Malaysia Daybreak | 19 March 2013
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REGIONAL DAILY December 26, 2012 MALAYSIA Malaysia Daybreak | 19 March 2013 Charts | Statistics ▌What’s on the Table… —————————————————————————————————————————————————————————————————————— FBMKLCI Index Axis REIT - Proxy for Iskandar's industrial boom 1,700 Axis REIT is the first listed Islamic industrial/office REIT globally. We like the 1,650 stock as it offers exposure to the industrial property boom in Iskandar Malaysia. Management's proactive style means that growth will be driven by acquisitions, 1,600 apart from organic enhancement plans. We initiate coverage with an 1,550 Outperform and a target price based on its DDM value. Rerating catalysts are 1) further yield-accretive asset acquisitions, and 2) upside surprises to rental rates 1,500 post asset enhancement initiatives. Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 Bumi Armada - Red, white and boom! ——————————————————————————— FBMKLCI Bumi Armada's recent participation at our New York conference was 1621.36 -6.28pts -0.39% well-received, and marked the company's second investor event in the US with MAR Futures APR Futures 1617.5 - (-0.49%) 1612.5 - (0.99%) us in six months. Its FPSO order book was again the key focus. Watch this ——————————————————————————— space as the company sails its way up the global rankings. Our target price Gainers Losers Unchanged rises as we now value the stock at 18.9x CY14 P/E, an unchanged 40% premium 218 487 259 ——————————————————————————— over our revised CY13 target market P/E of 13.5x from 13.3x previously. Bumi Turnover Armada’s long-term earnings visibility and a strong FPSO contract pipeline 777.01m shares / RM1489.697m underpin our Outperform call and 40% premium over the market. 3m avg volume traded 1250.03m shares 3m avg value traded RM1595.14m ——————————————————————————— WCT Bhd - A new brick in the 2013 wall Regional Indices FBMKLCI FSSTI JCI SET HSI The RM315m value for the Putrajaya building project that WCT has just 1,621 3,256 4,803 1,592 22,083 clinched is a nice surprise, arising probably from a wider scope of works. ———————————————————————————————— Market Indices Though net profit contribution is minimal, this news supports our expectation Close % chg YTD % chg of strong job award prospects in the medium term. This award does not affect FBMKLCI 1,621.36 (0.4) (4.0) our EPS as it is part of the RM1.5bn-2bn worth of new jobs we have assumed FBM100 10,934.38 (0.6) (3.3) FBMSC 11,797.94 (0.6) 2.8 for FY13 and which we continue to believe is within reach. Our target price FBMMES 3,927.75 (0.9) (6.8) remains pegged to a 40% discount to RNAV. WCT remains a Trading Buy Dow Jones 14,452.06 (0.4) 10.3 NASDAQ 3,237.59 (0.4) 7.2 rather than outperform because of election risks. Potential domestic wins FSSTI 3,256.47 (0.9) 2.8 backed by its RM3.5bn tender book and more land acquisitions could be FTSE-100 6,457.92 (0.5) 9.5 Hang Seng 22,083.36 (2.0) (2.5) catalysts. WCT remains one of our top sector picks. JCI 4,802.83 (0.3) 11.3 KOSPI 1,968.18 (0.9) (1.4) Regional Economic Compass - Spring is coming Nikkei 225 12,220.63 (2.7) 17.6 PCOMP 6,536.18 (1.8) 12.4 SET 1,591.65 (0.4) 14.3 Shanghai 2,240.02 (1.7) (1.3) ▌News of the Day… Taiwan 7,811.34 (1.5) 1.5 —————————————————————————————————————————————————————————————————————— ———————————————————————————————— • WCT awarded RM315m contract by Putrajaya Holdings Top Actives Close % chg Vol. (m) • Public Bank's succession plan is in place COMPUGATES 0.085 (5.6) 94.6 • AirAsia X to be listed in June, delayed from 1Q LUSTER 0.105 0.0 47.1 TEBRAU TEGUH 1.210 8.0 23.8 • MAS projects higher revenue from Penang MALAYAN BANKING 9.040 0.4 19.5 AIRASIA 2.690 (2.9) 14.2 • FGV to expand sugary refinery AXIATA GROUP 6.310 0.2 12.5 • Syed Mokhtar close to acquiring Penang Port INDUSTRONICS 0.605 0.8 10.1 CIMB GROUP 7.060 0.0 10.0 • Hap Seng reduces exposure to Vietnam's car market ———————————————————————————————— • London Biscuits raised RM22m from private placement Economic Statistics Close % chg US$/Euro 1.2945 (0.09) RM/US$ (Spot) 3.1298 (0.04) RM/US$ (12-mth NDF) 3.1927 (0.09) OPR (% ) 2.99 (0.33) BLR (% , CIMB Bank) 6.60 0.00 GOLD ( US$/oz) 1,606 0.02 WTI crude oil US spot (US$/barrel) 93.74 0.31 CPO spot price (RM/tonne) 0.04 2,326 ———————————————————————————————————————— 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 March 19, 2013 Global Economic News… The US NAHB housing market index dipped to 44 in Mar from 46 in Feb, worse than consensus of 47 as home builders blamed lack of available lots and credit. (Bloomberg) The US Senate on Monday inched closer to passage of a bill to fund federal agencies through 30 Sep and avoid a government shutdown at the end of this month when existing money runs out. (Reuters) Cyprus put off for another day a debate on a bank-deposit levy and said its banks would remain closed until Thursday, as the government sought more time to avert a collapse of its banking sector. (WSJ) The eurozone's total trade deficit stood at €3.9bn in Jan (trade surplus of €10.8bn in Dec), as seasonally adjusted exports and imports rose by 2.0% and by 3.1% respectively in Jan as against Dec. (Xinhua) The eurozone told Cyprus to ditch the part of a hugely controversial €5.8bn grab on savings that stung even the smallest of account holders in exchange for a €10bn sovereign bailout deal, according to a statement issued after a conference call. (CNA) Prices of newly built homes in 66 of 70 large and medium-size cities in China rose 1.01% mom on average in Feb, compared with a 0.54% increase in Jan, a development that could give Beijing added reason to clamp down on the fast-heating property market. (WSJ) The Bangko Sentral ng Pilipinas may soon ban foreign funds from being invested in its overnight borrowing facility—a move seen to address risks of the country attracting even bigger volumes of speculative capital from abroad. (Philippine Daily Inquirer) Singapore's non-oil domestic exports declined by 30.6% yoy in Feb, compared to the 0.4% increase in the previous month. Electronic exports plummeted by 27.4% yoy (-5.6% in Jan). (Bloomberg, CNA) Malaysian Economic News… The Employees Provident Fund (EPF) has published the 2013/2014 List of Fund Management Institutions (FMI) and unit trust funds for the EPF Members Investment Scheme (EPF-MIS). The list will be effective for the period of 1 Apr 2013 until 31 Mar 2014, Public Relations General Manager Nik Affendi Jaafar said in a statement Monday. A total of 206 unit trust funds from 25 FMIs are qualified to be offered under the EPF-MIS for the period of 2013/2014 (vs. 218 in 2012/2013). (Bernama) India-Malaysia trade hit a record high of RM41.2bn in 2012, a 7.3% growth over 2011, despite a slowdown in India's economic growth. The all-time high levels were recorded in both imports and exports in 2012. Malaysia's exports to India rose 4.2% to RM29.3bn while imports from India up 15.9% to RM11.8bn. India is Malaysia's 11th top trading partner in the world, an improvement from the 12th ranking in 2011. 2 Daybreak Malaysia March 19, 2013 Malaysia's main export item to India continues to be palm oil (25.2%), followed by electronic and electrical products (19.4%), crude petroleum (17.4%), chemicals and chemical-based products (10.6%) and transport equipment (4.8%). Indian exports to Malaysia comprised refined petroleum products (18%), chemicals and chemical products (16.3%), live animals and meat (8.9%), cereals (6%) and electrical and electronic product (5.2%). (Bernama) PM Datuk Seri Najib Tun Razak will launch the 2012 National Transformation Programme (NTP) Annual Report tonight. The annual report covers the outcome of the initiatives under both the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP). The launch will be telecast "live" from Auditorium Perdana, Angkasapuri. (Bernama) Around 80,000 civil servants in the technical and agriculture sector will have their remuneration schemes upgraded as of 1 July, said Malaysian Technical Services Union president Shuhaimi Othman. The upgrade would encompass technicians under schemes J17 to J29 and agriculture staff from schemes G17 to G29. This had been decided in a meeting with Public Service Department deputy director-general Datuk Farida Mohd Ali last week. The remaining 166,000 civil servants ranked between grades one to 10 were expected to be upgraded later this year, he added. (The Star) Bank Negara Malaysia (BNM) lacks transparency on criteria applied for the issuance of new banking licences and should deploy wider public consultation on proposed policy measures, according to an assessment led by the International Monetary Fund (IMF). BNM also may not have enough specialised risk personnel in view of the increasing sophistication of Malaysian banks' risk management processes and the ongoing implementation of complex regulatory approaches, which are expected to put increased demands on staffing. These are some of the conclusions of the Financial Sector Assessment Programme (FSAP), jointly conducted by the IMF and World Bank last year, on Malaysia.