PP16795/03/2013(031743) Dec-16

Transcription

1 Monday, 18 December, 2017 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Research Team PP16795/03/2013(031743) Corporate News Gamuda 1QFY18 net profit up 25%, declares 6 sen dividend Carimin Petroleum to buy Kemaman land for fabricating facility expansion Scientex to buy Pulai land for mixed property development Hubline proposes private placement to raise up to RM23.02m Eco World International in planned RM14b UK property JV Sunway sets up RM5b sukuk programme Bursa Malaysia Close Chg +/- Chg % YTD Chg (%) FBMKLCI 1, FBMEMAS 12, FBM100 12, FBMEMAS Shariah 12, FBM Hijrah Shariah 14, Volume (m) 2, Value (MYR m) 3, Economic News BNM to halt scheme of higher deposit rates for exporters Final Republican tax bill slashes US corporate rate, voting next week Oil hovers below 2-year highs with focus on US output China will cut, remove export tariffs on some steel, fertiliser Thai commercial banks may get incentives to merge finance minister Cambodia's Hun Sen challenges EU and US to freeze assets KLCI Performance KLCI Year-End Target: 1,790 points Regional Indices Commodities (Last Close) Close Chg +/- Chg % YTD Chg (%) Close Chg +/- Chg % DJIA 24, Brent Crude (USD/bbl) NASDAQ 6, WTI Crude (USD/bbl) S&P 500 2, CPO (RM/MT) 2, FTSE 100 7, Gold (USD/ounce) 1, Nikkei , Latex (sen/kg) HSI 28, 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 3.43 (%) (MYR m) (MYR m) (MYR m) KLIBOR 6-mth 3.56 Local Insti , , KLIBOR 12-mth 3.63 Local Retail yr MGS 3.61 Foreign yr MGS 3.97 Total , , Performance of BIMB Stock Coverage Source: Bank Negara Malaysia Source: The Sun, BIMB Securities Research Top Gainers Weekly Participation Close Chg +/- Chg % Participation (%) Bought (MYR m) Sold (MYR m) Net (MYR m) My Eg Services Local Insti , , Time Dotcom Local Retail , , Westports Foreign , , Mah Sing Total , , Kossan Rubber Industries Top Losers Close Chg +/- Chg % UMW Holdings Ikhmas Jaya IJM Plantations Datasonic GHL Systems Source: The Sun, BIMB Securities Research 2

3 CORPORATE NEWS Gamuda 1QFY18 net profit up 25%, declares 6 sen dividend Gamuda s construction division lifted the group's net profit for 1QFY18 by 25.2% to RM203.02m, from RM162.15m a year ago. EPS rose to 8.27 sen in 1QFY18, from 6.7 sen. Quarterly revenue rose 52.9% to RM771.82m from RM504.88m in 1QFY17, mainly due to higher work progress from the group s various construction projects, coupled with stronger overseas property sales and several new property projects in Malaysia. It also declared a first interim dividend of 6 sen per share for FY18, payable on Jan 25, Its construction division's revenue grew 49% to RM1.03bn in 1QFY18 compared with RM696m a year ago, mainly due to higher work progress from the Mass Rapid Transit Line 2 (MRT2) project, where the group is the project delivery partner and the sole underground works package contractor. (Source: The Edge) Carimin Petroleum to buy Kemaman land for fabricating facility expansion Carimin Petroleum is buying a 21,130 sq m piece of land at Kawasan Perindustrian Teluk Kalung in Kemaman, Terengganu, from Noorfauziah Mat Fauzi and Mohd Fauzi Musa for RM1.6 million cash. The proposed acquisition will enable it to develop the land and expand its fabricating facilities for its business operations. Its wholly-owned subsidiary Carimin Engineering Services SB has executed a share sale agreement with the 2 individuals to acquire Fazu Resources (M) SB, which holds the rights to the land. Fazu is currently dormant. The purchase consideration will be wholly satisfied by cash though internal funds. Carimin shares closed down one sen or 2.82% at 34.5 sen, with 296,300 shares done, bringing a market capitalisation of RM80.69m. (Source: The Edge) Scientex to buy Pulai land for mixed property development Scientex is buying a acre piece of freehold land in Pulai, Johor for RM284.19m cash, which it hopes to develop into a mixed property development. The proposed land acquisition will enable it to boost and expand on its existing landbank in Johor. The land will also provide the group adequate landbank to sustain its property development over the medium and longer term. However, it said it is currently too preliminary to ascertain the exact total gross development value, development cost, the expected commencement and completion dates of the development and the expected profits to be derived from the development of the land. Scientex added its dormant wholly-owned subsidiary Amber Land (formerly known as Great Wall Plastic Industries) has entered into a sale and purchase agreement with DKTMG Land SB for the proposed land acquisition. It said the land is a freehold agriculture land located adjacent to the existing Taman Pulai Indah and Bandar Baru Kangkar Pulai in Skudai. (Source: The Edge) Hubline proposes private placement to raise up to RM23.02m Hubline is raising fresh funds again to pare down debts. The loss making shipping company has proposed a private placement of up to 10% of its issued capital, aiming to raise maximum gross proceeds of about RM23.02m. The proposal comes on the heel of the company's issuance of redeemable convertible notes (RCN) to raise RM80m fresh capital. The proceeds from the proposed share placement would be used for partial repayment of borrowings, capital expenditure, partial payment of secured container shipping business creditors, working capital, as well as expenses related to the exercise. The board has decided to raise additional funds through the proposed private placement to further reduce the group's existing borrowings, to expand its dry-bulk business and to settle amounts owing to creditors related to the group's container shipping business. Hubline's total borrowings were at RM133.3m. (Source: The Edge) Eco World International in planned RM14b UK property JV Eco World International and the UK-based Willmott Dixon Holdings Ltd's development arm Be Living Holdings Ltd will jointly develop 12 sites in Greater London and the South East of England under a proposed JV. Eco World International is acquiring a 70% stake in the JV. The estimated gross development value of the 12 sites is at least 2.6bn (approximately RM14bn). The JV also contemplates the acquisition of a development management company (DMco) with a full multi-disciplinary team of highly experienced personnel. Going forward, the DMco will be the development manager of all projects under the joint venture with Be Living. This will provide EcoWorld International, as the 70% shareholder of the DMco, with a strong pool of in-house talent and manpower resources to grow its UK business and bring it to greater heights. The planned acquisition of the sites will be carried out in two stages. (Source: The Edge) Sunway sets up RM5b sukuk programme Sunway will set up a RM5bn perpetual Islamic medium term note (IMTN) programme to finance its investment activities, capital expenditure and for working capital. Sunway has lodged the required information and relevant documents in relation to the sukuk programme, with SC. The first issuance of the IMTNs is expected by the 1Q18. Kenanga Investment Bank is the sole principal adviser, lead arranger and lead manager for the sukuk programme. Sunway shares closed up 10 sen or 6.25% at RM1.70, bringing it a market capitalisation of RM8.36bn. (Source: The Edge) 3

4 ECONOMIC NEWS BNM to halt scheme of higher deposit rates for exporters BNM will discontinue a special deposit facility for exporters from next year, rolling back a measure that it had introduced last year to stem the currency's slide against the USD. Last December, BNM clamped down on offshore ringgit trade and announced measures to boost liquidity and encourage more domestic trade of the ringgit as the currency fell to 13-month lows in the aftermath of Donald Trump's U.S. presidential election win. As a sweetener to keep more cash at home, all ringgit proceeds from exporters can earn a higher deposit rate of 3.25% annually under the special deposit facility. The ringgit is among the best performing currencies in the region this year, up around 9.8% against the USD so far this year, as the economy registered better-than-expected growth over the past 3 quarters. In a letter sent to banks operating locally, the special deposit facility which facilitated conversion of export proceeds by resident exporters will end by Dec 31. Outstanding balances in the deposit facility, however, can continue to earn a return of 3.10% per annum up to March 31 next year. (Source: StarBiz) Final Republican tax bill slashes US corporate rate, voting next week Congressional Republicans unveiled the final version of their dramatic US tax overhaul, debt-financed cuts for businesses, the wealthy and some middle-class Americans and picked up crucial support from two wavering senators ahead of planned votes by lawmakers early next week. Passage of the biggest US tax rewrite since 1986 would provide Republican lawmakers and President Donald Trump their first major legislative victory since he took office in January. Prospects for approval soared after Republican senators Marco Rubio and Bob Corker pledged support. It would cut the corporate income tax rate to 21% from 35%. Corporate tax lobbyists have been seeking a tax cut of this magnitude for many years. (Source: Bloomberg) Oil hovers below 2-year highs with focus on US output Oil prices were mixed on Friday, lingering below 2 year highs as the continuing outage of a North Sea pipeline gave support, while climbing U.S. output and weak gasoline demand kept a lid on gains. Brent crude futures settled down 8 cents or 0.1% to $63.23 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled up 26 cents to $57.30 a barrel. WTI hit a 2 year high of $59.05 on Nov. 24. Brent ended the week down slightly with a 0.3% fall, while WTI was down 0.1%. There's definitely some pressure on crude. Demand for gasoline is lower which isn't normally the case in the holiday season and supplies are steadily rising. Gasoline futures were down 3.5% on the week. (Source: Bloomberg) China will cut, remove export tariffs on some steel, fertiliser China will cut export taxes on some steel products and fertilisers and ditch those for sales abroad of steel wire, rod and bars from Jan 1, in a series of measures that could boost shipments. The move is likely to stir concerns among foreign competitors in the United States and Europe that China, the world's top steel producer, may be looking to sell its excess product abroad. It follows a ministerial level G20 meeting in Berlin last month, where China and the United States remained at odds over how to tackle excess steel capacity. The global steel sector is worth about US$900bn a year. Stainless steel plate export tariffs will fall to 5% from 10%, while billet tariffs will be 10%, down from 15% currently. (Source: Bloomberg) Thai commercial banks may get incentives to merge finance minister Thailand's finance minister said the ministry was considering a plan to offer tax incentives to encourage mergers among the country's commercial banks to create institutions able to compete with foreign banks, including regional competitors. Their policy is not to force but to give incentives to motivate them into thinking because Thailand does not have a bank that can be called a champion bank that can compete with overseas. So they will use tax incentives to help as a deciding factor. Thai banks were small compared with Singapore and Malaysian ones, and their size was impeding them from doing business outside of Thailand. Thailand's 5 biggest lenders are Bangkok Bank, Krung Thai Bank, Siam Commercial Bank, Kasikornbank and Bank of Ayudhya. In June, Thailand's central bank said it would relax foreign exchange rules, including allowing more Thais to directly invest abroad. Commercial banks would also be allowed to lend baht to non-residents for investment. (Source: Bloomberg) Cambodia's Hun Sen challenges EU and US to freeze assets Cambodian Prime Minister Hun Sen encouraged the US and EU to freeze the assets of Cambodian leaders abroad in response to his government's crackdown on the opposition and civil society. The strongman who has ruled Cambodia for more than 3 decades, has taken a strident anti-western line ahead of a 2018 election and has dismissed donor criticism of the dissolution of the main opposition party. The US and EU have suspended funding for next year's election and Washington has put visa curbs on some Cambodian leaders. There is no current proposal for asset freezes by either the US or EU, but some lawmakers have floated the idea. (Source: Bloomberg) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 12/18/ :50 JN Trade Balance Nov b b 284.6b 12/18/ :50 JN Trade Balance Adjusted Nov 265.0b b -- 12/18/ :50 JN Exports YoY Nov 14.70% % -- 12/18/ :50 JN Imports YoY Nov 18.00% % -- 12/18/ :00 EC CPI MoM Nov 0.10% % 0.10% 12/18/ :00 EC CPI YoY Nov F 1.50% % -- 12/18/ :00 EC CPI Core YoY Nov F 0.90% % -- 12/18/ /19 RU PPI MoM Nov 0.80% % -- 12/18/ /19 RU PPI YoY Nov 7.50% % -- 12/19/ :00 JN Machine Tool Orders YoY Nov F % -- 12/19/ :00 GE IFO Business Climate Dec /19/ :00 GE IFO Expectations Dec /19/ :00 GE IFO Current Assessment Dec /19/ :00 EC Construction Output MoM Oct % -- 12/19/ :00 EC Construction Output YoY Oct % -- 12/19/ :00 EC Labour Costs YoY 3Q % -- 12/19/ :00 RU Unemployment Rate Nov 5.20% % -- 12/19/ :00 RU Real Disposable Income Nov -0.30% % -- 12/19/ :00 RU Real Wages YoY Nov 4.50% % -- 12/19/ :00 RU Retail Sales Real MoM Nov -0.30% % -- 12/19/ :00 RU Retail Sales Real YoY Nov 3.30% % -- 12/19/ :30 US Housing Starts Nov 1248k k -- 12/19/ :30 US Housing Starts MoM Nov -3.30% % -- 12/19/ :30 US Building Permits Nov 1275k k 1316k 12/19/ :30 US Building Permits MoM Nov -3.10% % 7.40% 12/19/ :30 US Current Account Balance 3Q -$116.4b -- -$123.1b -- 12/20/ :30 JN All Industry Activity Index MoM Oct 0.30% % -- 12/20/ :00 JN Convenience Store Sales YoY Nov % -- 12/20/ :00 GE PPI MoM Nov 0.20% % -- 12/20/ :00 GE PPI YoY Nov 2.60% % -- 12/20/ :00 EC ECB Current Account SA Oct b -- 12/20/ :00 EC Current Account NSA Oct b -- 12/20/ :00 IT Current Account Balance Oct m -- 12/20/ :00 US MBA Mortgage Applications Dec % -- 12/20/ :00 RU CPI WoW Dec % -- 12/20/ :00 RU CPI Weekly YTD Dec % -- 12/20/ :30 CA Wholesale Trade Sales MoM Oct 0.50% % -- 12/20/ :00 US Existing Home Sales Nov 5.52m m -- 12/20/ :00 US Existing Home Sales MoM Nov 0.70% % -- 12/20/ /25 JN Supermarket Sales YoY Nov % -- 12/21/ :50 JN Japan Buying Foreign Bonds Dec b -- 12/21/ :50 JN Japan Buying Foreign Stocks Dec b -- 12/21/ :50 JN Foreign Buying Japan Bonds Dec b -- 12/21/ :50 JN Foreign Buying Japan Stocks Dec b -- 12/21/ :30 JN Nationwide Dept Sales YoY Nov % -- 12/21/ :30 JN Tokyo Dept Store Sales YoY Nov % -- 12/21/ :45 FR Business Confidence Dec /21/ :45 FR Manufacturing Confidence Dec /21/ :45 FR Production Outlook Indicator Dec /21/ :45 FR Own-Company Production Outlook Dec

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 chg 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