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Bursa Malaysia Daily Market Report - 2 November

Mohd Noordin
By Mohd Noordin
4 years ago
Bursa Malaysia Daily Market Report - 2 November

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  1. Thursday , 02 November, 2017 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only N ew s 1. D ai l y M arke t C om men t a ry 2. D ai l y B ri ef Fu nd a me n tal Rep o r ts 1 . A x ia t a G ro u p Be r h a d : Go o d R e su l ts b y X L , b u t O b s ta c le s E m e r g e 2 . U n is e m ( M ) Be r h a d : M a rg in s D i sa p p o in t 3 . U S Ec o n o m y: F e d H o l d s I n te re s t R a te s , T ru m p t o A n n o u n c e N e x t Fe d C h a ir Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck Pi cks 2. D ai l y St o ck S cr een 3. Fore i gn Te ch n i ca l St o c k W at ch ( A US , H K & F SS TI) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
  2. Daily Market Commentary Thursday , 02 November 2017 For Internal Circulation Only TA Research, e-mail : taresearch@ta.com.my KLSE Market Statistics (01.11.2017) (mil) Main Market 2,015.3 Warrants 361.9 ACE Market 673.4 Bond 15.0 ETF 0.0 LEAP 0.0 Total 3,065.7 Off Market 67.2 Volume +/-chg (RMmn) -255.3 2,162.4 138.4 26.8 27.3 110.7 4.7 2.2 -0.13 0.0 0.03 0.0 2,302.2 -48.1 163.1 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP October Futures Other Markets DOW JONES NASDAQ (US) FTSE (UK) NIKKEI (JAPAN) KOSPI (KOREA) HANG SENG (HK) FSSTI (S'PORE) SET (BANGKOK) JCI (JAKARTA) SHANGHAI SHENZHEN AUSTRALIA Review & Outlook Value Value/ +/-chg Volume Up Down -464.2 1.07 250 342 4.4 0.07 75 98 -22.1 0.16 37 58 0.6 0.15 5 4 -0.19 1.65 0 2 0.01 0.19 1 0 0.75 368 504 106.1 2.43 % chg % YTD chg 1,743.93 12,590.42 17,455.59 1,740.50 -3.99 -6.85 21.76 -8.50 -0.23 -0.05 0.12 -0.49 6.23 9.80 18.62 6.42 23,435.01 6,716.53 7,487.96 22,420.08 2,556.47 28,594.06 3,391.61 1,714.55 6,038.15 3,395.91 2,003.44 5,937.77 57.77 -11.14 -5.12 408.47 33.04 348.52 17.53 -6.82 32.36 2.57 1.16 28.75 0.25 -0.17 -0.07 1.86 1.31 1.23 0.52 -0.40 0.54 0.08 0.06 0.49 18.58 24.77 4.83 17.29 26.15 29.97 17.73 11.12 14.00 9.42 1.74 4.80 Blue chips ended lower Wednesday, dragged down by foreign selling and after Moody's downgrade of Sime Darby's issuer rating due to its demerger exercise.The KLCI shed 3.99 points to close at 1,743.93, off an early high of 1,748.80 and low of 1,742.35, as losers beat gainers 504 to 368 on total trade of 3.06bn shares worth RM2.30bn. Stocks should stay range bound pending positive leads, with oil & gas related stocks expected to lead gains given the sustained strength in global oil prices. Immediate overhead resistance for the index stays at the prior 2 Oct pivot low of 1,750, next will be 1,767, the 100-day moving average, while tough hurdle is seen from the 8 Aug peak of 1,782, followed by the double-top peak of 1,793 and 1,796. On the downside, stronger support below the recent pivot low of 1,733 will be the April low of 1,729, and subsequently 1,700. Bullish technical momentum on Dialog promotes upside bias towards the 161.8%FP (RM2.32), with higher targets of 176.4%FP (RM2.40) and 200%FP (RM2.52) going forward. Key retracement supports at the 138.2%FP (RM2.19) and 123.6%FP (RM2.12) limits downside risk. Likewise, Wah Seong should extend gains to challenge the 28/8/17 peak (RM1.03), with a confirmed breakout to aim for the 123.6%FP (RM1.12) and 138.2%FP (RM1.18) ahead. Crucial uptrend supports are from the 200-day ma (92sen) and 61.8%FR (88sen). News Bites • • • • • Top 10 KLCI Movers Based on Mkt Cap. Off Market (mn) PTRANS 23.0 @ PCHEM 11.0 @ APPASIA 8.8 @ MAYBANK 5.0 @ APFT 5.0 @ KIPREIT 5.0 @ YONGTAI 3.0 @ YONGTAI-PA 3.0 @ TGUAN 1.0 @ (RM) 0.32 7.37 0.28 9.25 0.01 0.92 1.57 0.90 4.43 Counter MAYBANK TENAGA PBBANK SIME DIGI GENM TM RHBBANK ASTRO YTLCORP Mkt Cap. Chg (RM’mn) (RM) 97,358 84,772 78,929 61,820 38,642 28,342 23,224 20,090 14,208 13,432 -0.05 -0.02 -0.02 -0.11 -0.03 -0.03 -0.17 -0.07 -0.13 -0.02 Vol. (mn) 4.54 3.27 3.89 3.13 5.16 17.59 2.01 0.33 0.01 6.49 • • • • • • The Employees Provident Fund is in talks with overseas insurers to possibly buy stakes in their local units as the central bank enforces foreign-ownership limits in the industry. AirAsia Bhd's wholly-owned subsidiary, Ground Team Red Sdn Bhd has entered into a standard ground handling agreement with AirAsia X Bhd for the provision of ground handling services from GTR to AAX. Unisem (M) Bhd's 3QFY17 net profit grew 4.7% YoY to RM40.4mn on higher sales, improved average selling prices and the appreciation of USD/MYR exchange rate. It was below expectations. Axis Real Estate Investment Trust is leasing a plot of land from Malaysia Airports Holdings Bhd to build an industrial manufacturing facility to be leased to an aerospace components manufacturer. Tan Sri Dato' Seri Vincent Tan Chee Yioun has returned to the Board of Directors of Berjaya Corporation Bhd and assumed the position of Executive Chairman with immediate effect. Hektar Real Estate Investment Trust has revealed that the investment properties under its portfolio have registered a total deficit of RM8.0mn following a revaluation exercise. T7 Global Bhd has proposed to undertake a private placement of up to 10% of the issued shares of the group to third party investors to be identified later. In response to the unusual market activity query issued by Bursa Malaysia Securities Bhd,Theta Edge Bhd said it has been actively pursuing projects in its ordinary course of business and is considering a private placement exercise. Datuk Lee Kian Seng, the former MD of Magna Prima Bhd, has been appointed as the new MD of Jiankun International Bhd. The Nikkei Malaysia Manufacturing PMI dropped to 48.6 in October as compared to 49.9 in September, while the manufacturing sector's overall business conditions deteriorated at the sharpest rate since July. The Federal Reserve left short-term interest rates unchanged, but suggested it remained on course to lift them before year's end amid signs the economy is gaining momentum. Important Dates Exchange Rate 4.2307 -0.0018 114.00 0.6300 1.164 0.0012 USD/MYR ASIABIO - 10:5 Rights Issue - RI of up to 1,163.2m ICPS together USD/JPY with up to 116.3m free detachable warrants. EUR/USD 10 ICPS together with 1 free warrant for every 5 existing shares held, at an issue price of RM0.08 per ICPS. Entitlement Date: 02/11/2017. Trading of Rights: 03/11 - 16/11/2017. Application Closed: 24/11/2017. LISTING ON: 11/12/2017. Disclaimer Commodities Futures Palm Oil (RM/mt) 2,851.00 35.00 Crude Oil ($/Barrel) 54.27 -0.37 Gold ($/tr.oz.) 1,275.50 3.70 The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan, Head of Research MENARA TA ONE, 22 JALAN for TA SECURITIES HOLDINGS BERHAD (14948-M) A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BHD P RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL : 603 - 2072 1277. FAX : 603 - 2032 5048 www.ta.com.my
  3. Thursday , November 02, 2017 FBMKLCI: 1,743.93 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Brief Market View, News In Brief: Corporate, Economy, and Share Buybacks Chartist: Stephen Soo Tel: +603-2167-9607 stsoo@ta.com.my www.taonline.com.my M a r k e t V i e w Oil & Gas Stocks to Lead Gains Blue chips ended lower Wednesday, dragged down by foreign selling and after Moody’s downgrade of Sime Darby’s issuer rating due to its demerger exercise. The KLCI shed 3.99 points to close at 1,743.93, off an early high of 1,748.80 and low of 1,742.35, as losers beat gainers 504 to 368 on total trade of 3.06bn shares worth RM2.30bn. Resistance at 1,750, Support at 1,733 Stocks should stay range bound pending positive leads, with oil & gas related stocks expected to lead gains given the sustained strength in global oil prices. Immediate overhead resistance for the index stays at the prior 2 Oct pivot low of 1,750, next will be 1,767, the 100-day moving average, while tough hurdle is seen from the 8 Aug peak of 1,782, followed by the double-top peak of 1,793 and 1,796. On the downside, stronger support below the recent pivot low of 1,733 will be the April low of 1,729, and subsequently 1,700. Buy Dialog & Wah Seong Bullish technical momentum on Dialog promotes upside bias towards the 161.8%FP (RM2.32), with higher targets of 176.4%FP (RM2.40) and 200%FP (RM2.52) going forward. Key retracement supports at the 138.2%FP (RM2.19) and 123.6%FP (RM2.12) limits downside risk. Likewise, Wah Seong should extend gains to challenge the 28/8/17 peak (RM1.03), with a confirmed breakout to aim for the 123.6%FP (RM1.12) and 138.2%FP (RM1.18) ahead. Crucial uptrend supports are from the 200-day ma (92sen) and 61.8%FR (88sen). Japan’s Nikkei Lead Asian Market Rally Asian shares hit a 10-year high on Wednesday, with markets in Japan and South Korea leading gains in the region as investors digested release of China's Caixin manufacturing Purchasing Managers' Index, which met expectations. The Caixin/Markit Manufacturing Purchasing Manager’s Index (PMI) was 51.0 in October, unchanged from September’s reading and in line with economists’ expectations for a further modest improvement in operating conditions. China’s economy has surprised global financial markets and investors with robust growth of nearly 6.9 percent so far this year, driven by a renaissance in long-ailing “smokestack” industries such as steel. Investors are also focused on the progress of a U.S. tax-cut plan being developed by President Donald Trump and fellow Republicans and on Trump’s announcement of the next head of the Federal Reserve. Japanese stocks yet again scaled a 21-year high on Wednesday, cheered by booming profits for Japan Inc. including exporters such as Sony and Nitto Denko. The Nikkei closed up 1.86 percent at 22,420.08 after reaching 22,455.92, the highest since July 1996. Across the Korean Strait, the Kospi rose 1.18 percent on strength in the tech sector. Samsung Electronics and SK Hynix jumped more than 3 percent. In down Under, the S&P/ASX 200 rose 0.49 percent, with energy stocks leading gains on the broader index. On the mainland, the Shanghai Composite edged up 0.08 percent to end at 3,396.07 and the Shenzhen Composite finished just 0.05 percent above the flat line at 2,003.44. Page 1 of 7
  4. 2-Nov-17 Wall Street Edges Higher On Fed Economic View U .S. stocks mostly closed higher Wednesday, with the Dow and the S&P 500 ending near record levels after the Federal Reserve stood pat on interest rates but referred to the U.S. economy in positive terms. The central bank, in its statement following a two-day meeting, said economic activity has been picking up at a “solid rate,” versus the “moderate” rate that it had referenced in September. The rosier view of the economy also suggests that it is on track to hike interest rates in December, as has been widely expected. With the monetary policy update out of the way, attention will now focus on who will become the next Fed chair. President Donald Trump is expected to name his pick on late Thursday, with all indications so far pointing to current Fed Gov. Jerome Powell as the choice. Separately, investors continue to digest the latest corporate earnings. This season has been strong thus far, with 75 percent of the S&P companies that have reported beating analyst estimates, according to FactSet data. Energy was the best-performing S&P 500 sector, rising 1.1 percent while utilities lagged the most. The Dow Jones Industrial Average rose 57.77 points, or 0.25 percent, to 23,435.01, the S&P 500 gained 4.1 points, or 0.16 percent, to 2,579.36 and the Nasdaq Composite dropped 11.14 points, or 0.17 percent, to 6,716.53. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, November 02, 2017, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 7
  5. 2-Nov-17 N e w s I n B r i e f Corporate The Employees Provident Fund is in talks with overseas insurers to possibly buy stakes in their local units as the central bank enforces foreign-ownership limits in the industry . (The Edge) AirAsia Bhd’s wholly-owned subsidiary, Ground Team Red Sdn Bhd (GTR) has entered into a standard ground handling agreement with AirAsia X Bhd (AAX) for the provision of ground handling services from GTR to AAX. The contract worth RM31.8mn was derived from the estimated number of flight turnarounds. (The Star) Unisem (M) Bhd’s 3QFY17 net profit grew 4.7% YoY to RM40.4mn on higher sales, improved average selling prices and the appreciation of USD/MYR exchange rate. A second interim dividend of 3.5sen per share was declared. (Bursa Malaysia) Axis Real Estate Investment Trust is leasing a plot of land from Malaysia Airports Holdings Bhd to build an industrial manufacturing facility to be leased to an aerospace components manufacturer. (The Edge) Tan Sri Dato’ Seri Vincent Tan Chee Yioun has returned to the Board of Directors of Berjaya Corporation Bhd and assumed the position of Executive Chairman with immediate effect. Accordingly, Dato’ Sri Robin Tan Yeong Ching will relinquish his position as Chairman and will remain as the Chief Executive Officer of the group. (Bursa Malaysia) Hektar Real Estate Investment Trust has revealed that the investment properties under its portfolio have registered a total deficit of RM8.0mn following a revaluation exercise. (The Star) Cepatwawasan Group Bhd’s 3QFY17 net profit declined by 28.8% YoY to RM7.6mn. This was mainly due to lower sales volume of crude palm oil and palm kernel by 21% and 26% respectively, lower fresh fruit bunches production by 14%, lower milling margin and higher plant maintenance cost. (Bursa Malaysia) Damansara Realty Bhd's wholly-owned unit, Metro Parking (M) Sdn Bhd, has secured parking facilities management contracts worth RM1.1mn for the Dataran Maybank, Etiqa Twins and Akademi Etiqa buildings in Kuala Lumpur. (Bernama) T7 Global Bhd has proposed to undertake a private placement of up to 10% of the issued shares of the group to third party investors to be identified later. The exercise is expected to raise approximately RM14.0mn to RM15.5mn which is intended to be utilised for the working capital of the group’s projects. (Bursa Malaysia) In response to the unusual market activity query issued by Bursa Malaysia Securities Bhd on Theta Edge Bhd, the group responded that it has been actively pursuing projects in its ordinary course of business and is considering a private placement exercise whereby it is in preliminary discussions with potential investors. (Bursa Malaysia) Datuk Lee Kian Seng, the former Managing Director (MD) of Magna Prima Bhd, has been appointed as the new MD of Jiankun International Bhd. (Bursa Malaysia) Page 3 of 7
  6. 2-Nov-17 N e w s I n B r i e f Economy Asia Malaysia Nikkei PMI Drops to 48 .6 on Lower New Orders The Nikkei Malaysia Manufacturing Purchasing Managers' Index (PMI) dropped to 48.6 in October as compared to 49.9 in September, while the manufacturing sector's overall business conditions deteriorated at the sharpest rate since July, following a broad stagnation in the prior month. According to a report by IHS Markit, which compiles the survey, the PMI reading was below the long-run series average of 49.3. "This was consistent with a modest deterioration in the health of Malaysia's manufacturing sector," it said. IHS said the overall downturn was mainly driven by a reduction in new work, and the rate of contraction was solid and the fastest since July. "Survey respondents associated the fall in new orders to subdued demand conditions," it added. Meanwhile, new export orders fell for the second consecutive month. The rate of contraction quickened the greatest since December 2016. "The manufacturing sector recorded a rise in output during October. That said, the rate of growth was only fractional," it said. In response to subdued demand conditions and spare operating capacity, firms decreased their payroll numbers at the fastest pace since August 2016. (The Edge Market) All Fuels Up by Four Sen in First Week of November From November 2, all fuels will be four sen more expensive, with RON 95 being priced at RM2.24 per litre (up from RM2.20 last week) and RON 97 at RM2.54 per litre (up from RM2.50). Meanwhile, Euro 2M diesel will now retail at RM2.17 per litre this week (up from RM2.13), and Euro 5 diesel – always higher by 10 sen over Euro 2M – is at RM2.27 per litre. These prices take effect from 12.01am until September 27, when the next round of fuel prices will be announced. Malaysia Drops One Place in 'Ease of Doing Business' Rankings Malaysia dropped one notch to No.24 in the World Bank's annual ease of doing business rankings. The report, which is a survey among 190 countries, takes into account the processes that an entrepreneur has to go through to start and operate a business in the country. Malaysia fell a notch lower despite an increase in the over-all score to 78.43 compared to 77.47 last year. "Doing Business records all procedures officially required, or commonly done in practice, for an entrepreneur to start up and formally operate an industrial or commercial business, as well as the time and cost to complete these procedures and the paid-in minimum capital requirement," said the World Bank in its Doing Business website. For instance, the report takes into consideration what procedures an entrepreneur has to undergo when dealing with construction permits, getting electricity, registering property, getting credit, paying taxes and so on. The report also takes note of the government initiatives and reforms that improve or hinder business activities in the country. (The Star) Japan Manufacturing Growth Remains Robust in October Japan's manufacturing activity continued to expand strongly in October, underpinned by solid expansions in output, new orders and employment, survey data from IHS Markit showed. The Nikkei Manufacturing Purchasing Managers' Index, or PMI dropped marginally to 52.8 in October from 52.9 in September. However, any reading above 50 indicates expansion in the sector. Expansionary trends continued in output and new orders in October. The rate of job creation picked up from September's ten-month low in line with production requirements. On the price front, input price inflation accelerated slightly to a 6-month high in October, led by higher raw material prices. As a result, companies raised output charges, with inflation accelerating to the joint-fastest since November 2014. Firms remained firmly optimistic regarding future output expectations. The level of positive sentiment weakened to the lowest since November 2016. (RTT News) Page 4 of 7
  7. 2-Nov-17 Caixin China Manufacturing PMI Is 51 .0 for October, Meeting Expectations A survey focused on small and mid-size businesses in China met expectations. The Caixin/Markit manufacturing Purchasing Managers' Index for October came in at 51.0. Economists polled by Reuters expected the private PMI reading to be at 51.0 for October — unchanged from September. While the reading signaled a marginal improvement in manufacturing operating conditions across China, production increased at the weakest pace in fourth months, Caixin and Markit said in a joint press release. Coupled with growth in new orders, that means there was an increase in outstanding business, they added. Output may still be pressured in the months ahead. The stringent production curbs imposed by the government to reduce pollution and relatively low inventory levels have added to cost pressures on companies in midstream and downstream industries, which could have a negative impact on production in the coming months. (CNBC) Australia Manufacturing Growth Moderates in October: AiG The manufacturing sector in Australia expanded for the thirteenth successive month in October, but the rate of growth eased since September, the latest survey from the Australian Industry Group revealed. The Performance of Manufacturing Index, or PMI, dropped to 51.1 in October from 54.2 in September. However, any reading above 50 indicates expansion in the sector. Moreover, the latest rate of growth was the weakest since January. Among components, new orders and employment, supplier deliveries all increased in October, while production decline sharply. (RTT News) United States Fed Leaves Rates Unchanged, Cites ‘Solid Rate’ of Economic Growth The Federal Reserve left short-term interest rates unchanged, but suggested it remained on course to lift them before year’s end amid signs the economy is gaining momentum. Officials have penciled in one more move for 2017 if the economy stays on track. The Fed has one more meeting scheduled before the end of the year, on Dec. 12-13. The central bank has raised its benchmark federal-funds rate four times since late 2015, in quarter-percentagepoint steps, to a current range between 1% and 1.25%. “Economic activity has been rising at a solid rate despite hurricane-related disruptions,” the Fed said in a statement after the conclusion of its two-day policy meeting. Gross domestic product, the broadest measure of goods and services produced in the U.S., rose at a 3% annual rate in the third quarter, the Commerce Department said Friday. That followed 3.1% annualized growth in the spring, for the best six-month stretch of growth in three years. The storms that hit the Gulf Coast and Florida in late summer “are unlikely to materially alter the course of the national economy in the medium term,” the Fed said. Fed Chairwoman Janet Yellen, in her most recent public remarks, kept the door open to another rate increase this year, saying the “ongoing strength of the economy will warrant gradual increases.” But she didn’t say when the next move was likely. Market expectations for a rate increase in December are high, and Fed officials have done little to dispel them. (The Wall Street Journal) ADP: U.S. Private Sector Adds 235,000 Jobs in October Hiring at private U.S. employers grew more than expected, according to a recent report, showing that the economy continues to grow as parts of the country rebuild from the recent hurricanes. Firms across the country added 235,000 workers to their ranks in October, according to payroll processor Automatic Data Processing Inc. and forecasting firm Moody’s Analytics. Economists surveyed by The Wall Street Journal had expected the addition of 190,000 jobs. The September total was revised down to 110,000 from 135,000. The ADP report is based on private-payroll data in addition to government data. “Resurgence in construction jobs shows the rebuilding is already in full swing,” said Mark Zandi, chief economist of Moody’s Analytics. “Looking through the hurricane-created volatility, job growth is robust.” Growth was driven by large employers, but small and midsize companies also showed employer growth. The ADP report comes ahead of the monthly jobs report from the U.S. Bureau of Labor Statistics on Friday. The BLS report is expected to show strong gains in employment, compared with an unexpected decline for September, largely Page 5 of 7
  8. 2-Nov-17 related to the recent hurricanes . Economists expect nonfarm jobs to rise by 315,000 for October, compared with a loss of 33,000 the prior month. (The Wall Street Journal) U.S. Factory-Activity Index Slipped in October, but Still Solid A closely watched gauge of U.S. manufacturing activity signaled healthy growth in October even as it retreated from its highest level in 13 years. The Institute for Supply Management on Wednesday said its manufacturing index fell to 58.7 in October from September’s 60.8, which was the strongest month since May 2004. A reading above 50 indicates activity is expanding across the factory sector, while a number below 50 signals contraction. Economists surveyed by The Wall Street Journal had expected an October reading of 59.0. Despite the pullback from September, no “serious weakening in the trend” is expected ahead, Pantheon Macroeconomics Chief Economist Ian Shepherdson said in a note to clients. “Global demand is strong, the dollar is competitive and domestic spending on capital equipment is rising rapidly.” Several late-summer hurricanes likely continue to skew the data, but the broader trend suggests solid growth in factory activity. “It’s still a very strong year,” said Timothy Fiore, who oversees the ISM survey. The details of Wednesday’s report showed a retreat across many components, though most remained in positive territory. The neworders index fell to 63.4 in October and the production index was down to 61.0. The employment index decreased to 59.8 last month. The index tracking new export orders fell to 56.5 in October. The prices index, tracking raw-material costs, declined to a still-high 68.5 last month. Inflation has been subdued this year, though a hurricane-fueled spike in gasoline prices pushed up broad price gauges in recent months. (The Wall Street Journal) U.S. Construction Spending Rises in September, but August Revised Lower U.S. construction spending unexpectedly rose in September as a surge in public construction outlays offset the third straight monthly decline in investment in private projects. The Commerce Department said on Wednesday that construction spending increased 0.3% to $1.22 trillion. But August’s construction outlays were revised down to show a 0.1% gain instead of the previously reported 0.5% rise. Economists polled by Reuters had forecast construction spending unchanged in September. Construction spending increased 2.0% on a year-on-year basis. In September, investment on private construction projects fell 0.4% after slipping 0.1% in August. It was the third straight monthly drop in private construction outlays and reflected a 0.8% decline in spending on private nonresidential projects. Spending on nonresidential projects in September was the lowest since April 2016. In September, outlays on public construction projects jumped 2.6% after rising 0.7% in August. Spending on state and local government construction projects climbed 2.5%. Federal government construction spending soared 3.4%. (Reuters) Europe and Uni ted Kingdom UK Manufacturing Growth was Stronger in October, Says PMI Survey British manufacturers reported stronger growth in October, driven by higher domestic demand and export orders. The IHS Markit/CIPS purchasing managers' index (PMI) rose to 56.3 last month, from 56 in September. It was the fifteenth consecutive month of expansion for the sector, and will fuel debate over whether the economy is ready for an interest rate rise. The news sent the pound to its highest against the dollar since early October. Sterling rose 0.2% to USD1.331. The pound also rose 0.3% versus the euro to €1.143, marking its highest level against the Eurozone currency since early June. The report said the UK domestic market was the prime source of new manufacturing orders. However, growth of the consumer goods sector fell to a seven-month low as new contracts eased. New export orders increased at a slightly slower pace as well, according to IHS Markit, due to the recent fluctuations in the pound sterling. More than 50% of manufacturers surveyed said they expected output to be higher in one year's time. (BCC News) UK House Price Growth Picks Up in October, Nationwide Says British annual house price growth edged up to a three-month high in October, mortgage lender Nationwide said, although the outlook for the housing market remained subdued. House prices rose 2.5% on the year compared with 2.3% in September. Analysts polled by Page 6 of 7
  9. 2-Nov-17 Reuters had predicted house price inflation would slow to 2 .2%. On the month, prices rose 0.2%, Nationwide said. The BoE is widely expected to raise rates from 0.25% to 0.5% at this week’s meeting. Nationwide said such a rise would probably have only a modest effect on borrowers with a variable rate mortgage, with monthly payments on the average mortgage likely to rise by 15 pounds. (Reuters) Share Buy-Back: 01 November 2017 Company BSLCORP E&O LIENHOE PECCA UNIMECH Bought Back Price (RM) Hi/Lo (RM) 5,000 70,000 2,504,000 82,200 10,000 0.60 1.53/1.52 0.355/0.35 1.39/1.38 1.05/1.04 0.60/0.59 1.53/1.51 0.355/0.35 1.40/1.38 1.06/1.04 Total Treasury Shares 1,364,113 10,702,747 13,824,200 1,637,200 5,999,510 Source: Bursa Malaysia Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 7 of 7
  10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) BETA EPS (sen) PER (X) Div Yield (%) FY17 FY18 FY17 FY18 FY17 52weeks 52weeks % Chg FY18 High Price % Chg Low Price % Chg YTD 01-Nov-17 AUTOMOBILE BAUTO 2.03 2.50 0.86 10.2 14.3 19.9 14.2 5.7 5.7 2.30 -11.7 1.84 10.3 MBMR 2.09 2.09 0.96 20.7 23.2 10.1 9.0 2.0 2.2 2.60 -19.6 2.01 4.0 -4.7 -2.3 PECCA 1.38 1.69 na 7.8 11.1 17.7 12.5 3.6 4.0 1.91 -27.7 1.38 0.0 -13.2 UMW 5.24 5.04 1.39 19.7 30.6 26.6 17.1 2.5 3.8 6.08 -13.8 4.09 28.0 24.1 BANKS & FINANCIAL SERVICES ABMB 3.74 4.80 1.38 33.1 30.6 11.3 12.2 4.3 4.3 4.49 -16.7 3.60 3.9 0.5 AFFIN 2.55 3.00 0.87 29.4 33.6 8.7 7.6 3.1 3.1 3.00 -15.0 2.15 18.6 6.7 AMBANK 4.33 5.70 1.21 43.9 48.6 9.9 8.9 4.1 4.2 5.70 -24.0 3.90 11.0 0.5 CIMB 6.14 8.00 1.48 49.6 55.2 12.4 11.1 4.1 4.5 7.08 -13.3 4.49 36.7 36.1 HLBANK 15.94 17.50 0.59 104.9 114.2 15.2 14.0 2.8 2.8 16.30 -2.2 12.80 24.5 18.1 MAYBANK 9.20 10.20 0.97 69.6 75.9 13.2 12.1 5.4 5.4 9.86 -6.7 7.63 20.6 12.2 PBBANK 20.44 23.60 0.60 137.2 142.4 14.9 14.4 2.7 2.8 20.90 -2.2 19.40 5.4 3.7 RHBBANK 5.01 5.80 1.41 50.6 55.0 9.9 9.1 3.0 3.0 5.59 -10.4 4.58 9.4 6.4 BURSA 9.98 11.10 0.78 40.2 39.0 24.8 25.6 3.4 3.4 10.98 -9.1 8.08 23.5 14.4 CONSTRUCTION BPURI 0.38 0.38 0.53 4.7 4.6 8.0 8.2 0.0 0.0 0.49 -22.7 0.33 15.4 -13.8 GADANG 1.23 1.75 0.40 15.2 14.3 8.1 8.6 2.4 2.4 1.37 -10.2 0.89 39.0 17.1 GAMUDA 5.16 6.00 0.96 27.8 34.5 18.6 15.0 2.3 2.3 5.52 -6.5 4.65 11.0 7.9 IJM 3.16 3.50 0.91 15.3 20.2 20.7 15.6 2.4 3.0 3.61 -12.5 3.07 2.9 -1.3 PESONA 0.55 0.64 0.69 4.6 6.9 12.1 8.0 4.5 4.5 0.74 -25.2 0.43 29.4 -9.1 SENDAI 0.98 0.58 1.26 8.2 9.6 11.8 10.2 1.0 1.0 1.39 -29.9 0.49 99.0 69.6 SUNCON 2.30 2.65 na 12.7 14.7 18.2 15.6 2.4 2.4 2.43 -5.3 1.56 47.4 35.3 WCT 1.70 1.61 1.00 11.5 12.5 14.8 13.6 1.8 1.8 2.48 -31.3 1.49 14.1 -1.1 LITRAK 5.88 6.26 0.33 41.9 45.7 14.0 12.9 4.3 4.3 6.15 -4.4 5.57 5.6 0.0 ANNJOO 3.72 4.40 1.21 41.3 45.5 9.0 8.2 5.5 5.9 3.86 -3.6 1.96 89.8 71.4 CHINHIN 1.31 1.58 na 8.3 11.3 15.9 11.6 3.1 4.6 1.49 -12.1 0.85 55.0 50.6 WTHORSE 1.95 1.67 0.49 6.7 10.0 29.1 19.6 5.1 5.1 2.19 -11.0 1.92 1.6 -3.0 CARLSBG 15.94 18.06 0.65 79.3 86.2 20.1 18.5 5.0 5.4 16.00 -0.4 13.72 16.2 14.5 HEIM 18.98 19.14 0.47 79.6 84.0 23.8 22.6 3.8 4.0 19.58 -3.1 15.56 22.0 15.9 AEON 2.06 2.23 0.49 6.5 7.5 31.6 27.4 2.0 2.3 2.85 -27.7 1.95 5.6 -19.8 AMWAY 7.17 8.62 0.34 30.6 38.7 23.4 18.5 4.5 4.9 8.18 -12.3 7.05 1.7 -2.2 F&N 25.34 27.41 0.14 121.1 150.9 20.9 16.8 2.8 3.0 26.00 -2.5 22.44 12.9 7.9 HUPSENG 1.15 1.50 0.30 6.5 6.6 17.7 17.4 5.2 5.2 1.28 -10.2 1.12 2.7 -0.1 Building Materials CONSUMER Brewery Retail JOHOTIN 1.41 1.80 0.43 13.7 15.3 10.3 9.2 3.0 3.5 1.76 -19.9 0.93 52.4 13.7 NESTLE 88.00 92.76 0.41 292.7 325.4 30.1 27.0 3.1 3.2 89.00 -1.1 74.12 18.7 12.5 PADINI 4.77 4.67 0.52 23.5 27.0 20.3 17.7 2.4 2.6 4.80 -0.6 2.26 111.0 87.8 POHUAT 2.01 2.50 0.63 27.4 27.4 7.3 7.3 4.0 4.0 2.08 -3.4 1.53 31.4 16.2 QL 3.87 3.26 0.32 12.1 12.8 32.0 30.2 1.1 1.2 4.03 -4.0 3.26 18.9 16.2 SIGN 0.92 1.08 0.87 6.4 8.2 14.4 11.3 2.7 3.8 1.07 -14.0 0.78 17.9 15.7 38.24 52.08 1.29 198.6 187.4 19.3 20.4 5.2 5.2 51.04 -25.1 38.00 0.6 -13.4 GENTING 9.06 11.51 1.49 45.6 54.4 19.9 16.7 1.5 1.8 10.00 -9.4 7.50 20.8 14.0 GENM 5.00 6.53 1.52 21.0 27.1 23.8 18.4 1.6 1.8 6.38 -21.6 4.42 13.1 10.7 BJTOTO 2.38 3.34 0.80 18.3 21.5 13.0 11.1 5.9 6.7 3.19 -25.4 2.25 5.8 -19.6 LUSTER 0.13 0.15 2.09 0.4 0.4 34.4 34.7 0.0 0.0 0.16 -21.9 0.05 150.0 150.0 IHH 5.64 6.41 0.68 7.9 13.1 71.1 43.1 0.6 0.6 6.60 -14.5 5.54 1.8 -11.2 KPJ 1.02 1.17 0.39 3.3 4.1 30.8 25.1 1.5 1.8 1.14 -10.5 0.96 6.0 -2.4 HARTA 7.65 6.87 0.57 17.1 24.6 44.6 31.1 1.1 1.4 7.77 -1.5 4.53 68.9 58.4 KOSSAN 7.11 7.35 -0.02 33.9 40.0 21.0 17.8 2.4 2.8 7.36 -3.4 5.62 26.5 7.9 SUPERMX 1.78 1.80 0.19 10.6 15.2 16.8 11.7 1.8 2.5 2.38 -25.2 1.69 5.3 -15.6 TOPGLOV 6.40 6.00 -0.36 26.4 29.4 24.3 21.7 2.3 2.3 6.80 -5.9 4.56 40.4 19.6 KAREX 1.62 1.60 0.16 2.8 4.6 58.1 34.9 1.2 0.7 2.62 -38.2 1.37 18.2 -31.4 SCIENTX 8.93 9.38 0.39 52.3 64.9 17.1 13.8 1.8 2.0 9.85 -9.3 6.50 37.4 33.3 SKPRES 1.74 1.75 0.47 8.3 10.4 21.1 16.8 2.4 3.0 1.85 -5.9 1.24 40.3 34.9 ASTRO 2.81 3.40 1.28 13.2 14.6 21.2 19.3 4.4 4.6 2.94 -4.4 2.47 13.8 8.1 MEDIA PRIMA 0.85 0.60 0.45 0.9 2.8 99.1 30.0 0.8 2.7 1.32 -36.0 0.66 29.0 -26.5 STAR 1.69 1.00 0.65 3.3 4.0 51.0 41.8 24.9 10.7 2.22 -23.8 1.63 3.7 -13.2 Tobacco BAT GAMING Casino NFO HEALTHCARE Hospitals Rubber Gloves INDUSTRIAL MEDIA
  11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) BETA EPS (sen) FY17 PER (X) Div Yield (%) FY18 FY17 FY18 FY17 52weeks 52weeks % Chg FY18 High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.49 0.75 1.14 3.6 4.5 13.5 10.8 2.0 2.0 0.69 -29.0 0.23 117.8 92.2 LCTITAN 5.24 6.66 na 42.8 63.4 12.2 8.3 4.4 4.8 6.53 -19.8 4.14 26.6 -19.4 -12.6 MHB 0.80 0.78 1.71 -2.0 -0.5 na na 0.0 0.0 1.16 -31.0 0.63 28.0 MISC 7.08 6.56 1.05 56.3 46.9 12.6 15.1 4.2 4.2 7.90 -10.4 6.91 2.5 -3.7 PANTECH 0.68 0.69 1.10 4.0 6.1 17.1 11.1 2.6 4.0 0.74 -8.1 0.44 56.3 52.8 PCHEM 7.37 7.62 0.98 44.3 44.7 16.6 16.5 2.6 2.7 7.80 -5.5 6.54 12.7 5.6 SENERGY 1.62 1.66 2.81 6.6 -0.4 24.5 na 0.6 0.0 2.10 -22.9 1.33 21.8 0.0 SERBADK 2.65 2.77 na 22.1 25.2 12.0 10.5 2.5 2.9 2.76 -4.0 1.51 75.5 76.7 UMWOG 0.34 0.48 1.70 -12.0 -3.5 na na 0.0 0.0 0.92 -63.7 0.27 24.1 -60.8 -13.5 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.47 1.55 1.27 FGV 1.91 1.52 1.86 IJMPLNT 2.88 3.58 0.32 IOICORP 4.48 4.14 1.32 KFIMA 1.67 1.89 0.46 KLK 24.60 26.18 SIME 9.09 9.80 UMCCA 6.78 GLOMAC HUAYANG 11.3 12.3 13.0 12.0 0.0 0.0 1.98 -25.8 1.28 14.8 1.0 2.5 193.2 75.0 2.6 2.6 2.18 -12.4 1.42 34.5 23.2 12.3 14.1 23.4 20.5 2.4 2.8 3.60 -20.0 2.83 1.8 -15.3 17.3 21.0 25.8 21.3 2.1 3.6 4.81 -6.9 4.30 4.2 1.8 19.9 13.3 8.4 12.6 5.4 5.4 1.96 -14.8 1.65 1.2 -1.8 0.79 103.4 120.4 23.8 20.4 2.1 2.4 25.50 -3.5 23.00 7.0 2.5 1.52 34.2 37.3 26.6 24.3 2.5 2.5 9.70 -6.3 7.85 15.8 12.2 7.52 0.41 37.5 31.8 18.1 21.3 3.4 2.5 6.83 -0.7 5.50 23.2 13.5 0.66 0.60 0.52 1.4 5.0 45.6 13.1 4.1 4.1 0.78 -15.4 0.61 8.2 -5.0 0.78 0.69 0.62 17.3 1.8 4.5 42.9 5.1 0.6 1.23 -36.6 0.78 0.6 -31.0 IBRACO 0.87 0.94 na 3.3 10.5 26.7 8.3 2.3 4.6 1.05 -17.1 0.76 15.2 -13.0 IOIPG 1.99 2.23 0.82 18.9 16.9 10.5 11.8 3.0 3.0 2.30 -13.6 1.85 7.7 2.1 MAHSING 1.58 1.76 0.97 14.3 13.5 11.0 11.7 4.1 4.1 1.64 -3.7 1.34 17.9 10.5 SNTORIA 0.74 0.98 0.29 6.2 10.3 12.0 7.2 1.4 1.4 1.00 -26.0 0.69 7.2 -7.5 PLANTATIONS PROPERTY Note: SNTORIA proposed bonus issue of warrants & right issue of shares. For more details please refer to 25.09.17 report. SPB 4.79 5.97 0.67 25.6 22.8 12.8 14.4 2.5 2.5 5.19 -7.7 4.32 10.8 8.4 SPSETIA 3.27 4.10 0.93 11.6 12.7 14.7 13.4 4.3 4.3 4.50 -27.3 3.10 5.5 4.5 SUNWAY 1.70 1.83 0.73 15.8 15.2 12.4 13.0 2.9 2.9 1.96 -13.2 1.24 37.2 32.2 SUNREIT 1.73 1.86 0.74 9.2 10.0 18.7 17.2 5.3 5.8 1.82 -4.9 1.63 6.1 0.6 CMMT 1.46 1.72 0.42 8.1 8.6 18.1 16.9 5.8 6.1 1.72 -15.1 1.40 4.3 -4.6 -25.5 REIT POWER & UTILITIES MALAKOF 1.02 1.22 0.65 6.8 6.9 14.9 14.9 6.9 6.9 1.52 -32.9 1.00 2.5 PETDAG 24.10 21.47 0.65 98.2 102.3 24.5 23.6 3.0 3.2 25.70 -6.2 23.00 4.8 1.3 PETGAS 18.08 19.37 0.88 87.6 100.1 20.6 18.1 3.5 3.9 22.18 -18.5 17.80 1.6 -15.1 TENAGA 14.98 17.38 0.76 175.7 130.0 8.5 11.5 3.0 3.0 15.46 -3.1 13.00 15.2 7.8 YTLPOWR 1.31 1.40 0.69 8.4 11.4 15.6 11.5 3.8 3.8 1.50 -12.7 1.29 1.6 -10.3 TELECOMMUNICATIONS AXIATA 5.40 5.40 1.34 15.7 16.9 34.5 31.9 1.5 1.6 5.40 0.0 4.11 31.4 14.4 DIGI 4.97 5.20 0.78 19.5 20.0 25.4 24.9 3.9 4.0 5.19 -4.2 4.63 7.3 2.9 MAXIS 5.99 6.10 0.74 26.0 26.2 23.1 22.8 3.3 3.3 6.60 -9.2 5.48 9.3 0.2 TM 6.18 7.20 0.63 22.6 23.2 27.3 26.6 3.3 3.4 6.69 -7.6 5.81 6.4 3.9 TECHNOLOGY Semiconductor & Electronics ELSOFT 2.59 3.00 0.54 11.3 14.1 22.9 18.4 3.1 3.8 2.95 -12.2 1.27 104.7 84.5 IRIS 0.17 0.25 1.85 -1.3 0.6 na 29.8 0.0 0.0 0.22 -25.0 0.10 65.0 50.0 INARI 2.80 2.75 0.74 11.3 13.0 24.8 21.5 3.5 3.3 2.87 -2.4 1.59 75.7 69.0 MPI 13.90 15.40 0.08 89.5 110.2 15.5 12.6 1.9 1.9 14.52 -4.3 7.20 93.1 87.6 UNISEM 4.02 3.85 0.76 23.5 27.1 17.1 14.8 3.0 3.0 4.25 -5.4 2.27 77.1 70.3 TRANSPORTATION Airlines AIRASIA 3.46 3.76 0.96 44.0 37.6 7.9 9.2 1.2 1.4 3.59 -3.6 2.16 60.2 51.1 AIRPORT 8.35 8.10 1.25 17.2 17.5 48.4 47.7 1.2 1.2 9.45 -11.6 5.91 41.3 37.8 120.0 Freight & Tankers PTRANS 0.32 0.44 na 2.1 2.3 15.6 14.0 1.9 2.1 0.38 -16.2 0.14 127.1 TNLOGIS 1.49 1.80 1.14 12.0 13.6 12.4 10.9 2.9 3.4 1.83 -18.7 1.48 0.7 -4.4 WPRTS 3.70 4.05 0.84 17.1 15.1 21.6 24.5 3.5 3.1 4.45 -16.9 3.58 3.4 -14.0 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) Beta EPS (cent) FY17 FY18 PER (X) FY17 FY18 Div Yield (%) FY17 52week 52week % Chg FY18 High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 22.99 23.30 1.23 172.7 189.1 13.3 12.2 2.6 2.6 23.1 -0.3 14.88 54.5 32.6 OCBC 11.94 13.50 1.19 95.5 104.0 12.5 11.5 5.7 6.7 12.0 -0.3 8.84 43.3 33.9 UOB 24.86 25.40 1.06 192.5 206.0 12.9 12.1 2.8 2.8 25.0 -0.6 17.98 38.3 21.9 PLANTATIONS WILMAR 3.41 3.72 0.86 28.9 31.1 11.8 11.0 2.3 2.6 4.0 -14.8 3.08 10.7 -5.0 IFAR 0.46 0.53 1.02 4.9 5.2 9.4 8.8 2.6 2.8 0.6 -23.5 0.44 4.6 -13.3 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
  12. COMPANY UPDATE Thursday , November 02, 2017 FBMKLCI: 1,743.93 Sector: Telecommunications THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM5.40 (0%) Axiata Group Berhad Last Traded: RM5.40 Good Results by XL, but Obstacles Emerge Paul Yap, CFA Tel: +603-2167 9603 UNDER REVIEW paulyap@ta.com.my Review XL Axiata delivered a strong 9MFY17 normalised net profit of Rp338bn. While surpassing ours and consensus net profit estimates, revenue and EBITDA came within expectations at 75%. The group’s data led strategy continues to bear fruit, as service revenue (+5% QoQ) growth outpaced an increase in opex (+3% QoQ). Data revenues advanced 11% QoQ, on the back of a 10% QoQ increase in total traffic to 338PB and a stabilisation of data yields. Subscriber traction sustained with 2.0mn QoQ net adds. However, potentially disrupting this momentum, competition has intensified moving into the 4Q2017 while prepaid SIM registration requirements could have an adverse impact on prepaid revenues. YoY. Service revenue increased 8% YoY – in line with expectations of a high single digit growth. Growth in revenue from data services more than offset lower interconnect revenues. Despite the increase, EBITDA (-0.5% YoY) was flattish. Any-Net minutes offerings led to a rise in interconnection costs, while sales and marketing expenses were increased to communicate brand propositions. Depreciation moderated on the absence of Rp555bn in accelerated depreciation a year ago. Emphasizing a data led strategy and supported by data monetisation activities, data revenues increased 64% YoY (55% of total revenues). Total traffic more than doubled to 862PB. Smartphone penetration rose 10pp to 70%, with data users now making up 72% of its subscriber base. Challenges to its dual brand strategy and distribution channels are under better control. A total of 7.5mn net adds were added from the previous year. Although ARPU declined 6% YoY to Rp34k, it has been normalising on a QoQ basis. However, presenting challenges, competition has begun to intensify moving into the 4Q2017. This is following initiatives by the market leader to offer increased data quotas at the same price points. www.taonline.com.my Share Information Bloomberg Code AXIATA MK Stock Code 6888 Listing Main Market Share Cap (mn) 8998.4 Market Cap (RMmn) 48,591.2 52-wk Hi/Lo (RM) 5.40/4.11 12-mth Avg Daily Vol ('000 shrs) 6,170.3 Estimated Free Float (%) 24.1 Beta 1.34 Major Shareholders (%) Khazanah Nasional Bhd - 37.5 EPF - 15.6 Skim Amanah Saham Bumiputera - 11.9 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 1,409 1,522 1,291 1,515 109.1 100.5 Hold (Under Review) Financial Indicators Net debt/EBITDA (x) CFPS (sen) P/CFPS (x) ROAE (%) ROAA (%) NTA/Share (RM) Price/ NTA (x) Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth FY17 1.8 73.5 7.3 5.9 2.0 1.1 5.1 FY18 1.7 84.3 6.4 6.2 2.0 1.2 4.6 Axiata 2.9 15.1 4.4 9.3 FBMKLCI (0.6) (1.5) (1.9) 5.1 (12-Mth) Share Price relative to the FBMKLCI We see more focused investments outside Java. Apart from the U900 initiatives launched, ~1,000 additional 3G/4G sites have been added in the region. Going forward, a more equal capex allocation is expected between Java and ex-Java regions. Effective 31st October 2017, all existing and new prepaid users are required to register their phone numbers with a valid national identification card and family card. For existing users, the registration deadline is 28 February 2018, of which failure to do so will result in a suspension of services. This could potentially have a negative impact on prepaid revenues over the next few quarters, but is likely to stabilise within a year. Positively, post implementation, prepaid churn rates should decline to low-to-mid single digit levels (currently 15%), Source: Bloomberg Page 1 of 4
  13. 2-Nov-17 Impact Leave our earnings unchanged , pending the release of Axiata’s 9MFY17 results. Outlook 2017 guidance was maintained. Revenue growth is expected to be in line with the market (high single digit), EBITDA margin at the high 30’s and cash out capex of around Rp7.0trn. Existing numbers are on track to meet targets. Specifically, this will be driven by increased data usage and a stabilisation of data yields. Meanwhile, better traction from both XL and Axis should translate into increased net adds. More resources will also be devoted to ex-Java regions to capture the sizeable potential revenue opportunity. Immediate challenges are prepaid SIM registration requirements and renewed competition in the industry. Valuation We value Axiata at an unchanged TP of RM5.40/share – based on a SOP valuation. While XL has done a commendable job with regards to its transformation strategy, we are wary of new potential challenges in the form of prepaid SIM registration requirements and more aggressive competition ahead. We revise our call to Under Review, as we await the release of Axiata’s 3QFY17 results. Table 1: Earnings Summary (RMmn) FYE Dec Revenue EBITDA EBITDA margin (%) Depreciation and amortisation EBIT Net finance costs JV/Associates EI PBT Taxes MI Net profit Core net profit Core EPS (sen) EPS Growth (%) PER (x) EV/EBITDA (x) DPS (sen) Div Yield (sen) Celcom (Malaysia) XL Axiata (Indonesia) Ncell (Nepal) Idea Cellular (India) Dialog Axiata (Sri Lanka) Robi (Bangladesh) M1 (Singapore) Smart (Cambodia) Holding Co Net Cash Total FY15 19,883 7,284 36.6 (4,170) 3,114 (658) 434 441 3,331 (695) (82) 2,554 2,071 23.1 (8.2) 23.4 9.3 20.0 3.6 Equity Value (RM mn) 25,482.4 16,743.9 9,127.5 22,036.1 2,987.1 3,193.2 5,030.4 2,266.5 FY16 21,565 8,013 37.2 (5,595) 2,418 (1,018) 30 (290) 1,140 (482) (153) 504 1,418 15.8 (31.5) 34.2 8.4 8.0 1.5 Stake 100.0% 66.4% 80.0% 19.8% 83.3% 68.7% 28.5% 82.5% FY17F 23,072 8,798 38.1 (5,685) 3,113 (1,092) 50 0 2,070 (525) (136) 1,409 1,409 15.7 (0.7) 34.4 7.7 7.9 1.5 Effective Equity Value (RM mn) 25,482.4 11,111.3 7,302.0 4,352.1 2,488.9 2,193.4 1,435.7 1,869.9 -7,621.3 48,614.3 FY18F 23,884 9,362 39.2 (5,817) 3,545 (1,075) (75) 0 2,394 (642) (230) 1,522 1,522 17.0 8.0 31.8 7.2 8.5 1.6 FY19F 24,535 9,886 40.3 (5,836) 4,051 (1,074) (40) 0 2,937 (774) (327) 1,836 1,836 20.5 20.6 26.4 6.8 16.4 3.0 Value/Share (RM) % of SOP 2.84 1.24 0.81 0.49 0.28 0.24 0.16 0.21 52.4% 22.9% 15.0% 9.0% 5.1% 4.5% 3.0% 3.8% -0.85 5.40 -15.7% Valuation Method DCF: WACC 7.0%, TG: 1.0% DCF: WACC 9.0%, TG: 3.0% 10x CY18 EPS Consensus TP Consensus TP DCF: WACC 13.8%, TG: 3.0% Consensus TP 10x CY18 EPS Page 2 of 4
  14. 2-Nov-17 Figure 1 : Forward PE Figure 2 : Forward EV/EBITDA x x 10.5 40.0 10.0 35.0 +1sd: 9.5x 9.5 +1sd: 33.9x 9.0 Mean: 29.2x 30.0 Mean: 8.5x 8.5 8.0 25.0 7.5 -1sd: 24.4x -1sd: 7.5x 7.0 20.0 6.5 Source: Bloomberg, TA Securities Aug-17 Nov-17 Feb-17 May-17 Aug-16 Nov-16 Feb-16 May-16 Aug-15 Nov-15 Feb-15 May-15 Aug-14 Nov-14 Feb-14 May-14 Aug-13 Nov-13 Feb-13 May-13 6.0 Nov-12 Aug-17 Nov-17 Feb-17 May-17 Aug-16 Nov-16 Feb-16 May-16 Aug-15 Nov-15 Feb-15 May-15 Aug-14 Nov-14 Feb-14 May-14 Aug-13 Nov-13 Feb-13 May-13 Nov-12 15.0 Source: Bloomberg, TA Securities Table 2: XL Axiata’s 9MFY17 Results Analysis (Rpbn) FYE Dec Revenue Cellular telecommunications services Other telecommunications services Discount cellular revenue Total Opex EBITDA Depreciation & amortisation EBIT Other Expenses Net finance costs Net forex gain/(loss) JV/Associates Others PBT Tax Net profit Normalised net profit 3QFY16 5,229 2QFY17 5,667 3QFY17 5,970 QoQ (%) 5.3 YoY (%) 14.2 9MFY16 16,083 9MFY17 16,903 YoY (%) 5.1 5,031 5,446 5,689 4.5 13.1 15,313 16,174 5.6 220 (21) (3,250) 1,980 (1,800) 179 (270) (355) 20 (61) 125 (90) 26 (65) 56 228 (7) (3,595) 2,073 (1,702) 371 (272) (366) 20 (50) 124 99 (2) 96 94 287 (6) (3,690) 2,281 (1,705) 576 (410) (343) (29) (9) (29) 167 (71) 95 224 25.9 (14.3) 2.6 10.0 0.2 55.3 50.7 (6.3) (245.0) (82.0) (123.4) 68.7 3,450.0 (1.0) 138.3 30.5 (71.4) 13.5 15.2 (5.3) 221.8 51.9 (3.4) (245.0) (85.2) (123.2) (285.6) (373.1) (246.2) 300.0 825 (54) (9,847) 6,236 (5,761) 475 (350) (1,289) 431 (169) 676 125 35 160 (85) 752 (23) (10,702) 6,202 (5,086) 1,116 (924) (1,057) 34 (103) 202 193 46 238 338 (8.8) (57.4) 8.7 (0.5) (11.7) 134.9 164.0 (18.0) (92.1) (39.1) (70.1) 54.4 31.4 48.8 (497.6) Profitability ratios EBITDA margin (%) EBIT margin (%) PBT margin (%) Net profit margin (%) Tax rate (%) 37.9 3.4 (1.7) 1.1 28.9 36.6 6.5 1.7 1.7 2.0 38.2 9.6 2.8 3.8 42.5 1.6 3.1 1.1 2.1 40.5 0.3 6.2 4.5 2.7 13.6 38.8 3.0 0.8 (0.5) (28.0) 36.7 6.6 1.1 2.0 (23.8) (2.1) 3.6 0.4 2.5 4.2 Operational metrics Subscriber base (mn) Postpaid ('000) Prepaid (mn) 45.0 511 44.5 50.5 582 49.9 52.5 631 51.9 2.0 49 2.0 7.5 120 7.4 ARPU (IDR '000) Postpaid Prepaid 36 116 35 34 115 33 (5.6) (0.9) (5.7) Total data traffic (Petabyte) 327 862 163.5 Page 3 of 4
  15. 2-Nov-17 ( T HI S P AGE I S I NT E N T I ON AL L Y L E FT B L ANK) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, November 02, 2017, the analyst, Paul Yap Ee Xing, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 4 of 4
  16. RESULTS UPDATE Thursday , November 02, 2017 FBMKLCI: 1,743.93 Sector: Technology THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM3.85 (-4.2%) Unisem (M) Berhad Last Traded: RM4.02 Margins Disappoint Paul Yap, CFA SELL Tel: +603-2167 9603 paulyap@ta.com.my Review Unisem’s 9MFY17 net profit came in at RM127.4mn (-3.9% QoQ, +14.9% YoY). A second interim dividend of 3.5sen/share (YTD: 7.0sen/share) was declared. Despite USD revenues (+6.3% QoQ) coming within guidance, earnings disappointed, making up only 64.5% and 68.2% of ours and consensus estimates. The deviation was due to lower-than-anticipated margins. An EBITDA margin of 22.9% (-1.7pp QoQ) registered in the 3QFY17 was the lowest seen in 13 quarters. This was due to a combination of forex losses (RM3.1mn), overtimes due to public holidays and a lower proportion of advanced wafer level packages. YoY. Revenues grew 15.4% YoY. Albeit aided by a weaker ringgit, underlying USD sales were also healthy, increasing 8.4% YoY. The increase was predominantly from the industrial (+40.0% YoY), consumer (+17.3% YoY) and PC (+10.8% YoY) segments. EBITDA margins, however, narrowed 2.0pp to 24.3%. There was a larger proportion of leaded products and lower mix of advanced wafer level packages produced during the period. Wafer level volumes moderated to 4.0mn/day from 6.5mn/day previously – driven by a shift to modules. Headcount increased by 380 to 7,874 individuals. Nevertheless, the figure is expected to hold at existing levels, with productivity and improvement programs in place. 9MFY17 capex stood at RM135.6mn or 50.3% of EBITDA. Higher than historical trends, investments were made in flip chip bonders, microphone assembly facilities, development tooling and bumping & wafer level equipment. Capex is guided to be at 43.0-45.0% of EBITDA for the full year. Its net cash position inched up to RM213.2mn. Impact We trim our EBITDA margin assumption by 2.0-2.4pp. We also reduce our revenue growth assumption by 1.6-2.1% for FY18-19. As such, we lower our FY17/FY18/FY19 earnings by 12.7%/15.6%/16.3% to RM172.6mn/RM199.0mn/RM210.5mn. www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) UNI MK 5005 Main Market 733.8 2,950.0 4.25/2.27 1,686.0 63.6 0.76 John Chia - 24.0 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 (12.7) (15.6) 172.6 199.0 184.9 203.1 93.4 98.0 Hold (Downgraded) Financial Indicators Net gearing (x) CFPS (sen) P/CFPS (x) ROAA (%) ROAE (%) NTA/Share (RM) Price/ NTA (x) FY17 (0.2) 36.2 11.1 9.8 11.9 2.0 2.0 FY18 (0.2) 51.2 7.9 11.0 12.8 2.2 1.8 % of FY 64.5 68.2 Below Below UNI 6.3 5.2 17.5 60.8 FBM KLCI (0.6) (1.5) (1.9) 5.1 Scorecard vs. TA vs. Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBMKLCI Outlook Guidance is for flattish 4QFY17 revenues. Microphones for smart speaker applications are expected to ramp up in 2018. Demand should also be supported by power management products and tyre pressure monitoring systems. Meanwhile, wafer level volumes are only expected to return in the 2H2018, as it expands its bumping facilities. Valuation Source: Bloomberg Page 1 of 3
  17. 2-Nov-17 Following our cut in earnings , we lower our TP for Unisem to RM3.85/share (RM4.30/share). While we are still expecting strong doubledigit growth for the group, we believe this has been reflected in the current share price. The stock is trading more than 1SD above is historical average EV/EBITDA and PB ratio. We downgrade our call for the stock to SELL from HOLD. Table 1: Earnings Summary (RMmn) FYE Dec Revenue EBITDA EBITDA margin (%) Depreciation and amortisation EBIT Net finance costs JV/Associates EI PBT Taxes MI Net profit Core net profit Core EPS (sen) EPS Growth (%) PER (x) EV/EBITDA (x) DPS (sen) Div Yield (sen) FY15 1,260.4 349.3 27.7 (176.4) 172.9 (5.1) 0.0 5.3 173.1 (15.9) (1.7) 155.5 150.2 20.5 128.9 19.6 7.9 10.0 2.5 FY16 1,322.8 356.9 27.0 (169.7) 187.2 (0.1) 0.0 0.0 187.2 (23.8) (1.1) 162.3 162.3 22.1 8.0 18.2 7.7 11.0 2.7 FY17F 1,403.1 375.6 26.8 (180.0) 195.6 (1.8) 0.0 0.0 193.8 (19.4) (1.7) 172.6 172.6 23.5 6.4 17.1 7.4 12.0 3.0 Figure 1 : Forward EV/EBITDA FY18F 1,477.9 410.4 27.8 (185.5) 224.9 (1.6) 0.0 0.0 223.3 (22.3) (2.0) 199.0 199.0 27.1 15.2 14.8 6.7 12.0 3.0 FY19F 1,516.8 428.5 28.2 (191.0) 237.5 (1.2) 0.0 0.0 236.3 (23.6) (2.1) 210.5 210.5 28.7 5.8 14.0 6.4 12.0 3.0 Figure 2 : Forward PB x x 7.5 2.1 7.0 1.9 1.7 6.5 +1sd: 5.9x 6.0 5.5 +1sd: 1.4x 1.5 1.3 Mean: 5.1x 5.0 Mean: 1.1x 1.1 4.5 0.9 0.7 Aug-17 Nov-17 Feb-17 May-17 Aug-16 Nov-16 Feb-16 May-16 Aug-15 Nov-15 Feb-15 May-15 Aug-14 Nov-14 Feb-14 May-14 Aug-13 Nov-13 -1sd: 0.7x Nov-12 Aug-17 Nov-17 Feb-17 May-17 Aug-16 Nov-16 Feb-16 May-16 Aug-15 Nov-15 Feb-15 May-15 Aug-14 Source: Bloomberg, TA Securities Nov-14 Feb-14 May-14 Aug-13 Nov-13 0.3 Feb-13 3.0 May-13 0.5 Nov-12 3.5 Feb-13 -1sd: 4.2x May-13 4.0 Source: Bloomberg, TA Securities Page 2 of 3
  18. 2-Nov-17 Table 2 : 9MFY17 Results Analysis (RMmn) FYE Dec Revenue Revenue (USD) EBITDA Depreciation & Amortisation EBIT Interest costs EI PBT Tax MI Net profit Core net profit Capex Average USD/MYR rate Core EPS (sen) DPS (sen) 3QFY16 322.0 79.4 86.0 (41.8) 44.2 (0.1) 0.0 44.1 (5.3) (0.2) 38.6 38.6 29.8 4.1 5.3 3.5 2QFY17 365.7 84.4 89.7 (42.4) 47.2 0.7 0.0 47.9 (5.4) (0.4) 42.1 42.1 41.1 4.3 5.7 3.5 3QFY17 382.3 89.7 87.4 (42.6) 44.8 0.7 0.0 45.4 (4.5) (0.5) 40.4 40.4 23.3 4.3 5.5 3.5 QoQ (%) 4.5 6.3 (2.5) 0.5 (5.3) (1.4) n/a (5.2) (17.2) 19.0 (3.9) (3.9) (43.3) (1.6) (4.0) 0.0 YoY (%) 18.8 12.9 1.6 2.1 1.2 (690.1) n/a 2.9 (16.0) 178.9 4.7 4.7 (21.8) 5.2 4.8 0.0 9MFY16 960.6 235.3 253.1 (127.9) 125.2 (0.9) 0.0 124.4 (12.5) (0.9) 111.0 111.0 106.3 4.1 15.1 7.0 9MFY17 1,108.3 255.1 269.5 (127.2) 142.3 1.9 0.0 144.2 (15.3) (1.4) 127.4 127.4 135.6 4.3 17.4 7.0 YoY (%) 15.4 8.4 6.5 (0.5) 13.6 (316.3) n/a 15.9 22.4 59.7 14.9 14.9 27.6 6.4 14.9 0.0 Profitability ratio (%) EBITDA margin PBT margin Net profit margin Tax rate 26.7 13.7 12.0 12.0 24.5 13.1 11.5 11.2 22.9 11.9 10.6 9.8 p.p. (1.7) (1.2) (0.9) (1.4) p.p. (3.9) (1.8) (1.4) (2.2) 26.3 12.9 11.5 10.1 24.3 13.0 11.5 10.6 p.p. (2.0) 0.1 (0.1) 0.6 Product mix (%) Leaded Leadless WL pkg/MEMs bumping Test 20 32 31 17 21 33 30 16 20 30 33 16 -1 -3 3 0 0 -2 2 -1 Communication Consumer PC Industrial Auto 29 25 16 13 17 26 26 16 17 15 25 25 17 17 16 -1 -1 1 0 1 -4 0 1 4 -1 Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, November 02, 2017, the analyst, Paul Yap Ee Xing, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
  19. ECONOMIC UPDATE Thursday , November 02, 2017 FBMKLCI: 1,743.93 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* US Economy Fed Holds Interest Rates, Trump to Announce Next Fed Chair Shazma Juliana Abu Bakar Tel: +603-2167 9608 shazma@ta.com.my www.taonline.com.my FOMC Leaves Rates Unchanged, Opens Door to December As widely expected, the US Federal reserve held its benchmark interest rate between 1.0% and 1.25% but left its door open for a rate hike before year-end amid signs the US economy is gaining momentum. The vote was unanimous. The probability for a 25bps rate hike in December FOMC meeting is currently high at above 90%. All four rate hikes since late 2015 have come at meetings that were accompanied by a press conference, which occurs at alternating meetings. The central bank remained positive over the economic prospect, commenting that “the labour market has continued to strengthen” and “economic activity has been rising at a solid rate despite hurricane-related disruptions.” The economy grew at a surprisingly strong 3% annual rate in the third quarter of 2017 despite the hurricanes that hit the Gulf Coast in late summer. In its statement, the Fed said the hurricanes were likely to temporarily disrupt economic activity, employment and inflation but that the storms “are unlikely to materially alter the course of the national economy in the medium term.” The Fed added that the storms caused job losses by 33,000 in September 2017, but the unemployment rate declined further to 4.2% - the lowest level since 2001. The decline is expected to reverse as market expects big payroll gains in October 2017 as idled employees returned to work. Wage growth should soon accelerate. Average annual pay increases generally have been stuck at about 2.5% for more than a year. The Fed also acknowledged that inflation remained soft but did not downgrade its assessment of inflation expectations. The Fed’s preferred price gauge, the personalconsumption expenditures (PCE) price index, rose 1.6% YoY in September 2017, but that was largely because of a storm-related surge in gasoline prices. So-called core prices, which exclude volatile food and energy items, were up by only 1.3% YoY. The committee conceded that inflation is still running below 2.0% and would only reach that by 2019. The Fed also noted that it’s continuing the gradual reduction of its USD4.5 trillion asset portfolio, an initiative it launched in the last FOMC meeting in September 2017. The Fed is not reinvesting the proceeds from some of the maturing Treasury bonds and mortgage-backed securities it bought during and after the 2008 financial crisis to lower long-term rates. It’s gradually increasing the amount that rolls off its books each month, and over time, the programme is likely to slowly push up those rates. A Reshuffling in the US Federal Reserve President Donald Trump is preparing to announce his pick to lead the Fed after Ms. Yellen’s current term as chairwoman expires in February 2018. Although he has praised her and considered offering her a second term, Mr. Trump is likely to nominate Fed governor Jerome Powell to as the new Fed Chairman. Powell is a Republican and former Treasury official. Page 1 of 2
  20. 2-Nov-17 We expect a smooth transition and do not expect any changes in the US monetary policy under Powell ’s leadership to avoid disrupting the recovery. Indeed, Mr. Powell has been an ally of Ms. Yellen on monetary policy. At an event last month, he commented that the Fed’s efforts to raise interest rates from post-crisis lows to a more normal level “should continue to be gradual, as long as the U.S. economy evolves roughly as expected.” In more than 40 FOMC votes since becoming a governor in 2012, including this meeting, he has never dissented. President Trump is also expected to fill three more vacancies on the Fed’s board of governors in coming months. He recently appointed former Treasury official and privateequity investor Randy Quarles as the governor who will handle bank supervision. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia www.ta.com.my Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 Page 2 of 2