REGIONAL DAILY December 26, 2012
MALAYSIA Malaysia Daybreak | 19 August 2013
Key Metrics ▌What’s on the Table… —————————————————————————————————————————————————————————————————————— FBMKLCI Index AMMB Holdings - Banking on writebacks and insurance income 1,850 At 25% of our full-year forecast (26% of consensus), 1QFY3/14 net profit was in 1,800 line with our expectations. We expect similar average earnings in 2Q-4Q as the 1,750 continuous topline expansion could be offset by the upturn in credit costs. 1,700 Our DDM-based target price (11.2% COE, 5% LT growth) is intact. We are 1,650 downgrading AMMB from a Neutral rating to Underperform due to the 1,600 de-rating catalysts of: 1) below-industry loan growth, 2) margin compression, 1,550 and 3) the expected upturn in credit costs. Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Puncak Niaga Holdings - Closer to the end game? ——————————————————————————— FBMKLCI We are upgrading Puncak from neutral to Trading Buy given the prospect of 1788.24 -3.97pts -0.22% favourable newsflow, including a better price tag for its water assets in Selangor. AUG Futures SEP Futures 1789 - (-0.50%) 1786 - (1.00%) The federal and state governments are reportedly making headway in resolving ——————————————————————————— the deadlock in the takeover. We believe there is a possibility of a top-up of Gainers Losers Unchanged the initial RM2.77/share offer for Puncak. Theoretically, the price should be 379 422 303 ——————————————————————————— close to RM3.67, which is the book value of its water assets and an offer that Turnover would be acceptable to minority shareholders. We raise our target price as we 2132.22m shares / RM1617.585m reduce our SOP discount from 50% to 30% to reflect the prospect of positive 3m avg volume traded 1756.84m shares 3m avg value traded RM2167.89m newsflow. ——————————————————————————— Regional Indices Kossan Rubber Industries - P/E not InTouch with growth FBMKLCI FSSTI JCI SET HSI 1,788 3,198 4,569 1,446 22,518 During our recent meeting, we gathered that Kossan should enjoy higher ———————————————————————————————— margins as it expands its new manufacturing model and nitrile production. Also, Market Indices Close % chg YTD % chg special purpose gloves (SPV) and potential technical rubber product (TRP) FBMKLCI 1,788.24 (0.2) 5.9 acquisitions would buffer competitive pressure. Kossan remains an FBM100 12,200.97 (0.2) 8.0 FBMSC 15,738.74 (0.3) 37.1 Outperform and our top pick, with the catalysts being strong demand, widening FBMMES 5,483.79 1.3 30.1 margins and diversification efforts. We raise our FY13-15 EPS forecasts by Dow Jones 15,081.47 (0.2) 15.1 NASDAQ 3,602.78 (0.1) 19.3 7-11% for a better product mix, higher plant efficiency and an assumed 5bn FSSTI 3,197.53 (0.7) 1.0 piece rise in capacity in FY14. We also apply a higher CY14 target P/E of 14x FTSE-100 6,499.99 0.3 10.2 Hang Seng 22,517.81 (0.1) (0.6) (20% discount to Hartalega's target instead of 30%) to reflect its higher JCI 4,568.65 (2.5) 5.8 margins and diversification moves. KOSPI 1,920.11 (0.2) (3.9) Nikkei 225 13,650.11 (0.7) 31.3 DRB-Hicom - Selling UniAsia Life Insurance for RM518m PCOMP 6,525.95 (0.8) 12.3 SET 1,445.76 (0.5) 3.9 Shanghai 2,068.45 (0.6) (8.8) JT International - Results likely unsurprising Taiwan 7,925.00 0.5 2.9 MISC Bhd - Shrinking with the downturn Top Actives Close % chg Vol. (m) MEDIA SHOPPE 0.105 0.0 132.8 ASTRAL SUPREME 0.255 (13.6) 83.6 ▌News of the Day… FLONIC HI-TEC 0.195 11.4 80.2 —————————————————————————————————————————————————————————————————————— INSTACOM GROUP 0.420 7.7 59.3 • 1MD wins RM6.2bn bridge-loan extension MALAYSIAN AIRLINE 0.330 0.0 52.5 CHINA STATIONERY 0.260 2.0 50.5 • CMS expects joint pact on phophate project soon RGB INTERNATIONAL 0.145 20.8 34.1 • Ekuinas steps up outsourcing programme SUMATEC RESOURCES 0.705 11.0 34.0 • AirAsia X emerges as Australia's fourth largest foreign airline Economic Statistics • Privatise MAS for profit, says Tun Mahathir Close % chg US$/Euro 1.3334 (0.10) • Kulim not raising offer for NBPOL RM/US$ (Spot) 3.2770 0.00 • Malaysia keeps palm oil export tax unchanged RM/US$ (12-mth NDF) 3.3459 0.12 OPR (% ) 3.00 0.00 BLR (% , CIMB Bank) 6.60 0.00 GOLD ( US$/oz) 1,360 (0.45) WTI crude oil US spot (US$/barrel) 107.33 0.45 CPO spot price (RM/tonne) 2,355 0.64 ———————————————————————————————————————— 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 August 19, 2013
Global Economic News… US housing starts rose 5.9% mom to 896,000 in Jul from a revised 846,000 in Jun, underperforming consensus of 900,000. (Bloomberg)
US nonfarm productivity rose a seasonally adjusted annualised rate (SAAR) of 0.9% qoq in 2Q13 from a revised -1.7% in 1Q13, outperforming consensus of 0.6%, whilst unit labour costs gained 1.4% qoq SAAR (-4.2% in 1Q13), again exceeding consensus of 1.0%. (Bloomberg)
The US Thomson Reuters/University of Michigan’s consumer sentiment index fell to 80.0 in Aug from 85.1 in Jul, underperforming consensus of 85.5. (Bloomberg)
Eurozone inflation registered at 1.6% yoy in Jul, matching an initial estimate on 31 Jul. It is the sixth straight month that the rate has been less than the ECB's 2% ceiling. (Bloomberg)
The eurozone current account surplus narrowed to €16.9bn in Jun from €19.5bn in May. Over the 12 months to Jun, the current account showed a surplus of €196.1bn, compared with a surplus of €66.1bn a year earlier. (Bangkok Post)
New home prices in China climbed in 69 of the 70 cities the government tracked last month from a year earlier. Prices rose an average 6.7% yoy in July, up from 6.1% in Jun. (Bloomberg, WSJ)
South Korea’s producer prices slipped 0.9% yoy in Jul (-1.4% in Jun). (Bloomberg)
Taiwan’s GDP grew 2.5% yoy in 2Q13 accelerating from 2.3% in 1Q13. (Bloomberg)
Indonesia’s consumer confidence index dropped to 108.4 in Jul from 117.1 in Jun. (Bloomberg)
Indonesia's current account deficit widened to 4.4% of GDP in the second quarter of the year, from 2.4% of GDP the previous quarter. (Business Times)
Singapore’s non-oil domestic exports fell 0.7% yoy in Jul (-8.9% in Jun). Electronic exports fell 7.6% (-12.4% in Jun). (Bloomberg)
Malaysian Economic News… Doctors in private clinics and hospitals are asking for a 30% increase in consultation fees, saying it is impossible for them to survive with rising operating costs. Malaysian Medical Association (MMA) president Datuk Dr N.K.S. Tharmaseelan said the proposed hike was more than a decade overdue. He claimed that doctors were now paid less than plumbers, electricians, hairstylists and food outlet operators.
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Currently, general practitioners get between RM30 and RM50 per consultation while specialists charge between RM50 and RM80. MMA proposed general practitioners’ consultation fees to be raised to between RM39 and RM65 while that of specialists to between RM65 and RM104. There are over 7,600 private clinics and hospitals nationwide. The association represents over 3,000 members. He said the MMA could not agree to the Government’s 14.4% fee increase proposal (general practitioners’ consultation fees at between RM34 and RM57; specialists’ consultation fees at between RM57 and RM91) made last year as it would result in a bleak future for its members. (The Star)
A 14.4% rise in private doctors’ consultation fees is “more appropriate” than the rate proposed by the Malaysian Medical Association, said Health director-general Datuk Dr Noor Hisham Abdullah. The quantum was based on the consumer price index of healthcare for the period 2002 to 2010 and decided after consulting various ministries and stakeholders, he said. He added that the ministry would add new clauses to the present regulations to reduce any attempt by medical and dental practitioners to manipulate the cost of procedures. “However, medical costs in the country are still lower than in Thailand and Singapore,” he said, adding that patients have a right to request for an estimation of charges based on initial diagnosis and other anticipated fees. (The Star)
Malaysia is facing a shortage of specialist doctors despite an increasing number of medical graduates from local and foreign institutions every year. Health Minister Datuk Seri Dr. S Subramaniam said the current lack of specialists needed to be addressed immediately to prevent a crisis later on. "We're still lacking in terms of specialists as we only manage to train about 500 to 600 doctors into experts in a year. So we are looking at ways to increase the number of specialists and at the same time upgrade the quality of care," he said. At present, there were 36,607 doctors, including specialists, with a doctor to population ratio of 1:791 and by the year 2020 based on the estimated population of 34m, 85,000 doctors would be needed to attain the standard ratio of 1:400. He added that the ministry had no intention of increasing the consultation fees of doctors by 30% as rumoured. (Bernama)
The US Department of Commerce has decided to impose Countervailing Duty on frozen prawns from Malaysia. Under the duty structure, Asia Aquaculture (M) Sdn Bhd has to pay 10.8% while Kian Huat Aquaculture Sdn Bhd and other companies are charged 54.5%, respectively, the Agriculture and Agro-based Industries Ministry said on 16 Aug. "The decision to levy a high rate is because the selected Malaysian companies have refused to cooperate in the investigations by the department and the US International Trade Commission. Asia Aquaculture is charged a lower duty following its voluntary cooperation with the US authorities," the ministry said. To address this issue, an action committee has been set up jointly chaired by the ministry and the International Trade and Industry Ministry since the investigations started to help the companies involved.
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Currently, the committee was studying the official documents by the US Department of Commerce for further action, the ministry added. (Bernama)
The Johor government has formed a special committee to help facilitate new investments and deal with issues faced by investors. State Domestic Trade, Tourism and Consumer Affairs Committee chairman Datuk Tee Siew Kiong said on 17 Aug that previously, investors had to deal with many units and this caused delays and confusion. “The Johor Investment Committee’s main task is to reduce red tape and come up with solutions for problems faced by parties who are interested to invest here,” he said. Tee said the state was prioritising investments related to manufacturing, agriculture, oil and gas, tourism, creative industries, logistics, ICT, education, health and aerospace. The committee would be chaired by Johor Mentri Besar Datuk Seri Mohamed Khaled Nordin and would conduct its first meeting soon, he added. (The Star)
Ekuiti Nasional Bhd (Ekuinas) has selected CMS Opus Private Equity Sdn Bhd, KAF Fund Management Sdn Bhd (KFM) and RM Capital Partners Sdn Bhd as its latest outsource partners, according to industry sources. This would be Ekuinas’ second tranche of selecting outsourced fund managers (OFMs), having already picked CIMB Private Equity Sdn Bhd, KFH Asset Management Sdn Bhd and Navis Capital Partners as outsource partners in the first tranche announced in July 2010. Sources said these new OFMs would receive around RM60m each from Ekuinas and were expected to raise from private sources, additional RM20m as part of the deal. It is unclear how many private equity firms participated in the selection process in this second tranche. Ekuinas said it was in the process of finalising the selection of OFMs for its second tranche. “We will make an announcement in mid-Sep as to the outcome of this selection process and will share all pertinent details then,” Ekuinas said. Ekuinas allocated RM400m in the first tranche and the three fund managers raised RM143m from private sources. It planned to appoint seven to 10 OFMs to manage the RM10bn fund in a three-year period. (Starbiz)
Sabah will have affordable energy and improved electricity supply once a RM2.3bn hydropower project is completed in six years' time. With a capacity of 180MW, the Upper Pada Hydroelectric Power Project (UPHEP) will able to generate reliable electricity supply for the state. Construction is expected to begin next year at the Pada basin, upstream of Kuala Tomani in Tenom. It is expected to be completed in 2019. Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili said UPHEP would not involve a large water catchment area as only 590ha would be used, involving 2.3ha per megawatt. Therefore, this project qualifies for the Clean Development Mechanism status under the United Nation's Framework Convention on Climate Change, he said.
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He added that the project was approved with a government loan of RM569m. He also said the project would create 1,000 jobs during its construction phase. (NST)
Political News… Pakatan Rakyat (PR) comfortably won the battle for first-time and younger voters in Election 2013. Barisan Nasional (BN) snared more Malay votes in this category of voters. But Ibrahim Suffian of Merdeka Center sounded a note of caution for the opposition pact. He noted that the majority of first-time Malay and young Malay voters gave their support to BN, suggesting that the Opposition has not done enough to convince young Malays that their future was secure with PAS, PKR and DAP. And Ibrahim noted that this segment is only going to get larger in coming elections, due to the higher birth rate among Malays. Given the changing population profile, Malays will be an even larger chunk of new voters in future polls than the nearly two-thirds, or 64.17% of new voters, registered this year. There are five voting channels and each represents an age group. The pollster said that based on the electoral rolls used on election day there were some 2.7 million more voters, and the influx of new voters was more pronounced in mixed and urban seats. Of the five channels or groups, the youngest group of under 30s was 64.17% Malay. The voter turnout overall for all races in this group of first-time and young voters was a hefty 83.22%. Of those, just over half, or 52.96%, voted for PR. But those older than this group were more inclined to vote for the Opposition. In the 31-40 age group, 54.25% voted for PR. The ethnic composition of this latter group was 53.12% Malays, 29.28% Chinese, 7.61% Indians and 10% others. The voter turnout was about the same as the younger group, at 83.47%. "Pakatan Rakyat will have no choice but to reach out to the Malays, tackle their fears about the position of Malays and at the same time put forward a comprehensive economic plan,” noted Ibrahim. (Malaysian Insider)
Malaysia will use a section of its Crime Prevention Act for the first time to hold suspects without filing charges in a crackdown on violence following a wave of killings, according to a copy of an internal police memo seen by Bloomberg News. The police will use Section 105 of the act to detain suspects for as long as 24 hours without charging them, according to the memo. The rise in violence is partly due to the abolition of the Emergency Ordinance in 2011, which led to 2,600 people being released from detention, the malaymailonline reported July 9, citing Home Minister Ahmad Zahid Hamidi. Prime Minister Najib Razak repealed the law in a bid to boost civil liberties. “Gangsterism” must be addressed, the memo reads. The first phase of the operation will start in the Klang Valley, which includes Malaysia’s capital of Kuala Lumpur. Inquiry officers have been appointed by the Attorney-General’s Chambers, the memo states. (Bloomberg)
Umno is losing out to PAS in the battle for young talent, with doctors, lawyers and engineers joining the Islamic political party. And the reason for this trend: Umno leaders fear those smarter than them. Former Umno president Tun Dr Mahathir Mohamad said, "the party itself is not the problem, the problem is the people who run it". "If
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you do not know how to run something, then the best organised organisation will not help.” He also said that the party has to attract younger people as some of the leaders have been there for far too long. "They will need to re-examine themselves, because the party has become old and a lot of the leaders have been there for quite a long time. The young people don't find the party attractive anymore." “The spirit to fight for the people, religion and country is no longer present. There is no loyalty to Umno because allegiance has now shifted from the party to selected individuals,” he said in the letter published in the Umno-backed Malay weekly, Mingguan Malaysia. “Members are bribed with money, overseas trips and to perform umrah. With that, all Umno members are involved in bribery by selling their votes for money," he said. However, Dr Mahathir said the party still has much to offer to Malays compared to opposition parties. (Malaysian Insider)
Umno Youth chief Khairy Jamaluddin announced that he will defend his position in the upcoming party polls. He made the announcement during his open house function at Kampung Gadong, near Seremban, Negeri Sembilan. "After consulting my Umno Youth colleagues, I am requesting for one more term because there is work still to be done and my struggle unfulfilled," he said. (Malaysiakini)
Bersih co-chairperson Datuk Ambiga Sreenevasan yesterday vowed there would be a Bersih 4.0 protest if the Election Commission (EC) fails to clean up the electoral roll before the re-delineation process is conducted. She said Bersih is adamant in its fight to tackle the flaws of GE13 to prevent a recurrence but the EC has chosen to turn a deaf ear to pleas from the public. (Financial Daily)
Corporate News… State investment fund 1Malaysia Development Bhd (1MDB) has obtained a six-month extension on a RM6.17bn bridge loan, giving it more time to sell shares in its power business to repay debt, said people familiar with the matter. 1MDB now has until May to repay Maybank Investment Bank, said the sources, asking not to be named because the information is private. The company may raise as much as US$2bn (RM6.6bn) from the initial public offering of its energy assets, the sources said. 1MDB, which bought US$3.7bn of power assets in two years, has total bonds and loans outstanding of RM31.2bn, according to data compiled by Bloomberg. The latest annual report shows it had RM7.8bn of debt at the end of Mar 12. The fund came under scrutiny in Parliament last month after it hired Goldman Sachs Inc to help manage US$6.5bn of note sales to finance expansion. The bank made about US$500m in commissions and trading gains, a person familiar with the matter said on 9 May. (BT, Bloomberg) We are surprised to note that 1MDB, a government-controlled entity, may have problem in repaying its borrowings to Maybank and has obtained a 6-month extension on a RM6.17bn bridging loans. We see this as a negative development because the classification of these loans to impaired loans will adversely affect Maybank’s asset quality. However, we think that Maybank will not have to classify these loans if they have been restructured and the borrower has a concrete plan to repay the loans via the proceeds from the listing of its power assets.
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Also, the above would not have material impact on Maybanks’ earnings because (1) the exposures are to a government-controlled entity, (2) the loans would be paid off by the proceeds from the planned listing of the power assets owned by 1MDB, and (3) the loans would be secured against some of 1MDB’s assets. Any provisioning from the exposures to 1MDB will dampen Maybank’s earnings but this would be written back upon the listing of 1MDB’s power assets.
Tun Dr Mahathir Mohamad suggested that Malaysia Airlines (MAS) be privatised in an effort to revitalise the government-linked company, and consequently, overcome its losses at present. The former Prime Minister said privatisation is a good step for MAS to generate big profits as when a company is government-owned, it faces constraints from the point of finance. Dr Mahathir, who is also Proton advisor, said based on experience with the national car maker, privatisation will make the owners more sensitive as to the issue of profit and loss, as they are footing all expenditure. "Through privatisation, when you lose money, the people who own it, have to pay out. But if it's government money, nobody cares. I know this because I have run the government company before," he added. (Bernama)
Murmurs of ownership change and the sale of Malaysia Airlines (MAS) is now making its rounds. Sparking such talk was Minister in the Prime Minister’s Department Datuk Seri Idris Jala’s comments that the national airline should not be sold at a loss. And the other point he made was for the government to exit the aviation industry. Before the 13th general election, two groups were keen and they had done their homework on why MAS needed a change. The identity of potential buyers are said to be Tan Sri Ahmad Johan of Nadi and Tan Sri Syed Azman Ibrahim of Weststar Group. Ahmad Johan has a stake in Malindo Air, owns Mofaz Air, and runs a MRO facility which he wants to build into a sizeable facility. Syed Azman has RM6bn worth of contracts to provide helicopter services to the oil and gas sector and an expansion into passenger flight services is seen as an extension to what he has. Syed Azman, known also as the “AP King” has the cash. US-based KKR is paying RM650mil for about a third of Weststar Aviation which is going for a listing next year. The listing should raise even more money for Syed Azman. Meanwhile, the MAS Employees Union is using its political clout to change the management. They do not see eye-to-eye with MD Ahmad Jauhari Yahya’s style and believe a home-grown candidate can do a better job. The union is also unhappy that the commercial unit is headed by foreigners as it feels MAS has proficient local talent to head that job. (Star)
AirAsia X will become Australia’s fourth largest foreign carrier by the end of 2013 as it allocates nearly all of its additional capacity for the remainder of the year to the Australian market. The expansion will see the medium/long-haul low-cost carrier increase its Australian operation from 35 weekly flights currently to 54 weekly frequencies in December 2013. AirAsia X in the process will overtake rival Malaysia Airlines (MAS) as well as Thai Airways and Cathay Pacific in the Australia international seat capacity ranking. The expansion is made possible by a new air services agreement between Malaysia and Australia which increased total capacity to Australia’s four main cities by 40%. Australia has been an important and profitable market for AirAsia X. (CAPA)
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Lion Air Group’s Malaysian affiliate Malindo Air plans to pursue rapid international expansion. Malindo will launch nine international routes over the next few months from its KLIA hub, including four to Indonesia (Jakarta, Medan, Bali and Batam), four to India (Delhi, Mumbai, Kochi and Tiruchirappalli) and the one to Bangladesh (Dhaka) with Dhaka to be launched in late-Aug 2013. All four Indonesian routes are expected to be launched by the end-Sep 2013. The international network expansion will be supported by the delivery of two additional 737-900ERs in Sep 2013, which will give the carrier a fleet of six 737-900ERs. All these new routes are expected to be served with one daily flight. AirAsia currently offers one daily A320 flight to Kochi and two daily A320 flights to Tiruchirappalli, with a third Tiruchirappalli frequency to be introduced at the end of Aug 2013. AirAsia does not fly to Delhi or Mumbai. The AirAsia group offers seven daily frequencies to Jakarta and Medan, and five daily frequencies to Bali, but none to Batam. Malindo is planning a second wave of Malaysia-Indonesia routes in 2014, including Kuala Lumpur to Makassar and Yogyakarta. Malindo still plans to add some domestic capacity, including new 737-900ER routes from Kuala Lumpur International to Langkawi and Penang in peninsular Malaysia (destinations Malindo now only serves from Subang) and potential new ATR 72 routes from Kota Kinabalu to Sandakan and Tawau within the eastern Malaysia state of Sabah. But the focus for Malindo the remainder of 2013 and 2014 will be on building up an international network. (CAPA)
Malaysia left the tax on crude palm oil exports unchanged for a seventh month in September as the world’s second-largest producer seeks to boost shipments before inventories expand and output accelerates. Shipments will be taxed at 4.5% next month as the reference price was set at RM2,281.72 (US$696) a metric ton, within the minimum band for a levy to be applied, according to a Customs Department statement. The tariff was zero in January and February before being raised to 4.5% in March. (Bloomberg)
Kulim (M) Bhd has voiced out that its offer to New Britain Palm Oil Ltd (NBPOL) shareholders is fair and reasonable and that it will not vary or extend its offer to buy up to 30m ordinary shares in NBPOL. On Aug 6, NBPOL released a company statement in which its independent directors recommended that shareholders reject Kulim's offer. In response to the independent directors' view that the partial offer is a negative factor, Kulim indicated that it disagreed with the directors' view and said its offer would provide NBPOL shareholders an opportunity to generate cash immediately by giving up their shares. (Financial Daily)
Cahya Mata Sarawak Bhd (CMS) expects to seal the JV agreement on a proposed multi-million-ringgit integrated phosphate plant project soon. This will be its second major investment after a ferrosilicon and manganese alloys smelting plant project in the Sarawak Corridor of Renewable Energy (Score). Group managing director Datuk Richard Curtis said negotiations on the terms of the JV agreement with Malaysian Phosphate Addictives Sdn Bhd were at an advanced stage and expected to be finalised soon. (Starbiz)
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The second Premium Outlets retail mall will be in Genting Highlands, possibly within Resorts World Genting. A source said that Genting Malaysia Bhd would make the announcement soon. The announcement comes shy of a month after Genting Malaysia sealed its partnership with Twentieth Century Fox to set up the world's first full-fledged Fox theme park in Genting Highlands valued at RM400m. (Malaysian Reserve)
Datuk Lukman Ibrahim is back at Proton Holdings Bhd, less than a month after resigning as the national carmaker’s deputy chief executive officer (CEO). Lukman, who abruptly resigned on July 29 to pursue his own interests, made the U-turn and assumed the same post after being advised by “several parties”. “I decided to come back after listening to advice from some parties who asked me to return and complete the transformation programme at Proton and Lotus,” he said. (BT)
The outcome of the dispute between Malakoff and Tenaga Nasional over capacity payments from the former's Tanjung Bin power plant will play a part in Malakoff's plans to go for listing. According to industry players, Malakoff is attempting to recover some RM200m in capacity payments from Tenaga on the grounds that the unplanned outages at its Tanjung Bin plant is partly due to the national electricity company itself. (Edge Weekly)
Tenaga Nasional Bhd is seeking US$1.33bn in financing to back a bid for Ireland's Bord Gais Energy. Several unnamed international and Malaysian banks had submitted proposals after Tenaga sent out a request for proposals for a bridge loan, the report said. A mandate for the loan has not been awarded. Bord Gais Eireann announced in May that it had started the sale process for its energy unit, which sources expect to fetch about 1.5bn euros. RBC Capital Markets is financial adviser to Bord Gais Eireann. The Irish state-owned group plans to complete the sale by the end of the year. (Reuters)
Can-One is revisiting the privatisation of Kian Joo, in which it has a 32% stake. Only this time, Can-One's advisers are looking at enlisting the help of the EPF to take private the largest can manufacturer in the country. (Edge Weekly)
Malaysia's overall media advertising expenditure (adex) rose by 17% to RM7.25bn in the first seven months this year, up from RM6.1bn in the same period last year. According to Nielsen Media Research, advertisers spent RM4.26bn on television advertising in the period under review, compared with RM3.13bn in the corresponding period last year. During the period, newspapers' adex revenue rose slightly to RM2.49bn from RM2.47bn in the same period in 2012. In terms of market share, newspapers held 34.4% of the adex in the media industry, TV (free-to-air and pay) captured 59% of the total market share and radio 3.6%. (BT)
LBS Bina Group, which has just completed the sale of some of its China assets, said it will announce its next strategic move at a press conference tomorrow. Several days ago, the property developer announced it had officially completed the sale of its China assets valued at HK$1.65bn (RM697m). (Financial Daily)
Silk Holdings Bhd has won a contract from Sarawak Shell Bhd to provide one unit of anchor handling tug supply vessel. Silk said its subsidiary, Jasa Merin Sdn Bhd, was awarded the contract valued at RM82m. The contract is expected to commence from Aug 18, 2013, for a primary term of three years and may be extended for a further one-year period at the discretion of Sarawak Shell. (Malaysian reserve)
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YFG Bhd is likely to surpass the initial RM500m target for its orderbook judging by the amount of contracts it has secured so far and some RM700m of projects tendered in the first half of the year. It is worth noting that its recent development project in Sabah is the first diversification from its electrical and mechanical (E&M) solutions business which currently accounts for 90% of the group's revenue. YFG expects 30% of total revenue to eventually come from property development and 70% from E&M construction. (Financial Daily)
Daya Materials could become one of the first Malaysian companies to secure long-term upstream oil & gas contracts in the highly competitive Norwegian market. According to group MD Nathan Tham, Daya is close to securing both short-term and long-term contracts in the North Sea for its chartered vessel Siem Daya 1, ensuring that the subsea service vessel is deployed for jobs immediately upon its delivery in Sep. Meanwhile, the company is in negotiations to acquire a major stake in a similar vessel in Norway which could be completed as early as Dec, along with service contracts in the North Sea. It plans to name the second vessel Siem Daya 2. (Edge Weekly)
Vestigo, a unit of Petronas Carigali, will play the role of an oil & gas operator, similar to that of ROC Oil and Petronas. It will bid for contracts based on the technical merits of its field development plan and the attractiveness of the commercial proposal. Vestigo will also pursue strategic partnerships with local and international players to develop small and marginal fields according to its technical and operational resources and capabilities, said Petronas Carigali president Datuk Anuar Mohd Taib. (Edge Weekly)
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BMSB: Changes in shareholdings Type of No of Ave Price 16-Aug-13 Date transaction securities Company (RM) EPF 13/8 Disposed 3,753,900 DIGI.COM EPF 13/8 Disposed 2,000,000 YTL POWER INTERNATIONAL EPF 13/8 Disposed 1,500,000 IJM CORPORATION EPF 13/8 Disposed 1,176,000 TELEKOM MALAYSIA EPF 13/8 Disposed 945,000 AXIATA GROUP EPF 13/8 Disposed 850,000 IOI CORPORATION EPF 13/8 Disposed 810,000 GAMUDA EPF 13/8 Disposed 756,200 PUBLIC BANK EPF 13/8 Disposed 717,300 SIME DARBY EPF 13/8 Disposed 670,100 WCT EPF 13/8 Disposed 307,200 STAR PUBLICATIONS EPF 13/8 Disposed 305,900 UOA DEVELOPMENT EPF 13/8 Disposed 300,000 KUALA LUMPUR KEPONG EPF 13/8 Disposed 283,400 HONG LEONG BANK EPF 13/8 Disposed 178,200 SYARIKAT TAKAFUL MALAYSIA EPF 13/8 Disposed 170,000 PRESTARIANG EPF 13/8 Disposed 140,200 MALAYSIA AIRPORTS EPF 13/8 Disposed 100,000 PPB GROUP EPF 13/8 Disposed 69,500 IHH HEALTHCARE EPF 13/8 Disposed 35,000 BRITISH AMERICAN TOBACCO EPF 13/8 Disposed 20,000 LAFARGE MALAYSIA Kumpulan Wang Persaraan 13/8 Disposed 711,700 BENALEC HOLDINGS Kumpulan Wang Persaraan 13/8 Disposed 150,000 WCT Aberdeen Asset Management PLC 15/8 Disposed 6,100 SHANGRI-LA HOTELS Mitsubishi UFJ Financial Group, Inc. 12/8 Disposed 61,900 AEON CREDIT SERVICE (M) Mitsubishi UFJ Financial Group, Inc. 12/8 Disposed 11,000 SHANGRI-LA HOTELS Mitsubishi UFJ Financial Group, Inc. 12/8 Disposed 8,700 POS MALAYSIA Mitsubishi UFJ Financial Group, Inc. 12/8 Disposed 1,800 BRITISH AMERICAN TOBACCO EPF 13/8 Acquired 4,344,800 MALAYAN BANKING EPF 13/8 Acquired 3,000,000 MAXIS EPF 13/8 Acquired 1,327,300 SAPURAKENCANA PETROLEUM EPF 13/8 Acquired 1,287,800 YTL CORPORATION EPF 13/8 Acquired 1,266,600 AIRASIA EPF 13/8 Acquired 956,500 IJM LAND EPF 13/8 Acquired 742,100 AMMB HOLDINGS EPF 13/8 Acquired 584,400 KPJ HEALTHCARE EPF 12/8 Acquired 451,300 CIMB GROUP EPF 13/8 Acquired 416,400 DIALOG GROUP EPF 13/8 Acquired 348,800 TA ANN HOLDINGS EPF 13/8 Acquired 212,100 TAN CHONG MOTOR EPF 13/8 Acquired 150,900 PETRONAS DAGANGAN EPF 12/8 Acquired 135,100 AFFIN HOLDINGS EPF 13/8 Acquired 100,000 EVERSENDAI CORPORATION EPF 13/8 Acquired 98,300 MBM RESOURCES EPF 13/8 Acquired 39,300 POS MALAYSIA EPF 13/8 Acquired 30,000 BIMB HOLDINGS Lembaga Tabung Haji 30/7-31/7 Acquired 1,052,700 ALAM MARITIM RESOURCES Kumpulan Wang Persaraan 13/8 Acquired 1,000,000 S P SETIA Kumpulan Wang Persaraan 13/8 Acquired 541,200 FELDA GLOBAL VENTURES Kumpulan Wang Persaraan 12/8-13/8 Acquired 493,700 TOP GLOVE CORPORATION Kumpulan Wang Persaraan 13/8 Acquired 21,000 KULIM (MALAYSIA) Aberdeen Asset Management PLC 12/8-14/8 Acquired 171,300 ORIENTAL HOLDINGS Aberdeen Asset Management PLC 2/8-7/8 Acquired 54,800 GUINNESS ANCHOR Aberdeen Asset Management PLC 12/8-14/8 Acquired 23,400 UNITED PLANTATIONS Aberdeen Asset Management PLC 14/8 Acquired 4,000 UNITED MALACCA Aberdeen Asset Management PLC 14/8 Acquired 3,000 TASEK CORPORATION Aberdeen Asset Management Asia 12/8-14/8 Acquired 171,300 ORIENTAL HOLDINGS Aberdeen Asset Management Asia 2/8-7/8 Acquired 54,800 GUINNESS ANCHOR Mitsubishi UFJ Financial Group, Inc 12/8 Acquired 52,800 BURSA MALAYSIA SOURCES: BMSB
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BMSB: Changes in shareholdings Type of No. of Ave Price 16-Aug-13 Date transaction securities Company (RM) Mitsubishi UFJ Financial Group, Inc 12/8 Acquired 47,000 ORIENTAL HOLDINGS Mitsubishi UFJ Financial Group, Inc 5/8-7/8 Acquired 46,000 GUINNESS ANCHOR Mitsubishi UFJ Financial Group, Inc 12/8 Acquired 13,700 UNITED PLANTATIONS IGB CORPORATION 16/8 Shares Buy Back 400,000 IGB CORPORATION 2.60 HAP SENG CONSOLIDATED 16/8 Shares Buy Back 100,000 HAP SENG CONSOLIDATED 2.11 SOURCES: BMSB
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BMSB: ESOS & others 19-Aug-13 No Of New Shares Date of Listing Nature of transaction LBS BINA GROUP 20,000 19-Aug-13 Exercise of Warrants-18 GAMUDA 881,000 19-Aug-13 Exercise of ESOS TH PLANTATIONS 252,000 20-Aug-13 Exercise of ESOS LITRAK 28,000 19-Aug-13 Exercise of ESOS SOURCES: BMSB
BMSB: Off-market transactions 16-Aug-13 Vol GDEX 23,900,000 GDEX-WA 6,780,000 GBGAQRS 5,000,000 TROP 2,900,000 PRTASCO 2,500,000 AXIATA 2,000,000 SYF 1,113,500 SONA 1,000,000 Notes:CN-Crossing deal on board lots MN-Married deal on board lots MO-Married deal on odd lots SOURCES: BMSB
BMSB: Dividends Company Particulars Gross DPS (Sen) Ann Date Ex-Date Lodgement Payment Hektar REIT Second interim dividend 2.60 2-Aug-13 19-Aug-13 21-Aug-13 10-Sep-13 SP Setia Interim dividend 1.60 6-Aug-13 26-Aug-13 28-Aug-13 18-Sep-13 Interim dividend - single tier 2.40 6-Aug-13 26-Aug-13 28-Aug-13 20-Sep-13 AMMB Holdings Final dividend - single tier 15.00 30-Jul-13 28-Aug-13 30-Aug-13 12-Sep-13 QL Resources Final dividend - single tier 4.50 29-Jul-13 29-Aug-13 2-Sep-13 13-Sep-13 Maxis Interim dividend - single tier 8.00 6-Aug-13 4-Sep-13 6-Sep-13 3-Oct-13 Mah Sing Group First and final dividend - single tier 7.20 31-May-13 5-Sep-13 9-Sep-13 20-Sep-13 & 0.4 sen less income tax of 25% 0.40 Star Publications Interim dividend - single tier 6.00 14-Aug-13 25-Sep-13 27-Sep-13 18-Oct-13 SOURCES: BMSB
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Corporate Actions August 2013
SUN MON TUE WED THU FRI SAT
1 2 3 Gas Malaysia 2Q, Hektar REIT 2Q & Pavilion 2Q briefing
4 5 6 7 8 9 10 External Trade Hartalega 1Q, External Reserves, Hari Raya Puasa Hari Raya Puasa Sunway 4Q & IPI, Manufacturing briefing, Maxis 2Q, Sales F&N 3Q 11 12 13 14 15 16 17 MMHE 2Q & briefing MISC 2Q, AMMB 1Q
18 19 20 21 22 23 24 Tomypak 2Q, Affin KLK 3Q, Star briefing GDP, BOP, CPI, External Reserves, JTI briefing, Daibochi 2Q, Hap Seng Plant JobStreet 2Q, Nestle JTI 2Q, QL 1Q, briefing, Eksons 1Q, 2Q & briefing 2Q, AirAsia 2Q, Daibochi 2Q, YTL MSM briefng Maybank 2Q, AirAsia Power 4Q, Pet Gas X 2Q, Maybulk 2Q, 2Q, MSM 2Q IOI Corp 4Q 25 26 27 28 29 30 31 E&O 1Q, Wellcall 3Q, Mah Sing 2Q, UOA Media Chinese 2Q, UEM Sunrise 2Q & Money Supply, PPI, National Day CIMB 2Q, Kossan 2Q Dev 2Q, Prestariang Oriental 2Q, Tan conference call, Sime Darby 4Q & 2Q, Carlsberg 2Q & Chong 2Q & briefing Media Prima 2Q, briefing, Axiata 2Q, briefing, UMW 2Q, Ta MyEG 4Q, TM 2Q, Genting Group 2Q, Ann 2Q, Supermax Magnum 2Q, FGV DRB 2Q 2Q 2Q
Source: Company, BNM, DOS, CIMB estimates
SOURCES: Company, BNM, DOS, CIMB estimates
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Corporate Actions September 2013
SUN MON TUE WED THU FRI SAT
1 2 3 4 5 6 7 MPC External Reserves, External Trade
8 9 10 11 12 13 14 IPI, Manufacturing Sales, Astro 2Q
15 16 17 18 19 20 21 Malaysia Day CPI
22 23 24 25 26 27 28 External Reserves SP Setia 3Q
29 30 Money Supply, PPI
Source: Company, BNM, DOS, CIMB estimates
SOURCES: Company, BNM, DOS, CIMB estimates
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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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Daybreak Malaysia August 19, 2013
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