JF Apex Securities Berhad Newsletter Daily As Highlights 18 February Malaysia News & Highlights. Foreign News

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1 JF APEX SECURITIES BERHAD (47680-X) KDN PP13226/04/2013 (032022) JF Apex Securities Berhad Newsletter Daily As Highlights 18 February 2014 Malaysia News & Highlights LBS comes to VTI's rescue, injecting RM13mil into loss-making company Move to stem property speculation Aeon Malaysia looks to expand into 5 more states Seaview offers to buy 51pc DBhd stake from JCorp YTL unit aims to expand Vistana hotel chain nationwide Zelan sells IJM shares in open mart Perwaja Steel finalising TNB deal Syabas files appeal against Selangor ruling S'wak firms want probe into Wilmar for anti-competitive behabiour Nextnation in talks with data centre Kulim to invest RM148.5mil in Indonesian subsidiary Foreign News European Stocks Advance After Best Weekly Rally of 2014 Asian Stocks Advance on Record New Lending in China Gold Rises to 3-Month High; Silver Has Longest Rally Since 68 German Home Prices Rose Most in Decade on Cheap Finance Japan Growth Trails Forecasts as Sales-Tax Increase Looms Mexico s Currency Climbs for Third Day as Crude Price Increases FBM KLCI Daily Chart Closing: Support: 1770 Resistance: 1850 Please read carefully the important disclosures at end of this publication

2 Market Thoughts European stocks closed higher on Monday, with a rally in mining stocks helping the U.K.'s FTSE 100 to post healthy gains of over 1 percent. US markets were closed for the President's Day holiday. On the local exchange, the FBM KLCI rose 8.11 points to points. Following the recent surge, we expect the index's positive momentum to continue. Malaysia News & Highlights LBS comes to VTI's rescue, injecting RM13mil into loss-making company Property developer LBS Bina Group Bhd is injecting RM13.43mil into loss-making VTI Vintage Bhd, which is undertaking a regularisation exercise.lbs, in a filing with Bursa, said that it was subscribing for eight million new shares in VTI under a placement exercise for RM4mil or 50 sen each and another eight million new shares together with warrants on the basis of one warrant for every two rights shares for RM4mil. It would also subscribe up to million unsubscribed rights shares under VTI s proposed rights issue with warrants equivalent up to RM5.43mil. (Source: The Star) Comment: We are surprised with the move of the Group to acquire stake in VTI Vintage. To recap, VTI Vintage is a company that involved in manufacturing and trading of roof tiles, roof and steel related products. It was classified as a PN17 company in 2010 after years of losses. Whilst we reckon that the vertical expansion of acquiring this PN17 company could provide the Group to secure cheaper building materials for its property development business, we view such move as a bail out to the company as LBS would inject RM13m into this loss-making company via subscription of shares and rights issue. We see limited earnings contribution from VTI Vintage (despite profit guarantee of RM6m p.a. for two financial years will be given) and the Group is not going to assume the liabilities of this loss-making company pursuant to equity accounting method in view of LBS would end up holding between 17.5% and 29.4% of VTI. Maintain BUY on LBS with our target price of RM2.32. Move to stem property speculation Developers making bulk sales of more than four units must obtain Controller of Housing approval.the government plans to enforce a new ruling on bulk sales in order to curb property speculation, according to Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan. Abdul Rahman was commenting on the rise of property investors clubs, where a group of individuals pool their money, buy houses in bulk (thus receiving discounts from developers) and then sell them at a profit. This practice, known as property flipping, appears to be the latest trend among local and foreign investors. Though not illegal, this activity has a direct impact on the local property market. (Source: Business Times) Aeon Malaysia looks to expand into 5 more states Retail giant and household lifestyle brand Aeon Malaysia Bhd, which has 22 shopping centres and 27 stores in the country, plans to venture into five more states in the next five years. The retailer has yet to venture into Kelantan, Terengganu, Kedah, Sabah and Sarawak. Speaking to Business Times in conjunction with Aeon Malaysia's 30th anniversary, its managing director Nur Qamarina Chew Abdullah outlined the company's achievements as well as future plans to strengthen its position in the local market. "Aeon Malaysia's latest outlet opened in Kulaijaya, Johor, which marks yet another significant presence in the southern region where we now have five establishments. (Source: Business Times) Seaview offers to buy 51pc DBhd stake from JCorp Damansara Realty Bhd (DBhd) says its parent, Johor Corp (JCorp), has received an offer from Seaview Holdings Sdn Bhd to acquire a 51 per cent interest in the company. JCorp was also informed by Seaview of its potential obligation to extend a mandatory takeover offer to acquire all the remaining DBhd shares other than the shares under the proposed acquisition. In a filing to Bursa Malaysia yesterday, DBhd said both JCorp, a Johor state investment corporation, and Seaview Holdings have agreed to sign a conditional share sale agreement to formalise the offer. (Source: Business Times)

3 YTL unit aims to expand Vistana hotel chain nationwide YTL Corp Bhd's hospitality arm, YTL Hotels & Properties Sdn Bhd, aims to expand the Vistana hotel chain nationwide over the next few years. Deputy managing director Datuk Yeoh Seok Kian said YTL Hotels is also eyeing luxury hotel brands to include in its classic collection. YTL Hotels owns and manages a collection of hotels and Spa villages locally and in Thailand, Indonesia, China, Japan and Europe. (Source: Business Times) Zelan sells IJM shares in open mart Zelan Bhd has disposed of 1.42 million IJM Corp Bhd shares in the open market at an average price of RM5.75 per share for a total of RM8.15 million. It said proceeds from sales will be used to pay bank loans. The approval to dispose of the shares was obtained as part of the shareholders mandate for the sale of up to 56.7 million shares of RM1 each in IJM, which was approved on September 30 last year. (Source: Business Times) Perwaja Steel finalising TNB deal Perwaja Holdings Bhd said its wholly-owned subsidiary, Perwaja Steel Sdn Bhd, is finalising the signing of an agreement with Tenaga Nasional Bhd. Once the deal is signed, Perwaja will make the necessary announcements in due course, it said. The agreement refers to Perwaja s outstanding payment to TNB. (Source: Business Times) Syabas files appeal against Selangor ruling Puncak Niaga Holdings Bhd has announced that its unit, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), filed a notice of appeal at the Court of Appeal last Friday on its case against the Selangor government. In a statement to Bursa Malaysia, it said Syabas has appealed against the decision of the Kuala Lumpur High Court dated February 13. (Source: Business Times) S'wak firms want probe into Wilmar for anti-competitive behabiour Sarawak planters, reeling from Wilmar International Ltd s decision to stop buying from them, are crying foul, contending that the decision by the latter breaches anti-competition laws. The Sarawak Oil Palm Planter Owners Association (SOPPOA) has urged the Federal and Sarawak state governments to look into whether the Singapore-based Wilmar had abused its dominant position as a leading agribusiness group. Wilmar recently decided to stop buying crude palm oil (CPO) produced from oil palm in forest areas and peat land in Sarawak from (Source: The Star) Nextnation in talks with data centre Nextnation Communication Bhd is currently engaged in preliminary discussions with a data centre company to potentially acquire its business and also exploring and evaluating the possibility of a bonus issue, confirming last Saturday s StarBizWeek article. The mobile applications and platform provider said, however, no definitive or conclusive terms had been agreed upon to-date with any party on the matter. (Source: The Star) Kulim to invest RM148.5mil in Indonesian subsidiary Kulim (M) Bhd is expected to invest about US$42.86mil (RM148.48mil) into its Indonesian subsidiary, PT Wisesa Inspirasi Nusantara (PT WIN), under a corporate exercise in relation to its acquisition of a controlling stake in the latter. In a filing with Bursa Malaysia, Kulim said it would, among others, inject about US$25.3mil (RM84.11mil) into its 74%-owned PT WIN as working capital to buy plantation land. In addition, Kulim said it had received the Indonesian regulator s approval for the transfer to the company of 3.33 million PT WIN shares from PT Graha Sumber Berkah (PT GSB) and 1,000 PT WIN shares from Raden Wisik Tomo Siddi, a director of PT WIN, for US$17.14m (RM56.98mil). (Source: The Star) Foreign News European Stocks Advance After Best Weekly Rally of 2014 European stocks climbed after posting their biggest weekly gain this year, led by increases in real estate, mining and telecommunications companies. The Stoxx Europe 600 Index rose 0.4 percent to at the close in London for its eighth increase in nine days. The gauge advanced 2.5 percent last week after the Federal

4 Reserve said its stimulus policy will remain responsive to economic data and as companies from Renault SA to ThyssenKrupp AG reported profit that beat analysts projections. Asian Stocks Advance on Record New Lending in China Asian stocks rose for a second day after China s new credit increased to a record in January, boosting optimism the world s second-largest economy can maintain growth momentum. The MSCI Asia Pacific Index added 0.7 percent to at 7:40 p.m. in Tokyo as five shares rose for every two that fell. The equity benchmark climbed 1.6 percent last week as trade data from China beat estimates and Janet Yellen s first testimony to Congress as head of the Federal Reserve buoyed optimism about the U.S. economy. Gold Rises to 3-Month High; Silver Has Longest Rally Since 68 Gold advanced to the highest in more than three months as speculation the U.S. economic recovery will slow spurred demand for a haven. Silver headed for the longest rally in more than four decades. Last week, gold climbed 4.1 percent, the most since Aug. 16. U.S. factory production unexpectedly declined in January by the most since May 2009, according to a report on Feb. 14. The metal will establish a new range above $1,300 an ounce, and U.S. investors are becoming friendlier to the commodity, UBS AG said in a report today. German Home Prices Rose Most in Decade on Cheap Finance German home prices rose by the most in at least 10 years in 2013 as low interest rates made it cheaper to finance purchases and prompted investors to switch from bond markets to real estate. The gains slowed in the fourth quarter. Prices for houses, apartments and residential buildings climbed 4 percent in 2013 from a year earlier, according to an index published today by the VDP Association of German Pfandbrief Banks. That s the biggest gain since at least 2003, when VDP began compiling data. Prices rose 3.4 percent in the last three months of the year, the smallest increase in five quarters. Japan Growth Trails Forecasts as Sales-Tax Increase Looms Japan s economy grew at less than half the forecast pace in the fourth quarter, underscoring risks to the nation s recovery as a sales-tax increase looms in April. Gross domestic product expanded an annualized 1 percent from the previous quarter, the Cabinet Office said today in Tokyo, less than the median projection of 2.8 percent in a Bloomberg News survey of 37 economists where the lowest estimate was 1.1 percent. Mexico s Currency Climbs for Third Day as Crude Price Increases Mexico s peso rose for a third day as an advance in oil prices boosted the outlook for energy exports. The peso appreciated 0.2 to per U.S. dollar at 4 p.m. in Mexico City. It was the best performer among 16 major dollar counterparts tracked by Bloomberg after South Africa s rand and the South Korean won. (Source: Bloomberg) Futures Kuala Lumpur Composite Index Futures Crude Palm Oil *As at 8.00am 18 February 2014

5 Technical Review: FBM KLCI Index Closing: Support: (S1) 1770 / (S2) 1720 Resistance: (R1) 1826 / (R2) 1882 Comments: The FBM KLCI rose 8.11 points to points. Technical indicators are positive with the RSI rising in the neutral zone while the MACD crossed above its signal line. Following the record high in late Dec, the index pulled back after hitting its upper channel and resistance of 1882 points. The selldown since January was halted by the 200-day moving average which serves as its base for rebound. The bullish momentum slowed as down after being capped by the resistance of 1826 points. We expect consolidation at the moment with the uptrend still intact. FKLI Spot Month Contract FKLI Closing: 1827 Support: (S1) 1750 / (S2) 1685 Resistance: (R1) 1835 / (R2) 1880 Comments: The spot-month FKLI futures gained points to 1827 points. The contract represents 0.48 points discount to the cash market compared to 2.87 points discount in the previous trading day. Technical indicators improved with the RSI rising above the oversold zone while the MACD is cutting above its signal line. Following the major selldown, the contract rebounded off the 200-day moving average but was capped by the resistance of 1835 points. We expect sideways movement at the moment before resuming its uptrend.

6 3 rd Month Crude Palm Oil Contract CPO Closing: RM2682 Support: (S1) 2520 / (S2) 2485 Resistance: (R1) 2690 / (R2) 2750 Comments: The 3rd month CPO futures contract gained RM19 to RM2682. Technical indicators are positive with the MACD cutting above its signal line while the RSI is climbing towards the oversold zone. The rally since July 2013 lifted the contract to a 1-year high. After a correction last month, the contract bounced off the RM2490 level supported by the 100-day moving average. Following the recent rally, the contract failed to beat the resistance of RM2690 and could take a breather at the moment.

7 JF APEX SECURITIES BERHAD CONTACT LIST JF APEX SECURITIES BHD Head Office: 6 th Floor, Menara Apex Off Jalan Semenyih Bukit Mewah Kajang Selangor Darul Ehsan Malaysia General Line: (603) Facsimile: (603) PJ Office: 15 th Floor, Menara Choy Fook On No. 1B, Jalan Yong Shook Lin Petaling Jaya Selangor Darul Ehsan Malaysia General Line: (603) Facsimile: (603) DEALING TEAM Head Office: Kong Ming Ming (ext 3237) Shirley Chang (ext 3211) Norisam Bojo (ext 3233) Wong Wing Haur, Alvin (ext 3226) Institutional Dealing Team: Lim Teck Seng Sanusi Bin Mansor (ext 740) Fathul Rahman Buyong (ext 741) Ahmad Mansor (ext 744) Lum Meng Chan (ext 743) Zairul Azman (ext 746) PJ Office: Mervyn Wong (ext 363) Mohd Hanif Wan Said (ext 111) Fong Jia Wen (ext 822) Nursyazaleen Hazwani (ext 362) RESEARCH TEAM Head Office: Lee Chung Cheng (ext 758) Lee Cherng Wee (ext 759) Jessica Low Jze Tieng (ext 756) Soong Wei Siang (ext 754) Gabriela Fang Minn Fern (ext 753) Elliya Harisna binti Junaedi (ext 752) JF APEX SECURITIES BERHAD - DISCLAIMER Disclaimer: The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of JF Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report. Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of JF Apex Securities Berhad and are subject to change without notice. JF Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. JF Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against JF Apex Securities Berhad. JF Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of JF Apex Securities Berhad. Published & Printed by: JF Apex Securities Berhad (47680-X) (A Participating Organisation of Bursa Malaysia Securities Berhad)