Ananda Krishnan (AK) is understood to lend up to RM2bn to 1MDB to help 1MDB  settle  a  debt  (to  Maybank  and  RHB  Bank)  that  had  its  deadline extended  twice  already.  The  next  due  date  is  31  January  2015.  It  was reported  that  this  RM2bn  was  guaranteed  by  AK,  when  1MDB  acquired AK’s power assets in Mar12. (Source: The Edge Financial Daily)

Comment: We think this is a positive development for 1MDB, and would lift the  sentiment  for  the  KLSE.  Recall  from  our  Strategy  note  dated  7th January 2015, where we said that the debt owed by 1MDB will potentially be restructured. In the meantime, we think the market will remain volatile in the 1H15, and advocate staying defensive for the time being. The MREIT and telecommunication sector provides good dividend yields.

Source: Affin Hwang Capital Research - 30 Jan 2015