Maybank Research Highlights - 1 Aug 2014

kltrader

Publish date: Fri, 01 Aug 2014, 09:24 AM

Technicals

Beginning of a very severe downturn

The FBMKLCI declined 6.98 points to 1,871.36 yesterday, while the FBMEMAS and FBM100 also closed lower by 40.14 points and 40.18 points, respectively. We recommend a “Sell on Rallies” stance for the index.

Trading idea is a Take Profit call on MHB with a downside target areas at MYR3.31 & MYR3.00.

Other Local News

Sime Darby: Kulim picks Sime Darby to take over NBPOL. Kulim (M) Bhd announced yesterday that it intends to sell its entire controlling stake of 48.97% in Papua New Guinea (PNG)-based New Britain Palm Oil Ltd (NBPOL) to Sime Darby Bhd. If the sale goes through, Sime Darby stands to get a slice of over 78,000ha of planted oil palm plantations under NBPOL. Based on the market price of GBP5.15, the share acquisition from Kulim would cost Sime Darby GBP378.4m (MYR2.04b) It is not known if the conglomerate will make a mandatory offer to buy out the company. (Source: The Edge Financial Daily)

Keladi Maju: To go high-end with MYR1.5b project. Kedah-based property player Keladi Maju Bhd plans to build high-end properties on the 5.66ha prime land it is buying from Goh Ban Huat Bhd (GBH) in Mukim Batu, Segambut, confirming market talk that it will be making its maiden foray into the high-end residential market in its first venture in the Klang Valley. Managing director Datuk Chuah Chin Ah said plans for the development are still in the very early stages, but affirmed that the land carries a gross development value (GDV) of MYR1.5b, and that Keladi Maju plans to undertake the project all by itself. (Source: The Edge Financial Daily)

Malpac: Shareholders block sale. Malpac Holdings Bhd shareholders have firmly rejected the plantation firm’s plan to sell off subsidiary Radiant Response Sdn Bhd and a palm oil mill in Perak, which would have collectively netted it MYR53.1m. An overwhelming 99.96% of its shareholders voted against the sale. Radiant Response is the registered owner of two parcels of plantation land – both in Perak – that are held in trust for Malpac. One of the two parcels of land measures 767ha in Hutan Melintang and the other 1,266ha in Durian Sebatang. (Source: The Edge Financial Daily)

Scomi: Abu Sahid no longer substantial shareholder of Scomi. Tan Sri Abu Sahid Mohamed has ceased to be a substantial shareholder of Scomi Group Bhd after he sold off 22.29 million more shares in the open market. Following this latest disposal on July 25, Abu Sahid’s still holds 58.34 million shares in Scomi Group, but they are below the 5% threshold – the level when a shareholder becomes a substantial shareholder. Abu Sahid has been gradually reducing his stake in Scomi Group over the past three months. (Source: The Star)

Outside Malaysia

U.S: Fewer Americans filed applications for unemployment insurance benefits over the past month than at any time in more than eight years, signaling employers are hanging on to workers as demand improves. The four-week average of jobless claims, considered a less volatile measure than the weekly figure, dropped to 297,250, the lowest since April 2006, from 300,750 the prior week. Claims in the period ended July 26 climbed to 302,000. (Source: Bloomberg)

E.U: Inflation unexpectedly slowed in July to the weakest in almost five years, underscoring the European Central Bank's concerns that the economy is too feeble to drive price growth. Inflation was 0.4% compared with 0.5% in
June, the European Union's statistics office said. (Source: Bloomberg)

E.U: Unemployment rate fell in June as the currency bloc gradually shakes off the legacy of the region's debt crisis and longest-ever recession. The jobless rate dropped to 11.5% from 11.6% in May, the European Union's statistics office said. (Source: Bloomberg)

Germany: Unemployment fell for the first time in three months in a sign that Europe's largest economy is gathering pace after a second-quarter slowdown. The number of people out of work dropped a seasonally adjusted 12,000 to 2.9 million in July, the Nuremberg-based Federal Labor Agency said. The adjusted jobless rate was unchanged at 6.7%, the lowest level in more than two decades. (Source: Bloomberg)

U.K: House-prices grew at the slowest pace in more than a year in July, adding to evidence of a property slowdown as measures to cool the market took effect. Property values rose 0.1% from June to an average GBP 188,949 (USD 312,000), Nationwide Building Society said. That's the smallest increase since April 2013. From a year earlier, prices climbed 10.6%, following June's annual gain of 11.8%, which was the fastest year-on-year gain since 2005. (Source: Bloomberg)

China: Interest-rate swaps declined as the central bank guided borrowing costs lower in its open-market operations for the first time in 11 months. The People's Bank of China said it offered CNY 26b (USD 4.2b) of 14-day contracts at 3.7%, down from 3.8% when the agreements were last sold on April 15. In that interim period, it conducted 28-day repos paying 4%. The previous rate reduction was for seven-day reverse-repos in August 2013. Open-market operations drained a net CNY 11b from banks this week, after 11 weeks of injections that added CNY 528b. (Source: Bloomberg)

Japan: Wage growth slowed in June, highlighting the risk to consumer spending as inflation squeezes household budgets in the world's third-largest economy. Average overall monthly earnings rose 0.4% from a year earlier to JPY 437,362 (USD 4,255) after a 0.6% gain in May, the labor ministry reported. Excluding bonuses and overtime pay increased 0.3%, the first gain in 27 months. (Source: Bloomberg)

Philippines: Raised its benchmark interest rate for the first time since May 2011, guarding against inflation risks even as economic growth slowed. Bangko Sentral ng Pilipinas raised the rate it pays lenders for overnight deposits to 3.75% from a record-low 3.5%, according to a statement. (Source: Bloomberg)

SIME (4197)JKGLAND (6769)MALPAC (4936)SCOMI (7158)

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