Maybank IB Views

COMPANY UPDATE
S P Setia RM6.70: Buy
Swap for prime Bangsar land Shariah-compliant

Maintain Buy. We are positive on the potential 40-acre land in Bangsar under a land swap agreement with the government. The development could boost our RNAV/sh estimate for S P Setia (SPSB) by 19sen to RM6.47. We retain our RM6.28 RNAV estimate and RM6.90 TP (10% premium to RNAV) for now, which have upside potential. During peak times, SPSB had traded up to a 20% premium to its RNAV which implies RM7.54 potential target based on our existing RNAV estimate.


Malaysia Marine and Heavy Engineering Holdings RM6.37: Buy
New year, new head, new direction Shariah-compliant

We are positive. Dominique's appointment as MHB's MD signals the Group's commitment to: (i) enhance and internationalise its franchise values, (ii) improve collaborations between MHB and Technip, and (iii) capitalise on Technip's strength in subsea structures, offshore platforms and onshore mega complexes areas.


Technicals
The FBM KLCI lost 2.32-points and closed at 1,569.89 last week as some profit-taking activities caused the market’s small decline after the previous week’s surge. The firm support areas for the FBM KLCI are located in the 1,531 to 1,569-zone. The key resistance zone of 1,571 and 1,576 may offer some token selling only.

Weekly trading idea is a technical ACCUMULATE call for AIRASIA.


Other Local News
TNB: Considers additional capex of RM300m. Tenaga Nasional Bhd (TNB) is considering an additional capital expenditure (capex) of RM300m over the next two years, aimed at improving supply reliability in the Iskandar region of Johor. Under a special project called "Iskandar 10", TNB aims to reduce the level of interruption in the critical area to 10 minutes within the next three years. (Source: The Star).

DiGi: Unit applies for spectrum. DiGi Telecommunications Sdn Bhd, a wholly-owned subsidiary of DiGi.Com Bhd, has submitted its application to the Malaysian Communications and Multimedia Commission (SKMM) for spectrum in the 2600MHz band. This is pursuant to SKMM's offer to award 20MHz of this spectrum via apparatus assignment subject to DiGi submitting a suitable business plan. (Source: Bursa Malaysia)

MUI: More parties eye MUI insurance unit. Malayan United Industries Bhd (MUI) has received Bank Negara Malaysia's approval to commence preliminary negotiations with Liberty International Holding Inc to sell its entire 52.2% equity stake in MUI Continental Insurance Bhd. Liberty is a unit of Boston-based Liberty Mutual Group, the sixth largest property and casualty insurer in the US. (Source: The Edge Financial Daily)

Finance: Government's RM10b strategy to build police quarters, facilities. The Minister of Finance Inc's 99.99%-owned Pembinaan BLT Sdn Bhd (PBLT) will raise up to RM10b to finance the construction of 74 police quarters and facilities. CIMB Investment Bank Bhd is the principal adviser and lead arranger for the Islamic medium term notes (IMTN) programme whereas Bank Islam Malaysia Bhd is the syariah adviser and the consultant to PBLT would be Prokhas Sdn Bhd. The joint lead managers are AmInvestment Bank Bhd, Bank Islam, CIMB, Maybank Investment Bank Bhd and RHB Investment Bank Bhd. (Source: The Edge)

E&U: First power line from Bakun to Bintulu completed. The first line to transmit power from Bakun dam to Similajau, Bintulu, has been completed while Sarawak Energy Bhd's (SEB) Similajau power sub-station in Bintulu is expected to be ready by March. Works are now underway to construct a power sub-station within the proposed Samalaju Industrial Park to supply electricity to energy-intensive industries such as the aluminium smelting and solar panel plants. (Source: The Star)

Construction: MRT may cost over RM36.6b. The cost of building the mass rapid transit (MRT) transport system, which is scheduled to begin construction in six months, may swell beyond the projected RM36.6b as developers and residents have begun lobbying on the proposed locations and types of stations. Business leaders want the MRT stations to be located close to the centre of commercial activity, in some cases where they have projects or plan to build one, but residents living near or adjacent to the proposed lines have voiced objection against the MRT tracks being built above ground and want the lines and stations to be underground so as to avoid congestion and noise pollution issues. (Source: The Star)

Plantation: Severe labour shortage in Sarawak estates. Sarawak oil palm companies want the state government to allow the recruitment of foreign workers other than Indonesians to address the worsening labour shortage issue. They have also asked the authorities to extend work permits to 10 years from the present six years for selected skilled foreign workers. (Source: The Star)