On The Platter
AUTOMOTIVE (NEUTRAL) Sector News Flash: Tighter Lending Not
To Blame TIV plunged in Jan 2012 on slower business activities in a month
shortened by fewer working days due to the Lunar New Year holidays. While the
tighter lending rules have dampened vehicle sales, we expect the impact to be
quite manageable as banks and dealers adapt to the situation. Given that we
have no SELLs in our auto coverage, we upgrade our sector call from UNDERWEIGHT
to NEUTRAL, with UMW as our top pick. We are still cautious on the macro
picture though, as the demand upside would be marginal since the replacement
cycle for new vehicles - a potential
sales driver - has peaked and upcoming
models may not be exciting enough to spur TIV amid deteriorating consumer
sentiment.
TRANSPORT
(OVERWEIGHT) Sector News Flash: Qantas Deal Fails to Take Off
Market Review
Range bound trading. The
FBM KLCI closed marginally lower at 1,579.00 pts
last Friday, for a week-on-week loss of 4.78 pts, or 0.30%. Despite some
foreign interest in the market, profit taking had offset the
earlier gains. The key market
news over the weekend are MAS and Qantas call off talks on new premium
airline, Datuk Ajit Ranjit Singh made new SC chairman, Cosway and Eng Kah set
up a 70:30 JV to build a plant in China to manufacture personal care plus
household products, Ho Wah denies Yunnan buying its mining operation, AirAsia X
may face penalty if it ends flights to Christchurch, Perwaja extends deadline
for RCULs application to 16 March and PFCE has asked for trading suspension
pending an acquisition announcement. Last week, US
stocks rose, capping the fourth straight weekly rally for the S&P
500 Index, after a government report showed
stronger-than-forecast payroll growth bolstered optimism in the world’s
largest economy. The default in Greece
was shrugged off as a non-incident.
Therefore, we expect the local market
to trend higher given the positive
domestic and external sentiments
MEDIA HIGHLIGHTS
Datuk Seri Shahrizat leaving
as Women, Family and Community Development Minister
Datuk Seri Shahrizat Abdul Jalil has announced that she will
step down as minister when her senatorship ends on 8 Apr. UMNO leaders,
including its president Datuk Seri Najib Tun Razak, welcomed her decision,
saying it was an appropriate thing to do. Wanita UMNO leaders lamented that
Shahrizat’s resignation was a big loss but were grateful that she was still
their chief. (The Star)
RM139bn boost for
Johor
A total of 59 projects are expected to bring in RM139.3bn in
investments by 2020 and create 68,000 job opportunities in Johor, said Prime
Minister Datuk Seri Najib Tun Razak. He noted that the projects, under the Economic Transformation Programme (ETP),
would not only change Iskandar Malaysia’s landscape but also Pangerang in the
South East and Mersing in the North East. The 27 entry point projects (EPP)
would cover the education, tourism and the oil and gas sectors while the 32
Quality Living Projects under the Johor Baru transformation plan would cover
safety and security, improvements in living standards in the city and also its road
and transport systems. (The Star)Qantas plan in jeopardy as MAS talks fail on
trade terms Qantas Airways Ltd’s plans to set up a full-service carrier in Asia
to reverse losses on international routes have been set back after talks with
Malaysian Airline System Bhd collapsed. The companies couldn’t agree on commercial
terms, the Sydney-based airline said in a statement last Friday. The company
said it will examine other opportunities for a venture in Asia involving
minimal capital. (Malaysian Reserve)
Please see accompanying report
Eversendai has bid
for RM800m worth of jobs locally
Eversendai Corp Bhd has another RM800m worth of jobs that it
has bid for in Malaysia, which includes some work for the new MRT line. Fresh
from its Tanjung Bin project win, group managing director Datuk AK Nathan said
of the RM12bn it has bid for, about 10% is for businesses in Malaysia while the
rest are mainly in the Middle East. He added that financing for its projects
would mainly be via banks. (BT)
Eng Kah moves into
China with Cosway
Eng Kah Corp Bhd, one of the largest contract manufacturers
for personal care and household products in the country, is banking on a joint
venture partner Cosway Corp Ltd’s aggressive expansion in China to further
boost its bottom line. The two companies, Cosway and Eng Kah, via a 70:30 joint
venture company, have set up a plant in
China to manufacture personal care and household products for Cosway’s stores
there. (Financial Daily)
DRB-Hicom, VW target
40% local content in 12-18 months
Volkswagen AG and DRB-Hicom are targeting at localizing 40%
of the automotive components in the next 12 to 18 months, said Dr Christof
Spathelf, senior vice-president, group manufacturing overseas of Volkswagen AG.
The Passat 1.8 TSI is the first of a few
Volkwagen vehicles to be assembled at the DRB-Hicom Automotive Complex
in Pekan and the group is currently investigating the potential export of
Passat to other countries of Asean. (Financial Daily)
Source: OSK188
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