RHBInvest Research

Plantation:

Sector Update

• Looking to the sky for guidance
• We reiterate our view that our CPO price assumptions of RM3,100/tonne for 2011 and RM2,900/tonne for 2012 would be maintained as long as the weather normalises and La Niña ends within the next few months, resulting in “normal” production levels in 2H2011. However, if La Niña persists, CPO prices could potentially remain high at above RM3,500/tonne for the entire year.
• No change to our Overweight rating on the sector.

Macro View

GDP:

Economic Outlook (published 10 Feb 2011)

• Slower economic growth in 4Q 2010, but momentum is building for a rebound in 2H 2011.
• Going forward, the global economy, though will likely expand at a slower pace in 1H 2011.We expect the country’s real exports to expand at a slower pace in 2011, after returning to positive growth in 2010.
• On the local front, domestic demand will likely be resilient in sustaining the country’s economic growth going forward, albeit at a more moderate pace. As a whole, we expect real GDP growth to normalise to 5.0% in 2011, from +7.0% estimated for 2010.

IPI:

• Economic Highlights (published 10 Feb 2011)
• Moderated To 4.2% in Dec, translating to slower GDP growth in 4Q 2010
• As a result, we estimate that real GDP growth is likely to have moderated to 4.3% yoy in 4Q, from +5.3% in 3Q and a peak of +10.1% in 1Q.

Corporate Highlights


Dayang: Market Perform

• News Update
• Wins topside maintenance contract
• Maintain Market Perform call, with an unchanged fair value of RM2.60/share.