To determine the long-term sustainability of the sector, wetake a look at the latest progress of some of the government initiatives underthe ETP as well as the current situation for education providers in Malaysia.We also make some brief comparisons with developed economies to gauge theunderlying growth potential for the local education sector as Malaysia aspiresto become a high-income nation by 2020. All in, we maintain OVERWEIGHT on thesector with SEG International (BUY, FV: RM2.17) and Prestariang (BUY, FV:RM1.48) being our top buys. 

Cautious sentiment expected. The  FBM KLCI index closed a touch loweryesterday, although the number of gainers outnumbered losers by a small margin.Among the key corporate headlines for today are: CIMB inking a deal soon to acquire a 60% stake in Philippines' Bankof Commerce (BOC) and the government reportedly imposing a no layoff conditionfor the takeover of Penang Port. Overnight, the Dow muscled itself above the13,000 mark on the back of increased appetite for Spanish bonds and heady gainsmade by technology stocks, with Apple reversing its 5-day losing streak. Whilethere is some upside bias  for the FBMKLCI,  we think that  the prevailing cautious sentiment should leadto further range-bound trading in the short term.

US stocks rose, giving benchmark indexes the biggest ralliesin a month, as higher forecasts from the International Monetary Fund and gainsin Spanish bonds overshadowed declines in housing starts and factory production.The Standard & Poor's 500 Index rose 1.6% to 1,390.78, after falling 1.3%in two days. The Dow Jones Industrial Average added 194.13 pts, or 1.5%, to13,115.54. The Nasdaq Composite Index climbed 1.8% to 3,042.82. About 6bnshares changed hands on US exchanges, or 11% below the three-month  average. (Bloomberg)

The Federal government is understood to have imposed acondition, with regards to Penang Port SB's takeover ' that any party planningto take over the port operator must not lay off any of its workforce for aminimum period of five years. 'The condition is non-negotiable. Any partieswhich intend to take over the port, must comply with the condition, even beforethey present their financial plan,' said a source. BT was told that at leasttwo parties are interested in taking over Penang Port. 'One is a party led by aChina-owned entity, while the other is MMC Corp Bhd. But, to date, no decisionhas been made as the due diligence process is still being carried out,' said thesource. Penang Port is 100% owned by the Minister of Finance Inc. (BT)

Wijaya Baru Global clarified yesterday that it isnegotiating with interested parties to start timber extraction and thereafterplant oil palm in Papua Province, Indonesia. Tan Sri Ling Chiong Ho's SarawakOil Palms is also reportedly proposing a JV to help plant the felled junglewith oil palm trees, a venture that could eventually cost some RM306m.(Financial Daily)

IGB Corp, the third largest property developer by marketvalue, plans to  raise about RM700m byselling shares in a retail property trust, said two people familiar with thematter. IGB's trust would initially hold two Kuala Lumpur shopping malls  ' the Garden's Mall and Mid ValleyMegamall  ' which IGB would acquire fromits subsidiary KrisAssets Holdings. (StarBiz)

Ingenuity Solutions (Ingens) has obtained a RM125m contractto be the sole distributor of WiMAX modems for broadband player Packet OneNetworks (M) SB (P1). The company said it would supply P1 4G WiMAX modems to858 P1 authorized resellers throughout Malaysia. Prior to this agreement, P1undertook the distribution of its 4G modems internally. (StarBiz)

The Malaysian Institute of Economic Research (MIER) hasrevised upwards its growth outlook this year, from 3.7% to 4.2%, on improvingconsumer and business confidence levels in the first quarter. Executivedirector Dr Zakariah Abdul Rasheed said improved production and sales numbersare expected to follow suit in the second quarter. (BT)

India slashed its benchmark interest rate by agreater-than-forecast half a percentage point, seeking to bolster growth withthe first reduction since 2009. Inflation might limit the room for furthercuts, the central bank said. Governor Duvvuri Subbarao lowered the repurchaserate to 8% from 8.5%, the Reserve Bank of India said. The outcome was predictedby  three of 25 economists in a BloombergNews survey. Seventeen expected a 0.25 percentage-point cut and the restpredicted no change. (Bloomberg)

Japan said it will provide USD60bn to the International MonetaryFund's effort to expand its resources and shield the global economy against anydeepening of Europe's debt crisis. Finance Minister Jun Azumi unveiled the commitmentin speaking to reporters in Tokyo before semiannual meetings of the IMF andWorld Bank in Washington 20-22 April. Azumi said he hopes for an earlyagreement among Group of 20 members, who will also gather in Washington, oncontributions to the IMF. (Bloomberg)

European consumer prices increased at a faster pace thaninitially estimated in March, driven by energy costs, complicating the EuropeanCentral Bank's task as it tries to push the inflation rate below its 2% limit.Inflation in the 17-nation euro region held at 2.7% for a fourth month, theEuropean Union's statistics office in Luxembourg said. That's higher than theestimate of 2.6% published on 30 March. (Bloomberg)

Production at US factories dropped in March for the firsttime in four months as the industry cooled following the strongest surge inthree decades. Manufacturing, which makes up about 75% of industrial output,decreased 0.2% last month as appliance and furniture makers cut back, data fromthe Federal Reserve showed. The decline followed a revised 3.4% gain fromDecember through February that marked the biggest three-month jump since March1984. (Bloomberg)

Builders began work on fewer homes than forecast in March,signalling a sustained industry recovery will take time to get underway.Housing starts dropped 5.8% to a 654,000 annual rate, less than the lowestestimate of economists surveyed by Bloomberg News and the least since October,Commerce Department figures showed. The slump was led by the volatilemultifamily category, which at the same time showed a jump in permits, a proxyfor future construction. (Bloomberg)

The International Monetary Fund raised its global growthforecast for the first time in more than a year, with the US boosting theoutlook while recent improvements remain 'very fragile.' The world economy willexpand  3.5% this year, compared with aJanuary projection of 3.3%, the Washington-based IMF said in its World EconomicOutlook. It sees growth of 4.1% in 2013, up from 4.0%. It raised its forecastsfor the US to gains of 2.1% this year and 2.4% in 2013. (Bloomberg)

Source: OSK188