OSK188 - 9 April 2012: DAILY RESEARCH REPORT

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Publish date: Mon, 09 Apr 2012, 10:44 AM

On The Platter

GAMUDA (FV: RM4.58)Company Update: MRT Works Ready to Roll To get a first-hand look at theRM50bn KV MRT - the MalaysianGovernment's largest ever infrastructure project - we dropped in at one of the5 KV MRT Information Centres in town, and took a bus to trace the journey fromSungai Buloh to Semantan, which is part of the Sungai Buloh-Kajang (SBK) line.We are positive on the potential rollout of the project and see the award ofcontracts accelerate in the coming months, with MMCGamuda assuming the role asthe caretaker of this line's elevated portion. Maintain BUY on Gamuda, at anunchanged FV of RM4.58, based on our SOP-based valuation.

EITA (FV: RM0.81 'NOT RATED) IPO Note: Elevating Its Profile

MMC CORP (FV: RM3.70)Company Update: Along The MRT Trail

TELEKOM MALAYSIA (FV:RM5.70) Corporate News Flash: Super Speed Me

Market Review

Cautious trading.The FBM KLCI edged up more than 5 pts to 1598.87 last Friday on the back ofblue chip support with gainers thumping losers almost 2-to-1. In the news are: the Government, which says it is still keen onthe high speed rail project linking Kuala Lumpur to Singapore, and Sime Darby plans its 11^thtownship north of its existing township in Denai Alam in Selangor.With the Dow closing a tad lower ahead of the weekend on poor US jobs data andthe local bourse digesting the new high charted last week, a further pullback may be in the offing this week forthe FBM KLCI.

MEDIA HIGHLIGHTS

Perodua draftingroadmap for used-car business

Second national car company Perusahaan Otomobil Kedua SdnBhd (Perodua) hopes to establish an organization structure for its used-carbusiness by middle for the year, its chief said. The company is venturing intothe used-car business to expand its revenue base and provide a platform forexisting and new customers so that they can trade in their Perodua cars orother makes, for its new models. Perodua entered the used-car business inAugust 2008, but ceased operations more than a year later due to low salesvolume. (BT)

Govt still keen onhigh-speed rail link

The Government is still keen on the high-speed rail projectlinking Kuala Lumpur and Singapore, the Land Public Transport Commission (SPAD)said. SPAD chief executive officer Mohd Nur Ismal Mohamed Kamal, however, stressedthat it will depend on the outcome of a feasibility study, which started lastmonth and is expected to be completed in 6 to 12 months' time. (BT)

S P Setia entersIndonesia in regional expansion

S P Setia continuesits regional expansion with the opening of a representative office in Jakarta,giving the developer a foothold in the archipelago. Jakarta is the fifthoverseas destination the developer has ventured into after Vietnam, Singapore,Australia and China. S P Setia president and CEO Tan Sri Liew Kee Sin said S P Setiahopes to be able to directly source Indonesian arts and crafts, buildingmaterials and furniture for its projects in the future. (Financial Daily)

Rafique to joinMaybank as new group CFO

Former chief financial officer (CFO) of the country'sutility company Tenaga Nasional Bhd (TNB), Mohamed Rafique Merican MohdWahiduddin Merican will join the country's largest banking group, MalayanBanking Bhd (Maybank) as its group chief financial officer (CF) effective 1Jun. In an exchange filing last Friday, Maybank said he will succeed DatukKhairussaleh Ramli, 43, who stepped down from his position as the bank's group CFO following his appointment as the president director of PTBank Internasional Indonesia Tbk, a subsidiary of Maybank in Indonesia.(Malaysian Reserve)

Ekuinas targest 12%minimum return for its investments in education sector

Ekunas Nasional Bhd is looking at a time horizon of betweenthree and five years for its investments in the education sector with along-term minimum target internal rate of return of 12% per year, according toa spokesperson from the government-linked private equity fund management firm.Its aspirational target for the investments is at 20%. Ekuinas has recentlycompleted a purchase of a 90% stake in Cosmopoint SB for RM246m and has beenreportedly eyeing Masterskill Education Group Bhd and Help International CorpBhd on its plans to create the country's largest education group. (MalaysianReserve)

MBSB extends homefinancing

Malaysia Building Society (MBSB) will start extending homefinancing facilities to the second generation of property purchasers for itshousing project in Sepang, president and CEO Datuk Ahmad Zaini Othman said. Thenon-bank lender, which does not come under the purview of Bank Negara, saidthis special financing facility would allow home buyers to stretch monthlyhome-loan repayments to the kids (second generation) of these home buyers, mostof whom are retirees in their 50's. (StarBiz)

ECONOMICHIGHLIGHTS

Japan: Bank of Japanseen adding stimulus on nominee rejection

The Bank of Japan may expand stimulus this month after law makers escalated pressure for extra actionby blocking a candidate for the bank's board and renewing calls for a more'proactive' monetary policy. Parliament's upper house rejected economistRyutaro Kono, described as holding similar views to Governor Masaaki Shirakawa, who says that monetarypolicy alone cannot solve deflation. The central bank may stand pat at atwo-day meeting ending 10 April, preserving ammunition for later in the month,when price projections will show a goal of 1% inflation is not in sight.(Bloomberg)

Canada: Jobs growmost since 2008 as firms add full timers

Canada added the most jobs since September 2008 last month,a gain dominated by full-time positions that revived what had been a stallinglabor market in the world's 10th largest economy. Employment rose by 82,300 followinga decline of 2,800 in February, lowering the jobless rate to 7.2% from7.4%.Employment growth should add to household spending that the Bank of Canadasaid last month has been rising faster than expected. Fulltime employment inCanada jumped by 70,000 in March while part-time positions grew by 12,400.About 42,600 jobs were created by private companies and 20,900 in the publicsector. Average hourly earnings of permanent employees rose 2.5% in March y-o-y,faster than last month's 2.1%. (Bloomberg)

US: Employmentincrease in US trails most-pessimistic forecasts

Hiring by American employers trailed the most pessimisticforecasts in March, casting doubt on the strength of the expansion now in itsthird year. The 120,000 increase in payrolls was the smallest in five months.The data also showed the unemployment rate fell to 8.2% as people left thelabor force, while workers put in fewer hours. The figures followed an average246,000 increase in payrolls in the previous three months. Estimates ranged fromincreases of 175,000 to 250,000. The March data showed a 34,000 decrease inretail employment. February data, meanwhile, rose a revised 240,000. Employmentat service providers increased 89,000 last month, less than half the 211,000gain in February. Professional and business service payrolls rose 31,000 last month,restrained by a 7,500 drop in temporary hiring. Manufacturing was among the fewindustries that added more jobs than in February, with a 37,000 increase.(Bloomberg)

US: Jobless claimsfell to lowest level in four years

Claims for US unemployment benefits dropped last week to thelowest level in four years. Jobless claims fell 6,000 to 357,000 in the weekended 31 March, the fewest since April 2008. The number of people on unemploymentbenefit rolls also dropped, while those getting extended payments increased.The unemployment rate among people eligible for benefits, which tends to trackthe jobless rate, held at 2.6%. 26 states and territories reported a decline inclaims, while 27 reported an increase. (Bloomberg)

US: Consumer creditrose less than forecast in February

US consumer borrowing rose less than forecast in February,restrained by a drop in credit-card debt. Credit increased USD8.7bn, the leastin four months, after a revised USD18.6bn gain in January that was more than initiallyestimated. Smaller gains in borrowing indicate American households arecontinuing to pay down debt or are less optimistic about their finances. TheFed's statistics showed revolving debt, which comprises credit cards, fellUSD2.2bn in February after a USD3bn drop a month earlier. Non-revolving debt,including educational loans and borrowing for autos and mobile homes, climbedby USD10.9bn in February, the smallest gainin four months. (Bloomberg)

Source: OSK188