PP16795/03/2013(031743) Aug-16

Transcription

1 Thursday, 10 August, 2017 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Research Team PP16795/03/2013(031743) Corporate News TM to offer access to Netflix by Oct 2017 MISC 2Q net profit down on year at RM557m, pays 7 sen dividend Cepatwawasan 2Q net profit up 91% boosted by higher sales volumes ManagePay enters JV to procure MVNO licence from MCMC Scientex buys land for Klang Valley foray Reach Energy's RM180m private placement off the table Bursa Malaysia Close Change +/- Change % FBMKLCI 1, FBMEMAS 12, FBM100 12, FBMEMAS Shariah 12, FBM Hijrah Shariah 13, Volume (m) 1, Value (MYR m) 1, FBMKLCI YTD performance 8.30 Economic News SGX's introduction of ringgit futures against Malaysia's policy Hard-pedalling soft power, China helps launch USD13bn Belt and Road rail project in Malaysia US wholesale inventories post biggest gain in 6 months UK says EU offers restricted post-brexit residency rights to Britons Hong Kong's crowded currency trade enters dangerous territory Gold imports by India more than doubled in July KLCI Performance KLCI Year-End Target: 1,800 points Regional Indices Commodities (Last Close) Close Change +/- Change % YTD Change (%) Close Change +/- Change % DJIA 22, 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 27, Soybean Oil SHCOMP 3, KOSPI 2, Forex TWSE 10, (per USD) BIMB (YE Forecast) Close Change +/- Change % STI Closed MYR JCI 5, JPY SET 1, EUR PSEi 7, 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 3.55 Local Insti KLIBOR 12-mth 3.63 Local Retail yr MGS 3.66 Foreign yr MGS 3.98 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 % IOI Properties % Dagang Nexchange % Padini % Hartalega % IHH Healthcare % Datasonic % IJM Plantations % TSH Resources % Caring Pharmacy % Hua Yang % 2

3 CORPORATE NEWS TM to offer access to Netflix by Oct 2017 TM will be offering its customers access to popular internet television network Netflix by October 2017, as the group expands its content proposition. Those who subscribe for the service will become Netflix members and will be able to enjoy unlimited viewing of content of a huge library of licensed shows, TV series, films, documentaries and more. The latest collaboration with Netflix is testament to the company commitment towards becoming Malaysia s content aggregator champion, whereby Malaysians will have easier access to Netflix s award-winning content at their convenience. Furthermore, with high speed internet access powered by UniFi, coupled with unlimited data mobility with TM s mobility service provider, webe, customers can fulfill the crave for their favourite movies or shows from Netflix on multiple devices, at their own convenience at home, on the move, anywhere and anytime. (Source: The Edge) MISC 2Q net profit down on year at RM557m, pays 7 sen dividend MISC's 2Qr net profit fell 59% to RM556.5m, from RM1.35bn a year earlier, as petroleum shipping and oil and gas structure construction revenue dropped. Asset impairment loss also curbed MISC's profit. The group revenue declined to RM2.3bn in the 2QFY17, from RM2.39bn. MISC places its oil and gas structure construction business under its heavy engineering unit. Petroleum shipping revenue of RM1,026.2m was 12.0% lower than the corresponding quarter s revenue of RM1,165.6m, mainly due to lower freight rates and earning days in the current quarter. Heavy engineering revenue of RM257.3mi was 13.5% lower than the corresponding quarter s revenue of RM297.5m, mainly due to most ongoing projects in the heavy engineering sub-segment, nearing completion. (Source: The Edge) Cepatwawasan 2Q net profit up 91% boosted by higher sales volumes Cepatwawasan s net profit jumped 91% to RM9.68m or 3.13 sen per share in the 2QFY17 from RM5.07m, or 1.64 sen per share, a year earlier. Quarterly revenue ballooned 37% to RM70.35m from RM51.28m in the previous corresponding quarter a year ago. The group attributes the improved quarterly earnings mainly to the increase in sales volume of CPO by 33%, PK by 32% FFB by 46%, FFB production by 15%, milling margin and higher export of electricity and EFB oil selling price. The plantation segment saw a 43% increase in pre-tax profit from RM6.78m to RM9.73m mainly due to increase in FFB production by 15%. (Source: The Edge) ManagePay enters JV to procure MVNO licence from MCMC MPay has entered into an agreement with Contracts Rise SB (CRSB) to set up a JVC to procure Mobile Virtual Network Operator (MVNO) licence from Malaysian Communication And Multimedia Commission (MCMC) and to launch and promote selfbranded MVNO Starter Pack to all Malaysian and foreigners in Malaysia. CRSB would secure a project of 200,000 users for the JVC, while MPay would enable each user with e-money capabilities via MPay E-Wallet, including issuing a MasterCard Virtual Card Number in each MPay Wallet. This provides growth and business prospects for MPay in the future. MPay will hold a 40% stake in the JVC, while CRSB the remaining 60%. It would fund its investment in the JVC, through its internally-generated funds. (Source: The Edge) Scientex buys land for Klang Valley foray Scientex is buying a 26.44ha land in Rawang, Selangor, for RM85.38m, marking the company's planned foray into the Klang Valley property market. Scientex plans to undertake a mixed development project on the tract located some 2km from the Rawang toll. Its wholly-owned unit Scientex Park (M) SB had signed the sale and purchase agreement with seller Medius Developments SB. The proposed acquisition forms part of the group's strategy to expand its property business from the south of Peninsular Malaysia to the northern parts of Peninsular Malaysia, including the Klang Valley, which also manufacturers industrial packaging. It already had RM1.5bn worth of ongoing property projects across Johor, Melaka and Perak. (Source: The Edge) Reach Energy's RM180m private placement off the table Reach Energy has decided not to go ahead with the RM180m private placement it proposed in May 2016 due to prevailing market conditions. Proceeds from the placement were earmarked mainly to settle the remaining purchase consideration of the acquisition of 60% equity interest in Palaeontol BV, and 60% of the shareholder loans from MIE Holdings Corp, which was completed on Nov 25, Due to the prevailing market conditions, it is challenging for the company to implement the placement at an issue price that is in the best interest of the company and its shareholders. Nevertheless, the company will continue to explore other avenues of fundraising and make the necessary announcements in due course. Reach Energy first proposed the private placement of up to m new shares as a means to repay shareholders who voted against its qualifying acquisition (QA) of the 60% stake in Palaeontolol BV for USD175.9m (RM754.44m). (Source: The Edge) 3

4 ECONOMIC NEWS SGX's introduction of ringgit futures against Malaysia's policy BNM said the introduction of ringgit futures at the Singapore Stock Exchange (SGX) and the Intercontinental Exchange (ICE) goes against Malaysia s foreign exchange administration (FEA) policy. The Malaysian ringgit is a non-internationalised currency and thus, offshore trading of ringgit, in any form whether as a non-deliverable forward traded out of offshore financial centres or as a futures, options and other derivative contracts on exchanges outside of Malaysia, is against Malaysia s policy. BNM urged all market participants to observe the existing FEA rules, adding that a contravention of the FEA is an offence under the Financial Services Act 2013 and Islamic Financial Services Act An appropriate action under the law will be taken against any person that does not comply with the prevailing rules and regulations. (Source: Reuters) Hard-pedalling soft power, China helps launch USD13bn Belt and Road rail project in Malaysia China and Malaysia broke ground on Wednesday on a USD13bn rail project linking peninsular Malaysia's east and west, the largest such project in the country and a major part of Beijing's Belt and Road infrastructure push. The planned 688-km (430-mile) East Coast Rail Link will connect the South China Sea, large parts of which are claimed by China, at the Thai border in the east with the strategic shipping routes of the Straits of Malacca in the west. It is among the most prominent projects in China's controversial Belt and Road Initiative, which aims to build a modern-day "Silk Road" connecting the world's second-largest economy by land corridors to Southeast Asia, Pakistan and Central Asia and maritime routes opening up trade with the Middle East and Europe. The ECRL is indeed yet another 'game changer' and a 'mindset changer' for Malaysia as it will significantly cut travel time to and from the east coast of the peninsula, which faces the South China Sea. (Source: Reuters) US wholesale inventories post biggest gain in 6 months US wholesale inventories increased more than previously reported in June, recording their biggest gain in 6 months, as automobile stocks rose further amid declining salesthe wholesale inventories rose 0.7% after an unrevised 0.6% increase in May. The department reported last month that wholesale inventories jumped 0.6% in June. Auto inventories rose 1.4% after advancing 0.6% in May. The auto sector is struggling in the face of slowing demand, which has left manufacturers with an inventory glut. The component of wholesale inventories that goes into the calculation of gross domestic product wholesale stocks excluding autos rose 0.6% in June. Inventory investment had a neutral impact on the second quarter's 2.6% annualized growth pace after chopping off 1.46% points from GDP at the start of the year. (Source: Reuters) UK says EU offers restricted post-brexit residency rights to Britons The European Union has proposed that Britons living in the bloc after Brexit will only have the right to stay in the country where they are resident when Britain leaves. The future rights of UK nationals living in the EU and EU nationals living in Britain is one of the issues the EU wants to settle in the first stage negotiations. Only then will it move on to talks over the future trading relationship. The EU was only offering restricted residency rights to Britons. EU s offer only guarantees residence rights in the member state in which a British national was resident at the point of our exit from the EU. It does not guarantee the holder any right to onward movement within the EU, for example to work or study in a neighbouring member state. (Source: Reuters) Hong Kong's crowded currency trade enters dangerous territory One of the world s most reliable currency bets is suddenly looking like less of a sure thing. The Hong Kong dollar carry trade, which has produced steady returns for seven straight months, suffered a rare setback on Wednesday as the currency abruptly strengthened the most since February Its 0.1% gain against the US dollar may have been tiny by global standards, but it jolted investors who had positioned for declines by borrowing in Hong Kong to invest in higher-yielding American assets. The trade had been a consistent winner this year after interest rates in the US rose and those in the former British colony held near rock-bottom levels. But now the tightlymanaged exchange rate is turning more volatile as it approaches the weak end of a trading band imposed by the city s de facto central bank. The Hong Kong Monetary Authority triggered Wednesday s spike by announcing plans to sell additional debt instruments called Exchange Fund Bills. (Source: Bloomberg) Gold imports by India more than doubled in July Gold imports by India are said to have risen in July on arrival of some delayed shipments booked ahead of the implementation of a new national goods and services tax on the first of last month. Inbound purchases rose to 53.4 tonnes last month from 22 tonnes a year earlier. Sequentially, imports of the metal fell from 72 tonnes in June. Total imports during January to July jumped more than 2½ times to tonnes. While traders and dealers stocked up on gold inventories ahead of the levy of the national goods and services tax on fears of a higher duty, demand is expected to slow in the second half of 2017 as buyers take time to transition to the new regime. Consumption is estimated to remain below a five-average of 850 tonnes and be in the range of 650 tonnes to 750 tonnes this year. (Source: Bloomberg) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 08/10/ :50 JN Machine Orders MoM Jun 3.60% % -- 08/10/ :50 JN Machine Orders YoY Jun -1.10% % -- 08/10/ :00 FI Industrial Production MoM Jun % -- 08/10/ :00 FI Industrial Production WDA YoY Jun % -- 08/10/ :45 FR Industrial Production MoM Jun -0.60% % -- 08/10/ :45 FR Industrial Production YoY Jun 3.10% % -- 08/10/ :45 FR Manufacturing Production MoM Jun -1.00% % -- 08/10/ :45 FR Manufacturing Production YoY Jun 3.20% % -- 08/10/ :30 SW Industrial Production MoM Jun -0.30% % -- 08/10/ :30 SW Industrial Production NSA YoY Jun % -- 08/10/ :30 SW Industrial Orders MoM Jun % -- 08/10/ :30 SW Industrial Orders NSA YoY Jun % -- 08/10/ :00 IT Trade Balance EU Jun m -- 08/10/ :00 IT Trade Balance Total Jun m -- 08/10/ :30 UK Industrial Production MoM Jun 0.10% % -- 08/10/ :30 UK Industrial Production YoY Jun -0.10% % -- 08/10/ :30 UK Manufacturing Production MoM Jun 0.00% % -- 08/10/ :30 UK Manufacturing Production YoY Jun 0.60% % -- 08/10/ :30 UK Visible Trade Balance GBP/Mn Jun /10/ :30 UK Trade Balance Jun /10/ :30 SV Industrial Production MoM Jun % -- 08/10/ :30 SV Industrial Production YoY Jun % -- 08/10/ :30 US PPI Final Demand MoM Jul 0.10% % -- 08/10/ :30 US PPI Ex Food and Energy MoM Jul 0.20% % -- 08/10/ :30 US PPI Final Demand YoY Jul 2.20% % -- 08/10/ :30 US PPI Ex Food and Energy YoY Jul 2.10% % -- 08/10/ /15 CH Money Supply M2 YoY Jul 9.50% % -- 08/10/ /15 CH Money Supply M1 YoY Jul 14.00% % -- 08/10/ /15 CH Money Supply M0 YoY Jul 6.50% % -- 08/11/ :00 SO Construction Constant YoY Jun % -- 08/11/ :00 PD Current Account Balance Jun -827m m -- 08/11/ :00 PD Trade Balance Jun 120m m -- 08/11/ :00 PD Exports Jun 16609m m -- 08/11/ :00 PD Imports Jun 16547m m -- 08/11/ :30 US CPI MoM Jul 0.20% % -- 08/11/ :30 US CPI Ex Food and Energy MoM Jul 0.20% % -- 08/11/ :30 US CPI YoY Jul 1.80% % -- 08/11/ :30 US CPI Ex Food and Energy YoY Jul 1.70% % -- 08/11/ :30 US CPI Core Index SA Jul /11/ :30 US CPI Index NSA Jul /11/ :30 US Real Avg Weekly Earnings YoY Jul % 1.20% 08/11/ :30 US Real Avg Hourly Earning YoY Jul % 0.90% 08/14/ :50 JN GDP SA QoQ 2Q P 0.60% % -- 08/14/ :50 JN GDP Annualized SA QoQ 2Q P 2.50% % -- 08/14/ :50 JN GDP Nominal SA QoQ 2Q P 0.70% % -- 08/14/ :50 JN GDP Deflator YoY 2Q P -0.50% % -- 08/14/ :50 JN GDP Private Consumption QoQ 2Q P 0.50% % -- 08/14/ :50 JN GDP Business Spending QoQ 2Q P 1.20% % -- 08/14/ :00 CH Industrial Production YoY Jul 7.10% % -- 08/14/ :00 CH Industrial Production YTD YoY Jul 6.90% % -- 08/14/ :00 LN Current Account Balance Jun m -- 08/14/ :00 CZ Current Account Monthly CZK Jun -1.00b b -- 08/14/ :00 EC Industrial Production SA MoM Jun %

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