Market Insight. Performance of BIMB Stock Coverage. Top Losers Weekly Participation. Sold (MYR m) Bought (MYR m)

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1 Monday, 29 May, 2017 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Research Team PP16795/03/2013(031743) Reports Published Results Review: Econpile 3Q17 (Inline): Record year in the making Results Review: GHL System 1Q17 (Inline): More from TPA Results Review: KPJ 1Q17 (Inline): Grossly overlooked Corporate News Axiata to decide on M1 Ltd stake disposal by third quarter Tropicana 1Q net profit more than doubles on strong sales Affin 1Q net profit up 4.6% on improved operating income MCT 3Q net profit down 73% on slower property completion Mitrajaya's 1Q net profit jumps 55% on compulsory land acquisition Serba Dinamik in final discussions with Affin for office tower buy Bursa Malaysia Close Change +/- Change % FBMKLCI 1, FBMEMAS 12, FBM100 12, FBMEMAS Shariah 12, FBM Hijrah Shariah 14, Volume (m) 2, Value (MYR m) 2, FBMKLCI YTD performance 7.95 Economic News Central banks launch new forex code, aim at universal adoption Pound slips as PM May's lead narrows, commodity currencies shaky Japan's factory output seen jumping in April, led by global demand Japan consumer prices rise in April, driven by energy costs China securities regulator moves to reduce volatility with new rules KLCI Performance KLCI Year-End Target: 1,800 points Regional Indices Commodities (Last Close) Close Change +/- Change % YTD Change (%) Close Change +/- Change % DJIA 21, 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 25, Soybean Oil SHCOMP 3, KOSPI 2, Forex TWSE 10, (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 Market Insight % Participation Bought Sold Net KLIBOR 3-mth 3.43 (%) (MYR m) (MYR m) (MYR m) KLIBOR 6-mth 3.54 Local Insti , , KLIBOR 12-mth 3.63 Local Retail yr MGS 3.56 Foreign yr MGS 3.87 Total , , Performance of BIMB Stock Coverage Source: Bank Negara Malaysia Source: The Sun, BIMB Securities Research Top Gainers Weekly Participation Close Change +/- Change % Participation (%) Bought (MYR m) Sold (MYR m) Net (MYR m) Barakah Offshore % Local Insti , , IOI Properties % Local Retail , , Matrix Concepts % Foreign , , IJM Plantations % Total , , Telekom Malaysia % Top Losers Close Change +/- Change % UMW Oil & Gas % Ho Hup % Xin Hwa % Benalec % UEM Sunrise % Source: The Sun, BIMB Securities Research 2

3 CORPORATE NEWS Axiata to decide on M1 Ltd stake disposal by 3Q Axiata will announce its position to sell or keep its 28.5% stake in Singapore-based telecommunications firm M1 Ltd in the 3QFY17, according to its president and group chief executive officer Tan Sri Jamaludin Ibrahim. The company aim to come to a conclusion on whether to sell our stake [in M1 Ltd] or to remain in the company by the 3Q this year. Axiata, along with 2 other key shareholders of M1 Ltd Singapore Press Holdings (SPH) and Keppel Telecommunications & Transportation Ltd had announced a strategic review of their respective shareholdings in the company in March this year. Axiata, SPH and Keppel are not in a rush to sell the stake, as the company have strong balance sheets at the moment, adding that the shareholders participate in a working committee on a weekly or fortnightly basis, to discuss the potential of selling the stake. (Source: The Edge) Tropicana 1Q net profit more than doubles on strong sales Tropicana doubled its net profit to RM32.52m or 2.27 sen a share in the 1QFY17 from RM15.17m or 1.05 sen a share a year ago, mainly contributed by its core property development operations. Quarterly revenue jumped 33.1% to RM381.87m in 1QFY17 from RM286.93m in 1QFY16. The strong quarterly performance reflects the strong sales achieved and the advanced progress of construction works with many of the group s ongoing projects. While the short term prospects are expected to remain challenging, it believes that there will still be demand for properties in prime locations with accessibility to good amenities and attractive pricing. The company is confident to deliver earnings growth in the near future as the group s unbilled sales remained healthy at RM2.3bn as at March 31, 2017, and its developments in the central region continue to draw healthy interest. (Source: The Edge) Affin 1Q net profit up 4.6% on improved operating income Affin's net profit grew 4.6% to RM123.2m for the 1QFY17 from RM117.8m in the 1QFY16, backed by improved operating income, Islamic banking income and net interest income. Revenue rose 19% to RM509.6m from RM426.92m. The total capital ratio, common equity tier- 1 capital ratio and tier-1 capital ratio of all its banking entities remained healthy, well above the minimum requirements. Affin Bank (ABB) was a key contributor to Affin's overall results, achieving a pre-tax profit of RM125.3m for the 1Q17, compared to RM123.1m in the previous year's corresponding quarter. The improved performance was primarily due to higher Islamic banking income, net interest income and other operating income, adding that Affin Islamic Bank Bhd also delivered higher pre-tax profit of RM32.8m for the quarter. (Source: The Edge) MCT 3Q net profit down 73% on slower property completion MCT Bhd's net profit dropped 73.1% to RM5.21 million or 0.37 sen per share in the third quarter ended March 31, 2017 (3QFY17) from RM19.33m or 1.76sen/share a year ago, due to mix of projects with varying completion stages sold to the market. This was cushioned by lower expenses of RM29.4m in 3QFY17 from unspent operating and general administrative expenses due to timing and cost savings initiatives. Quarterly revenue also fell 8.6% to RM137.29m in 3QFY17 from RM150.17m in 3QFY16, mainly due to slower stages of completion from the property development segment from managed completion in Cyberjaya and Cybersouth. For the 9MFY17, MCT posted a 29.1% decline to RM45.56m from RM64.29m in 9MFY16, while revenue fell 13.1% to RM430.32m from RM495.24m a year ago. The property development segment continues to be the group's key financial driver, contributing 92% of total revenues for 9MFY17 compared with 88% contribution in 9MFY16. (Source: The Edge) Mitrajaya's 1Q net profit jumps 55% on compulsory land acquisition Mitrajaya s net profit jumped 55% to RM28.74m for the 1QFY17, from RM18.46m in 1QFY16, helped by a compulsory land acquisition. Earnings per share increased to 4.29sen, from 2.88sen/ share. Revenue for the quarter rose 49% to RM291.4m, from RM195.49m a year earlier. The better financial results in this current quarter were mainly due to recognition of compensation sum received from compulsory land acquisition at Mukim Pengerang, Daerah Kota Tinggi, Johor. The wholly-owned subsidiary, Kemajuan Sekim Baru SB, has received second payment of RM10.90m from the total sum offered of RM33.22m. Segmentally, its construction division and property development division saw better performance for the quarter, while its South Africa investment saw lower profit contribution. Going forward, the construction division will continue to be the main growth driver, backed by its outstanding orderbook of RM1.73bn. (Source: The Edge) Serba Dinamik in final discussions with Affin for office tower buy Serba Dinamik has clarified that it is in the final stages of discussions to acquire an office tower from Affin Holdings. The group was responding to a news report in a business weekly which claimed that Affin Holdings is believed to have sold its office tower in Shah Alam, valued at RM38.25m, to Serba Dinamik. Serba Dinamik Group, has been in negotiations with Affin Holdings' wholly-owned unit Affin Bank to acquire Bangunan AFFIN Bank Shah Alam, a 16-storey building with a four-storey basement located in Seksyen 14. The sale and purchase agreement in relation to the proposed transaction is currently being prepared and has yet to be executed. The company also wish to highlight that the prospectus in relation to their initial public offering dated Dec 30, 2016 stated that as part of the company future plans, the company intend to acquire a corporate office building to house their head office and operational staff, and that they intend to utilise approximately RM30m from the proceeds of the initial public offering for such an acquisition. (Source: The Edge) 3

4 ECONOMIC NEWS Central banks launch new forex code, aim at universal adoption Regulators and leading financial firms launched a new code of conduct for global currency trading, including measures aimed at forcing its universal adoption by the world's major financial institutions. The code was its last chance to head off full formal regulation of the $5trn a day market after a scandal over market manipulation and misuse of client information that saw seven major banks fined around $10bn at the end of a huge global inquiry in Most of the document was published a year ago and the final version's main additions include measures that ask banks and a new generation of electronic traders to provide more details on the algorithms they use and their trading processes. It also addresses and launches a formal consultation over the controversial last look practice that allows banks and other liquidity providers an extra chance to reject trades after receiving requests to execute. The 75-page document lays out 55 highlevel principles rather than hard rules for how participants in the world's biggest financial market should conduct business. (Source: Reuters) Pound slips as PM May's lead narrows, commodity currencies shaky Sterling fell on Friday after a poll showed a narrowing lead for British Prime Minister Theresa May over her opposition ahead of elections next month, while weakness in oil prices dragged on commodity-linked currencies. In a sign that the June 8 election could be more closely contested than previously thought, the opposition Labour Party had cut the lead of May's Conservatives to 5 points. Sterling fell 0.5% to $1.2884, pulling further away from its May 18 peak of $1.3048, the pound's strongest level since September last year. The assumption that a landslide election win for May would strengthen her hand over hard-line Brexiteers in her ruling party and allow her to negotiate a smoother departure from the EU, had been a source of support for sterling. (Source: Reuters) Japan's factory output seen jumping in April, led by global demand Japan's factory output was expected to rebound in April at the fastest rate in about 6 years, boosted by rising exports as global demand recovers. Industrial production was expected to rise 4.3% in April from March, which would be its strongest growth since posting a gain of 6.8% in May The data is expected to confirm production activity is improving on the back of rises in exports and an inventory adjustment coming to an end. Monthly data has fluctuated recently, so better average out figures in April-June to see the trend. A pickup in auto production thanks to a recovery in car sales and rising global demand for electronic components supported Japan's industrial production in April. The trade ministry will release factory output data at 2350 GMT on Tuesday. Respondents expected retail sales to grow 2.3% in April from a year earlier, up for the 6 th month in a row. Household spending was seen slipping 0.7% in April, down for the 14th consecutive month, but the rate of decline would slow from the previous month when it fell an annual 1.3%. (Source: Reuters) Japan consumer prices rise in April, driven by energy costs Japan's core consumer prices rose 0.3% in April from a year earlier to mark a 4 th straight month of increases, offering policymakers some hope a steady economic recovery will convince consumers to start spending again. But the increase was due largely to the fading effect of last year's energy price falls, underscoring the challenges the BoJ still faces after years of heavy monetary stimulus to reach its ambitious 2% inflation target. When stripping away the effect of volatile fresh food and energy costs, consumer prices were unchanged in April from a year ago in a sign many companies remain wary of hiking prices for fear of scaring away cost-sensitive households. Retailers are struggling to raise prices because wages and household income aren't increasing much. Thus try to trim costs by keeping wages low. The positive economic cycle isn't kicking in yet, adding that the BoJ will likely maintain its ultra-loose monetary policy for the time being. With the economy showing signs of life, the BoJ's expect to move to be a reduction rather than an expansion of its monetary stimulus. (Source: Reuters) China securities regulator moves to reduce volatility with new rules China's securities regulator will revise trading rules to reduce financial market volatility, preventing stock dumping and changing the way some bonds are sold. The move comes as stocks held steady after a tumultuous week. Initially hurt by Moody's downgrading of the country's sovereign credit rating, financial heavyweights then surged amid speculation the government had intervened to stabilise the market. The China Securities Regulatory Commission (CSRC) also appears to have slowed the pace of approval for IPOs, amid worries that a flood of new listings are sucking up liquidity. The regulators will revise rules to guide major shareholders to reduce stocks in a regulated and orderly" manner. CSRC also revised securities underwriting rules, saying investors subscribing to convertible bonds no longer need to hand in money before they are awarded the allotted securities. Under the current system, convertible bond issuance would freeze up a massive amount of capital, disturbing money and bond markets. (Source: Reuters) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 05/29/ :30 SW Trade Balance Apr b -- 05/29/ :00 EC M3 Money Supply YoY Apr 5.20% % -- 05/30/ :00 GE Import Price Index MoM Apr 0.10% % -- 05/30/ :00 GE Import Price Index YoY Apr 6.30% % -- 05/30/ :00 PO Industrial Production MoM Apr % -- 05/30/ :00 PO Industrial Production YoY Apr % -- 05/30/ :30 US PCE Deflator MoM Apr 0.20% % -- 05/30/ :30 US PCE Deflator YoY Apr 1.70% % -- 05/30/ :30 US PCE Core MoM Apr 0.10% % -- 05/30/ :30 US PCE Core YoY Apr 1.50% % -- 05/31/ :50 JN Industrial Production MoM Apr P 4.20% % -- 05/31/ :50 JN Industrial Production YoY Apr P 6.10% % -- 05/31/ :00 CH Manufacturing PMI May /31/ :00 CH Non-manufacturing PMI May /31/ :00 JN Construction Orders YoY Apr % -- 05/31/ :00 FI Trade Balance Mar F m -- 05/31/ :00 SP Current Account Balance Mar b -- 05/31/ :00 CZ Money Supply M2 YoY Apr % -- 05/31/ :30 UK Money Supply M4 MoM Apr % -- 05/31/ :30 UK M4 Money Supply YoY Apr % -- 05/31/ :45 US Chicago Purchasing Manager May /31/2017 BP Base Interest Rate Jun % -- 06/01/ :30 JN Nikkei Japan PMI Mfg May F /01/ :45 CH Caixin China PMI Mfg May /01/ :00 HU Trade Balance Mar F m -- 06/01/ :30 UK Markit UK PMI Manufacturing SA May /01/ :45 US Markit US Manufacturing PMI May F /01/ :00 US ISM Manufacturing May /01/ :00 US ISM Prices Paid May /01/ :00 US ISM New Orders May /01/ :00 US ISM Employment May /01/ /07 JN Official Reserve Assets May $1242.3b -- 06/02/ :30 SW Current Account Balance 1Q b -- 06/02/ :30 UK Markit/CIPS UK Construction PMI May /02/ :30 US Trade Balance Apr -$46.0b -- -$43.7b -- 06/02/ :00 DE Foreign Reserves May /02/ :00 DE Change in Currency Reserves May 0.0b b -- 06/03/ /08 IR Industrial Production MoM Apr % -- 06/03/ /08 IR Industrial Production YoY Apr % -- 06/05/ :30 JN Nikkei Japan PMI Services May /05/ :30 JN Nikkei Japan PMI Composite May /05/ :45 CH Caixin China PMI Composite May /05/ :45 CH Caixin China PMI Services May /05/ :30 UK Markit/CIPS UK Services PMI May /05/ :30 UK Markit/CIPS UK Composite PMI May /05/ :30 UK Official Reserves Changes May $1362m -- 06/05/ :45 US Markit US Services PMI May F /05/ :45 US Markit US Composite PMI May F /05/ :00 US ISM Non-Manf. Composite May

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