Maybank Research Highlights - 14 Aug 2014

Author: kltrader   |   Publish date: Thu, 14 Aug 09:27

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Technicals

Rebound may be gaining momentum The FBMKLCI rose 7.65 points to 1,858.04 yesterday, while the FBMEMAS and FBM100 also closed higher by 54.44 points and 51.69 points, respectively. We recommend a “Range Trading” stance for the index.  Trading idea is a Short-Term Buy on IBHD with upside target areas at MYR2.25 & MYR2.40. Stop loss is at MYR1.79.

Other Local News

CIMB: Nazir upbeat on merger with RHBcap, MBSB. On concerns raised by shareholders, Nazir said to wait for the proposal before taking a position. On the other hand, although there is less attention on expansion plans in markets like the Philippines, Nazir mentioned that it will still go on. Meanwhile, he said the banking industry expects loans growth to grow at a slower 8-9% pace. (Source: Business Times) Gamuda: RAM Rating sees Gamuda debt load rising as projects increase. RAM expects Gamuda’s debt load to increase substantially over the next three years as it would need to finance its property and construction operations. However, its balance sheet is envisaged to remain healthy with gearing of about 0.6 times and adequate funds from operations (FFO) debt coverage of between 0.15 and 0.18 times, it said, adding this was before taking into consideration the effects from the sale of SPLASH. (Source: The Star) Uzma: Eyes O&G solution services contracts.  Uzma’s unit Uzma Engineering Sdn Bhd (UESB) has teamed up with information management firm Smart Core Technologies Sdn Bhd (STSB) to provide integrated solution services in the O&G sector. UESB will form a JV with STSB, (60:40). UESB will be responsible for business development and marketing support while STSB will provide the technical know-how. (Source: The Edge Financial Daily) Oil & Gas: Petronas reports stronger performance. It recorded higher sales and production. Q2FY14 net profit rose 38% to MYR21.1b, but the group has issued a profit warning for the next six months due to potentially weaker crude oil prices in the second half. (Source: Business Times)  Automotive: Perodua Axia open for bookings at 180 outlets. Perodua Axia is the first energy-efficient vehicle to be launched after the National Automotive Policy (NAP) 2014. It has a tentative starting price of MYR24,900. Axia is the next-generation Perodua model that is produced via the company’s modern and ecologically-friendly new manufacturing plant. Among the key features of the plant include a water-based paint formula, which is less abrasive compared with the solvent-based paints it currently uses. The high level of automation also improves quality while at the same time reduces cost. (Source: Business Times)

Outside Malaysia

U.S: Retail sales little changed in July as wages lag behind. Purchases were little changed, the weakest performance in six months, after a 0.2% MoM advance in June, the Commerce Department said. Gains in sales of clothing, groceries and personal-care goods were offset by declines at department, electronics and furniture stores. (Source: Bloomberg) Spain: Consumer prices fell at the fastest pace since the depths of the creditcrunch in 2009 as falling wages curbed the pricing power of retailers. Spanish prices dropped 0.4% YoY as measured by a harmonized European Union method. Prices slid 1.5% MoM on the month while core inflation, which excludes energy and fresh food prices, was flat. (Source: Bloomberg) China: Industrial output and fixed-asset investment growth unexpectedly slowed last month, putting a recovery at risk as the government copes with a property slump and rising bad loans. Factory production rose 9% YoY, the National Bureau of Statistics said, compared with June's 9.2% YoY pace. Fixed-asset investment increased 17% YoY in the January-July period and retail sales gained a less-than-projected 12.2% YoY last month. (Source: Bloomberg) China: Credit gauge plunges in July 2014. Aggregate financing was CNY 273.1b (USD 44.3b) in July, the central bank said, China's broadest measure of new credit plunged to the lowest since the global financial crisis, adding risks to growth as the government grapples with a property slump. (Source: Bloomberg) Indonesia: Ban on ore exports will remain in place under the next governmentas the curbs spur as much as USD 18b in investment in processing plants by 2017, said the Energy and Mineral Resources Ministry. Mostly Chinese investors are planning at least 64 facilities to process nickel, bauxite and other metals, R. Sukhyar, director general of mineral and coal, said in an interview. Investments reached USD 4.9b so far this year, said Sukhyar, who'll keep his post in the new administration. (Source: Bloomberg)