Aviation (Overweight)

MAHB Championing Tariff Hikes

'''' MAHB has again announced new airport charges beginning 15 November 2011, which was deferred by the government back on 14 September 2011.

'''' The new rates for international passenger departing from airports (ex-LCCTs) will be increased from RM51 to RM65 (RM14 previously subsidized by government) while those'' from LCCTs will be raised from RM25 to RM32.

'''' Aircraft landing charges will be increased by 9% p.a. and parking charges will be increased by 18% p.a. for the next 3 years starting January 2012.

'''' Positives to MAHB, and slight negatives to AirAsia and MAS, as we expect airlines to pass-through the additional cost to consumers, while the additional cost are very marginal to travelling cost and unlikely to have significant impact on travelling demand.

'''' Separately, MAHB also announced setting up a new JV (23:77) with Tenaga, to supply chilled water and electricity to new KLIA2. MAHB expects the JV to contribute RM5m p.a.

'''' Raised MAHB FY12-13 earnings by 7.2% and 10.1% respectively.

'''' Recommendation:

'''' Maintained BUY on MAHB with higher target price of RM7.00 (Previously RM6.50) based on DCF to equity.

'''' Maintain BUY on AirAsia with TP of RM4.50.

'''' Maintain SELL on MAS with TP of RM1.19.

''

Enjoy the ride toward 1500-1513 pts

'''' Riding on the overnight bullish Wall St and Europe markets, FBM KLCI is expected to continue its uptrend towards 1500 psychological barrier and probably to retest the 200-d SMA (now at 1513) after a mild profit taking consolidation. Immediate supports are 10-d SMA (1450) and 50-d SMA (1435) pts.

''

Coastal: Targeting RM2.10-2.25 amid bullish technicals

'''' Based on the weekly and daily charts, promising trend and momentum readings as well as rising +DMI suggest COASTAL could stage a meaningful upside towards RM2.10 (38.2% FR and upper channel) and RM2.25 (200-d SMA & 50% FR) in the short term. Supports are RM1.80-1.85. Cut loss below RM1.80.