, DOS, CIMB estimates

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Daybreak Malaysia October 3, 2013

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Recommendation Framework #1 * Stock Sector OUTPERFORM: The stock's total return is expected to exceed a relevant OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is benchmark's total return by 5% or more over the next 12 months. expected to outperform the relevant primary market index over the next 12 months. NEUTRAL: The stock's total return is expected to be within +/-5% of a relevant NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected benchmark's total return. to perform in line with the relevant primary market index over the next 12 months. UNDERPERFORM: The stock's total return is expected to be below a relevant UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is benchmark's total return by 5% or more over the next 12 months. expected to underperform the relevant primary market index over the next 12 months. TRADING BUY: The stock's total return is expected to exceed a relevant TRADING BUY: The industry, as defined by the analyst's coverage universe, is benchmark's total return by 5% or more over the next 3 months. expected to outperform the relevant primary market index over the next 3 months. TRADING SELL: The stock's total return is expected to be below a relevant TRADING SELL: The industry, as defined by the analyst's coverage universe, is benchmark's total return by 5% or more over the next 3 months. expected to underperform the relevant primary market index over the next 3 months.

* This framework only applies to stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand, Jakarta Stock Exchange, Australian Securities Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons. CIMB Research Pte Ltd (Co. Reg. No. 198701620M)

Recommendation Framework #2 ** Stock Sector OUTPERFORM: Expected positive total returns of 10% or more over the next 12 months. OVERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of +10% or better over the next 12 months. NEUTRAL: Expected total returns of between -10% and +10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, has either (i) an equal number of stocks that are expected to have total returns of +10% (or better) or -10% (or worse), or (ii) stocks that are predominantly expected to have total returns that will range from +10% to -10%; both over the next 12 months. UNDERPERFORM: Expected negative total returns of 10% or more over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of -10% or worse over the next 12 months. TRADING BUY: Expected positive total returns of 10% or more over the next 3 months. TRADING BUY: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of +10% or better over the next 3 months. TRADING SELL: Expected negative total returns of 10% or more over the next 3 months. TRADING SELL: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of -10% or worse over the next 3 months.

** This framework only applies to stocks listed on the Korea Exchange, Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2012. AAV – not available, ADVANC - Excellent, AEONTS – Good, AMATA - Very Good, ANAN – not available, AOT - Excellent, AP - Very Good, BANPU - Excellent , BAY - Excellent , BBL - Excellent, BCH – not available, BCP - Excellent, BEC - Very Good, BGH - not available, BJC – Very Good, BH - Very Good, BIGC - Very Good, BTS - Excellent, CCET - Good, CENTEL – Very Good, CK - Very Good, CPALL - Very Good, CPF - Very Good, CPN - Excellent, DELTA - Very Good, DTAC - Very Good, EGCO – Excellent, ERW – Excellent, GLOBAL - Good, GLOW - Very Good, GRAMMY – Excellent, HANA - Very Good, HEMRAJ - Excellent, HMPRO - Very Good, INTUCH – Very Good, ITD – Very Good, IVL - Very Good, JAS – Very Good, KAMART – not available, KBANK - Excellent, KK – Excellent, KTB - Excellent, LH - Very Good, LPN - Excellent, MAJOR - Good, MAKRO – Very Good, MCOT - Excellent, MINT - Very Good, PS - Excellent, PSL - Excellent, PTT - Excellent, PTTGC - Excellent, PTTEP - Excellent, QH - Excellent, RATCH - Excellent, ROBINS - Excellent, RS – Excellent, SAMART – Excellent, SC – Excellent, SCB - Excellent, SCC - Excellent, SCCC - Very Good, SIRI - Good, SPALI - Very Good, SRICHA – not available, SSI – not available, STA - Good, STEC - Very Good, TCAP - Very Good, THAI - Excellent, THCOM – Very Good, TICON – Very Good, TISCO - Excellent, TMB - Excellent, TOP - Excellent, TRUE - Very Good, TTW – Very Good, TUF - Very Good, VGI – not available, WORK – Good.

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