PP16795/03/2013(031743) Mar-16

Transcription

1 Wednesday, 15 March, 2017 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Research Team PP16795/03/2013(031743) Corporate News Economic News UMW OG secures another charter for drilling rig from Britain Petronas Chemicals JV search continues after Saudis join oil hub Major shareholding changes at EKA Noodles BAuto s 3Q net profit falls to RM25.11m on lower sales volume Transocean in RM140m reverse merger deal Short-term money goes out of Malaysia US producer prices rise broadly in February UK PM May's hand moves closer to Brexit trigger Indian inflation quickens on food costs before Fed's rate review Oil hits 3-month lows as Opec reports rising stocks, Saudi output jump Bursa Malaysia KLCI Performance Close Change +/- Change % FBMKLCI 1, FBMEMAS 12, FBM100 11, FBMEMAS Shariah 12, FBM Hijrah Shariah 13, Volume (m) 3, Value (MYR m) 3, FBMKLCI YTD performance KLCI Year-End Target: 1,755 points Regional Indices Commodities (Last Close) Close Change +/- Change % YTD Change (%) Close Change +/- Change % DJIA 20, Brent Crude (USD/bbl) NASDAQ 5, WTI Crude (USD/bbl) S&P 500 2, CPO (RM/MT) 2, FTSE 100 7, Gold (USD/ounce) 1, Nikkei , Latex (sen/kg) HSI 23, Soybean Oil SHCOMP 3, KOSPI 2, Forex TWSE 9, (per USD) BIMB (YE Forecast) Close Change +/- Change % STI 3, MYR JCI 5, JPY SET 1, EUR PSEi 7, SGD

2 Major Rates Daily Participation % Participation Bought Sold Net KLIBOR 3-mth 3.41 (%) (MYR m) (MYR m) (MYR m) KLIBOR 6-mth 3.54 Local Inst , , KLIBOR 12-mth 3.63 Local Retail yr MGS 3.87 Foreign yr MGS 4.14 Total , , Performance of BIMB Stock Coverage Top Gainers Source: Bank Negara Malaysia Top Losers Source: The Sun, BIMB Securities Research Close Change +/- Change % Close Change +/- Change % Bermaz Auto % GHL Systems % Kimlun % Felda Global Ventures % WCT % Benalec % Eco World Development % Padini % Hartalega % Dayang Enterprise % 2

3 CORPORATE NEWS UMW OG secures another charter for drilling rig from Britain UMW OG has secured a contract from British oilfield services company Petrofac for one of its jack-up drilling rigs. This is the 2 nd contract the company had received with the price of crude oil at above USD50 a barrel which helped to spur drilling activity. UMW OG had procured a letter of award from Petrofac and its jack-up drilling rig, UMW Naga 5, would be start in the 2Q of The contract is to drill 2 wells with the option of an additional well plus one. The provision of the drilling rig services is expected to contribute positively to the earnings and net assets of UMW OG Group during the contract period for the financial period ending Dec 31, (Source: StarBiz) Petronas Chemicals JV search continues after Saudis join oil hub Petronas Chemicals, a unit of Malaysia s state energy company to invest in a $27bn oil refining and petrochemical project, sustaining hope it can find a partner after at least 3 previous deals fell through. Companies from Japan, South Korea, China, Taiwan and Italy have expressed interest in joining the Refinery and Petrochemicals Integrated Development, or RAPID. Earlier plans by Petronas Chemicals parent, Petroliam Nasional, to develop petrochemical plants at the complex in the southern state of Johor with Evonik Industries AG, BASF SE and Kuokuang Petrochemical Technology Co. never materialized. (Source: Bloomberg) Major shareholding changes at EKA Noodles EKA Noodles saw a slew of changes in its board of directors which coincided with a significant change in the group s substantial shareholders. The group saw 4 new appointments to its board as well as 2 resignations. The new appointees, 3 of who are independent and non-executive directors, are Leong Woay Hong, Lim Choo Hooi and Datuk Dr Chin Yew Sin. The 4 th appointee, Fong Yit Meng, is designated as an executive director. At the same time, Raja Nazrin Raja Ghazilla resigned as independent and non executive director while Datuk Ahmad Zaffry Sulaiman stepped down from his executive director position. The boardroom reshuffle coincided with a significant off market disposal by a substantial shareholder. (Source: StarBiz) BAuto s 3Q net profit falls to RM25.11m on lower sales volume BAuto saw its net profit for the 3QFY17 fall to RM25.11m from RM41.13m a year ago on the back of lower sales volume. The group s revenue for 3QFY17 amounted to RM338.68m compared to RM522.58m during the previous year s corresponding quarter. On a cumulative basis, BAuto reported a net profit of RM96.84m and revenue of RM1.31bn for the 9 months period ended Jan 31. In comparison, it reported a net profit and revenue of RM146.39m and RM1.58bn, respectively, over the same period last year.bauto is the distributor of Mazda vehicles and spare parts in Malaysia. It distributes a selected range of Mazda vehicles and spare parts in Malaysia and the Philippines. (Source: StarBiz) Transocean in RM140m reverse merger deal, Nadzmi to give up control Transocean is paying RM140m to take over container transportation firm Taipanco SB in a bid to strengthen its logistics business and financial performance. Transocean had signed a conditional agreement to buy the entire equity interest in Taipanco from the vendors, Jee Chau Hau, Nazari Akhbar and Nor Rahah Ab Ghani as well as a profit guarantee agreement. The RM140m payment would be satisfied through the issuance of 102m new ordinary shares and 38m new redeemable convertible preference shares (RCPS) in Transocean. This will result in a change of controlling shareholder. (Source: StarBiz) 3

4 ECONOMIC NEWS Short-term money goes out of Malaysia Foreigners have sold RM21.71bn worth of government bonds in the last 3 months, reducing their share of holding in the debt papers to 28.7% as of end February from a peak of 34.7% last year. According to Bank Negara, 70% of the debt papers that were sold by foreigners have less than 3 years to mature and the bulk of them will expire in less than a year. The selldown was largely due to the unwinding of the NDF (non-deliverable forwards) positions by non-resident financial institution investors. The central bank took measures from Nov 11 last year following a drastic decline in the value of the ringgit to restrict the speculative trading. The situation was made worse by Donald Trump being elected at the US presidential election which resulted in the strengthening of the USD. (Source: Bloomberg) US producer prices rise broadly in February US producer prices increased more than expected in February, and the yoy gain was the largest in nearly 5 years, pointing to a steady rise inflation pressures. Its producer price index for final demand increased 0.3% last month after rising 0.6% in January. Economists polled by Reuters had forecast a 0.1% uptick. In the 12 months through February, the PPI jumped 2.2%, the biggest advance since March 2012 and ahead of the 2.0% gain forecast in the Reuters poll. It followed a 1.6% increase in January. Producer prices are rising as the prior weak readings, induced by cheap oil, drop out of the calculation. Crude oil prices have risen above USD50/barrel. Also boosting price pressures are the USD 1.5% drop against the currencies of the US main trading partners since January and overall commodity price gains in tandem with a firming global economy. (Source: Reuters) UK PM May's hand moves closer to Brexit trigger British Prime Minister Theresa May cleared the final hurdle standing between her and the start of Brexit negotiations on Monday after parliament passed legislation giving her the power to start the EU exit process. Members of the lower house of parliament voted to throw out changes to the bill made by the upper house earlier this month, after the government argued it needed freedom to operate without restriction to get a good deal. Despite an attempt by the Liberal Democrats in the unelected upper chamber, the House of Lords, to re-introduce the conditions, the Lords also went on to approve the legislation unamended late on Monday. (Source: Reuters) Indian inflation quickens on food costs before Fed's rate review India s inflation accelerated more than predicted due to higher food prices, supporting the central bank s decision to abandon its accommodative policy stance before an expected increase in US interest rates. Key PointsConsumer prices rose 3.65% in February from a year earlier. That s faster than the 3.6% median estimate in a Bloomberg survey of 31 economists and January s 3.17% increase. Wholesale prices gained 6.55, compared with a 6.1% prediction and January s 5.25% increase. Bonds erased gains after WPI data the yield on the note due 2026 closed at 6.9% in Mumbai. (Source: Bloomberg) Oil hits 3-month lows as Opec reports rising stocks, Saudi output jump Oil prices slid to 3 month lows on Tuesday after Opec reported a rise in global crude stocks and a surprise jump in production from its biggest member, Saudi Arabia, despite output curbs by the group. The kingdom, the world s biggest oil exporter, led Opec to supply cuts announced last year. Signs of even modestly higher Saudi output flustered investors. Brent futures were down 91 cents at USD50.44 a barrel by 1421 GMT, after touching USD50.33, their lowest since Nov 30. US crude slid USD1 to USD47.40 a barrel, after also dropping to its lowest since November at USD Saudi output fell in February to 9.797m bpd, but Opec rose to m bpd. The focus on Saudi Arabia pushing production back to 10m bpd after cutting beyond the call of duty in January is a key. (Source: Reuters) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 03/15/ :30 JN Industrial Production MoM Jan F % -- 03/15/ :30 JN Industrial Production YoY Jan F % -- 03/15/ :30 JN Capacity Utilization MoM Jan % -- 03/15/ :30 NE Trade Balance Jan b -- 03/15/ :00 FI Current Account Balance Jan b -- 03/15/ :00 CZ Construction Output YoY Jan % -- 03/15/ :00 CZ Industrial Output YoY Jan 7.90% % -- 03/15/ :00 IR Trade Balance Jan m -- 03/15/ :30 US CPI MoM Feb 0.00% % -- 03/15/ :30 US CPI Ex Food and Energy MoM Feb 0.20% % -- 03/15/ :30 US CPI YoY Feb 2.70% % -- 03/15/ :30 US CPI Ex Food and Energy YoY Feb 2.20% % -- 03/15/ :30 US CPI Core Index SA Feb /15/ :30 US CPI Index NSA Feb /15/ :30 US Real Avg Weekly Earnings YoY Feb % -0.50% 03/15/ :30 US Real Avg Hourly Earning YoY Feb % 0.10% 03/15/ :00 BE Trade Balance Jan m -- 03/16/ :00 US FOMC Rate Decision (Upper Bound) 15-Mar 1.00% % -- 03/16/ :00 US FOMC Rate Decision (Lower Bound) 15-Mar 0.75% % -- 03/16/ :00 CZ Export Price Index YoY Jan % -- 03/16/ :00 CZ Import Price Index YoY Jan % -- 03/16/ :00 LN Current Account Balance Jan m -- 03/16/ :00 CZ Current Account Monthly CZK Jan 30.50b b b 03/16/ :00 UK Bank of England Bank Rate 16-Mar 0.25% % -- 03/16/ :00 UK BOE Asset Purchase Target Mar 435b b -- 03/16/ :00 UK BOE Corporate Bond Target Mar 10b -- 10b -- 03/16/ :00 PD Current Account Balance Jan 332m m -- 03/16/ :00 PD Trade Balance Jan 377m m -- 03/17/ :00 IT Trade Balance EU Jan m -- 03/17/ :00 IT Trade Balance Total Jan m -- 03/17/ :00 EC Trade Balance SA Jan 22.0b b -- 03/17/ :00 EC Trade Balance NSA Jan b -- 03/17/ :00 PD Sold Industrial Output MoM Feb 1.40% % -- 03/17/ :00 PD Sold Industrial Output YoY Feb 2.70% % -- 03/17/ :00 PD Construction Output YoY Feb -0.10% % -- 03/20/ /24 SP Trade Balance Jan m -- 03/21/ :00 LN Industrial Production YoY Feb % -- 03/21/ :30 SV Industrial Production MoM Jan % -- 03/21/ :30 SV Industrial Production YoY Jan % -- 03/21/ :30 US Current Account Balance 4Q -$128.6b -- -$113.0b -- 03/21/2017 PO Current Account Balance Jan m -- 03/22/ :50 JN Trade Balance Feb b b 03/22/ :50 JN Trade Balance Adjusted Feb b -- 03/22/ :50 JN Exports YoY Feb % -- 03/22/ :50 JN Imports YoY Feb % 8.40% 03/22/ :00 EC Current Account NSA Jan b -- 03/22/ :00 EC ECB Current Account SA Jan b -- 03/22/ :30 IT Current Account Balance Jan m -- 03/23/ :30 HU Current Account NSA 4Q

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. 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