Malaysia Daybreak | 30 April 2013
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REGIONAL DAILY December 26, 2012 MALAYSIA Malaysia Daybreak | 30 April 2013 Key Metrics ▌What‟s on the Table… —————————————————————————————————————————————————————————————————————— FBMKLCI Index Dialog Group - Swimming upstream in Balai 1,750 Things are going swimmingly for Dialog's first upstream venture. The 1,700 company's JV unit, BC Petroleum, remains on a hot streak and continues to find drilling success at multiple wells at the Balai marginal field cluster. In 1,650 our SOP-based target price calculation, we continue to value Dialog‟s 1,600 businesses at 18.9x P/E, a 40% premium over our CY13 target market P/E of 1,550 13.5x. Attractive prospects for marginal and mature fields are the potential 1,500 catalysts that support our Outperform call and 40% target P/E premium over Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 the market. Malaysian Pacific Industries - Higher-margin portfolio chips in ——————————————————————————— FBMKLCI MPI‟s RM3.6m core earnings in 3QFY6/13 narrowed YTD core net losses to 1707.97 -3.32pts -0.19% APR Futures MAY Futures RM0.1m, which is broadly in line with our expectations as rising demand for 1709.5 - (-0.26%) 1706.5 - (1.00%) smartphone and tablets points to a stronger 4Q. MPI also declared a 5 sen ——————————————————————————— tax-exempt dividend. Our earnings forecast rises by 0.3% as we tweak our DPS Gainers Losers Unchanged 209 495 288 forecast for FY13 to 9.1 sen vs 10 sen. Though our forecasts are largely ——————————————————————————— unchanged, our target price falls by 8.5% as an unchanged 2 s.d. below its Turnover 682.53m shares / RM1403.28m 5-year historical P/BV average now works out to 0.71x. Maintain our Neutral 3m avg volume traded 1217.58m shares call as the lack of re-rating catalysts is reflected in its low valuations. Switch to 3m avg value traded RM1609.10m ——————————————————————————— MyEG for growth. Regional Indices FBMKLCI FSSTI JCI SET HSI Tasek Corporation - Competition looms in 1Q 1,708 3,362 5,000 1,585 22,581 ———————————————————————————————— Market Indices Tasek's annualised 1Q13 core net profit made up 89% of our and consensus' Close % chg YTD % chg full-year numbers. We consider the results broadly in line as 1Q is seasonally FBMKLCI 1,707.97 (0.2) 1.1 FBM100 11,491.68 (0.2) 1.7 slow. Demand should pick up in tandem with construction activities, but FBMSC 12,144.47 (1.0) 5.8 competitive pressures remain the drag. We raise the target price as we now FBMMES 3,968.87 (0.0) (5.8) Dow Jones 14,818.75 0.7 13.1 apply a higher CY13 P/BV multiple of 1.91x (from 1.68x), pegged to an NASDAQ 3,307.02 0.8 9.5 unchanged 10% discount to Lafarge's higher one-year P/BV average. The FSSTI 3,361.92 0.4 6.2 FTSE-100 6,458.02 0.5 9.5 outlook for cement demand remains positive in 2013. However, we maintain Hang Seng 22,580.77 0.1 (0.3) JCI 4,999.75 0.4 15.8 Neutral given rising competitive pressures which continue to dent selling prices, KOSPI 1,940.70 (0.2) (2.8) and persistent losses in the ready-mix segment. Nikkei 225 13,884.13 (0.3) 33.6 PCOMP 7,028.35 0.0 20.9 SET 1,584.93 0.1 13.9 Shanghai 2,177.91 (1.0) (4.0) Taiwan 8,029.74 0.1 4.3 ▌News of the Day… —————————————————————————————————————————————————————————————————————— Top Actives • Sunway wins RM222m piling and sub-structure works at KLCC Close % chg Vol. (m) SAPURAKENCANA 3.100 2.6 29.4 • KDEB to buy 56.6% stake in Kumpulan Hartanah Selangor for 76 sen/share LUSTER INDUSTRIE 0.095 5.6 12.8 NEXTNATION COMM 0.085 (5.6) 11.6 • PNB has found a suitor to buy the non-core assets of Sime Darby Bhd TIGER SYNERGY BH 0.270 (3.6) 11.5 • New SPV set up to develop RM30bn global logistic hub in Selangor? SILVER BIRD GROU 0.080 23.1 11.4 DIALOG GROUP BHD 2.350 (0.4) 11.1 • US personal income rose 0.2% mom in Mar (1.1% in Feb) TENAGA NASIONAL 7.840 0.1 11.0 ASTRAL SUPREME 0.210 (4.5) 10.5 • US pending home sales rose 1.5% mom in Mar (a revised -1.0% in Feb) Economic Statistics Close % chg US$/Euro 1.3096 (0.03) RM/US$ (Spot) 3.0326 (0.03) RM/US$ (12-mth NDF) 3.0880 (0.11) OPR (%) 3.00 0.00 BLR (%, CIMB Bank) 6.60 0.00 GOLD ( US$/oz) 1,475 (0.06) WTI crude oil US spot (US$/barrel) 94.50 1.61 CPO spot price (RM/tonne) (0.22) 2,290 ———————————————————————————————————————— 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 April 30, 2013 Global Economic News… The US Thomson Reuters/University of Michigan consumer sentiment index fell to 76.4 in Apr from 78.6 in Mar. Economists expected a reading of 73.0. (Bloomberg) US personal income rose 0.2% mom in Mar (1.1% in Feb), half the consensus of 0.4%, whilst consumer spending gained 0.2% mom (0.7% in Feb), double the consensus of 0.1%. The PCE price index dipped 0.1% mom (+0.4% in Feb), matching consensus, whilst the core PCE price index experienced no change (0.1% in Feb and consensus). (Bloomberg) US pending home sales rose 1.5% mom in Mar (a revised -1.0% in Feb), more than double the 0.7% expected by economists. (Bloomberg) Eurozone M3 money supply grew by 2.6% yoy in Mar, down from 3.1% in Feb. (AFP) The European Commission’s index of executive and consumer sentiment dropped to 88.6 in Apr from a revised 90.1 in Mar, the lowest since Dec. Economists had forecast a decline to 89.3. A gauge of sentiment among manufacturers fell to -13.8 from -12.3 in Mar. An indicator of services confidence dropped to -11.1 from -7, while consumer sentiment improved to -22.3 from -23.5. (Bloomberg) The IMF assured it is "carefully" monitoring massive capital flows into Asia and urged the region's policymakers to guard against risks of overheating. (AFP) South Korea’s industrial output slipped 3% yoy in Mar (-9.4% in Feb), lower than analyst expectations of a 0.7% decline. (Bloomberg) South Korea’s current-account surplus totaled US$4.98bn in Mar, up from US$2.71bn in Feb, the biggest surplus since US$6.91bn in Nov and compares with a surplus of US$2.97bn in Mar last year. (Dow Jones) Australian Prime Minister Julia Gillard warned voters to brace for an austere election-year budget, unveiling a A$12bn (US$12.4bn) slump in revenues due to the strong dollar. (AFP) Indonesia may raise fuel prices to the same level across all categories instead of revising them by vehicle type in its bid to curb subsidies, as an announcement on the policy nears. (Bloomberg) Thailand’s Finance Ministry is set to impose fiscal measures to curb the baht's rise if the Bank of Thailand decides not to cut the policy rate. In related news, the private sector will submit a letter to the central bank and Finance Ministry outlining seven measures to help cope with the strong baht. The measures sought by the Federation of Thai Industries (FTI) include keeping the baht in line with other regional currencies, helping small and 2 Daybreak Malaysia April 30, 2013 mid-sized enterprises (SMEs) form groups to apply for insurance against risk, and letting exporters open letters of credit in baht terms. The FTI also wants funds set up to guide exporters to new markets and help SMEs affected by the stronger baht. Other measures include checks on capital inflows and higher rates for export tax refunds. (Bangkok Post) Malaysian Economic News… The Golden Triangle of Kuala Lumpur city centre may have grown bigger, accommodating the developments that have been rippling from the heart of the city in the past few years, Property consultancy CH Williams Talhar & Wong believes that the commercial, retail, and entertainment hub should be redefined to encompass a larger area reflecting the growth of the city. "Our definition of the new Golden Triangle has expanded. Where the border originally ends in Bukit Bintang in the south, it will now include the Tun Razak Exchange while the north will be expanded from Kuala Lumpur Convention Centre to The Intermark." said managing director Foo Gee Jen. He also noted that residential properties buyers needed to be aware of what they were getting into under the Developers Interest-Bearing Scheme. "There are caveats to this scheme as buyers commit to a financial obligation upon signing the S&P and interest cost are actually already passed onto buyers through higher selling prices, In many cases the 20%-30% higher selling prices do not reflect the appreciation of the market values in the locality of the projects," he said. (Starbiz) Malaysia is on track to achieve GDP growth of 5-6% this year driven by strong domestic demand and investment inflows despite the current slowdown in China, Bank Negara Malaysia (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz said. The central bank had already included the risk from global slowdown in the projection and the current situation in China will not affect the GDP target for the whole year, she said.