On The Platter
EDUCATION
(OVERWEIGHT) Sector Update: Laying The Path of Enlightenment
To determine the long-term sustainability of the sector, we
take a look at the latest progress of some of the government initiatives under
the ETP as well as the current situation for education providers in Malaysia.
We also make some brief comparisons with developed economies to gauge the
underlying growth potential for the local education sector as Malaysia aspires
to become a high-income nation by 2020. All in, we maintain OVERWEIGHT on the
sector with SEG International (BUY, FV: RM2.17) and Prestariang (BUY, FV:
RM1.48) being our top buys.
MUDAJYA (FV RM2.66 –
NEUTRAL) Corporate News Flash: Uncertainties Over Coal Supply
Market Review
Cautious sentiment expected. The FBM KLCI index closed a touch lower
yesterday, although the number of gainers outnumbered losers by a small margin.
Among the key corporate headlines for today
are: CIMB inking a deal soon to acquire a 60% stake in Philippines’ Bank
of Commerce (BOC) and the government reportedly imposing a no layoff condition
for the takeover of Penang Port. Overnight, the Dow muscled itself above the
13,000 mark on the back of increased appetite for Spanish bonds and heady gains
made by technology stocks, with Apple reversing its 5-day losing streak. While
there is some upside bias for the FBM
KLCI, we think that the prevailing cautious sentiment should lead
to further range-bound trading in the short term.
MEDIA HIGHLIGHTS
US stocks post
biggest rally in one month amid global optimism
US stocks rose, giving benchmark indexes the biggest rallies
in a month, as higher forecasts from the International Monetary Fund and gains
in Spanish bonds overshadowed declines in housing starts and factory production.
The Standard & Poor’s 500 Index rose 1.6% to 1,390.78, after falling 1.3%
in two days. The Dow Jones Industrial Average added 194.13 pts, or 1.5%, to
13,115.54. The Nasdaq Composite Index climbed 1.8% to 3,042.82. About 6bn
shares changed hands on US exchanges, or 11% below the three-month average. (Bloomberg)
Malaysia imposes
‘no-layoff’ condition for port takeover?
The Federal government is understood to have imposed a
condition, with regards to Penang Port SB’s takeover – that any party planning
to take over the port operator must not lay off any of its workforce for a
minimum period of five years. “The condition is non-negotiable. Any parties
which intend to take over the port, must comply with the condition, even before
they present their financial plan,” said a source. BT was told that at least
two parties are interested in taking over Penang Port. “One is a party led by a
China-owned entity, while the other is MMC Corp Bhd. But, to date, no decision
has been made as the due diligence process is still being carried out,” said the
source. Penang Port is 100% owned by the Minister of Finance Inc. (BT)
Wijaya in talks to
start logging in Papua
Wijaya Baru Global clarified yesterday that it is
negotiating with interested parties to start timber extraction and thereafter
plant oil palm in Papua Province, Indonesia. Tan Sri Ling Chiong Ho’s Sarawak
Oil Palms is also reportedly proposing a JV to help plant the felled jungle
with oil palm trees, a venture that could eventually cost some RM306m.
(Financial Daily)
IGB plans to raise
RM700m from retail property trust
IGB Corp, the third largest property developer by market
value, plans to raise about RM700m by
selling shares in a retail property trust, said two people familiar with the
matter. IGB’s trust would initially hold two Kuala Lumpur shopping malls – the Garden’s Mall and Mid Valley
Megamall – which IGB would acquire from
its subsidiary KrisAssets Holdings. (StarBiz)
Ingens confirms
bagging RM125m job
Ingenuity Solutions (Ingens) has obtained a RM125m contract
to be the sole distributor of WiMAX modems for broadband player Packet One
Networks (M) SB (P1). The company said it would supply P1 4G WiMAX modems to
858 P1 authorized resellers throughout Malaysia. Prior to this agreement, P1
undertook the distribution of its 4G modems internally. (StarBiz)
ECONOMIC
HIGHLIGHTS
MIER revises upwards
growth outlook to 4.2%
The Malaysian Institute of Economic Research (MIER) has
revised upwards its growth outlook this year, from 3.7% to 4.2%, on improving
consumer and business confidence levels in the first quarter. Executive
director Dr Zakariah Abdul Rasheed said improved production and sales numbers
are expected to follow suit in the second quarter. (BT)
India: Cuts key rates
as growth risks trump inflation
India slashed its benchmark interest rate by a
greater-than-forecast half a percentage point, seeking to bolster growth with
the first reduction since 2009. Inflation might limit the room for further
cuts, the central bank said. Governor Duvvuri Subbarao lowered the repurchase
rate to 8% from 8.5%, the Reserve Bank of India said. The outcome was predicted
by three of 25 economists in a Bloomberg
News survey. Seventeen expected a 0.25 percentage-point cut and the rest
predicted no change. (Bloomberg)
Japan: Will provide
USD60bn to expand IMF crisis funding
Japan said it will provide USD60bn to the International Monetary
Fund’s effort to expand its resources and shield the global economy against any
deepening of Europe’s debt crisis. Finance Minister Jun Azumi unveiled the commitment
in speaking to reporters in Tokyo before semiannual meetings of the IMF and
World Bank in Washington 20-22 April. Azumi said he hopes for an early
agreement among Group of 20 members, who will also gather in Washington, on
contributions to the IMF. (Bloomberg)
EU: Euro-area March
inflation rate exceeds estimate on energy
European consumer prices increased at a faster pace than
initially estimated in March, driven by energy costs, complicating the European
Central Bank’s task as it tries to push the inflation rate below its 2% limit.
Inflation in the 17-nation euro region held at 2.7% for a fourth month, the
European Union’s statistics office in Luxembourg said. That’s higher than the
estimate of 2.6% published on 30 March. (Bloomberg)
US: Factories cool
for first time in four months
Production at US factories dropped in March for the first
time in four months as the industry cooled following the strongest surge in
three decades. Manufacturing, which makes up about 75% of industrial output,
decreased 0.2% last month as appliance and furniture makers cut back, data from
the Federal Reserve showed. The decline followed a revised 3.4% gain from
December through February that marked the biggest three-month jump since March
1984. (Bloomberg)
US: Housing starts in
US unexpectedly fall to five-month low
Builders began work on fewer homes than forecast in March,
signalling a sustained industry recovery will take time to get underway.
Housing starts dropped 5.8% to a 654,000 annual rate, less than the lowest
estimate of economists surveyed by Bloomberg News and the least since October,
Commerce Department figures showed. The slump was led by the volatile
multifamily category, which at the same time showed a jump in permits, a proxy
for future construction. (Bloomberg)
IMF Raises Global
Forecast for First Time Since Early 2011
The International Monetary Fund raised its global growth
forecast for the first time in more than a year, with the US boosting the
outlook while recent improvements remain “very fragile.” The world economy will
expand 3.5% this year, compared with a
January projection of 3.3%, the Washington-based IMF said in its World Economic
Outlook. It sees growth of 4.1% in 2013, up from 4.0%. It raised its forecasts
for the US to gains of 2.1% this year and 2.4% in 2013. (Bloomberg)
Source: OSK188
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