PP16795/03/2013(031743) Jan-16

Transcription

1 Friday, 27 January, 2017 Jan-16 Feb-16 Mar-16 Mar-16 Apr-16 May-16 May-16 Jun-16 Jul-16 Jul-16 Aug-16 Sep-16 Sep-16 Oct-16 Nov-16 Nov-16 Dec-16 Jan-17 Research Team PP16795/03/2013(031743) Corporate News Economic News Petronas will continue to focus on Pengerang Integrated Complex Sime Darby Property to build affordable houses in Shah Alam Sime Darby to split into three listed companies IHH Heathcare unit buys land, building in Perak for RM63m Kelington unit secures RM40m Pasir Gudang project CCM made reseller of Biocon s human insulin medication Borneo Oil signs deals for marble quarry ops Malaysia looks to Mid-East to sustain palm oil exports Unemployment rate won't exceed 3.5% Japan s fiscal targets slip on falling tax revenue Jobless rate in Q4 hits 6-year high as economy slows India plans expansive budget despite worries Philippines fast emerging as new Asian tiger Bursa Malaysia Close Change +/- Change % FBMKLCI 1, FBMEMAS 11, FBM100 11, FBMEMAS Shariah 12, FBM Hijrah Shariah 13, Volume (m) 1, Value (MYR m) 1, FBMKLCI YTD performance 3.08 KLCI Performance 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) 3, FTSE 100 7, SMR 20 (sen/kg) 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 Market Insight % Participation Bought Sold Net KLIBOR 3-mth 3.42 (%) (MYR m) (MYR m) (MYR m) KLIBOR 6-mth 3.53 Local Insti , , KLIBOR 12-mth 3.63 Local Retail yr MGS 3.61 Foreign yr MGS 4.16 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 % Scomi Energy % Hovid % UMW % Eversendai % Barakah Offshore % Benalec % FGV % TSH Resources % Petronas Gas % MMHE % 2

3 CORPORATE NEWS Petronas will continue to focus on Pengerang Integrated Complex Petronas has clarified that its Pengerang Integrated Complex (PIC) project will continue to be the focus of its downstream growth agenda in the coming years. Petronas made the clarification in response to a Wall Street Journal report on Wednesday that Saudi Aramco has called off plans to partner Petronas for an up to RM89bn (US$20.1bn) project in Pengerang. With the increase in population coupled with the growth of middle-class income both domestically and regionally, Petronas is optimistic that PIC's product range, integrated development and strategic location has positioned it well to capture opportunities from increasing consumer demand (Source: TheEdge) Sime Darby Property to build affordable houses in Shah Alam Sime Darby Property is developing an affordable housing project, Harmoni 1, in the City of Elmina, Shah Alam with a gross development value of RM155m. The project would be the 1 st to adopt the divergent dwelling design (D3) concept. The company would complete 2 prototypes of the D3 concept house by the middle of the year before pursuing the actual project in the 3 rd quarter. (Source: Bernama) Sime Darby to split into three listed companies Sime Darby intends to spin off its plantation and property businesses into 2 new listed companies, leaving it with the trading and logistics businesses, under a plan to create 3 stand-alone pure plays. This initiative would enable each business to pursue its distinct aspirations with greater focus and agility, taking advantage of potential growth opportunities to maximise value for all shareholders. Sime Darby would evaluate the implementation measures and indicative timelines to give effect to the board s decision. It will make appropriate disclosures after getting final approval of the board following the evaluations. (Source: StarBiz) IHH Heathcare unit buys land, building in Perak for RM63m IHH Healthcare s indirect subsidiary, Pantai Medical Centre SB (PMCSB), which is currently leasing a 5-storey building from YNH Property to operate Pantai Hospital Manjung in Perak, is buying the building as well as the 19,986-sq-m land where it sits on for RM63m. PMCSB had signed an agreement with YNH Property s units; YNH Hospitality and Kar Sin to acquire the freehold land in Seri Manjung and purpose-built private hospital with 384 surface car parks erected on it. The proposed acquisition is expected to result in rental savings in the long run. (Source: StarBiz) Kelington unit secures RM40m Pasir Gudang project Kelington has secured a RM40m contract to provide turnkey construction and engineering services to one of the world s major suppliers of speciality emulsion polymers. Kelington s unit Kelington Technologies SB had bagged the contract to construct a manufacturing plant in Pasir Gudang, Johor. The contract was expected to be completed over 11 months and end by December Inclusive of this new contract, the group s outstanding orderbook across its operations in Singapore, China, Taiwan and Malaysia was about RM260m. (Source: StarBiz) CCM made reseller of Biocon s human insulin medication CCM has been appointed the reseller of human insulin medication by Biocon SB, the local subsidiary of Biocon Ltd, a biopharmaceutical company based in Bengaluru, India. Biocon was awarded the contract to manufacture the insulin medication under the Health Ministry s off-take programme. The contract, commencing Dec 2 last year, will last till Dec 1, 2019 with a total contract value of RM300m. The contract terms would be formalised through the execution of a formal agreement between the three parties; CCM, Biocon and the ministry. The contract would include the provision of front-end sales, marketing, distribution and support services for the insulin to all the ministry s hospitals and health clinics. (Source: StarBiz) Borneo Oil signs deals for marble quarry ops Borneo Oil and Gas Corp SB, a subsidiary of Borneo Oil, has entered into sublease and marble quarry operation agreements to acquire 7 parcels of quarry land in Lahad Datu, Sabah. The agreements were in line with the groups expansion plan into limestone mining and related activities. The sublease, dated Jan 24, 2017 and valued at RM80m, was for 6 parcels of quarry land measuring ha. The company had, in July last year, also acquired another parcel measuring 5.49 ha for RM20.58m, which did not require an announcement to Bursa Malaysia. The sublease agreements entitled the company for a 30-year lease, with an additional 30 years. (Source: Bernama) 3

4 ECONOMIC NEWS Malaysia looks to Mid-East to sustain palm oil exports Post TPPA breakdown, Malaysia is pivoting towards the Middle East to sustain its export growth of palm oil. The Cabinet on Wednesday approved the setting up of a regional palm oil office in Tehran, Iran, by mid-2017 to push the commodity into a new untapped market. After Iran s trade embargo was lifted in January last year, Malaysia has exported RM1bn worth of palm oil. Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong wants to double that number by Malaysia will also set up a palm oil research centre in Mumbai, India - Malaysia s biggest importer of the commodity. (Source: Starbiz) Unemployment rate won't exceed 3.5% Malaysia's unemployment rate is manageable and not expected to exceed 3.5% this year amid the global economic slowdown. Malaysia had always been among countries with low unemployment rates averaging 3.1%. The government has lined up an economic agenda which is expected to produce 1.5m jobs by 2020 under the 11th Malaysia Plan. Malaysia should still be regarded as a full employment country. If the average unemployment rate of 3.1% goes up, it will not likely exceed 3.5%. Besides, the government's economic agenda is to produce more new jobs and skilled workers, and the SMEs are currently still employing a lot of people. (Source: Bernama) Japan s fiscal targets slip on falling tax revenue Japan s primary deficit will worsen in coming years, even according to its most optimistic forecasts, because of falling tax revenue and weak consumer spending. The forecasts, released by the Cabinet Office, show the government is falling behind 2 important fiscal discipline targets that were intended to eliminate the primary deficit, which excludes debt servicing costs and new bond sales. Chances for a turnaround are slim because Shinzo Abe last year shifted policy to prioritise infrastructure spending over fiscal discipline, raising concerns that Japan's debt burden will worsen further. Japan s primary deficit will total 8.3trn yen (US$73.1bn), or 1.4% of nominal GDP in fiscal (Source: Reuters) Jobless rate in Q4 hits 6-year high as economy slows Singapore s jobless rate hit a 6-year high in the 4Q, while total employment in 2016 grew at the weakest pace in over a decade, as labour market conditions softened amid a slowdown in economic growth. The total unemployment rate rose to 2.2% in the 4Q from 2.1% in the 3Q, rising to a level last seen in the 4Q of While the rise in the unemployment rate is milder than what was recorded during economic recessions in the past, it raises concerns on the economy s outlook. Consumption growth will slow further, which will impact things like retail sales, discretionary spending. For the whole of 2016, total employment was estimated to have increased by 16,400 or 0.4%, the weakest growth since 2003 when total employment shrank by 0.6%. (Source: Reuters) India plans expansive budget despite worries India s finance minister is likely to borrow more than originally planned when he presents the budget on Feb 1, despite counting on revenues from a national sales tax whose launch date is still unknown. Arun Jaitley is looking at how to fund giveaways to taxpayers and higher public investment to help nurse Asia s 3 rd largest economy back to health after the government s shock decision in November to abolish high-value banknotes. That is raising concern among some economists and investors that the government will take too many fiscal risks. Yet officials say that, given the choice, they would choose growth sustained by state investment over a fiscal straitjacket. (Source: Reuters) Philippines fast emerging as new Asian tiger After years spent languishing behind its neighbours, the Philippines is finally catching up with its fellow Asian tiger economies as it posts some of the fastest growth rates in the world. With the World Bank forecasting expansion of more than 6% for 8 years until 2019 unparalleled in the nation s history, the Philippines is mimicking gains seen in Malaysia and Thailand in the 1990s as they industrialised. Growth in the Philippines was 6.8% in 2016, faster than China s. The region s former powerhouses are giving way to newcomers like the Philippines and Vietnam, whose younger populations and rising middle classes help lure manufacturers. (Source: Bloomberg) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 01/27/ :00 GE Import Price Index MoM Dec 1.30% % -- 01/27/ :00 GE Import Price Index YoY Dec 2.70% % -- 01/27/ :00 EC M3 Money Supply YoY Dec 4.90% % -- 01/27/ :00 BP Gross External Debt Nov b -- 01/27/ :30 US GDP Annualized QoQ 4Q A 2.20% % -- 01/27/ :30 US Personal Consumption 4Q A 2.50% % -- 01/27/ :30 US GDP Price Index 4Q A 2.10% % -- 01/30/ :00 PO Industrial Production MoM Dec % -- 01/30/ :00 PO Industrial Production YoY Dec % -- 01/30/ :30 US PCE Deflator MoM Dec 0.30% % -- 01/30/ :30 US PCE Deflator YoY Dec 1.80% % -- 01/30/ :30 US PCE Core MoM Dec 0.10% % -- 01/30/ :30 US PCE Core YoY Dec 1.70% % -- 01/31/ :50 JN Industrial Production MoM Dec P 0.30% % -- 01/31/ :50 JN Industrial Production YoY Dec P 3.00% % -- 01/31/ :00 JN Construction Orders YoY Dec % -- 01/31/ :00 FI Trade Balance Nov F m -- 01/31/ :00 CZ Money Supply M2 YoY Dec % -- 01/31/ :00 SP Current Account Balance Nov b -- 01/31/ :30 UK Money Supply M4 MoM Dec % -- 01/31/ :30 UK M4 Money Supply YoY Dec % -- 01/31/ :45 US Chicago Purchasing Manager Jan /31/2017 BP Base Interest Rate Feb % -- 02/01/ :30 JN Nikkei Japan PMI Mfg Jan F /01/ :00 CH Non-manufacturing PMI Jan /01/ :00 CH Manufacturing PMI Jan /01/ :30 UK Markit UK PMI Manufacturing SA Jan /01/ :45 US Markit US Manufacturing PMI Jan F /01/ :00 US ISM Manufacturing Jan /01/ :00 US ISM Prices Paid Jan /01/ :00 US ISM New Orders Jan /01/ :00 US ISM Employment Jan /01/ /07 JN Official Reserve Assets Jan $1216.9b -- 02/02/ :00 US FOMC Rate Decision (Upper Bound) 1-Feb 0.75% % -- 02/02/ :00 US FOMC Rate Decision (Lower Bound) 1-Feb 0.50% % -- 02/02/ :00 HU Trade Balance Nov F m -- 02/02/ :30 UK Markit/CIPS UK Construction PMI Jan /02/ :00 UK Bank of England Bank Rate 2-Feb 0.25% % -- 02/02/ :00 UK BOE Asset Purchase Target Feb 435b b -- 02/02/ :00 UK BOE Corporate Bond Target Feb 10b -- 10b -- 02/02/ :00 CZ Repurchase Rate 2-Feb 0.05% % -- 02/02/ :00 DE Foreign Reserves Jan /02/ :00 DE Change in Currency Reserves Jan b -- 02/03/ :30 JN Nikkei Japan PMI Services Jan

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