Friday, 27 April 2012

OSK188 - 27 April 2012: DAILY RESEARCH REPORT


On The Platter
AEON (FV RM8.53 – NEUTRAL) Company Update: Hello AEON, Bye-bye Jusco
AEON unveiled its new brand name „AEON‟ and tagline „AEON Enriching Your Lifestyle‟, superseding the „Jusco‟ brand that most Malaysians have grown accustomed to over the past 28 years The rebranding exercise will take place over the next two years, with the ultimate aim of embracing one brand name for all its stores and shopping centres on a global scale. Moving forward, the company plans to open another outlet in Manjung, Perak after the grand opening of the Ipoh Station 18 mall lately. Maintain NEUTRAL with a FV of RM8.53 given the limited upside potential for the share price.

CIMB (FV RM8.53 – BUY) Company Update: CIMB Niaga Results Beat Estimates

AIRASIA (FV RM4.57 – BUY) Company Update: 1Q Stats: Looking Good

MAHB (FV RM7.53 – BUY) 1QFY12 Results Review: A Good Start to 2012

MPI (FV RM3.64 – TRADING BUY) 9MFY12 Results Review: Better Outlook in 2H


Market Review
Key index gains but caution linger. The FBM KLCI inched up 0.34 pts to 1,579.69. However, the market sentiment was subdued with losers leading gainers by 453 to 253 while 321 counters remained flat and 515 others untraded. Among the key market news today include, Tan Sri Ananda Krishnan is  said to pare down  his  15% stake in Bumi Armada, Pengerang Independent Terminal SB to set up crude oil storage terminals, TA Global to buy Thai hotel for RM275.6m, DRB-Hicom gets 98.6% of Proton shares, AirAsia dismisses “not using KLIA2” talks, CIMB Niaga 1Q profit jumps 29% and Malaysian Pacific Industries posts net loss on weak demand. Overnight, U.S. stocks extended gains into a third day as better-than-expected data on housing and an upbeat forecast from Citrix Systems Inc. helped lift the S&P 500 Index briefly  above 1,400 for the first time in three weeks. The DJIA also added 113.90 pts, to 13,204.62 thus possibly helping to warm up sentiment across the regional bourses today.

MEDIA HIGHLIGHTS
US stocks rise after home sales increase
US stocks rose for a third day as pending home sales increased more than forecast and technology companies rallied on better-than-estimated earnings. Metals led commodities higher, while 10-year Treasury yields approached a two-month low. The Dow rose 113.90 to close at 13,204.62 while the S&P 500 Index closed up 0.7% to 1,399.98. The S&P 500 reversed early losses as the National Association of Realtors reported that pending home purchases rose 4.1% to the highest level since April 2010, tempering concern about the economy after an earlier government report showed 388,000 Americans filed jobless claims last week, 13,000 more than the median economist estimate. (Bloomberg)

Ananda pares down stake in Bumi Armada
Tan Sri Ananda Krishnan and his  bumiputera partners will sell roughly 15% of Bumi Armada in private placements to local land foreign institutional investors in a deal that will raise close to RM2bn and cut Ananda and his partners‟ stake to 55%. The shares would be placed out at a discount of between 3%-6% of the RM4.22 current price. The planned placement represents the latest in a series of asset sales involving Ananda‟s companies. Last month, Anada sold his power generation business to 1MDB for RM8.5bn. Sources also said that 1MDB is in talks to buy Ananda‟s satellite operator Measat Global.(Financial Daily)

Felda Global to offer 2.19bn shares in IPO
Felda Global Ventures Holdings (FGVH) will see up to 2.19bn shares being offered under its IPO scheduled for end-May or early June. The IPO comprises an offer for sale by Felda of up to 1.21bn shares and a public issue of up to 980m shares. FGVH is in the  upstream and downstream palm oil business and other agribusinesses encompassing oil palm and rubber plantation products, soybean and canola products, oleochemical and sugar products. 49%-owned associate Felda Holdings, meanwhile, is the largest CPO producer in the world. FGVH also has MSM under its stable. (StarBiz)

KLIA passenger traffic hit by MAS, AirAsia route cuts
KLIA underperformed regional airports in terms of passenger movement in the first quarter of 2012, due to route cuts by Malaysia Airlines and AirAsia. KLIA saw passenger movement grow by 6.9% for the quarter under review compared with Changi‟s 12.8% growth and Jakarta‟s 18.4% jump. Last year, MAS announced route cuts to at least 10 international destinations as part of efforts to rationalise its network and return to profitability, (BT)

Big spin-offs from Pengerang O&G project
The RM5bn Pengerang Independent Deepwater Petroleum Terminal (PIDPT) project, which will be completed about four years from now, is targeted to contribute RM19.8bn in gross national income and create 14,100 jobs by 2020. It will complement Petronas' Refinery and Petrochemicals Integrated Development (Rapid) complex with its crude oil refining capacity. The project will start next year and is scheduled for completion in 2016. The Pengerang terminal will be the second largest of its kind in Asia, with close to 1.3 million cubic m in capacity. (BT)


ECONOMIC HIGHLIGHTS
Malaysia: Najib spending spree risks credit downgrade
Malaysian Prime Minister Najib Razak's record spending binge, aimed at shoring up support before elections that could be called as early as next month, may risk the country's first credit-rating downgrade since the Asian financial crisis 15 years ago. Standard and Poor's "might have to think about" a potential cut of Malaysia's Arating in a few years unless the next government enacts measures to boost revenue and reduce subsidies after the vote, Mr Takahira Ogawa, an analyst at the rating company, said. (Bloomberg)

Singapore: Production falls on drugs, electronics
Singapore's industrial production fell for the second time in three months last month as electronics and pharmaceutical manufacturers decreased output. Manufacturing fell 3.4% y-o-y after a revised 11.8% gain in February. Economists had expected a 5.8% decline. From the previous month, output climbed a seasonally adjusted 2.7%. (Bloomberg)

Thailand: Exports down in March on continued Europe weakness
Thailand‟s exports fell 6.5% y-o-y in March, the fourth decline in five months, as factories struggled to resume full production after last year's flood crisis. Shipments fell in nearly all product items affected by last year's floods, with March exports valued at USD19.9bn. In particular, shipments to Europe fell 15.3% and to Japan, 3.6%. Exports to the US meanwhile rose 5.3% and to China 1.1%. (Bloomberg)

Spain: Ratings cut by S&P on deficit, bank bailout concern
Spain‟s sovereign credit rating was cut to BBB+ from A by Standard & Poor‟s on concern the nation will have to provide further fiscal support to the banking sector as the economy contracts. Its short-term rating was lowered to A-2 from A-1, while the outlook on the long-term rating is negative. (Bloomberg)

Italy: Business confidence drops to lowest in two years
Italian business confidence unexpectedly fell to the lowest level in more than two years in April amid concerns that the country‟s fourth recession in a decade may deepen. The manufacturing-sentiment index dropped to 89.5 from a revised 91.1 in March. Economists had predicted a reading of 92.1. (Bloomberg)

EU: Spanish, Italian bond yields climb after confidence data
Spanish and Italian bond yields climbed in light volumes Thursday, as demand for lower-rated euro-zone government debt was curbed following a survey that showed economic confidence in Europe was dwindling. The 10-year Spanish bond yield rose by seven basis points to 5.84% while the corresponding Italian bond yield increased by two basis points to 5.65%, according to Tradeweb. The weaker backdrop could pose a challenge to an Italian bond auction on Friday for up to EUR6.25bn. (Bloomberg)

US: Cooling labor market takes a toll on confidence
More Americans than forecast filed applications for unemployment benefits last week and consumer confidence declined by the most in a year, signaling that a cooling labor market may restrain household spending. Jobless claims fell to 388,000 from a revised 389,000 the prior week that was the highest since early January while the Bloomberg Consumer Comfort Index declined to minus 35.8 from minus 31.4 the previous week. (Bloomberg)

US: Pending sales of existing homes increased 4.1% in March
Signed contracts to buy US homes rose more than forecast in March as low interest rates drew buyers back into the market. The index of pending home purchases rose 4.1% to 101.4, the highest level since April 2010, after a 0.4% gain in February that was revised from a previously estimated 0.5% drop, the National Association of Realtors reported. The median forecast of 43 economists surveyed by Bloomberg News called for a 1% rise in the measure, which tracks contracts on previously owned homes. (Bloomberg)

Source: OSK188

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