MISC (FV RM7.45 'BUY) Company Update: Tanker Rates on The Rise Tanker rates are rising dueto strong demand from China, the return of the Libyan  oil and the build-up of tensions in Iran  resulting in oil  being sourced from elsewhere. We believe thetanker market hit bottom in 3Q, noting that forward freight agreement (FFA) rateshave been inching up since end-Sept 2011. This increases the possibility of thetanker segment recovering faster than expected by early 2014. We are still ofthe view that at current levels, MISC is trading at an attractive P/BV of lessthan -2 std deviations. With a 37% upside to our unchanged fair value at RM7.45which is based on 1.5x P/BV, we still advocate a Buy on MISC. 

MAS (FV RM0.90 'SELL) Corporate News Flash: Ditches Plan For Premium Airline

PENERGY (FVRM1.50  ' BUY) Corporate News Flash:Holding Hands With Baker Hughes

SOP (FV RM7.09 'NEUTRAL) Corporate News Flash: Buys Shipping Assets

TELKOM (FV IDR8500 'BUY) Company Update: Higher Dividends in Store

Another high. As expected, the FBM KLCI scaled to  yet another new high yesterday, ending theday at 1,606.63  pts on improved regionalsentiment.  However, the market breadthwas  mixed with  decliners beating advancers 379 to 354,with  a slightly lower share turnover of RM1.36bn  compared to RM1.4bn a day before. Today'sheadlines for include: MAS is abandoning its plan to set-up a regional premiumservice carrier, DRBHicom has appointed forensic consultants to conduct a duediligence on Lotus Group, and Navis said it has not decided on buying outSEGi.  On the global front, the Dow slippedafter the Fed signaled less support for another round of quantitative easing.

Petroliam Nasional (Petronas), Malaysia's state oil company,plans to lower its annual dividend paid to the government to RM28bn this yearas it holds on to cash to help reverse a production slump. 'We need to grow', DatukShamsul Azhar Abbas, the group's CEO said. 'Energy reserve is not infinite, itwill deplete. You can't be sucking us dry', he added. (Malaysian Reserve)

Malaysia Airlines (MAS) has dropped its plan to establish ashort-haul regional premium airline and will instead offer such servicesin-house as a division under the national carrier. Without offering any reason,MAS COO (short-haul) Ignatius MC Ong said there was  already a slight business module realignmentfor the regional airline initiative. 'Strategy and objective of the short-hauloperations will remain unchanged but there will be no new airline', he said.(Malaysian Reserve) Please see accompanying report

Malaysian Resources Corp (MRCB) is open to options for itsEastern Dispersal Link (EDL) in Johor Baru, including the sale of the highway.MRCB said the government could also consider charging a levy onforeignregistered  vehicles going intoSingapore using the highway. Originally, all vehicles, except motorcycles,using the Causeway were to pay toll on the EDL. (Financial Daily)

Petra Energy has entered into a memorandum of understanding(MoU) with Baker Hughes (M) SB (BHM) to undertake oil and gas (O&G)projects in Malaysia. Petra Energy said the companies would cooperate toprovide capability development services including deploying their respectiveexpertise and knowledge for O&G projects for the operators in Malaysiawithin the duration of the MoU. (Financial Daily) Please see accompanyingreport

Ekuiti Nasional (Ekuinas) plans to create one of Malaysia'slargest education entities and is now eyeing a third education group just aftercompleting its acquisition of a 90% stake in Cosmopoint SB for RM246m. Amongthe education groups that Ekuinas is eyeing are Masterskill Education Group(MEGB) and HELP International Corp. MEGB has some 11k students as of 2011 whileHELP has 13k students. If Ekuinas were to acquire either one of these educationgroups, its student enrolment would increase to almost 30k from about 20kcurrently, making it the biggest listed education player. (StarBiz)

Sarawak Oil Palms (SOP) has signed a shareholders andsubscription agreement with Danum Shipping SB for a proposed JV for palm oiltanker shipping services. SOP said it would take up a 45% stake in the JVcompany, Micaline SB, with the balance held by Danum, a wholly-owned subsidiaryof Shin Yang Shipping Corp. They added that it would subscribe and pay in cashfor 7.65m shares of RM1 each in Micaline, while Danum took up 9.35m shares.(StarBiz) Please see accompanying report

Navis Capital Partners, which has already announced itsacquisition of a 28% stake in SEG International (SEGi), has yet to decide if itwill buy out the rest of the shares in the company. 'We have not made adecision on that yet,' said Nicholas Bloy, the managing partner of Navis AsiaVI Management Company Ltd and who has also been appointed to the board of SEGisince Monday. Bloy said Navis liked the education sector, especially in emergingmarkets, because of the growth potential and the 'sticky' customer profile.(StarBiz)

DRB-Hicom, the ultimate owner of Proton Holdings, has hiredtwo top-notch forensic teams to conduct a due diligence on Lotus GroupInternational. Lotus, the British sportscar maker owned by Proton, has been amajor strain to the national carmaker's cashflow over the years. Proton gainedcontrol of Lotus in 1996 from the liquidators of Bugatti Automobili SpA. Thenational carmaker has not made any profit from the British unit over the past15 years, which has been struggling to compete against other sportscar makerssuch as Porsche AG and Ferrari SpA in Europe. (BT)

The lowest auction demand in four months for Japan's 10-yeardebt foreshadows a gain in yields this fiscal year as the central bank'smonetary easing curbs demand for yen-based assets. The JPY2.1trn (USD26bn) saleof the securities was the first debt offering in the year started 1 April anddrew bids valued at 2.73 times the amount on offer. That's the lowest ratiosince the auction on 1 Dec and below the average of 3.08 for the past 10 sales.Benchmark yields rose two basis points to 1.03%, the highest since 21 March.The bid-to-cover ratio for 10-year US debt has been over 3 at every sale thisyear. (Bloomberg)

China's economy may have expanded about 8.4% in the firstquarter, the least since the first half of 2009, according to an estimate givenby an official 10 days before the data are due. Zhang Xiaoqiang, vice chairman ofthe National Development and Reform Commission, cited 'relevant China research institutes' initial figures' forthe estimate and predicted a gain of about 3.5% in consumer prices. (Bloomberg)

Australia's central bank signalled it may resume cutting interest rates as soon as next month ifweaker-thanforecast growth slows inflation, sending the local currency and bondyields lower. 'The board judged the pace of output growth to be somewhat lowerthan earlier estimated, but also thought it prudent to see forthcoming key dataon prices to reassess its outlook for inflation, before considering a furtherstep to ease monetary policy,' Governor Glenn Stevens said in a statement afterleaving the overnight cash-rate target at 4.25%. (Bloomberg)

UK construction expanded at the fastest pace in 21 months inMarch, adding to signs the economy returned to growth in the first quarter. Agauge of building activity rose to 56.7 from 54.3 in February, Markit EconomicsLtd. and the Chartered Institute of Purchasing and Supply said. The medianforecast in a Bloomberg News survey of nine economists was 53.4. A readingabove 50 indicates expansion. Markit said confidence at companies increased toa 22-month high. (Bloomberg)

Orders to US factories climbed in February for the thirdmonth in the last four, boosted by demand for business equipment. Bookings rose1.3% after a revised 1.1% decline in January, figures from the Commerce Departmentshowed. The median of 60 economists' projections in a Bloomberg News surveycalled for a 1.5% advance. Orders excluding transportation equipment increasedby the most in five months. (Bloomberg)

Source: OSK188