Maybank Research Highlights - 7 July 2014

Author: kltrader   |   Publish date: Mon, 7 Jul 09:50

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Technicals

Reclaiming new all-time highs The FBM KLCI gained 3.98 points WoW to close at 1,884.91, as some minor buying activities led the index up slightly. With the buying that emerged from 1,860.20, we advise clients to buy at the support areas of 1,860 to 1,884. The resistance levels of 1,886 and 1,892 will see some profit-taking activities. Trading idea is a Short-Term Buy on ULICORP with upside target areas at MYR1.75 & MYR1.84. Stop loss is at MYR1.40.

Other Local News

Sime Darby: Seeds USD500m by listing auto unit. Sime Darby Bhd, the world’s top oil palm planter by landbank size, is seeking to raise about USD500m (MYR1.6b) by listing its automobile unit as early as this year. Sime Darby has invited banks to make a pitch to win the initial public offering (IPO) mandate. (Source: The Edge Financial Daily) Inari: To raise MYR133m via 1-for-8 rights issue. Inari Amertron Bhd proposes to raise up to MYR133.2m via a renounceable rights issue of up to 88.8 million new shares for its expansion and working capital. Inari intends to set aside MYR40m for the expansion of production capacity, including the purchase of land and factories, as well as to expand its existing factories. A further MYR40m would be allocated for the purchase of new equipment and machinery and MYR30.5m for working capital. The remaining proceeds of MYR22.7m will be used for defraying bank borrowings and expenses of the rights and free warrants issue. The 1-for-8 rights issue, at an indicative subscription price of MYR1.50 per share, comes with one free detachable warrant per rights share at an indicative exercise price of MYR2 per warrant. (Source: The Star) Seacera: Plans to go big in construction and property. Its 60%-owned construction outfit SPAZ Sdn Bhd had unbilled contracts worth about MYR250m that could last for three years. The company came under investor radar when it announced that it was a member of a consortium to bid for the superstructure of the multi-billion ringgit Warisan Merdeka. Seacera added that the pre-qualification results for the 118-storey building should be known next month and construction work should start latest by next year, as completion of the project was expected in 2018. (Source: The Star) IPO: Logistics firm Xin Hwa going for IPO. Xin Hwa Holdings Bhd, a logistic service provider that is looking to make its debut ion Bursa Malaysia’s Main Market, plans to use bulk of its IPO proceeds for business expansion. Out of the 75% of IPO proceeds allocated for expansion, Xin Hwa plans to construct a new warehouse in Pasir Gudang, Johor, in view of increasing demand for our warehousing services. (Source: The Edge Financial Daily)

Outside Malaysia

Global: IMF Lagarde hints at forecast cut even as U.S. rebounds. International Monetary Fund Managing Director Christine Lagarde signaled a cut in the institution's global growth forecasts, saying investment is still weak and that risks remain in the U.S. even as its rebound accelerates. "The global economy is gathering speed, though the pace may be a bit less than we previously predicted because the growth potential is lower and investment" spending remains lackluster, Lagarde told the Cercle des Economistes conference in Aix-en-Provence, France. (Source: Bloomberg) Germany: Manufacturing orders decline on Geopolitical risks. Orders, adjusted for seasonal swings and inflation, fell 1.7% MoM from April, when they rose a revised 3.4% MoM, the Economy Ministry in Berlin said. While recent surveys suggest that the pace of Germany's economic expansion is cooling and tensions between Russia and Ukraine have increased uncertainty, the nation remains the driving force for the subdued recovery in the euro area, its largest trading partner. The Bundesbank has said Germany's outlook remains positive and the European Central Bank is relying on unprecedented stimulus to fuel growth and inflation in the 18-nation currency bloc. (Source: Bloomberg) Singapore: Property prices likely to drop again: Finance Minister. Singapore Finance Minister Tharman Shanmugaratnam said he expects property prices to fall further, days after data showed home values in the city-state dropped for a third consecutive quarter. "I don't think the cycle is over," Shanmugaratnam said at a conference hosted by DBS Group Holdings Ltd. in Singapore. "I think further correction would not be unexpected." The Singapore government has taken steps since 2009 to curb speculation in the property market. An index tracking private residential prices in Singapore fell 1.1% to 209.3 points in the three months ended June 30, following a 1.3% decline in the previous three-month period, according to preliminary data released by the Urban Redevelopment Authority on July 1. (Source: Bloomberg)