Regional Plantation Companies
Supply constraint continues

Malaysia’s Jun13 palm oil stock fell 9% m-o-m to 1.647m MT – 11% below forecast – as same month output was 10% below expectations. Flat Jun13 palm oil exports were partly compensated by higher domestic consumption. Given YTD numbers and Ramadan slowdown, we cut Jul13F output by 3% to 1.656 MT; Jul13 stock may drop further to 1.593m MT. Productivity may deteriorate if low prices persist; our long-term picks: BAL, FR, IOI and WIL.
 

Asian Telecom Sector
Who will milk 4G & 3G?

Among mature markets, Hong Kong is likely to benefit more than Singapore from 4G networks. Among emerging markets, China and Thailand are monetising 3G better than Indonesia.Our top picks offer growth at reasonable valuations – Shin Corp & China Unicom. Bargain hunting opportunity after excessive share price drop – Indosat & Smartone. Top sells are Maxis & Telekom Malaysia.

MMC Corporation; Trading Buy; RM2.66
Price target: RM4.95; MMC MK
Chasing up

MMC Corporation stands out as a laggard that is poised to play catch-up going forward. Its share price (up just 1.1% year-to-date) could run up after trailing against the benchmark FBM KLCI (+4.7%) and its closest peer Gamuda (+34.6%). Historically speaking, MMC Corporation has mostly outperformed Gamuda. But since early this year, the stock has diverged from Gamuda shares after opening up a huge performance gap. Therefore, from a technical perspective, MMC Corporation’s share price will likely advance and narrow the performance gap. Trading Buy.

Source: HwangDBS Research - 11 Jul 2013