JF Apex Securities Berhad Newsletter Daily As Highlights 18 March 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 March 2014 Malaysia News & Highlights Kian Joo defers decision on offer, Toyota Tsusho told to seek advice on Bursa rules EA proposes rights issue CB unit receives RM46mil LOA from Gilford 100pc take-up rate for Sendayan lots: MCHB BToto net profit down 15%, takeover and aborted listing drag 3Q earnings Prospecting job for Borneo Oil Petronas and Shell find oil Foreign News U.S. Stocks Rise From 3-Week Low as Factory Output Jumps Europe Stocks Gain as RWE, Vodafone Rise on M&A Activity Emerging Stocks Climb on Russia as RTS Leads World Gains Evergrande Bonds Decline Amid China Housing Bankruptcy Factory Output in U.S. Rises Most in Six Months: Economy Russia Sounds Alarm on Economic Crisis as West Imposes Sanctions FBM KLCI Daily Chart Closing: Support: 1800 Resistance: 1838 Please read carefully the important disclosures at end of this publication

2 Market Thoughts US stocks rallied on Monday, with the Dow industrials rebounding after a five-day losing streak, as voting in Crimea passed without violence and after economic reports had U.S. manufacturing output jumping the most in six months in February. Similarly, European stocks closed higher, recovering from last week's slump as investors responded to positive U.S. data and shrugged off the referendum result in Crimea at the weekend. On the local exchange, the FBM KLCI surged points to points. Following the rebound in the US, we expect the KLCI to be positive today with an eye on its resistance of 1825 points. Stocks to watch for today include: a) EA Holdings Bhd (EAH), following the proposal of a renounceable rights issue exercise; b) CBIP, after its wholly owned unit won a RM46m contract in Papua New Guinea; c) Berjaya Toto, as its latest quarterly net profit fell 15% yoy; and d) Borneo Oil, as the Group has been appointed as contractor to carry out prospecting and mining of alluvial and lode gold in Lipis, Pahang. Malaysia News & Highlights Kian Joo defers decision on offer, Toyota Tsusho told to seek advice on Bursa rules Kian Joo Can Factory Bhd effectively deferred on making a decision pertaining to an offer from Toyota Tsusho Corp (TTC) to acquire at least 51% of its shares. In an announcement yesterday, Kian Joo said the company was not in the position to mull over the non-binding letter of interest made by TTC. The company has today written to TTC to inform that the company is in no position to consider their non-binding letter of interest dated March 7, Kian Joo told the local exchange yesterday. (Source: The Star) EA proposes rights issue ACE Market-listed EA Holdings Bhd (EAH) has proposed a renounceable rights issue exercise with free detachable warrants to raise as much as RM63.6mil to pay for future expansion. The ICT business solution provider s chief executive officer Mohammad Sobri Saadhas provided his irrevocable undertaking to subscribe in full his entitlement. (Source: The Star) CB unit receives RM46mil LOA from Gilford CB Industrial Product Holding s wholly-owned unit, Modipalm Engineering Sdn Bhd, has received a letter of award (LOA) worth RM46.02mil from Gilford Ltd with respect to the proposed 60 tonnes/hr Modipalm Continuous Sterilisation palm oil mill in Papua New Guinea. In a filing with Bursa Malaysia, CB Industrial said the LOA was expected to contribute positively to the earnings of the group for financial years ending Dec 31, 2014 and Dec 31, (Source: The Star) 100pc take-up rate for Sendayan lots: MCHB Property developer, Matrix Concepts Holdings Bhd (MCHB)'s Sendayan Metropark Shop Offices registered a takeup rate of 100 per cent at its soft launch today. The group said all 50 units of the shop lots with a gross development value (GDV) of RM60 million, were snapped up via a balloting system within an hour. (Source: Business Times) BToto net profit down 15%, takeover and aborted listing drag 3Q earnings Berjaya Sports Toto Bhd s (BToto) net profit fell 15% to RM73.2mil for the third quarter ended Jan 31 from RM86.1mil a year ago, dragged down by cash expenses incurred for the takeover of H.R. Owen Plc and the aborted listing of Sports Toto Malaysia Trust. The group s results were also affected by a lower profit contribution from Berjaya Philippines Inc (BPI). There would have been an increase of 3.2% in the pre-tax profit if the expenses for the corporate exercises had been excluded, BToto said in a statement. (Source: The Star) Prospecting job for Borneo Oil Borneo Oil Bhd s wholly-owned unit, Borneo Oil & Gas Corp Sdn Bhd has been appointed by Champmark Sdn Bhd as its contractor to carry out prospecting and mining of alluvial and lode gold on an exclusive basis on an

3 area covering 400 acres under mining lease in Lipis, Pahang. The sub-contract agreement was for a period of five years and renewal for another five years. (Source: The Star) Petronas and Shell find oil Petroliam Nasional Bhd (Petronas) and Shell Malaysia has announced oil discovery in offshore Sabah. The discovery was made by Shell via the Limbayong-2 well during the appraisal of the Limbayong gas field. The appraisal well encountered 136 metres of oil bearing sands and there are plans to conduct more appraisal work on the discovery to determine its recoverable volume. Petronas is indeed pleased with the discovery, which affirms the hydrocarbon prospects of Malaysia s deepwater areas, said Petronas in a statement. (Source: The Star) Foreign News U.S. Stocks Rise From 3-Week Low as Factory Output Jumps The Standard & Poor s 500 Index rose, rebounding from its worst week since January, as data showing a gain in industrial production boosted optimism over the economy and investors watched developments in Ukraine. The S&P 500 rose 1 percent to 1, at 4 p.m. in New York. The Dow Jones Industrial Average climbed points, or 1.1 percent, to 16, About 5.7 billion shares changed hands on U.S. exchanges, 15 percent lower than the three-month average. The S&P 500 rose 1 percent to 1, at 4 p.m. in New York. The Dow Jones Industrial Average climbed points, or 1.1 percent, to 16, About 5.7 billion shares changed hands on U.S. exchanges, 15 percent lower than the three-month average. Europe Stocks Gain as RWE, Vodafone Rise on M&A Activity European stocks advanced, following their biggest weekly drop since January, as companies from RWE AG to Vodafone Group Plc rose amid renewed merger-and-acquisition activity. The Stoxx Europe 600 Index added 1.1 percent to at the close of trading. The benchmark fell 3.3 percent last week as investors awaited Crimea s March 16 referendum on whether to leave Ukraine and join Russia. Emerging Stocks Climb on Russia as RTS Leads World Gains Emerging-market stocks advanced, rebounding from a one-month low, as concern eased that the referendum in Crimea will lead to more violence in the region. Russia s RTS Index rose the most among global equity gauges. The MSCI Emerging Markets Index rose 0.6 percent to The Micex Index, which slumped into a bear market last week, climbed 3.7 percent, while the dollar-denominated RTS posted the biggest gain among 94 equity measures. Benchmark gauges in Hungary, Poland and Turkey added more than 1.4 percent. Indonesia s rupiah rallied to the highest in 19 weeks as Jakarta Governor Joko Widodo s candidacy lured foreign inflows. Evergrande Bonds Decline Amid China Housing Bankruptcy Stocks and bonds issued by Chinese real estate companies slumped after the collapse of a private developer added to concern that defaults are starting to mount as the economy slows and the government reins in lending. Prices on the dollar bonds sold by Evergrande Real Estate Group Ltd., the nation s fourth largest developer by market value, fell 0.5 cent on the dollar yesterday, sending yields to the highest since August. Prices on Kaisa Group Holdings Ltd. (1638) s bonds maturing in 2018 dropped to a seven-month low. Shares of E-House China Holdings Ltd., the online real estate services provider, slid 2.6 percent while SouFun Holdings Ltd. retreated for a seventh day. Factory Output in U.S. Rises Most in Six Months: Economy Factory production rose in February by the most in six months, showing manufacturing will help the U.S. economy emerge from a weather-related setback. The 0.8 percent gain exceeded the highest estimate in a Bloomberg survey and followed a revised 0.9 percent slump in January, figures from the Federal Reserve in Washington showed today. The pickup contrasts with the housing industry, where another report showed builder sentiment rose less than forecast in March. Russia Sounds Alarm on Economic Crisis as West Imposes Sanctions Russia s economy is showing signs of a crisis, the government in Moscow said as the U.S. and the European Union announced sanctions over the country s support for the Crimea region breaking away from Ukraine. The

4 situation in the economy bears clear signs of a crisis, Deputy Economy Minister Sergei Belyakov said in Moscow yesterday. The cabinet needs to refrain from raising the fiscal burden on companies, which would be the wrong approach, he said. Taking money from companies and asking them afterward to modernize production is illogical and strange. (Source: Bloomberg) Futures Kuala Lumpur Composite Index Futures Crude Palm Oil *As at 8.00am 18 March 2014 Technical Review: FBM KLCI Index Closing: Support: (S1) 1800 / (S2) 1780 Resistance: (R1) 1838 / (R2) 1882 Comments: The FBM KLCI gained points to points. Technical indicators were mixed as the RSI climbed in the neutral zone while the MACD hovered below its signal line. Following the record high in December, the index pulled back after hitting its upper channel of 1882 points. After the recent sideways movement around 1825 points, the index turned bearish and could extend the downtrend if it breaches the 1790-point level supported by the 200-day moving average.

5 FKLI Spot Month Contract FKLI Closing: Support: (S1) 1790 / (S2) 1767 Resistance: (R1) 1845 / (R2) 1880 Comments: The spot-month FKLI futures contract jumped points to points. The contract represents 1.34 points premium to the cash market compared to 8.12 points discount in the previous trading day. Technical indicators were mixed with the RSI is climbing in the neural zone while the MACD moving flat below its signal line. Last month, the contract rebounded from its support of 1767 points but could not breach the 1845-point threshold. The contract could enter a downtrend if the support level of 1790 points is broken. 3 rd Month Crude Palm Oil Contract CPO Closing: RM2741 Support: (S1) 2730 / (S2) 2690 Resistance: (R1) 2950 / (R2) 3100 Comments: The 3rd month CPO futures contract dropped RM30 to RM2741 after hitting a 18-month high of RM2900 recently. Technical indicators were negative with the MACD fell further below the signal line while the RSI is falling towards the neutral zone. The rally since July 2013 lifted the contract to its highest since September Following the recent surge, the contract hit its upper channel and has retraced about RM100 from its peak. We expect profit taking to ease and consolidation to kick in around RM2800.

6 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)