JF Apex Securities Berhad Newsletter Daily As Highlights 20 November 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 20 November 2013 Malaysia News & Highlights A RM2b gap in pricing IJM to buy smaller stake in concession. GST will cut Petronas payout to govt Bina Puri targets more joint ventures CPO price trending up Nova MSC unit bags RM7.1mil Saudi job New O&G developments on Perdana Petroleum's radar KPJ eyes Bangladesh market, plans to lease 250-bed hospital in Dhaka Gadang eyes mega highway jobs Foreign News U.S. Stocks Fall as Best Buy Drops Before Bernanke Speech Europe Stocks Slip from Five-Year High; Paddy Power Drops U.K. Stocks Decline after Three-Day Gain; Intertek Drops Emerging-Market Stocks Decline on OECD Growth Forecast Chinese Skeptics Deepening Biggest A-Share Discount in 3 Years Canada Stocks Drop as Technology Slump Offsets Gains by Miners FBM KLCI Daily Chart Closing: Support: 1800 Resistance: 1820 Please read carefully the important disclosures at end of this publication

2 Market Thoughts U.S. stocks posted mild losses on Tuesday, with the S&P 500 recording its first two-day decline of the month, as investors weighed upbeat results from Home Depot and a cautionary note from Best Buy while waiting for indications of central-bank monetary moves ahead. Similarly, European equities closed lower on Tuesday, with markets still cautious about when the U.S. Federal Reserve might scale back its stimulus program and disappointing corporate results weighing on Wall Street. Back to local front, the FBM KLCI surged points or 0.82% to points yesterday mainly lifted by plantation counters following the recent surge of CPO price and expectation of monsoon season which could lead to fall in CPO production and hence further lift the palm oil price. We expect the benchmark index to retreat at a modest level today with some profit taking activities going on. However, the index could still hover above our support level of 1800 points as inspired by the Federal Reserve Chairman Ben Bernanke s speech this morning that the Fed will maintain ultra-easy U.S. monetary policy "for as long as needed'' and will only begin to taper bond buying once it is assured that labor market improvements would continue. This is in line with dovish comments by his nominated successor, Janet Yellen. Stocks could spur investor interest for today are Matrix, Daya, AirAsia X, TSH Resources, Alam Maritim, and Tambun following their quarterly results announcement yesterday. Malaysia News & Highlights A RM2b gap in pricing Puncak Niaga Holdings is seeking a 15% return on equity (ROE) for its water concessionaires, which would put the total value of the consolidation exercise of Selangor water assets to nearly RM12billion, sources said. Puncak Niaga s expectation far exceeds the Selangor government s offer of 12% ROE that values the entire deal at RM9.65 billion. This is the crux of the matter that has delayed the takeover exercise of the water assets in Selangor by the state government, a source said. (Source: The Edge) IJM to buy smaller stake in concession. IJM Corp Bhd is reducing its proposed stake in Indian highway concession firm Viajyawada Tollway Pte Ltd (VTPL) to 89.8% from the originally intended 99.97%. This is in line with the Indian government s policy requirements on foreign ownership of concessions. (Source: The Edge) GST will cut Petronas payout to govt Petroliam Nasional Bhd (Petronas) will contribute less, in percentage terms, to the government s coffers after the goods and services tax (GST) is implemented. Minister in the Prime Minister s Department Datuk Seri Abdul Wahid Omar, however, said the lower contribution will not reflect the value of dividend and tax paid to the government. Petronas is the largest taxpayer and source of revenue, accounting for at least 30 per cent of the government s revenue. Wahid said the percentage of revenue contribution from Petronas has been declining and the government has to broaden its other sources of revenue. With revenue from GST, the proportion of Petronas revenue will come down as a percentage of total revenue. That is our long-term objective, he said after delivering a keynote address at the 18th Malaysian Capital Market Summit, here, yesterday. (Souce: Business Times) Bina Puri targets more joint ventures Bina Puri Holdings Bhd aims to seal new joint-venture deals in the property, construction, mining and power sectors here and overseas within the next four months. Chairman Tan Sri James Foong Cheng Yuen said Bina Puri has been exploring new business opportunities in Malaysia, Thailand, Brunei and Iraq. In the last two months, the group inked four joint-venture agreements to undertake three projects in Malaysia and one in Thailand. These included a deal with the Kuching Hockien Association (KHA) for a mixed property development in Kuching, Sarawak, worth RM300 million, and a tie-up with Chinese and Thailand investors to build the Bangkok Marina Resort & Spa in Thailand for RM200 million.the latest pact is with landowner Sentosa Jaya Sdn Bhd to undertake a mixed development in Kota Baru, Kelantan. (Souce: Business Times)

3 CPO price trending up CRUDE palm oil (CPO) price is expected to strengthen to RM2,609 per tonne in the next three months, Deputy Prime Minister Tan Sri Muhyiddin Yassin said. CPO price stood at an average RM2,555 per tonne in the first 17 days of the month. Muhyiddin said there has been an increase in CPO price from RM2,221 in January to RM2,328 last month."cpo price is on a rising trend, and we hope it will continue next year," he said at a press conference after launching the Malaysian Palm Oil Board's International Palm Oil Congress 2013 (PIPOC) yesterday. (Source: Business Times) Nova MSC unit bags RM7.1mil Saudi job Nova MSC Bhd s wholly-owned subsidiary, novacitynets International Pte Ltd, has bagged a contract from Husain Almasri and Mahmoud Alahdab Consultant Engineering Co in Saudi Arabia, worth about RM7.1mil. The contract is to provide our proprietary, FORNAX eplancheck, an automated building plan checking expect system, the licence and technical consultancy service over the next 18 months, it said in a filing with Bursa Malaysia yesterday. (Source: Bernama) New O&G developments on Perdana Petroleum's radar Perdana Petroleum Bhd expects to benefit from future contract flows from new developments in the oil and gas industry, such as enhanced oil recovery (EOR) initiatives and marginal fields, and other developments. Executive director Datuk Henry Kho said in the future, the company would assist in EOR projects as well as the continued development of marginal fields. There would be spin-off requirements (for offshore support vessels) because everything is offshore, he told StarBiz after the company s EGM. (Source: The Star) KPJ eyes Bangladesh market, plans to lease 250-bed hospital in Dhaka KPJ Healthcare Bhd has recognised that the doubling of Bangladeshis seeking medical treatment in Malaysia to 11,589 in 2012 compared with 2011 is a good opportunity to stake its presence in Bangladesh. In a filing with Bursa Malaysia, KPJ said that it plans to lease a 250-bed hospital building in Dhaka known as Sheikh Fazilatunnessa Mujib Memorial KPJ Specialist Hospital via wholly owned subsidiary KPJ Sdn Bhd from the Father of the Nation Bangabandhu Sheikh Mujibur Rahman Memorial Trust to run it. Operating and managing the RM87.5mil hospital is a reasonable step to take for KPJ to have hands-on experience as a new player in the Bangladeshi healthcare industry, the private healthcare services provider said. (Source: The Star) Gadang eyes mega highway jobs Construction firm Gadang Holdings Bhd has identified the design and build works for the Kinrara-Damansara Expressway and the construction works for the West Coast Expressway, the Damansara-Shah Alam Highway and the Sungai Besi-Ulu Kelang Elevated Expressway as among the RM6bil worth of projects the company is tendering for. Managing director and chief executive officer Tan Sri Kok Onn said more announcements on the tenders would be made available in the coming months. There is the privatisation of a few mega highways that we re looking forward to participate in for the tender for works, he said after a shareholders meeting. (Source: The Star) Foreign News U.S. Stocks Fall as Best Buy Drops Before Bernanke Speech U.S. stocks fell after disappointing forecasts from Best Buy Co. and Campbell Soup Co. while investors awaited a speech from Federal Reserve Chairman Ben S. Bernanke to gauge the prospect of continued stimulus. The Standard & Poor s 500 Index fell 0.2 percent to 1, at 4 p.m. in New York. Yesterday, the gauge briefly surpassed 1,800 for the first time. The Dow Jones Industrial Average lost 8.99 points, or less than 0.1 percent, to 15, About 5.8 billion shares changed hands on U.S. exchanges, about 3 percent below the threemonth average.

4 Europe Stocks Slip from Five-Year High; Paddy Power Drops European stocks dropped from a five-year high as investors weighed equity valuations that are at the highest since The Stoxx Europe 600 Index declined 0.7 percent to at the close of trading in London. The gauge yesterday jumped to its highest level since May 2008, extending a six-week rally. The Stoxx 600 is trading at 15.1 times projected earnings, higher than the 10-year average of 12.1 times earnings, according to data compiled by Bloomberg. U.K. Stocks Decline after Three-Day Gain; Intertek Drops U.K. stocks fell as investors weighed valuations and awaited releases from central banks this week that may shed light on the path of monetary policy. The FTSE 100 Index fell points, or 0.4 percent, to 6, at the close of trading in London. The benchmark gauge has climbed 14 percent this year, reaching a valuation of 13.7 times the estimated earnings of its members, near the highest since 2009, according to data compiled by Bloomberg. The broader FTSE All-Share Index lost 0.4 percent today, and Ireland s ISEQ Index slid 0.9 percent. Emerging-Market Stocks Decline on OECD Growth Forecast Emerging-market stocks fell for the first time in four days after the Organization for Economic Cooperation and Development cut its global outlook. Turkey s lira climbed as the central bank tightened access to credit. The MSCI Emerging Markets Index sliped 0.1 percent to 1, Brazil s Ibovespa dropped the most among major equity gauges in the Americas as oil producer Petroleo Brasileiro SA tumbled. The Shanghai Composite Index snapped a three-day rally as financial and dairy companies plunged. The Borsa Istanbul National 100 Index decreased 1.3 percent, while the lira capped the longest advance since April after the central bank s bid to contain exchange-rate volatility and curb inflation. Chinese Skeptics Deepening Biggest A-Share Discount in 3 Years China s largest package of economic reforms since the 1990s is getting a bigger vote of confidence from foreign investors than from the nation s own citizens. In a year when Asian equities are up 10 percent and American stocks are rising the most in a decade, China s market is getting little respect, even from its own citizens. The Shanghai Composite index is down 3.4 percent, trailing its Hong Kong counterpart by the most since Investors saddled with $698 billion of lost market value since 2010 are proving difficult to win back even as valuations in industries such as cement and transportation offer some of the biggest discounts ever versus companies traded outside the mainland. Canada Stocks Drop as Technology Slump Offsets Gains by Miners Canadian stocks fell, after reaching a two-year high last week, as a slump in technology and industrial shares offset a rise in gold producers while investors watched for signs the U.S. Federal Reserve will continue monetary stimulus. The Standard & Poor s/tsx Composite Index fell points, or 0.1 percent, to 13,442.6 at 4 p.m. in Toronto, after gaining as much as 0.3 percent earlier in the day. The gauge has climbed 8.1 percent this year. (Source: Bloomberg) Futures Kuala Lumpur Composite Index Futures Crude Palm Oil *As at 8.00am 20 November 2013

5 Technical Review: FBM KLCI Index Closing: Support: (S1) 1800 / (S2) 1780 Resistance: (R1) 1820 / (R2) 1826 Comments: The FBM KLCI jumped points to points. Technical indicators are positive with the RSI climbed towards the overbought zone while the MACD climbed higher below its signal line. In early May, the index rallied to an all time high of points after the general election but has since been moving sideways until August s selldown to a 4-month low. The Index had broke its downtrend and embarked on an uptrend. Immediate resistance level is seen at 1820 points. FKLI Spot Month Contract FKLI Closing: 1809 Support: (S1) 1800 / (S2) 1750 Resistance: (R1) 1828 / (R2) 1834 Comments: The spot-month FKLI futures surged 14 points to 1809 points. The contract represents 1.84 points premium to the cash market compared to 2.61 points premium in the previous trading day. Technical indicators are higher with the RSI climbed towards the overbought zone while the MACD moving upwards its signal line. The contract broke its immediate resistance of 1800 points following the surge and the next resistance level is seen at 1828 points.

6 3 rd Month Crude Palm Oil Contract CPO Closing: RM2556 Support: (S1) 2505 / (S2) 2375 Resistance: (R1) 2630 / (R2) 2755 Comments: The 3rd month CPO futures contract lost RM37 to RM2556. Technical indicators are mixed with the MACD crossed its signal line from above to generate a bearish sign while the RSI is declining below the overbought zone. The rally since last month failed to beat the resistance of RM2630 and remains in the long-term sideways trend since October We expect consolidation before re-challenging the RM2630 threshold with support from the RM2500 level.

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)