Bursa Malaysia Daily Market Report - 6 March

Transcription

1. Tuesday , 06 March, 2018 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 . M a la ys i a n Ec o n o m y : I m p re s s iv e J a n u a ry 2 0 1 8 T ra de N u m b e rs 2 . S im e D a r b y Be r h a d : G o o d O u t lo o k b u t S tr e tc h e d V a lu a t io n 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 ( L oc al ) 2. D ai l y St o ck S cr een 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
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Daily Market Commentary Tuesday , 06 March 2018 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (05.03.2018) (mil) Main Market 1,450.7 Warrants 586.8 ACE Market 574.3 Bond 9.0 ETF 0.1 LEAP 0.0 Total 2,621.0 Off Market 45.2 Volume +/-chg (RMmn) -215.9 1,666.6 213.1 373.6 68.1 506.2 4.3 4.7 0.0 0.1 0.0 0.0 2,551.2 -47.4 92.7 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP March 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 % YTD chg -13.45 -132.08 -315.28 -16.50 -0.72 -1.00 -1.92 -0.89 2.55 0.77 -5.47 2.94 24,874.76 7,330.71 7,115.98 21,042.09 2,375.06 29,886.39 3,438.61 1,808.89 6,550.59 3,256.93 1,830.84 5,895.03 336.70 72.84 46.08 -139.55 -27.10 -697.06 -40.59 -3.09 -31.72 2.40 8.62 -33.86 1.37 1.00 0.65 -0.66 -1.13 -2.28 -1.17 -0.17 -0.48 0.07 0.47 -0.57 0.63 6.19 -7.44 -7.57 -3.75 -0.11 1.05 3.15 3.07 -1.52 -3.61 -2.80 (mn) 13.0 7.0 6.5 6.0 4.0 2.0 1.5 1.4 1.0 1.0 % chg 1,842.62 13,041.87 16,118.58 1,837.50 (RM) @ @ @ @ @ @ @ @ @ @ 0.76 1.00 0.15 1.20 0.70 0.06 0.85 1.40 0.57 0.56 Counter MAYBANK TENAGA PBBANK CIMB PCHEM IHH MAXIS HLBANK GENTING MISC Mkt Cap. Chg (RM’mn) (RM) 113,031 88,729 88,428 66,424 63,760 49,685 44,520 38,253 34,253 30,711 -0.04 -0.04 -0.08 -0.07 -0.13 -0.07 -0.11 -0.80 -0.06 -0.02 Bursa Malaysia shares slumped on Monday, trailing regional losses with steel-related counters leading falls on fears the US President's tariff threat on steel and aluminum imports will trigger a global trade war.The KLCI fell 13.45 points to close at 1,842.62, off an opening high of 1,853.76 and low of 1,840.04, as losers swamped gainers 963 to 172 on total turnover of 2.62bn shares worth RM2.4bn. Given the bearish momentum and negative external tone with fears the proposed US tariffs on steel imports will spark a global trade war, further downward correction can be expected. Immediate support for the index is revised lower to 1,826, the 50-day moving average, followed by the lower Bollinger band at 1,816, while stronger support is at 1,800. Crucial resistance-turn-support level is at 1,796, the June 2017 peak matching the 6 Feb pivot low. Immediate resistance will be the overhead 10-day ma at 1,857, followed by last week's high of 1,872, with tough hurdle from the 2 Feb peak of 1,880. Bearish technical momentum on Affin point to further downside risk, with breakdown below the lower Bollinger band (RM2.38) to grease fall towards the 76.4%FR (RM2.28), and stronger support seen at RM2.20. Overhead resistance is from the 50%FR (RM2.52). Likewise,ABMB shares should fall towards the 38.2%FR (RM3.94), with a confirmed breakdown to target the 23.6%FR (RM3.80) ahead, while key resistance areas are from the 61.8%FR (RM4.15) and 76.4%FR (RM4.28). News Bites Top 10 KLCI Movers Based on Mkt Cap. Off Market FAJAR TEOSENG BINTAI EFORCE KIPREIT XINGHE TOMYPAK GBH XIANLNG GLBHD Review & Outlook Value Value/ +/-chg Volume Up Down -672.9 1.15 121 559 295.7 0.64 32 297 417.7 0.88 16 100 4.0 0.52 1 4 0.0 1.18 2 2 0.0 0.06 0 1 0.97 172 963 -70.9 2.05 Vol. (mn) 15.42 7.19 3.34 9.52 5.29 2.23 2.66 1.19 2.47 0.74 Important Dates HSSEB - 1:10 Rights Issue - RI of up to 31.9m shares together with BI of up to 15.9m shares and up to 47.9m free detachable warrants. 1 rights share for every 10 existing shares held, at an issue price of RM1.30 per rights share, together with 1 bonus share and 3 warrants for every 2 rights shares subscribed. Application Closed: 08/03/2018. LISTING ON: 21/03/2018. • Malaysia's exports in January surged 17.9% YoY to RM82.86bn, underpinned by growth in all major sectors and increased trade with its major trading partners. • AirAsia Bhd has strongly denied news that AirAsia Group chief executive officer and AirAsia X Co-Group CEO, Tan Sri Tony Fernandes will be resigning to enter the financial technology sector. • Malaysian Anti-Corruption Commission is investigating MISC Bhd, for alleged bribery amounting to USD27.8mn (RM108.5mn). • Globetronics Technology Bhd has proposed a one-to-two share spit, followed by a bonus issue on the basis of one bonus share for every six split Globetronics shares. • Eco World Development Group Bhd's unit, Eco Botanic Sdn Bhd has made a lodgement of unrated medium-term notes pursuant to a MTN Programme of up to RM250mn. • Prestar Resources Bhd, has entered into a sale and purchase agreement with Skyhub Technologies Sdn Bhd to acquire a parcel of leasehold land in Pekan Subang, Selangor for RM19.25mn. • LBS Bina Group Bhd has entered into a heads of agreement with NWP Holdings Bhd to jointly develop Zhuhai International Circuit in China. • Lii Hen Industries Bhd has proposed to purchase 3.9 hectares of agricultural land in Muar, Johor from four individuals for RM6.3mn. • Malaysia will now switch off its analogue TV service at a later date instead of June 30 this year, according to the Communications and Multimedia Minister. • The leaders of two anti-establishment parties have each claimed they have the right to govern Italy, after voters in Europe's fourth-largest economy did not return a majority to any single party. • China set a 2018 growth target of around 6.5%, omitting an intention to hit a faster pace if possible, as leaders intensify their push to ensure financial stability. Exchange Rate USD/MYR 3.9060 -0.003 USD/JPY 106.18 0.580 EUR/USD 1.234 -0.0015 Commodities Futures Palm Oil (RM/mt) 2,460.00 -8.00 Crude Oil ($/Barrel) 62.61 1.16 Gold ($/tr.oz.) 1,320.90 -2.80 Disclaimer 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. Tuesday , March 06, 2018 FBMKLCI: 1,842.62 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 Further Correction on Trade War Worries Bursa Malaysia shares slumped on Monday, trailing regional losses with steel-related counters leading falls on fears the US President’s tariff threat on steel and aluminum imports will trigger a global trade war. The KLCI fell 13.45 points to close at 1,842.62, off an opening high of 1,853.76 and low of 1,840.04, as losers swamped gainers 963 to 172 on total turnover of 2.62bn shares worth RM2.4bn. Support Revised to 1,826, Resistance at 1,857 Given the bearish momentum and negative external tone with fears the proposed US tariffs on steel imports will spark a global trade war, further downward correction can be expected. Immediate support for the index is revised lower to 1,826, the 50-day moving average, followed by the lower Bollinger band at 1,816, while stronger support is at 1,800. Crucial resistance-turn-support level is at 1,796, the June 2017 peak matching the 6 Feb pivot low. Immediate resistance will be the overhead 10-day ma at 1,857, followed by last week’s high of 1,872, with tough hurdle from the 2 Feb peak of 1,880. SELL Affin & ABMB Bearish technical momentum on Affin point to further downside risk, with breakdown below the lower Bollinger band (RM2.38) to grease fall towards the 76.4%FR (RM2.28), and stronger support seen at RM2.20. Overhead resistance is from the 50%FR (RM2.52). Likewise, ABMB shares should fall towards the 38.2%FR (RM3.94), with a confirmed breakdown to target the 23.6%FR (RM3.80) ahead, while key resistance areas are from the 61.8%FR (RM4.15) and 76.4%FR (RM4.28). Asian Markets Dip on Trade War Fears Markets in Asia closed lower on Monday as Chinese leaders headed into an annual parliament meeting while in Italy, exit poll projections indicated that no party is emerging with a clear majority in Sunday's election. Japan's Nikkei 225 fell 0.66 percent to close at 21,042.09, marking its fourth straight session of losses. Monday's declines also saw the Nikkei touch its lowest levels since October. Across the Korean Strait, the Kospi closed lower by 1.13 percent. Chinese mainland markets reversed early losses to close slightly higher, with the Shanghai composite finishing up 0.09 percent. The Shenzhen composite wavered between gains and losses to close higher by 0.47 percent. Meanwhile, the ChiNext start-up board climbed 1.2 percent to outperform the benchmark. Italian voters delivered a hung parliament on Sunday, flocking to anti-establishment and farright parties in record numbers and casting the euro zone’s third-largest economy into a political gridlock that could take months to clear. In the United States, President Donald Trump proposed tariffs on imported steel and aluminum, a pledge that met with warnings of retaliation from the rest of the world over the weekend. Page 1 of 8
4. 6-Mar-18 Wall Street Rebound as Trade War Fears Ebb U .S. stocks closed higher Monday, with the Dow Jones Industrial Average bouncing back from a four-session losing streak, as fears of a global trade war ebbed with investors betting that U.S. President Donald Trump would back down on his threat to impose hefty tariffs on steel and aluminum imports. Several investors said the threat of a trade war over planned tariffs on steel and aluminum imports diminished slightly, as administration officials, including Commerce Secretary Wilbur Ross, played down concerns on Sunday’s television talk shows. House Speaker Paul Ryan also broke with Mr. Trump over his decision to impose tariffs on imported steel and aluminum products, warning the White House to drop the plan. On economic front, data on Monday showed that growth across U.S. service industries continued at a solid pace in February, despite the largest drop in an employment gauge in a decade, according to the Institute for Supply Management’s nonmanufacturing index. Shares of manufacturers and other industrial heavyweights led major indexes higher, as many investors were using the recent pullback following the tariff news as a chance to buy stock at discounted prices. The Dow Jones Industrial Average rose 336.70 points, or 1.37 percent, to 24,874.76, the S&P 500 gained 29.69 points, or 1.10 percent, to 2,720.94 and the Nasdaq Composite added 72.84 points, or 1 percent, to 7,330.71. Page 2 of 8
5. 6-Mar-18 N e w s I n B r i e f Corporate AirAsia Bhd has strongly denied news that AirAsia Group chief executive officer (CEO) and AirAsia X Co-Group CEO, Tan Sri Tony Fernandes will be resigning to enter the financial technology sector. The company advised the public and media to disregard screenshots of a hoax CNN story, titled, “Tony Fernandes Leaves Air Asia, Jumps On Financial Tech” circulating on social media. It said Fernandes remained committed to AirAsia and would continue to oversee its strategic direction and business operations (StarBiz). Malaysian Anti-Corruption Commission (MACC) is investigating MISC Bhd, for alleged bribery amounting to USD27.8mn (RM108.5mn). MACC was currently probing alleged bribes in the form of fraudulent claims worked out between company officials and maritime contractors. The officers had supposedly filed claims to receive payments for ship maintenance services, but there was no upkeep being done from 2010 to 2013 (Malay Mail). Malaysia will now switch off its analogue TV service at a later date instead of June 30 this year, according to the Communications and Multimedia Minister. This is to allow more time for all parties to prepare for a fully digital broadcasting environment, from the broadcasters themselves to the man in the street. Although the analogue service might be switched off, the government would like to ensure that every household had access to the free-to-air channels once the service became fully digital and that it was running smoothly (The Edge). Eco World Development Group Bhd's unit, Eco Botanic Sdn Bhd has made a lodgement of unrated medium-term notes (MTNs) pursuant to a MTN Programme of up to RM250mn. The programme comprised unrated MTNs of up to RM100mn with a tenure of up to five years, and another unrated MTNs of up to RM150mn for a tenure of up to seven years, to be guaranteed by government-owned Danajamin Nasional Bhd (Bursa Malaysia). Harrisons Holdings (M) Bhd (Harrisons) has entered into an agreement with Watts Co Ltd to acquire Komonoya products retailer Watts Harrisons Sdn Bhd (WHSB). Harrisons will pay a nominal sum of US$1 (RM3.91) for the 100% stake and will also pay on behalf of WHSB the remaining balance of the outstanding debt owed to Watts Co Ltd if WHSB has insufficient cash to pay on the expected completion date of April 5 (Bursa Malaysia). YFG Bhd has bagged a RM5.4mn contract from Premiumtel Sdn Bhd to install the electrical system and provide information and communication technology services for a 14-storey office block in Ipoh. The project would start tomorrow and be completed in 16 months’ time (Bursa Malaysia). Prestar Resources Bhd, has entered into a sale and purchase agreement with Skyhub Technologies Sdn Bhd to acquire a parcel of leasehold land in Pekan Subang, Selangor for RM19.25mn. The 8,304 square metres parcel located was strategically located in a prominent industrial estate in Kampung Baru Subang and the acquisition would also include the buildings erected on the land. The land has a 99-year lease expiring on Nov 6, 2115, and there are two units of single-storey semi-detached factory cum three-storey office building and two guardhouses erected on the land (Bernama). LBS Bina Group Bhd has entered into a heads of agreement with NWP Holdings Bhd (NWP) to jointly develop Zhuhai International Circuit (ZIC) in China. The group would subscribe to 1.1bn NWP shares, representing approximately 73.7% of NWP's enlarged number of issued shares for RM93.5mn, or 8.5 sen per share, to fund ZIC's development. The group had obtained the approvals, and together with NWP, would jointly transform ZIC, located on a 106.83-hectare site in the Guangdong Province, into a mixed commercial development (Bernama). Page 3 of 8
6. 6-Mar-18 Lii Hen Industries Bhd has proposed to purchase 3 .9 hectares of agricultural land in Muar, Johor from four individuals for RM6.3mn. The acquisition was expected to be completed within four months from the date of sale and purchase, and the purchase was for the purpose of expanding its factory. The group is expected to fund the purchase through internally generated funds (Bernama). GDB Holdings Bhd, aims to raise RM43.75mn from its initial public offering to fund future expansion. GDB, which is principally involved in the construction of high-rise residential, commercial and mixed development projects, is slated for listing on Bursa Malaysia Securities Bhd's ACE Market on March 27 (The Edge). Globetronics Technology Bhd has proposed a one-to-two share spit, followed by a bonus issue on the basis of one bonus share for every six split Globetronics shares. The proposals will increase Globetronics’ issued share capital to between RM179.55mn with 666.3mn shares, and RM205.99mn comprising 676.56mn shares, subject to whether its outstanding employees’ share option scheme options are implemented and exercised (The Edge). IOI Corp Bhd declared a special dividend of 11.5 sen per share to be paid on March 30, with the ex-date on March 16. This follows its earlier announcement of a 4.5 sen per share interim dividend payable on the same date. (Bursa Malaysia/The Edge) Page 4 of 8
7. 6-Mar-18 N e w s I n B r i e f Economy Asia Malaysia 's Exports Grow 17.9% to RM82bil Malaysia's exports in January surged 17.9% year-on-year to RM82.86bil, underpinned by growth in all major sectors and increased trade with its major trading partners. Also, total imports grew 11.6% to RM73.15bil, resulting in a trade surplus of RM9.71b. On a month-onmonth basis, total trade, exports and imports expanded by 3.0%, 4.4% and 1.5%, respectively. Exports of manufactured goods saw the most growth of 20.4% to RM68.34bil, accounting for 82.5% share of the country's total exports. The main contributors to the increase were exports of electrical and electronic (E&E) products which surged by 27.1%, followed by chemicals and chemical products (23.4%), iron and steel products (60.9%), optical and scientific equipment (18%), manufactures of metal (14.8%) as well as transport equipment (32%). Exports of mining goods grew 8.5% to RM7.25bil, underpinned by growth in exports of liquefied natural gas (LNG) due to higher Average Unit Volume (AUV) and quantity. Meanwhile, exports of agriculture goods rose 6.2% to RM6.51bil on higher exports of palm oil and palm oil-based agriculture products. Exports of palm oil grew by 10.1% to RM3.92 billion, due to higher quantity. (The Star) China Sets GDP at about 6.5%, Omitting Aim to Go Higher China set a 2018 growth target of around 6.5%, omitting an intention to hit a faster pace if possible, as leaders intensify their push to ensure financial stability. The target was released ahead of Premier Li Keqiang’s report to the National People’s Congress gathering in Beijing. While a target of 6.5% is equivalent to last year’s goal, the statement didn’t include an objective for output growth to be “higher if possible in practice” as it did in 2017. President Xi Jinping has been intensifying his push to curb pollution, poverty and debt risk at a time when the world’s second-largest economy is on a long-term growth slowdown. As a result, numerical GDP targets have been de-emphasized in favor of higher-quality expansion since last year. While growth handily surpassed 2017’s target with a 6.9% expansion that was the first acceleration since 2010, economists forecast a moderation to 6.5% this year amid the ongoing deleveraging drive and trade tensions with the Trump administration. The government also signaled its intent to continue efforts to slow debt growth, and set the budget deficit target markedly lower, at 2.6% of GDP, down from 3% in the past two years. (The Star) China Services Growth Eases Slightly but Still Robust: Caixin PMI Growth in China’s services sector softened slightly in February but remained robust, prompting companies to hire more workers for the 18th month in a row, a private business survey showed. The Caixin/Markit services purchasing managers’ index (PMI) fell to 54.2 in February from January’s 68-month high of 54.7, but was still above recent trends and well above the 50-mark that separates growth from contraction. Despite the figures being seasonally adjusted, many economists think the Lunar New Year effect is so sweeping that it inevitably clouds China’s readings early in the year. This year the week-long holiday fell in February, which may have contributed to new business growing at the slowest pace in three months. However, spending on consumer services was likely to be boosted by the festivities. The retail and catering sectors posted sales of 926 billion yuan ($146 billion) during the holiday. The business outlook for the next 12 months picked up from a four-month low as new marketing strategies, upcoming projects and expectations that market conditions will continue to improve all supported optimism. (Reuters) Page 5 of 8
8. 6-Mar-18 Australia Company Operating Profits Jump 2 .2% in Q4 Company operating profits in Australia advanced a seasonally adjusted 2.2% on quarter in the fourth quarter of 2017, the Australian Bureau of Statistics said. That topped expectations for an increase of 1.5% following the 0.2% decline in the three months prior. On a yearly basis, profits climbed 4.3%. Inventories added 0.2% on quarter, missing forecasts for 0.5% but unchanged from the previous three months. On a yearly basis, inventories gained 1.0%. Separately, the total number of building approvals issued in Australia spiked a seasonally adjusted 17.1% on month in January, standing at 19,851. That topped expectations for an increase of 5.0% following the 0.2% gain in December. On a yearly basis, building approvals advanced 12.0% - again exceeding expectations for a decline of 0.5% following the 5.0% contraction in the previous month. Approvals issued for private sector houses fell 1.1% on month and jumped 6.0% on year to 9,825. Approvals for dwellings excluding houses skyrocketed 42.2% on month and 18.1% on year to 9,748. (RTT) Japan Services PMI Eases to 51.7 in February – Nikkei The services sector in Japan continued to expand in February, albeit at a slightly slower pace, the latest survey from Nikkei showed with a services PMI score of 51.7. That's down from 51.9 in January, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Individually, business activity was up, although at a weaker rate. Employment growth fell to a three-month low, while the level of positive sentiment declined. The composite index came in at 52.2, down from 52.8 in the previous month. (RTT) United States Services-Sector Activity Remains Robust Despite Employment Drop-Off Growth across U.S. service industries continued at a solid pace in February, despite the largest drop in an employment gauge in a decade. The Institute for Supply Management on Monday said its nonmanufacturing index fell to 59.5 in February. A reading above 50 indicates activity is expanding across service and other industries, while a number below 50 signals contraction. Economists surveyed by The Wall Street Journal had expected a lower February reading of 59.0. A sharp 6.6 percentage-point decline in the employment subindex, the heftiest drop since the middle of the last recession, drove the overall reading lower. January’s employment reading hit an all-time high, leading many analysts to argue February’s large employment index decline is pullback from an unstainable peak and isn’t likely to signal a poor jobs report release this Friday. Still, the nonmanufacturing index remains at an elevated level despite the employment drop, a sign of health in the broader economy. The business activity and production index grew 3.0 percentage points, and the new-orders index also grew, increasing 2.1 points. The prices index declined 0.9 percentage point, signaling prices are now growing at a slower pace. (The Wall Street Journal) Europe and Uni ted Kingdom Eurozone's Economic Roar Lost Some Volume in February: PMI The Eurozone’s economic boom paused last month as rising prices took a toll on demand, but the zone remains on course for its best growth in eight years, a survey showed. Growth was robust and broad, with countries across the region reporting expansion, welcome news to the European Central Bank as it looks to end its ultra-easy monetary policy. IHS Markit’s Final Composite Purchasing Managers’ Index, seen as a good overall indicator of growth for the euro zone, fell to 57.1 in February from January’s 58.8 and down from the flash estimate of 57.5. January’s reading was a level not seen since June 2006. But the slight slip last month leaves the PMI well above the 50 mark that separates growth from contraction. The Eurozone economy looks to have hit a speed bump in February after a stellar start to the year. It’s too early to read too much into the February fall in the PMI, and some pull-back from January’s high was always on the cards,” said Chris Williamson, chief business economist at IHS Markit. Williamson said the PMI was consistent with GDP rising at a buoyant rate of 0.8 to 0.9%, which at the upper end would be the strongest since the second quarter of 2010. (Reuters) Page 6 of 8
9. 6-Mar-18 Eurozone Retail Sales Drop Slightly in January Eurozone retail sales dropped marginally in January , as expected, figures from Eurostat revealed Monday. The volume of retail trade fell slightly by 0.1 percent month-on-month in January, following December's 1 percent decrease. The rate came in line with expectations. Sale of food, drinks and tobacco decreased 0.2 percent and non-food products sales fell 0.3 percent. On a yearly basis, retail trade growth accelerated to 2.3 percent from 2.1 percent in December. Sales were forecast to climb 2 percent. In the EU28, retail sales decreased 0.1 percent on month in January but grew 2.7 percent from the previous year. (RTT) Eurozone Investor Confidence Deteriorates Notably in March Eurozone investor confidence weakened sharply in March largely due to the deterioration in Germany, survey data from think tank Sentix showed Monday. The investor sentiment index fell to 24.0 in March from 31.9 in February. The score was forecast to drop moderately to 30.9. The current conditions index came in at 45.8 in March, down from 49.5 a month ago. Meanwhile, the expectations index declined sharply to 4.3 from 15.5 in the previous month. In Germany, the investor sentiment index slid to 29.1 in March from 36.2 in February as the expectations index declined to negative 2.5. This was first negative score since February 2016. Germany's current conditions index decreased to 65.8 in March from 71.5 a month ago. (RTT) UK Services Sector Perks Up in Feb, Keeping BoE on Track for May Hike Britain looks on track to sustain the same growth rate as late 2017, helped by strong global growth, economists said. But headwinds persist from weak consumer spending and investor caution before Britain quits the European Union in March 2019. The IHS Markit/CIPS services purchasing managers’ index (PMI) rose to a four-month high of 54.5 from 53.0 in January, beating the average forecast in a poll of 53.3. January’s reading had been the weakest for that month since 2009, when the economy was deep in recession, and February’s data remains weaker than the euro zone PMI. IHS Markit economist Chris Williamson said Britain’s PMI data so far this year pointed to first-quarter economic growth of nearly 0.4%, even taking into account last week’s subdued manufacturing PMI, which slipped to an eight-month low. This rate of growth is only fractionally weaker than in the last three months of 2017 - and in line with what the BoE believes to be the economy’s maximum non-inflationary growth rate - so made a May rate rise likely, Williamson said. (Reuters) Italy Election Results Highlight Struggle to Govern in Europe as Populist Forces Rise After voters from the snowy peaks of the Alps to the sunny shores of Sicily delivered a verdict so fractured and mysterious it could take months to sort out, the banner headline Monday in the venerable daily La Stampa captured the state of a nation that’s left no one in charge: “Ungovernable Italy.” The same can increasingly be said for vast stretches of Europe. Across the continent, a once-durable dichotomy is dissolving. Fueled by anger over immigration, a backlash against the European Union and resentment of an out-of-touch elite, anti-establishment parties are taking votes left, right and center from the traditional power players. They generally aren’t winning enough support to govern. But they are claiming such a substantial share of the electorate that it has become all but impossible for the establishment to govern on its own. The result is a continent caught in a netherworld between a dying political order and a new one still taking root. “This has been a postideological result, beyond the traditional left-right divide,” said Luigi Di Maio, whose populist Five Star Movement trounced its opponents to become Italy’s largest party on Monday. Now the country has plunged into uncertainty. “The traditional structures of political alignment in Europe are breaking down,” said Josef Janning, head of the Berlin office of the European Council on Foreign Relations. “It started in the smaller countries. But now we see that it’s happening everywhere.” (The Washington Post) Page 7 of 8
10. 6-Mar-18 Share Buy-Back : 05 March 2018 Company AMPROP FIMACOR FITTERS GLOMAC GRANFLO HARNLEN IFCAMSC KPJ MALAKOF NYLEX PANTECH PRESTAR SALCON SAUDEE SNTORIA SUNWAY UNIMECH YILAI Bought Back Price (RM) Hi/Lo (RM) 50,000 30,000 600,000 13,000 10,000 1,000 10,000 50,000 1,996,800 80,000 72,700 100,000 50,000 5,000 209,100 16,000,000 8,000 170,000 0.74/0.73 2.00/1.97 0.40 0.535/0.515 0.23 0.62 0.36 0.92 0.91/0.90 0.80/0.78 0.58 0.99 0.415/0.41 0.47 0.64/0.62 1.62/1.59 1.03/1.02 0.75 0.74/0.73 2.02/1.97 0.40/0.395 0.535/0.51 0.24/0.225 0.62/0.575 0.355/0.335 0.955/0.92 0.92/0.895 0.80/0.78 0.59/0.57 1.01/0.98 0.425/0.41 0.465/0.45 0.64/0.62 1.63/1.58 1.05/1.02 0.75 Total Treasury Shares 16,062,100 4,264,000 32,408,500 5,845,400 8,643,000 12,255,200 80,000 67,108,700 22,703,200 6,054,324 1,464,624 7,039,100 4,050,062 87,000 4,555,000 26,312,862 6,983,010 9,356,508 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 8 of 8
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) PER (X) Div Yield (%) FY18 FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 05-Mar-18 AUTOMOBILE BAUTO 2.03 2.50 23.2% Buy 2,353 0.50 14.3 19.9 14.2 10.2 5.6 5.9 2.47 -17.8 1.84 10.3 MBMR 2.22 2.47 11.3% Hold 868 0.69 24.7 26.9 9.0 8.3 2.7 3.2 2.60 -14.6 2.01 10.4 -7.7 0.9 PECCA 1.34 1.62 20.9% Buy 247 0.47 9.7 10.9 13.8 12.3 3.7 3.7 1.70 -21.2 1.26 6.3 -13.5 SIME 2.65 2.55 -3.8% Sell 18,022 1.58 13.2 16.4 20.1 16.2 1.2 1.5 3.06 -13.4 2.03 30.8 19.9 UMW 6.00 5.52 -8.0% Sell 7,010 1.33 28.6 40.2 21.0 14.9 2.3 3.3 6.98 -14.0 4.70 27.7 15.4 -2.0 BANKS & FINANCIAL SERVICES ABMB 4.00 4.60 15.0% Buy 6,192 1.26 32.6 35.8 12.3 11.2 4.0 4.0 4.49 -10.9 3.62 10.5 AFFIN 2.53 2.40 -5.1% Sell 4,916 0.93 22.2 23.9 11.4 10.6 3.2 3.2 2.98 -15.0 2.22 13.9 9.5 AMBANK 4.06 4.70 15.8% Buy 12,238 1.43 38.1 44.4 10.7 9.2 4.4 4.4 5.70 -28.8 4.05 0.2 -7.9 CIMB 7.20 8.60 19.4% Buy 66,424 1.67 58.2 59.9 12.4 12.0 4.0 4.2 7.39 -2.6 5.21 38.2 10.1 HLBANK 18.70 19.30 3.2% Hold 38,253 0.81 116.8 126.8 16.0 14.7 2.6 2.6 20.02 -6.6 13.38 39.8 10.0 MAYBANK 10.42 11.50 10.4% Buy 113,031 1.00 74.1 78.3 14.1 13.3 5.3 5.3 10.58 -1.5 8.70 19.8 6.3 PBBANK 22.90 27.30 19.2% Buy 88,428 0.72 153.3 166.5 14.9 13.8 2.5 2.6 23.04 -0.6 19.66 16.5 10.2 RHBBANK 5.40 6.10 13.0% Buy 21,654 1.55 54.3 59.0 9.9 9.2 2.8 2.8 5.61 -3.7 4.71 14.6 8.0 BURSA 10.86 11.80 8.7% Buy 5,837 0.93 43.9 45.0 24.8 24.1 3.3 3.3 11.48 -5.4 8.85 22.7 7.3 Note: BURSA proposed bonus issue of shares on the basis of 1 for 2. Ex-Target price RM7.04 BUILDING MATERIALS ANNJOO 3.32 4.34 30.7% Buy 1,718 1.33 43.7 46.6 7.6 7.1 6.5 7.5 3.98 -16.6 2.27 46.3 -14.0 CHINHIN 1.05 1.39 32.4% Buy 584 0.99 11.4 11.1 9.2 9.4 6.1 5.4 1.49 -29.5 1.00 5.5 -13.2 ENGTEX 1.06 1.38 30.2% Buy 451 0.83 14.2 16.1 7.5 6.6 3.9 5.2 1.52 -30.3 1.01 5.0 -3.6 GADANG 1.01 1.69 67.3% Buy 667 1.12 14.2 18.1 7.1 5.6 3.0 3.0 1.37 -26.3 1.00 1.5 -9.0 GAMUDA 5.10 6.00 17.6% Buy 12,532 0.87 34.5 35.6 14.8 14.3 2.4 2.4 5.52 -7.6 4.58 11.4 2.8 IJM 2.70 2.89 7.0% Sell 9,797 1.17 13.7 18.2 19.7 14.9 3.5 3.5 3.61 -25.2 2.65 1.9 -11.5 CONSTRUCTION KAB 0.27 0.38 38.9% Buy 9 na 31.4 37.3 0.9 0.7 3.7 4.4 0.33 -18.2 0.25 10.2 -10.0 PESONA 0.38 0.46 21.1% Buy 264 1.11 5.0 4.5 7.7 8.4 3.9 3.9 0.74 -48.3 0.38 0.0 -15.6 SENDAI 0.83 0.55 -33.7% Sell 648 1.19 9.1 8.5 9.2 9.8 1.2 1.2 1.39 -40.3 0.58 44.3 -4.0 SUNCON 2.19 2.65 21.0% Hold 2,830 0.57 14.7 16.4 14.9 13.3 3.7 4.1 2.64 -17.0 1.70 28.8 -12.7 WCT 1.54 1.50 -2.6% Sell 2,167 0.90 11.3 10.8 13.6 14.2 1.9 1.9 2.48 -37.8 1.46 5.5 -4.9 LITRAK 5.58 6.26 12.2% Hold 2,945 0.38 45.6 47.1 12.2 11.8 4.5 4.5 6.15 -9.3 5.40 3.3 0.5 CARLSBG 18.88 18.09 -4.2% Buy 5,808 0.75 87.8 91.8 21.5 20.6 4.5 4.7 18.88 0.0 14.12 33.7 23.4 HEIM 21.22 21.64 2.0% Hold 6,411 0.39 93.0 101.6 22.8 20.9 3.6 3.7 21.52 -1.4 16.98 25.0 12.3 AEON 1.75 1.97 12.6% Buy 2,457 0.31 7.5 8.9 23.2 19.6 2.6 2.9 2.52 -30.6 1.45 20.7 -0.6 AMWAY 7.53 8.59 14.1% Buy 1,238 0.46 48.3 49.9 15.6 15.1 5.3 5.4 8.18 -7.9 7.04 7.0 2.0 F&N 30.66 33.74 10.0% Buy 11,238 0.25 122.7 145.8 25.0 21.0 2.6 3.1 31.50 -2.7 23.40 31.0 13.6 CONSUMER Brewery Retail HUPSENG 1.13 1.25 10.6% Buy 904 0.41 5.7 5.9 19.8 19.1 5.3 5.3 1.28 -11.7 1.05 7.6 3.7 JOHOTIN 1.03 1.48 43.7% Buy 320 1.00 11.1 12.0 9.3 8.6 5.8 6.3 1.76 -41.5 1.00 3.0 -14.9 NESTLE 127.90 129.90 1.6% Hold 29,993 0.53 322.2 360.2 39.7 35.5 2.3 2.5 128.80 -0.7 76.02 68.2 23.9 PADINI 5.08 4.67 -8.1% Sell 3,342 0.79 28.0 30.4 18.2 16.7 2.5 2.6 5.50 -7.6 2.86 77.7 -3.8 POHUAT 1.54 2.01 30.5% Buy 338 0.60 22.9 25.4 6.7 6.1 5.2 5.2 2.07 -25.6 1.43 7.7 -14.0 QL 4.90 5.41 10.4% Hold 7,950 0.59 12.8 14.7 38.2 33.3 0.9 1.0 4.98 -1.6 3.45 42.2 12.6 SIGN 0.61 0.92 52.1% Buy 138 0.69 6.9 9.2 8.7 6.6 4.1 5.8 1.07 -43.5 0.57 6.1 -14.2 28.04 34.72 23.8% Hold 8,006 1.43 170.8 168.8 16.4 16.6 5.7 5.7 49.02 -42.8 27.48 2.0 -29.9 GENTING 8.94 11.58 29.5% Buy 34,253 1.47 55.1 61.8 16.2 14.5 1.8 1.8 10.00 -10.6 8.70 2.8 -2.8 GENM 5.21 6.68 28.2% Buy 29,483 1.45 27.6 32.0 18.9 16.3 2.3 2.5 6.38 -18.3 4.87 7.0 -7.5 2.23 3.34 49.8% Buy 3,004 0.60 21.5 26.0 10.4 8.6 7.2 8.1 2.98 -25.2 2.20 1.4 -0.4 CCMDBIO 2.83 3.40 20.1% Buy 789 0.88 16.2 17.4 17.5 16.3 3.8 4.0 3.05 -7.2 1.97 43.7 11.9 IHH 6.03 6.40 6.1% Sell 49,685 0.79 11.9 15.0 50.8 40.3 0.5 0.6 6.33 -4.7 5.42 11.3 2.9 KPJ 0.92 1.13 22.8% Buy 3,878 0.55 3.9 4.4 23.5 21.1 2.4 2.6 1.14 -19.3 0.87 5.7 -5.2 HARTA 11.00 7.80 -29.1% Sell 18,210 1.13 25.2 28.8 43.7 38.2 1.4 1.6 12.18 -9.7 4.71 133.5 3.0 KOSSAN 8.11 9.73 20.0% Buy 5,186 0.54 37.4 42.1 21.7 19.3 2.3 2.6 8.79 -7.7 5.62 44.3 0.0 SUPERMX 2.48 2.70 8.9% Buy 1,626 0.63 20.0 22.6 12.4 11.0 2.1 2.5 2.74 -9.5 1.69 46.7 24.0 TOPGLOV 9.82 9.35 -4.8% Sell 12,334 0.66 35.1 42.4 27.9 23.1 1.5 1.8 10.24 -4.1 4.56 115.4 22.9 KAREX 0.87 0.93 6.9% Sell 872 0.82 1.8 3.0 49.1 28.7 0.5 0.9 2.26 -61.5 0.87 0.6 -33.1 SCIENTX 8.28 10.01 20.9% Buy 4,048 0.89 67.5 79.4 12.3 10.4 2.5 3.1 9.85 -15.9 7.23 14.5 -4.4 SKPRES 1.80 2.20 22.2% Buy 2,250 0.87 10.4 14.8 17.3 12.2 2.9 4.1 2.35 -23.4 1.24 45.2 -21.1 ASTRO 2.41 3.10 28.6% Buy 12,565 0.83 14.0 13.7 17.3 17.6 5.4 5.6 2.94 -18.0 2.38 1.3 -9.1 MEDIA PRIMA 0.47 0.45 -4.3% Sell 521 1.24 -3.8 -1.7 na na 0.0 0.0 1.28 -63.3 0.47 1.1 -38.2 STAR 1.30 1.25 -3.8% Sell 959 1.05 6.7 6.7 19.3 19.3 9.2 9.2 2.22 -41.4 1.29 0.8 -21.2 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical Rubber Gloves INDUSTRIAL MEDIA
12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) FY18 PER (X) Div Yield (%) FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.42 0.72 71.4% Buy 737 1.58 4.2 4.5 10.0 9.3 2.4 2.4 0.69 -39.1 0.38 10.5 -13.4 LCTITAN 5.56 6.10 9.7% Buy 12,638 na 56.3 60.9 9.9 9.1 4.5 4.9 6.53 -14.9 4.14 34.3 18.3 MHB 0.79 0.81 2.5% Sell 1,264 1.37 0.5 1.7 164.5 47.4 0.0 0.0 1.16 -31.9 0.63 26.4 -4.2 MISC 6.88 7.00 1.7% Sell 30,711 1.12 50.1 53.8 13.7 12.8 4.4 4.4 7.90 -12.9 6.73 2.2 -7.3 PANTECH 0.58 0.69 19.0% Buy 432 1.24 6.1 6.8 9.6 8.5 4.7 5.3 0.74 -21.6 0.48 22.1 -10.1 PCHEM 7.97 8.84 10.9% Hold 63,760 0.86 52.5 53.8 15.2 14.8 3.3 3.3 8.28 -3.7 6.80 17.2 3.5 SAPNRG 0.61 1.25 106.6% Buy 3,625 1.99 -6.5 -5.0 na na 0.0 0.0 2.10 -71.2 0.60 0.8 -14.8 SERBADK 3.48 4.15 19.3% Buy 5,110 na 27.7 31.5 12.6 11.0 2.6 2.9 3.68 -5.4 1.63 113.5 7.4 UMWOG 0.32 0.39 23.8% Buy 2,588 1.84 0.4 1.2 82.5 27.2 0.0 0.0 0.68 -53.6 0.27 16.7 3.3 UZMA 1.45 1.57 8.3% Hold 464 0.85 12.9 13.9 11.3 10.5 0.0 0.0 1.98 -26.8 1.26 15.1 13.3 FGV 1.90 1.98 4.2% Sell 6,931 1.63 3.5 4.4 55.0 43.6 2.6 2.6 2.18 -12.8 1.51 25.8 12.4 IJMPLNT 2.25 2.25 0.0% Sell 1,981 0.22 6.7 10.8 33.3 20.8 3.6 4.0 3.38 -33.4 2.21 1.8 -17.9 IOICORP 4.78 5.08 6.3% Buy 30,037 0.92 20.9 21.6 22.9 22.1 6.1 3.6 4.82 -0.8 4.31 10.9 5.3 KFIMA 1.51 1.89 25.2% Buy 426 0.69 14.1 14.7 10.7 10.3 6.0 6.0 1.96 -23.0 1.45 4.1 -3.8 KLK 25.40 27.07 6.6% Hold 27,050 0.65 120.7 125.7 21.0 20.2 2.4 2.4 25.78 -1.5 23.66 7.4 1.6 SIMEPLT 5.52 6.25 13.2% Buy 37,541 na 21.0 22.1 26.2 25.0 2.5 2.7 6.00 -8.0 4.58 20.5 -8.0 TSH 1.57 1.97 25.5% Buy 2,168 0.51 9.3 9.6 16.9 16.3 1.5 1.6 1.90 -17.4 1.55 1.3 -4.8 UMCCA 6.26 6.73 7.5% Sell 1,313 0.39 22.7 34.8 27.5 18.0 2.7 2.9 7.08 -11.6 5.77 8.4 -3.8 GLOMAC 0.54 0.46 -14.0% Sell 425 0.73 3.0 4.4 18.1 12.1 3.7 3.7 0.67 -20.5 0.50 8.1 -3.5 HUAYANG 0.56 0.58 3.6% Sell 197 0.92 0.7 3.4 84.4 16.5 0.9 0.9 1.16 -51.7 0.56 0.0 -8.2 IBRACO 0.68 0.80 17.6% Buy 338 na 7.2 10.7 9.4 6.4 4.4 5.9 0.98 -30.3 0.50 36.0 -16.6 IOIPG 1.85 2.00 8.1% Sell 10,186 0.88 16.3 15.7 11.3 11.8 3.2 3.2 2.22 -16.7 1.79 3.4 0.0 MAHSING 1.19 1.59 33.6% Buy 2,889 0.94 11.8 11.3 10.1 10.6 5.5 5.5 1.64 -27.4 1.18 0.8 -17.9 PLANTATIONS PROPERTY SIMEPROP 1.40 1.51 7.9% Hold 9,521 na 7.5 7.5 18.6 18.7 2.9 2.1 1.78 -21.3 1.04 34.6 -21.3 SNTORIA 0.64 0.76 19.7% Buy 357 0.15 8.3 8.6 7.7 7.4 1.6 1.6 0.91 -30.2 0.56 13.4 -8.6 SPB 4.73 5.10 7.8% Hold 1,625 0.56 18.7 24.0 25.2 19.7 2.5 2.5 5.50 -14.0 4.39 7.7 -3.5 SPSETIA 3.22 3.73 15.8% Buy 12,085 0.95 19.8 19.4 16.3 16.6 3.7 3.7 4.38 -26.5 3.07 4.9 -19.5 SUNWAY 1.60 1.75 9.4% Hold 7,831 0.92 11.8 12.4 13.5 12.9 3.8 3.8 1.96 -18.3 1.32 20.9 -1.8 SUNREIT 1.68 1.87 11.3% Hold 4,948 0.84 10.0 10.7 16.7 15.7 6.0 6.4 1.90 -11.6 1.64 2.4 -11.6 CMMT 1.03 1.64 59.2% Buy 2,099 0.74 7.9 8.6 13.0 11.9 8.0 8.6 1.83 -43.7 1.02 1.0 -43.7 REIT POWER & UTILITIES MALAKOF 0.91 0.82 -9.9% Sell 4,526 0.93 6.6 7.2 13.8 12.6 7.7 7.7 1.30 -30.0 0.86 5.8 -7.1 PETDAG 25.50 24.08 -5.6% Sell 25,333 0.44 114.7 116.3 22.2 21.9 3.4 3.4 26.20 -2.7 21.00 21.4 5.1 PETGAS 17.62 19.46 10.4% Buy 34,865 0.88 99.3 100.0 17.7 17.6 3.9 4.0 20.12 -12.4 15.82 11.4 0.8 TENAGA 15.66 18.22 16.3% Buy 88,729 0.55 131.3 127.5 11.9 12.3 4.2 4.0 16.12 -2.9 13.44 16.5 2.6 YTLPOWR 1.09 1.16 6.4% Sell 8,643 0.92 8.6 8.9 12.6 12.2 4.6 4.6 1.50 -27.3 1.09 0.0 -15.5 -2.2 TELECOMMUNICATIONS AXIATA 5.37 6.50 21.0% Buy 48,592 1.54 15.9 19.4 33.7 27.6 1.5 2.9 5.82 -7.7 4.54 18.3 DIGI 4.75 5.15 8.4% Hold 36,931 0.96 19.7 20.4 24.1 23.3 4.1 4.3 5.19 -8.5 4.36 8.9 -6.9 MAXIS 5.70 6.05 6.1% Sell 44,520 1.08 25.2 25.0 22.6 22.8 3.5 3.5 6.60 -13.6 5.48 4.0 -5.2 TM 5.72 7.20 25.9% Buy 21,495 0.64 22.8 24.9 25.0 23.0 3.6 3.9 6.69 -14.5 5.65 1.2 -9.2 ELSOFT 2.55 3.30 29.4% Buy 701 0.86 13.1 15.0 19.4 17.0 3.6 4.1 2.95 -13.6 1.60 59.2 -5.6 IRIS 0.18 0.22 22.2% Buy 445 2.47 0.0 0.3 654.3 56.9 0.0 0.0 0.25 -26.5 0.12 56.5 -2.7 INARI 3.04 3.65 20.1% Hold 6,283 0.73 13.7 15.3 22.1 19.9 3.3 3.6 3.82 -20.4 1.88 62.0 -10.6 TECHNOLOGY Semiconductor & Electronics Note: INARI proposed bonus issue shares on the basis of 1 for 2. For more detail please refer to 30.01.18 report. MPI 8.80 10.70 21.6% Hold 1,750 0.84 73.9 86.9 11.9 10.1 3.6 3.6 14.52 -39.4 8.62 2.1 -30.3 UNISEM 2.56 2.70 5.5% Sell 1,879 1.16 19.0 20.3 13.5 12.6 4.7 4.7 4.25 -39.8 2.52 1.6 -29.9 TRANSPORTATION Airlines AIRASIA 4.25 4.93 16.0% Hold 14,203 1.06 49.3 49.3 8.6 8.6 1.9 1.9 4.75 -10.5 2.62 62.2 26.9 AIRPORT 8.65 8.61 -0.5% Sell 14,352 1.29 18.0 18.8 48.1 46.0 1.5 1.2 9.45 -8.5 6.43 34.5 -1.6 Freight & Tankers PTRANS 0.29 0.46 61.4% Buy 359 na 2.3 3.8 12.2 7.6 2.4 3.9 0.38 -25.4 0.17 69.5 1.8 TNLOGIS 1.13 1.45 28.3% Buy 516 1.04 10.3 10.5 11.0 10.7 4.4 4.4 1.83 -38.4 1.10 2.7 -15.7 WPRTS 3.58 4.06 13.4% Buy 12,208 0.44 15.6 20.0 22.9 17.9 1.1 1.4 4.19 -14.6 3.12 14.7 -3.2 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) % upside Recom Market Cap. (S$m) Beta EPS (cent) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 28.00 30.50 8.9% Buy 71,788 1.14 212.3 246.0 13.2 11.4 2.3 2.5 29.7 -5.8 18.47 51.6 12.7 OCBC 13.09 14.30 9.2% Buy 54,782 1.22 109.5 123.2 12.0 10.6 6.7 7.7 13.6 -3.8 9.45 38.5 5.6 UOB 27.61 27.80 0.7% Hold 45,894 1.18 216.6 244.0 12.7 12.7 2.9 2.9 28.8 -4.1 21.30 29.6 4.4 PLANTATIONS WILMAR 3.12 3.31 6.1% Hold 19,963 0.80 27.4 29.3 11.4 10.7 3.2 3.5 3.9 -19.4 2.97 5.1 1.0 IFAR 0.33 0.36 10.8% Buy 466 0.98 3.8 4.1 8.6 7.9 1.6 1.7 0.5 -40.4 0.33 0.0 -16.7 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.
13. ECONOMIC UPDATE Tuesday , March 06, 2018 FBMKLCI: 1,842.62 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Malaysian Economy Impressive January 2018 Trade Numbers Shazma Juliana Abu Bakar Farid Burhanuddin Tel: +603-2167 9608 Tel: +603-2167 9220 shazma@ta.com.my farid@ta.com.my www.taonline.com.my Summary In line with stronger economic performance in our major trading partners, Malaysia’s exports registered a stronger-than-expected growth of 17.9% YoY to RM82.9bn in January 2018. This is significantly higher as compared to December’s 4.7% YoY and consensus estimate of 12.9% YoY (TA Forecast: +10% YoY). Re-exports in January 2018 was valued at RM17.4bn and accounted for 21.0% of total exports. Meanwhile, domestic exports grew RM5.6bn (or 9.3% YoY) to RM65.5bn during the month. Stronger exports were seen across key exports products, spearheaded by manufacturing products, which grew by a hefty 20.4% YoY vs. 5.6% YoY gain previously; followed by agriculture goods (Jan18: +6.2% YoY; Dec17: -10.5% YoY); and mining sector (Jan18: +8.5% YoY; Dec17: +13% YoY). Similarly, total import growth accelerated by 11.6% YoY to RM73.2bn (Consensus: 11.2% YoY; TA Forecast: +14% YoY). As exports growth outpaced imports, trade balance increased to a surplus of RM9.7bn from RM7.3bn observed in the prior month. In the meantime, total trade rose by 14.9% YoY, which were valued at RM156.0bn during the month. On a monthly basis, exports and imports increased by 4.4% MoM and 1.5% MoM, respectively, probably due to more working days as compared to long holiday in December. Figure 1: Statistical Summary of Malaysia’s Trade Performance Trade Performance 2017 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Exports (RMbn) 935.4 82.3 78.3 82.3 83.5 79.3 82.7 18.9% 21.6% 4.7% 14.8% -4.9% 18.7% 5.2% 14.4% 1.5% 4.7% -5.0% 17.9% 4.4% 838.1 72.3 69.7 71.9 73.6 72.1 73.2 19.9% 22.4% 2.4% 15.2% -3.7% 20.9% 3.2% 15.2% 2.4% 7.9% -2.0% 11.6% 1.5% 1,773.5 154.6 147.9 154.1 157.1 151.4 156.0 19.4% 22.0% 3.6% 15.0% -4.3% 19.7% 4.2% 14.8% 1.9% 6.2% -3.6% 14.9% 3.0% 97.2 10.0 8.6 10.4 9.9 7.3 9.7 10.3% 16.1% 24.5% 11.5% -14.0% 5.7% 21.4% 9.2% -4.7% -19.1% -27.2% 104.8% 33.9% YoY % MoM % Imports (RMbn) YoY % MoM % Total Trade (RMbn) YoY % MoM % Trade Balance (RMbn) YoY % MoM % Source: Department of Statistics, TA Securities Page 1 of 5
14. 6-Mar-18 January 2018 review Export growth came in way above ours and consensus estimate on the back of stronger exports for the manufacturing and agriculture products , despite moderate performance of mining sector. Manufacturing sector (82.5% of total exports in January) registered an exports value of RM68.3bn during the month, a double digit growth of 20.4% YoY (Dec17: +5.6% YoY). Comparatively to December 2017, the manufactured goods increased by 5.9% MoM. The tremendous gain was due to a hefty increase in the E&E segment. Exports of E&E products increased by 27.1% YoY and 10.3% MoM. The E&E alone constitutes about 38.2% of overall exports in January 2018. At the same time, chemicals & chemical products, which accounts for 7.5% of the exports market, grew by 23.4% YoY (or +3.1% MoM) and machinery, equipment & parts rose by 11.5% YoY and 5.5% MoM. The most significant growth increase was iron & steel products, with an outstanding 60.9% YoY YoY (or +14.5% MoM) to RM1.2bn during the month vs. 20.2% YoY increase in December 2017. We expect a similar robust performance in February 2018 on expectation that exporters would front load shipments before the imposition of new tariff by the US government on steel and aluminium by 25% and 10%, respectively. The President is expected to sign the order to impose the tariffs this week. We foresee a minimal direct impact on our exports due to its low contribution of only 1.5%. Most US steel imports come from Canada, Brazil and South Korea. So far, Mexico, China and the European Union have all said they would consider punitive tariffs. Malaysia has already been affected by the earlier imposition of tariffs on solar panels by the US. In January 2018, the US government announced that it would impose safeguard tariffs on imports of photovoltaic cells (PV) and modules over a period of four years, starting at a rate of 30% in year one, before moderating to 25% in year two, 20% in year three and 15% in year four. Malaysia is a major producer in the solar ecosystem, behind China and Taiwan. In the same vein, shipments of agriculture goods rebounded to register a 6.2% YoY gain in January 2018 as compared with 10.5% contraction previously. - In particular, growth of palm oil and palm oil-based products rose by 10.4% YoY to RM6.6bn. Exports of palm oil, the major commodity in this group of products grew by 10.1% due to the increase in export volume of 35.9% YoY. - In contrast, exports of natural rubber fell by 26% YoY to RM291mn (Dec17: -24.4% YoY), due to the decrease in both average unit value (-20.5% YoY) and export volume (-6.9% YoY). The contraction is expected to last until March 2018 as Malaysia has pledged to withhold exports of 350,000 tonnes of natural rubber. Note that natural rubber contributes only 0.4% of total exports. Meanwhile, exports liquefied natural gas (LNG) (4.5% of total exports), rose by 14.0% to RM3.8 billion due to the increase in both export volume (+10.2% YoY) and average unit value (+3.4% YoY). Also, shipment of crude petroleum registered a marginal increase of 0.1% YoY to RM27.9bn during the month while exports if tin registered an increase of 80.7% YoY. As a result, shipments of mining goods (8.5% of total exports) rose by 8.5% YoY during the month (Dec17: +13.0% YoY). By destinations, almost all key markets registered a better export growth in January 2018, including ASEAN, which grew by 15.6% YoY to RM24.2bn. The increase was attributed mainly by exports of electrical and electronic (E&E) products, petroleum products, chemicals and chemical products as well as machinery, equipment and parts. Namely, exports to Singapore rose by 8.5% YoY vs. 3.3% YoY decline previously. In the same vein, exports to China continued its positive performance at 17.9% YoY in January 2018 (Dec17: +12.8% YoY) due to higher shipments of manufactured products, while exports to the EU improved by 13.6% YoY as compared with 11.4% YoY observed previously. The gain was due to higher demand of manufactured good, especially E&E products. Note that, Singapore Page 2 of 5
15. 6-Mar-18 remained as Malaysia ’s number one export market, accounting for 14% of total exports. This is followed by China (Jan18: 12.2% of total exports). As mentioned earlier, total imports strengthened to 11.6% on a YoY basis, contributed mainly by higher imports of consumption goods (8.6% of total imports). - The consumption good increased by 9.8% YoY (or 1.3% MoM) to RM6.3bn as compared with 6.2% YoY gain registered previously. Contributing to this was the 13.2% YoY surge in imports of food & beverages, processed, mainly for household consumption as well as non-durables (Jan18: +11.6% YoY) and semi-durables items (Jan18: +10.2% YoY). - Imports of capital goods, meanwhile, dropped by 3.1% YoY to RM9.3bn reflecting the decrease in transport equipment (industrial) by 21.7% YoY. - Also, imports of intermediate goods, the largest contributor of Malaysia’s imports, declined by 1.7% YoY to RM37.7bn, mainly attributed to lower parts & accessories of capital goods (except transport equipment) by -26.5% YoY. By products, the highest imports was the E&E goods, which valued at RM22.4bn (or 30.7% of total imports) with a growth of 14.8% YoY. Petroleum, Chemicals and chemical products; petroleum products; machinery, equipment & parts; Manufactures of metal; and transport equipment were among our other major imports. In the meantime, China was the top import source with a total import value of RM15.1bn during the month with a growth of 3.1% YoY. Total imports from the ASEAN region increased by 17.1% to RM18.8bn which is 25.7% of Malaysia’s total imports during the month. Particularly, imports from Singapore rose by 39.7% YoY to RM9.1bn in January 2018. Trade Surplus Trade surplus improved by 104.8% YoY and 33.9% MoM to RM9.7bn during the month (Dec17: RM7.3bn), making it 243rd consecutive month of trade surplus since November 1997. Note that, the Government forecast trade surplus of RM96.99bn this year as highlighted in Malaysia Economic Report 2017/2018. Our View / Outlook While we expect limited adverse impact following the new and upcoming tariff measures on US imports of solar panels, washing machines, steel and aluminium products, we view this as a re-emergence of trade protectionism. This will pose as a downside risk to the economies that are highly leverage to trade activities including Malaysia. Thus, expect no changes in our OPR in the next MPC meeting on 7 March 2018 and moderate GDP growth of 5.4% this year. Figure 2: Malaysia’s Major Exports by Products (Aug17 – Jan18) Major Exports Products Electrical and Electronic (E&E) Palm Oil Liquefied natural gas (LNG) Chemicals and chemical products Optical and scientific equipment Petroleum products Manufactures of metal Crude petroleum Rubber Products Aug-17 20.1% -12.1% 101.8% 15.7% 28.7% 33.6% 24.7% 0.0% 28.2% Sep-17 17.7% -0.9% 8.2% 2.9% 14.5% 22.4% 25.4% -4.9% 19.4% Oct-17 16.9% 9.2% 6.3% 17.5% 20.3% 21.4% 38.0% 62.9% 30.6% Nov-17 21.0% -2.1% 7.5% 20.2% 15.2% 1.2% 20.8% -3.1% 37.0% Dec-17 6.2% -10.9% 4.8% 6.8% 5.5% 6.2% 17.0% 6.9% 3.5% Jan-18 27.1% 10.1% 14.0% 23.4% 18.0% 0.5% 14.8% 0.1% 12.1% Source: Department of Statistics, TA Securities Page 3 of 5
16. 6-Mar-18 Figure 3 : Malaysia’s Major Exports Market (Aug17 – Jan18) Major Exports Market China Singapore U.S. Japan EU ASEAN Hong Kong India Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 21.2% 20.5% 14.5% 18.0% 21.6% 16.5% 22.2% 4.9% 27.1% 8.1% 10.7% 6.9% 16.2% 13.0% 41.0% -7.0% 20.5% 16.1% 13.8% 20.4% 9.3% 19.6% 54.9% -5.7% 3.3% 16.8% 13.4% 6.7% 12.4% 18.4% 56.4% -4.1% 12.8% -3.3% -3.1% 5.8% 11.4% -0.2% 43.2% -6.1% 17.9% 8.5% 8.7% 3.3% 13.6% 15.6% 129.9% 19.1% Source: Department of Statistics, TA Securities Figure 4: Malaysia’s Major Exports by Sector (Jul17 – Jan18) Sectors Manufacturing Agriculture Mining Share of total exports 82.5% 7.9% 8.7% Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 32.6% 14.8% 27.5% 22.2% -1.7% 41.0% 17.1% -1.5% 8.9% 19.6% 6.5% 28.9% 18.3% -2.3% 0.4% 5.6% -10.5% 13.0% 20.4% 6.2% 8.5% Source: Department of Statistics, TA Securities Malaysia: International Trade Figure 5: Exports Growth (Jan16 – Jan18) Figure 6: Exports by Sector (Jan16 – Jan18) Source: Department of Statistics, TA Securities Source: Department of Statistics, TA Securities Figure 7: Total Imports (Jan16 – Jan18) Source: Department of Statistics, TA Securities Figure 8: Trade Balance (Jan16 – Jan18) Source: Department of Statistics, TA Securities Page 4 of 5
17. 6-Mar-18 Figure 9 : % Share of Exports by Countries (Jan18) Source: Department of Statistics, TA Securities Figure 10: % Share of Imports by Countries (Jan18) Source: Department of Statistics, TA Securities 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 5 of 5
18. COMPANY UPDATE Tuesday , March 06, 2018 FBMKLCI: 1,842.62 Sector: Automotive THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Sime Darby Berhad TP: RM2.55 (-3.8%) Last Traded: RM2.65 Good Outlook but Stretched Valuation Abel Goon Tel: +603-2072 1277 ext. 1641 SELL abelgoon@ta.com.my After our recent meeting with Sime Darby (SDB), we believe its forward prospects are largely secured, premised on 1) new life cycle model for BMW, 2) uptick in coal mining activities in Australia, 3) stronger Ringgit, and 4) no fixed price on valuable Malaysian Vision Valley (MVV) Land. That said, we believe SDB is currently trading at lofty valuations, with limited upside. Thus, we maintain Sell on SDB with higher TP of RM2.55 based on SOP valuations. BMW’s New Model Life Cycle We understand that the continental luxury car segment is an oligopoly between Audi, Mercedes and BMW. According to management, each marque will take the spotlight with new life cycle models. Note that Mercedes currently holds the crown in terms of sales, registering a total of 2.3mn cars delivered globally in CY17. However, according to various sources, BMW intends to snatch the crown by 2020 as it launches its new model line-up. SDB management informed us that the X3 and X5 SUVs will be launched in FY18, whilst the entry-level 3 Series will be launched in 2HFY19 (1HCY19). To recap, the 3 Series is BMW’s best-selling model, accounting for circa 30% of annual sales globally. Thus, we believe this will boost SDB’s FY19-20 sales, as it accounts for 2% of total BMW sales globally. Increasing Coal Prices Besides the expected improvement in the automotive segment, we believe the industrial segment will also pose major growth. Although there is an increase in construction activities in Malaysia and China (where SDB distributes Caterpillar equipment), competition in these markets is intense given the cheaper Asean brands such as Komatsu. In contrast, SDB’s Caterpillar distributorships in Australia (which supplies mining equipment at Queensland and the Northern Territory) are largely insulated from competitive intensity. Management also noted that competition is less intense in the mining equipment space, as Caterpillar is the preferred brand for most miners. Furthermore, we note that the recent increase in coal prices has spurred demand for coal mining equipment. This is in-line with historical trend and will boost SDB’s industrial orderbook. According to management, SDB’s Australian industrial orderbook jumped by 350% to RM1.24bn in December 2017 from RM275mn the year before. Construction Begins at Carmichael Mine but Delays Expected On top of the run-up in coal prices, we understand that construction of the Carmichael coal mine began in October 2017. This mine is set to be the largest coal mine in Australia, with expected production of 2.3bn tonnes over 60 years at an investment cost of USD16.5bn. As a result, if the project proceeds as planned, SDB’s orderbook should surge, given that it is the sole distributor for Caterpillar in Queensland, where the mine is located. That said, we note that Adani (Carmichael’s operator) has been facing massive opposition from environmental activists due to its expected impact on the Great Barrier Reef and is facing difficulties in financing the project. Thus, we believe that the www.taonline.com.my Share Information Bloomberg Code SIME MK Stock Code 4197 Listing Main Market Share Cap (mn) 6,800.8 Market Cap (RMmn) 18,022.1 52-wk Hi/Lo (RM) 3.06/2.03 12-mth Avg Daily Vol ('000 shrs) 12,211 Estimated Free Float (%) 28.3 Beta 1.8 Major Shareholders (%) PNB - 49.1 EPF - 11.5 KWAP - 4.9 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 0.0 0.0 897 1114 879 903 102 123 Sell (Maintain) Financial Indicators Net Debt / Equity (x) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) FY18 0.1 18.7 14.1 3.4 2.0 1.3 FY19 0.1 19.9 13.3 4.0 2.2 1.2 Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth SIME (6.7) 20.5 28.0 27.1 FBM KLCI 1.7 7.2 4.0 6.7 (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 6
19. 6-Mar-18 likelihood of delays is high as Adani attempts to manoeuvre around environmental and funding concerns . Figure 1. New BMW X3 Figure 2. New BMW X5 Source: Various, TA Securities Source: Various, TA Securities Figure 4. Coal Price Trend Figure 3: Rendered BMW 3 Series Source: Various, TA Securities Figure 5. Carmichael Mine, Queensland USD/tonne 120.0 110.0 100.0 90.0 80.0 70.0 60.0 50.0 40.0 Source: Bloomberg, TA Securities Jan-18 Jul-17 Oct-17 Jan-17 Apr-17 Jul-16 Oct-16 Jan-16 Apr-16 Jul-15 Oct-15 Jan-15 Apr-15 Jul-14 Oct-14 Jan-14 Apr-14 Jul-13 Oct-13 Jan-13 Apr-13 30.0 Source: Various MVV Land to be Sold to Highest Bidder To recap, Sime Darby Plantation sold 29 parcels of land totalling 8,800 acres to SDB for total consideration of RM2.5bn to settle all intercompany loans before the demerger. Subsequently, Sime Darby Property entered into a 5+3 year call option agreement with SDB to purchase the land. We understand that the transfer value will be based on the market price at the time of exercise and not the previously transacted price of RM2.5bn. Furthermore, SDB is also able to sell each parcel individually to other property developers, with Sime Darby Property having the first right of refusal. Thus, we believe sale of the MVV land may result in attractive special dividends over the longer-term. Healthcare and Logistics Division Plans According to management, SDB may look at disposing its port operations in China. However, it is in no hurry to do so, and will only consider disposal at an attractive price. Meanwhile, for its healthcare division, SDB plans to grow this as its third core business (Motors and Industrial are its 2 cores now). To recap, the group operates 6 hospitals in Malaysia and Indonesia via a JV with Ramsay Healthcare. That said, inorganic growth is the more likely path for this segment going forward. SDB is on the prowl to acquire hospitals in HK, Macau, Philippines, Thailand, China, Vietnam and Myanmar. However, management believes that valuations of healthcare assets are rich at this juncture. Therefore, acquisitions are unlikely to materialise in the near term. Page 2 of 6
20. 6-Mar-18 Figure 6 . Malaysian Vision Valley Location Figure 7. Close-up of SDB’s MVV Land Source: Company, TA Securities Source: Company, TA Securities Earnings and Valuation We maintain our earnings forecast. Additionally, we believe SDB’s motor and industrial divisions are in an ideal position compared to its peers. Its motor division boasts a global presence that is resilient to economic downcycles. Furthermore, BMW is expected to begin its model cycle update within the next few years. For the industrial division, steadily increasing coal prices is expected to boost demand for SDB’s Caterpillar equipment in the future. We also understand that Caterpillar equipment is more ideal for mining services as compared to Asian brands such as Komatsu and Doosan. Furthermore, Adani’s Carmichael coal mine will be a long-term catalyst, if it proceeds as planned. Thus, we ascribe a 2x premium to peers’ average for both sectors. Additionally, we remove the discount for SDB’s MVV, as its future sale value is now uncapped. Lastly, we value SDB’s healthcare division higher, at 1.5x P/B (previous: 1.0x) which is in-line with peers’ average. After all changes, we arrive at a higher TP of RM2.55 (previous: RM2.13) which implies a 17.2x CY18 PER. Reiterate Sell as we believe valuations are stretched at this juncture. Figure 8. Auto Peers Comparison PE (x) Company BAuto PB(x) Dividend Yield (%) ROE (%) CY18 CY19 CY18 CY19 CY18 CY19 CY18 CY19 11.2 9.1 3.8 3.1 5.8 6.6 33.4 34.1 MBM Resources 9.0 8.3 0.5 0.5 1.4 2.7 5.5 5.7 Pecca 13.3 11.8 1.4 1.3 3.7 4.1 10.7 11.3 SDB 17.9 15.6 1.1 1.1 1.4 1.6 6.3 6.8 UMW 21.0 14.9 1.6 1.5 0.0 1.7 7.6 10.0 Average 14.5 11.9 1.7 1.5 3.1 3.3 12.7 13.6 Page 3 of 6