PP16795/03/2013(031743) Mar-17

Transcription

1 Wednesday, 28 March, 2018 Mar-17 Apr-17 May- 17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Research Team PP16795/03/2013(031743) Corporate News TNB signs solar power purchase deals with six firms DNeX to develop halal park in the Philippines with local partners Sime Darby Engineering told to pay MMHE damages over fabrication yards dispute IOI Properties chairman raises stake as shares hit all-time low MCE secures contracts to supply Proton parts MIDA pushes for more local content in rail jobs Bursa Malaysia Close Chg +/- Chg % YTD Chg (%) FBMKLCI 1, FBMEMAS 13, FBM100 12, FBMEMAS Shariah 13, FBM Hijrah Shariah 14, Volume (m) 2, Value (MYR m) 1, Economic News US seeks China trade moves on autos, financials, chips Trump's Russian expulsions leave Moscow stunned BoE considered bank capital buffer hike but waiting to watch risks Oil briefly hits USD71, with US supply, Middle East in focus Indonesia imposes extra capital requirements on top banks KLCI Performance Regional Indices Commodities (Last Close) KLCI Year-End Target: 1,900 points Close Chg +/- Chg % YTD Chg (%) Close Chg +/- Chg % DJIA 23, Brent Crude (USD/bbl) NASDAQ 7, WTI Crude (USD/bbl) S&P 500 2, CPO (RM/MT) 2, FTSE 100 7, Gold (USD/ounce) 1, Nikkei , Latex (sen/kg) HSI 30, Soybean Oil SHCOMP 3, KOSPI 2, Forex TWSE 10, (per USD) BIMB (YE Forecast) Close Chg +/- Chg % STI 3, MYR JCI 6, JPY SET 1, EUR PSEi 8, SGD

2 Major Rates Daily Participation Market Insight % Participation Bought Sold Net KLIBOR 3-mth 3.69 (%) (MYR m) (MYR m) (MYR m) KLIBOR 6-mth 3.80 Local Insti , , KLIBOR 12-mth 3.90 Local Retail yr MGS 3.40 Foreign yr MGS 3.54 Total , , yr MGS 3.95 Performance of BIMB Stock Coverage Top Gainers Source: Bank Negara Malaysia Top Losers Source: The Sun, BIMB Securities Research Close Chg +/- Chg % Close Chg +/- Chg % Padini TH Plantations Supermax MCT MyEG Hibiscus Kossan Rubber FGV Top Glove KPJ

3 CORPORATE NEWS TNB signs solar power purchase deals with 6 firms TNB has signed 6 large-scale solar photovoltaic power purchase agreements (PPAs) with special purpose companies (SPCs) that won bids organised by the Energy Commission in the 1Q17. Each SPC will design, construct, own, operate and maintain a solar photovoltaic energy-generating facility with the approved capacity at its proposed location. The SPCs include Kenyir Gunkul Solar Sdn Bhd s megawatt capacity (Mwac) facility in Dungun, Terengganu, with a scheduled commercial operation date of Dec 31, (Source: The Edge) DNeX to develop halal park in the Philippines with local partners DNeX will work with the Department of Education Region V and Naga City of the Philippines to jointly develop a halal park there. DNeX, through its wholly-owned subsidiary Global Market ecommerce SB, had recently signed 2 MoU with the 2 parties to jointly develop the halal park. Under the MoUs, DNeX is given the exclusive right to undertake several initiatives for the halal park including R&D and certification of product and services within the park. The initiatives also include establishing and managing the halal logistics within the park, providing halal-related training, and marketing internationally all certified halal products within the park. DNeX has also agreed to establish a halal certification body for the park. (Source: The Edge) Sime Darby Engineering told to pay MMHE damages over fabrication yards dispute Sime Darby Engineering (SDE) was ordered to pay Malaysia Marine and Heavy Engineering (MMHE) damages for claims in relation to a dispute over 2 fabrication yards. There is indirect unit SDE had on March 19, received a notification from the Asian International Arbitration Centre that its Arbitral Tribunal had issued its award to MMHE. SDE is in the process of reviewing the award. The award is not expected to have a material effect on the earnings and the net assets of the Sime Darby Group for the FY18. SDE had signed an MoU with Petroliam Nasional Bhd and MMHE on May 27, 2011, over the sale of the Teluk Ramunia fabrication yard to Petronas for RM296m and Pasir Gudang fabrication yard to MMHE for RM399m. (Source: The Edge) IOI Properties chairman raises stake as shares hit all-time low Tan Sri Lee Shin Cheng, the founder of IOI Group, has been mopping up shares of the group s property arm on the open market, even as the stock hit an all-time low yesterday. Lee acquired 1.02m shares in the company, the latest in a series of purchases on the open market since end-february. The total of m shares or a 0.48% stake has been bought in the company since the company s share price began falling at end-february. This increased Lee s direct stake in IOI Properties to 2.77%, although he controls the company with an additional indirect interest of 60.79% via his private vehicle Vertical Capacity SB, a wholly-owned unit of Progressive Holdings SB, and the holdings of his children. (Source: The Edge) MCE secures contracts to supply Proton parts MCE has secured contracts to supply various electronics and mechatronic components and parts for new Proton car models. The supply of these parts by its wholly-owned unit, Multi-Code Electronics Industries (M) Bhd, is for 10 years, commencing in the 1Q of its next FY19. The projects could generate total revenue of RM62m for the group over the 10-year period. There will be no material impact on its earnings for FY18. Meanwhile, total investment cost is estimated at RM4.8m. They has slipped into the red for its 2Q18 as its top line shrank 31% on a fall in demand. (Source: The Edge) MIDA pushes for more local content in rail jobs MIDA is pushing for more local content to be used in railway projects such as the High Speed Rail (HSR), the Mass Rapid Transit (MRT), the East Coast Railway Line (ECRL) and the Light Rail Transit (LRT), to reduce reliance on imported goods and services. The agency will be hosting the first-ever National Supply Chain Conference that is focused specifically on the railway industry, to showcase opportunities for local outfits to be a part of the supply chain of the bigger industry players in Malaysia. This event will be mostly catering to the local players, showcasing the opportunities for them to be part of the supply chain of Malaysian railway owners like MyHSR Corp and MRT Corp. (Source: The Edge) 3

4 ECONOMIC NEWS US seeks China trade moves on autos, financials, chips Top Trump administration officials are asking China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more US made semiconductors in negotiations to avoid plans to slap tariffs on a host of Chinese goods and a potential trade war. White House trade adviser Peter Navarro confirmed that President Donald Trump asked Mnuchin and Lighthizer to try to resolve trade differences with China. (Source: Reuters) Trump's Russian expulsions leave Moscow stunned Donald Trump expelled 60 Russian diplomats considered spies from the US, the most since 1986, demonstrating united resolve with Europe after the UK blamed Vladimir Putin s government for a March 4 nerve-agent attack on a former Russian spy living in England. All told, more than 100 Russian envoys will be sent home from capitals across Europe and North America. Trump drew bipartisan praise in Washington for the expulsions, about a week after he was criticized for congratulating Putin on his re-election in a phone call with the Russian leader. (Source: Bloomberg) BoE considered bank capital buffer hike but waiting to watch risks BoE it will be considered this month increasing the amount of money banks must set aside to counter their risks as lending in Britain grows, but it held off taking a decision until June. It will be oversees risks to the economy from the banking system, had seen arguments for setting the so-called countercyclical capital buffer (CCyB) a little above its current level of 1% of a bank's risk-weighted assets. Risks had increased since the Committee first judged that a 1% UK CCyB rate was appropriate, in 1Q Although British economic growth slowed last year following the 2016 vote to leave the EU, it held up better than the BoE and most economists had expected. A Brexit transition deal struck by London and Brussels earlier this month has further eased short-term concerns about growth. (Source: Reuters) Oil briefly hits USD71, with US supply, Middle East in focus Oil hit USD71 a barrel before retreating, supported by concern about possible disruption to Middle East supply but capped by fast rising global output and a dollar recovery. Brent crude futures were up 18 US cents at USD70.30 by 1404 GMT, down from its brief high. West Texas Intermediate (WTI) futures slipped 6 cents to USD65.49, after touching USD The dollar recovered from earlier lows, erasing some gains in oil, which had neared its highest since late January. The oil price has risen more than 7% so far this month and by 5.3% in the 3MFY18, putting it on track for a 3 rd consecutive quarterly gain, a move seen in late (Source: Reuters) Indonesia imposes extra capital requirements on top banks Indonesia ordered the nation s biggest lenders to set aside additional capital to bolster their ability to absorb losses and protect against any bank failures. Banks have until Jan 1 to meet the additional requirement. The move may conflict with government efforts to reverse a slowdown in lending and bolster the economy. Credit growth in Southeast Asia s largest economy has fallen to single digits in the past 2 years from a more than 20% average in the decade before, as weak private investment weighs on demand for loans. President Joko Widodo early this month urged banks to take more risks as he seeks to accelerate economic growth, before a re-election bid in (Source: Bloomberg) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 03/28/ :00 SP Current Account Balance Jan b 3.6b 03/28/ :00 IT Industrial Sales WDA YoY Jan % -- 03/28/ :00 IT Industrial Sales MoM Jan % -- 03/28/ :00 IT Industrial Orders NSA YoY Jan % -- 03/28/ :00 IT Industrial Orders MoM Jan % -- 03/28/ :00 BP Gross External Debt Jan b -- 03/28/ :30 US GDP Annualized QoQ 4Q T 2.70% % -- 03/28/ :30 US Personal Consumption 4Q T 3.80% % -- 03/28/ :30 US GDP Price Index 4Q T 2.30% % -- 03/28/ :30 US Advance Goods Trade Balance Feb -$74.4b -- -$74.4b -$75.3b 03/29/ :00 FI Trade Balance Jan F m -- 03/29/ :00 CZ Export Price Index YoY Jan % -- 03/29/ :00 CZ Import Price Index YoY Jan % -- 03/29/ :00 HU Trade Balance Jan F m -- 03/29/ :00 CZ Money Supply M2 YoY Feb % -- 03/29/ :30 UK Money Supply M4 MoM Feb % -- 03/29/ :30 UK M4 Money Supply YoY Feb % -- 03/29/ :30 UK Current Account Balance 4Q -24.0b b -- 03/29/ :30 UK GDP QoQ 4Q F 0.40% % -- 03/29/ :30 UK GDP YoY 4Q F 1.40% % -- 03/29/ :00 PO Industrial Production MoM Feb % -- 03/29/ :00 PO Industrial Production YoY Feb % -- 03/29/ :00 CZ Repurchase Rate Mar % % -- 03/29/ :30 US PCE Deflator MoM Feb 0.20% % -- 03/29/ :30 US PCE Deflator YoY Feb 1.70% % -- 03/29/ :30 US PCE Core MoM Feb 0.20% % -- 03/29/ :30 US PCE Core YoY Feb 1.60% % -- 03/29/ :45 US Chicago Purchasing Manager Mar /29/2018 CH Swift Global Payments CNY Feb % -- 03/30/ :50 JN Industrial Production MoM Feb P 5.00% % -- 03/30/ :50 JN Industrial Production YoY Feb P 2.30% % -- 03/30/ :00 JN Construction Orders YoY Feb % -- 03/30/2018 BP Base Interest Rate Apr % -- 03/31/ :00 CH Non-manufacturing PMI Mar /31/ :00 CH Manufacturing PMI Mar /31/ :00 CH Composite PMI Mar /02/ :30 JN Nikkei Japan PMI Mfg Mar F /02/ :45 CH Caixin China PMI Mfg Mar /02/ :45 US Markit US Manufacturing PMI Mar F /02/ :00 US ISM Manufacturing Mar /02/ :00 US ISM Employment Mar /02/ :00 US ISM Prices Paid Mar /02/ :00 US ISM New Orders Mar /02/ /06 JN Official Reserve Assets Mar $1261.7b -- 04/03/ :30 UK Markit UK PMI Manufacturing SA Mar /04/ :30 JN Nikkei Japan PMI Services Mar /04/ :30 JN Nikkei Japan PMI Composite Mar /04/ :45 CH Caixin China PMI Composite Mar /04/ :45 CH Caixin China PMI Services Mar /04/ :30 UK Markit/CIPS UK Construction PMI Mar

6 DEFINITION OF RATINGS BIMB Securities uses the following rating system: STOCK RECOMMENDATION BUY Total return (price appreciation plus dividend yield) is expected to exceed 10 in the next 12 months. TRADING BUY Share price may exceed 15 over the next 3 months, however longer-term outlook remains uncertain. HOLD Share price may fall within the range of +/- 10 over the next 12 months TAKE PROFIT Target price has been attained. Fundamentals remain intact. Look to accumulate at lower levels. TRADING SELL Share price may fall by more than 15 in the next 3 months. SELL Share price may fall by more than 10 over the next 12 months. NOT RATED Stock is not within regular research coverage. SECTOR RECOMMENDATION OVERWEIGHT The Industry as defined by the analyst s coverage universe, is expected to outperform the relevant primary market index over the next 12 months NEUTRAL The Industry as defined by the analyst s coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months UNDERWEIGHT The Industry as defined by the analyst s coverage universe, is expected to underperform the relevant primary market index over the next 12 months Applicability of ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies. Disclaimer The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of BIMB Securities Sdn may from time to time have a position in or either the securities mentioned herein. Members of the BIMB and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgements as of this date and are subject to change without notice. BIMB Securities Sdn accepts no liability for any direct, indirect or consequential loss arising from use of this report. Printed and published by BIMB SECURITIES SB ( X) A Participating Organisation of Bursa Malaysia Securities Level 32, Menara Multi Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, Kuala Lumpur Tel: Fax: Azharuddin Nordin Head of Research 6