Monday, 9 April 2012

OSK188 - 9 April 2012: DAILY RESEARCH REPORT


On The Platter
GAMUDA (FV: RM4.58) Company Update: MRT Works Ready to Roll To get a first-hand look at the RM50bn KV MRT  - the Malaysian Government’s largest ever infrastructure project - we dropped in at one of the 5 KV MRT Information Centres in town, and took a bus to trace the journey from Sungai Buloh to Semantan, which is part of the Sungai Buloh-Kajang (SBK) line. We are positive on the potential rollout of the project and see the award of contracts accelerate in the coming months, with MMCGamuda assuming the role as the caretaker of this line’s elevated portion. Maintain BUY on Gamuda, at an unchanged FV of RM4.58, based on our SOP-based valuation.

EITA (FV: RM0.81 – NOT RATED) IPO Note: Elevating Its Profile

MMC CORP (FV: RM3.70) Company Update: Along The MRT Trail

TELEKOM MALAYSIA (FV: RM5.70) Corporate News Flash: Super Speed Me


Market Review
Cautious trading. The FBM KLCI edged  up more than  5 pts to 1598.87 last Friday on the back of blue chip support with gainers thumping losers almost 2-to-1. In the news are: the  Government, which says it is still keen on the high speed rail project linking Kuala Lumpur to Singapore, and  Sime Darby plans  its  11th township north of  its  existing township in Denai Alam in Selangor. With the Dow closing a tad lower ahead of the weekend on poor US jobs data and the local bourse digesting the new high  charted last week, a further pullback may be in the offing this week for the FBM KLCI.


MEDIA HIGHLIGHTS
Perodua drafting roadmap for used-car business
Second national car company Perusahaan Otomobil Kedua Sdn Bhd (Perodua) hopes to establish an organization structure for its used-car business by middle for the year, its chief said. The company is venturing into the used-car business to expand its revenue base and provide a platform for existing and new customers so that they can trade in their Perodua cars or other makes, for its new models. Perodua entered the used-car business in August 2008, but ceased operations more than a year later due to low sales volume. (BT)

Govt still keen on high-speed rail link
The Government is still keen on the high-speed rail project linking Kuala Lumpur and Singapore, the Land Public Transport Commission (SPAD) said. SPAD chief executive officer Mohd Nur Ismal Mohamed Kamal, however, stressed that it will depend on the outcome of a feasibility study, which started last month and is expected to be completed in 6 to 12 months’ time. (BT)

S P Setia enters Indonesia in regional expansion
S P Setia  continues its regional expansion with the opening of a representative office in Jakarta, giving the developer a foothold in the archipelago. Jakarta is the fifth overseas destination the developer has ventured into after Vietnam, Singapore, Australia and China. S P Setia president and CEO Tan Sri Liew Kee Sin said S P Setia hopes to be able to directly source Indonesian arts and crafts, building materials and furniture for its projects in the future. (Financial Daily)

Rafique to join Maybank as new group CFO
Former chief financial officer (CFO) of the country’s utility company Tenaga Nasional Bhd (TNB), Mohamed Rafique Merican Mohd Wahiduddin Merican will join the country’s largest banking group, Malayan Banking Bhd (Maybank) as its group chief financial officer (CF) effective 1 Jun. In an exchange filing last Friday, Maybank said he will succeed Datuk Khairussaleh Ramli, 43, who stepped down from his position as  the  bank’s group CFO following his appointment as the president director of PT Bank Internasional Indonesia Tbk, a subsidiary of Maybank in Indonesia. (Malaysian Reserve)

Ekuinas targest 12% minimum return for its investments in education sector
Ekunas Nasional Bhd is looking at a time horizon of between three and five years for its investments in the education sector with a long-term minimum target internal rate of return of 12% per year, according to a spokesperson from the government-linked private equity fund management firm. Its aspirational target for the investments is at 20%. Ekuinas has recently completed a purchase of a 90% stake in Cosmopoint SB for RM246m and has been reportedly eyeing Masterskill Education Group Bhd and Help International Corp Bhd on its plans to create the country’s largest education group. (Malaysian Reserve)

MBSB extends home financing
Malaysia Building Society (MBSB) will start extending home financing facilities to the second generation of property purchasers for its housing project in Sepang, president and CEO Datuk Ahmad Zaini Othman said. The non-bank lender, which does not come under the purview of Bank Negara, said this special financing facility would allow home buyers to stretch monthly home-loan repayments to the kids (second generation) of these home buyers, most of whom are retirees in their 50’s. (StarBiz)


ECONOMIC HIGHLIGHTS
Japan: Bank of Japan seen adding stimulus on nominee rejection
The Bank of Japan may expand  stimulus this month after law makers escalated pressure for extra action by blocking a candidate for the bank’s board and renewing calls for a more “proactive” monetary policy. Parliament’s upper house rejected economist Ryutaro Kono, described as holding  similar views to Governor Masaaki Shirakawa, who says that monetary policy alone cannot solve deflation. The central bank may stand pat at a two-day meeting ending 10 April, preserving ammunition for later in the month, when price projections will show a goal of 1% inflation is not in sight. (Bloomberg)

Canada: Jobs grow most since 2008 as firms add full timers
Canada added the most jobs since September 2008 last month, a gain dominated by full-time positions that revived what had been a stalling labor market in the world’s 10th largest economy. Employment rose by 82,300 following a decline of 2,800 in February, lowering the jobless rate to 7.2% from 7.4%.Employment growth should add to household spending that the Bank of Canada said last month has been rising faster than expected. Fulltime employment in Canada jumped by 70,000 in March while part-time positions grew by 12,400. About 42,600 jobs were created by private companies and 20,900 in the public sector. Average hourly earnings of permanent employees rose 2.5% in March y-o-y, faster than last month’s 2.1%. (Bloomberg)

US: Employment increase in US trails most-pessimistic forecasts
Hiring by American employers trailed the most pessimistic forecasts in March, casting doubt on the strength of the expansion now in its third year. The 120,000 increase in payrolls was the smallest in five months. The data also showed the unemployment rate fell to 8.2% as people left the labor force, while workers put in fewer hours. The figures followed an average 246,000 increase in payrolls in the previous three months. Estimates ranged from increases of 175,000 to 250,000. The March data showed a 34,000 decrease in retail employment. February data, meanwhile, rose a revised 240,000. Employment at service providers increased 89,000 last month, less than half the 211,000 gain in February. Professional and business service payrolls rose 31,000 last month, restrained by a 7,500 drop in temporary hiring. Manufacturing was among the few industries that added more jobs than in February, with a 37,000 increase. (Bloomberg)

US: Jobless claims fell to lowest level in four years
Claims for US unemployment benefits dropped last week to the lowest level in four years. Jobless claims fell 6,000 to 357,000 in the week ended 31 March, the fewest since April 2008. The number of people on unemployment benefit rolls also dropped, while those getting extended payments increased. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.6%. 26 states and territories reported a decline in claims, while 27 reported an increase. (Bloomberg)

US: Consumer credit rose less than forecast in February
US consumer borrowing rose less than forecast in February, restrained by a drop in credit-card debt. Credit increased USD8.7bn, the least in four months, after a revised USD18.6bn gain in  January that was more than initially estimated. Smaller gains in borrowing indicate American households are continuing to pay down debt or are less optimistic about their finances. The Fed’s statistics showed revolving debt, which comprises credit cards, fell USD2.2bn in February after a USD3bn drop a month earlier. Non-revolving debt, including educational loans and borrowing for autos and mobile homes, climbed by USD10.9bn in February, the smallest  gain in four months. (Bloomberg)

Source: OSK188

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