On The Platter
TIME dotCOM (FV RM0.87 – BUY) Corporate News Flash: Full
Speed Ahead
Last Friday, Time dotCom (TDC) announced that the High Court
of Malaya had granted its approval for TDC‟s proposals to conduct: (i) a
capital restructuring, and (ii) a capital repayment of RM0.02/share. We view
the approval by the High Court positively, in the run-up to the
much-anticipated acquisition of Global Transit
entities and AIMS Group, which is slated to be completed by 2HFY12. With
their inclusion into TDC‟s current business structure, we expect
the new enlarged entity to leverage on each other‟s strengths to provide
a more holistic one-stop solution to their wholesale customers since the
enlarged group would have an extensive
regional footprint with connectivity from Asia all the way to the US. We think
that with the multiple proposals in the pipeline, there may be a rerating of
the stock especially when the operations of the acquirees are consolidated
together with TDC‟s later during the year. We are reiterating our BUY recommendation
on the company at a fair value (FV) of RM0.87 based on a sum-of-theparts
valuation.
BANGKOK BANK (FV
THB206.3 – BUY) 1QFY12 Results Review: On Solid Ground
MEDIA SECTOR UPDATE
(OVERWEIGHT): 1QCY12 Adex: All Well
Within Expectations
AIR ASIA (FV
RM4.57 – BUY) Corporate News Flash: Extending Agreement With Tune Insurance
CHONGQING IRON &
STEEL (FV UNDER REVIEW) Results Review:
Narrowing Losses in 1Q
Market Review
Heads south. The FBM KLCI was down 4.77 pts to close at
1591.85. News over the weekend include:
the consumer price index (CPI) for March increased 2.1% y-o-y to 104.5, AirAsia
Bhd enters into distribution and call
option agreements with Tune Ins Holdings
SB and Tune Money SB in relation to the provision of insurance products to AirAsia
customers as well as the right to purchase Tune Ins shares, Ajiya Bhd invests RM30m
to set up a safety glass processing plant in Thailand and total advertising expenditure in the country
slipped 0.9% y-o-y to RM856.2m according to Nielsen. Meanwhile, the joint
venture of MMC Corp Bhd and Gamuda Bhd has accepted the RM8.8bn contract for
the underground works package for the
Klang Valley Mass Rapid Transit and Bank Negara‟s international reserves
totalled RM416.6bn as at 13 April 2012. Finally, US markets closed mix while
the crude oil price closed higher last
Friday. The price of crude oil edged up by USD1.21 to close at
USD103.78/barrel.
MEDIA HIGHLIGHTS
RRI land tender out
soon
The tender for the re-development of the 926ha out of the
1,215ha Rubber Research Institute (RRI) Malaysia land in Sungai Buloh, that is
now controlled by Kwasa Land SB is expected to be called by the third or fourth
quarter of this year, sources said. The new developments would give the RRI
land a huge physical and economic boost that would lift the land value of the
area. The tenders were supposed to be out by June but because this development
required considerable scrutiny and strategizing, it might take a little longer.
(StarBiz)
Petronas bags
Singapore, Indonesia gas deals
Petroliam Nasional (Petronas) made a major coup in the past
two weeks, securing two gas supply deals in Singapore and Indonesia. In the
latest deal, Petronas signed a gas sales
agreement with Keppel Energy, a subsidiary of Singapore-listed Keppel Corp to
supply 43m standard cubic feet per day of natural gas to the latter, a deal
which is believed to be worth USD2.2bn (RM6.74bn). (BT)
Redeveloping Old
Klang Road
Far East Organization, Singapore‟s largest private
developer, plans to redevelop a commercial site in Old Klang Road, here, into
an integrated lifestyle mixed development in three years. Chief operating
officer, Chia Boon Kuah said the group had commenced a feasibility study on the supply and demand
situation and the best product mix for the area. The group is considering
high-rise condominiums targeting the upper-middle income group, and retail
components. (BT)
AirAsia signs
insurance distribution agreement
AirAsia Bhd has entered into a distribution agreement with
Tune Ins Holdings SB, which will see the latter provide insurance products to
the company‟s customers, and a call option agreement with Tune Ins and Tune Money
SB for the right to purchase shares in Tune Ins. The agreement would help
improve performance of the travel insurance business and reduce costs, said the
company. (Malaysian Reserve)
MAS to set up JV
training school in Hyderabad
Malaysian Airline
System Bhd‟s (MAS) engineering and maintenance unit expects to expand its
training programme for licensed aircraft engineers and technicians by setting
up a training school in Hyderabad, India, under its joint-venture project with
GMR Hyderabad International Airport. The move is expected to help the national
flag carrier to generate more revenue and meet the demand for well-trained
aircraft maintenance facility personnel, MAS senior vice president, engineering
and maintenance, Subang, Khairuddin Hamzah said. (Malaysian Reserve)
ECONOMIC
HIGHLIGHTS
Malaysia: CPI up
moderately on food and non-food items
Malaysia‟s March CPI didn‟t bear surprises, with a moderate
increase of 2.1% to 104.5 y-o-y. The index for food and non-alcoholic beverages and non-food showed increases of
2.9% and 1.7% y-o-y respectively for March. The CPI remained unchanged at 104.5
m-o-m. The CPI for 1Q2012, meanwhile, rose 2.3% y-o-y. All main groups advanced
with the exception of communication, clothing and footwear. Food and
non-alcoholic beverages, in particular, rose 3.6%. (StarBiz) Please see
accompanying report
Indonesia: S&P
sees policy slippages as it considers rating
Indonesia‟s push to lure investment is at risk from “policy
slippages” such as the failure to cut fuel subsidies, said Standard &
Poor‟s, the only company with a non-investment-grade rating for the Southeast
Asian nation. If the government‟s subsidy spending alters the fiscal outcome or
markedly deteriorates the quality of expenditure or if policy measures deter
fresh foreign direct investment, then the ratings could stabilize at the
current level, according to S&P. Indonesian lawmakers last month rejected
the government‟s proposal for a 33% increase in subsidized-fuel prices from 1
April, instead allowing it to raise rates only if the Indonesia Crude Price
exceeds the state budgetary assumption of USD105 a barrel by 15% over a
six-month period. (Bloomberg)
Japan: Lacking fiscal
plan may be deflation cause
Japan‟s absence of “concrete reform plans” for the nation‟s
finances may be contributing to deflation and sluggish economic growth by
discouraging spending by the public on concerns over future fiscal
developments, central bank Governor Masaaki Shirakawa said. Shirakawa has
pledged to extend “powerful” easing until a 1% price goal is in sight and his
policy board next meets on 27 April. The nation‟s borrowings will exceed JPY1,000trn
(USD12.4trn) for the first time in this fiscal year, the Finance Ministry
projects, while the OECD predicts Japan‟s public debt will reach 219% of GDP.
(Bloomberg)
Japan: Loan demand
rising a boost for recovery
Demand for loans from Japanese companies, households, and
local governments rose in the first quarter as the nation‟s economy rebounded from a contraction in 2011. An
index showing companies‟ demand climbed to 6 from minus 2 in the previous three
months, while gauges for local governments and households jumped to 7 from
zero. The figure adds to evidence that Japan is recovering from last year‟s
earthquake, tsunami and nuclear disaster. The Bank of Japan‟s setting of a 1%
inflation target and expansion of its asset-purchase program by JPY10trn
(USD122bn) in February caused the yen to weaken, helping exporters. (Bloomberg)
EU: Governments urged
to fix crisis as G-20 warns of rising stress
Europe‟s governments were told the onus for fixing their
debt woes lies with them as the Group of 20 warned the two-year crisis still
threatens global growth. Canada and Australia joined the IMF and US in pressing
Europe to intensify efforts to quell the turmoil as it spreads to Spain. The
G-20 cited “the situation in Europe” first in a list of drags on the world
economy. (Bloomberg)
UK: March retail
sales surge on warm weather
UK retail sales rose at the fastest pace for more than a
year last month as the warmest March for half a century boosted purchases of
clothing and gardening products and panic buying lifted auto-fuel demand. Sales
including auto fuel gained 1.8% from February, when they fell 0.8%. The data
add to evidence that the economy returned to growth in the first quarter,
though the outlook remains fragile as inflation outpaces wages, continuing the squeeze
on household budgets. Sales were boosted by the warmest March since 1957,
increasing demand for clothing and footwear and spending at garden centers.
Fuel sales rose 4.9% from February. Sales at non-food stores rose 3%, with
clothing sales climbing 2.3% and purchases at department stores increasing
1.6%. (Bloomberg)
US: Consumer spending
probably paced growth
The biggest gain in consumer spending in a year probably
helped the US economy keep expanding in the first quarter even as fuel costs
climbed. GDP is expected to rise at a 2.5% annual rate after advancing 3% in
the previous three months. The Commerce Department will release the figure on
27 April. Consumer purchases that account for about 70% of the economy climbed
by the most since the end of 2010, the survey of economists showed. Job
creation and warmer winter weather helped Americans overcome higher prices at
the gas pump as auto sales powered ahead and retailers enjoyed more foot traffic.
At the same time, the pace of growth may not be enough to convince Federal Reserve policy makers
meeting this week to stray from their plan to keep borrowing costs low through
2014. (Bloomberg)
Source: OSK188
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