Maybank IB Views

Proton Holdings RM4.90: Buy
Lotus burns cash

Lotus' £480m capex is higher than expected, and we do not share Proton's direction of spending for the F1 whilst most major automakers have already exited the circuit in recent years. The high capex will dent Proton’s war chest and affect cash flows, impacting its business and financial turnaround plans. We are placing Proton Under Review with downside bias pending outcome of the Proton-Perodua merger.


Technicals
The FBM KLCI advanced 2.51 points to 1,509.79 yesterday. Its resistance areas at 1,510 and 1,531 may cap market gains, whilst its firm support areas are located at 1,493 and 1,508.

Trading idea for today is a SHORT TERM BUY call on TWS.


Other Local News
O&G: M'sia and Brunei ink billion-ringgit oil and gas exploration pact. Malaysia has sealed a 40-year joint oil and gas exploration deal with Brunei which is expected to generate billions in revenue for both countries. The deal involves two deep water blocks - CA1 and CA2 - located within the two countries' commercial arrangement area along the Brunei-Sarawak maritime border near the Limbang division. Petronas will also be looking into possible joint ventures with Brunei National Petroleum Company Sdn Bhd (Petroleum Brunei) to explore oil and gas in a third country and development of downstream industries. (Source: The Star)

CIMB: Unit eyes USD100m in sales from Dublin funds. CIMB-Principal Islamic Asset Management Sdn Bhd(CPIAM) is targeting about USD100m in sales for its Dublin domiciled syariah funds by the end of next year. CIMB intends to launch three funds under the UCITS III structure, all of which can be freely marketed across Europe. (Source: The Star)

WCT: Eyes more jobs in Qatar. WCT sees opportunities in Qatar as more infrastructure projects are expected to be implemented in preparation for 2022's FIFA World Cup. Bloomberg has reported that Qatar would spend USD57b (RM178.4b) on infrastructure developments related to the World Cup over the next decade. (Source: The Edge Financial Daily)

KPJ: Enhances medical business with takeover. KPJ Healthcare Bhd has acquired the 28-year-old Sabah Medical Centre (SMC). SMC would be KPJ's second venture in Sabah after the company took over the Damai Medical Centre five years ago. (Source: The Star)

KYM: Secures jobs from Vale. KYM Holdings Bhd has been awarded a contract valued at RM0.6m by Vale International SA for the provision of consultancy services relating to Vale's land acquisition in Teluk Rubiah, Perak. (Source: The Star)

Conglo: JCorp is not selling assets to repay RM3.6b debt. Johor Corp (JCorp) will not be selling any of its assets to repay its RM3.6b bonds due on July 31, 2012. JCorp is planning to refinance the debt instead. CIMB Bank and Maybank Investment Bhd have been appointed as the financial advisor. (Source: The Star)

Gaming: Olympia said to be keen on Pan Malaysian Pools. Olympia Industries Bhd has expressed an interest to acquire Pan Malaysian Pools Sdn Bhd from Tanjong plc. However, no formal offer has been made yet. (Source: The Star)