Maybank IB Views

Monday, April 4, 2011

RHB Capital RM8.72: Buy / AMMB Holdings RM6.57: Hold
Merge AMMB & RHB Cap? Why not....

Could it, should it, would it? Could the merger take place? We think it is plausible, for it would tie in with aspirations for further consolidation in the industry and the creation of larger banks. Should AMMB and RHB Capital merge? We believe such an exercise could be earnings accretive and synergistic. Would it happen? That's the billion Ringgit question .... that we will have to leave open-ended. We maintain a Buy on RHB Capital with a marginally higher TP of RM9.50 (from RM9.40) and a Hold on AMMB (TP: RM6.80) for now.

IJM Corporation RM6.35: Hold
Two new toll concessions Shariah-compliant

Lacking details. Two toll concessions, given the go-ahead by the government last Friday, should positively boost IJM Corporation's construction order book, which stands at approximately RM4.1b now. We estimate order book could easily double. The impact on valuations cannot however be assessed in the absence of further information. We maintain our Hold call on IJM for now, with an unchanged RM6.50 RNAV target price, which implies 21x 2011 earnings multiple.

FBM KLCI rose 39.83-points and closed at 1,555.38 last Friday. The fine support areas for the FBM KLCI are located in the 1,498 to 1,555-zone. The firm resistance zone of 1,558 and 1,576 will see heavy liquidation activities.

Trading idea for today is a Buy call on PCHEM.

Other Local News
TNB: Unit signs deal for Manjung plant. Tenaga Nasional Bhd (TNB) unit TNB Janamanjung Sdn Bhd (TNBJ) has signed an engineering, procurement and construction agreement with a consortium led by Alstom Power System SA for the 1,000 MW Manjung coal-fired power plant project. (Source: Bursa Malaysia)

YTL Power: Japanese partner to bid for RM9b Java project. YTL Power International Bhd has teamed up with a Japanese consortium to bid for a 2,000MW coal-fired power plant project in Central Java worth USD3b (RM9b). YTL Power and its Japanese partner have agreed to a 20:80 debt equity ratio, with the Japanese consortium assuming the larger portion of the risk. (Source: The Malaysian Reserve)

Kenanga-ECM Libra: Merger in the works? ECM Libra Financial Group and K&N Kenanga Holdings Bhd are believed to be exploring a potential merger with a possibility of ECM's shareholders selling out to Kenanga. (Source: The Edge Financial Daily)

Boustead: Eyeing majority stake in Esso M'sia with LTAT. Boustead Holdings Bhd and its parent company Lembaga Tabung Angkatan Tentera (LTAT) are believed to be eyeing Exxonmobil International Holdings Inc's 65% stake in Esso Malaysia. (Source: The Edge Financial Daily)

Plantation: World Bank lifts palm oil moratorium. The World Bank last Friday lifted an 18-month global moratorium on lending for new palm oil investments, endorsing a strategy that focuses on supporting small farmers that dominate the sector. (Source: Business Times)

Plantation: Felda Global plans sweet IPO. Felda Global Ventures Holdings Sdn Bhd plans to list some of its businesses starting with its sugar operations this year. The initial public offering (IPO) of wholly-owned Malayan Sugar Manufacturing (MSM) may raise more than RM1b. Felda Global plans to list five companies and it is already in talks with a few investment banks. (Source: Business Times)

Construction: Three foreign players in race for Pudu Jail redevelopment. Three foreign players are among the 10 companies shortlisted by the master developer, UDA Holdings Bhd for the redevelopment project of the Pudu Jail site. The companies are Dubai-based Damac Group teaming up with UEM Land, state-owned China State Construction Engineering Corp that has tied up with Kumpulan Jetson Bhd and Keppel Land Ltd. (Source: The Edge Financial Daily)


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