Maybank IB Views

Monday, August 1, 2011

Banking: Neutral
Household loans moderate

Neutral maintained. System loans growth moderated to 13.4% YoY in June from 13.8% YoY in May, with marginally slower household loan growth of 12.8% in June vs 13.0% in May and non-household loan growth of 14.2% in June from 14.7% in May. We remain Neutral on the banking sector with top picks being AMMB, BIMB and CIMB.
Eastern Pacific Industrial Corp RM2.80: Hold
2QFY11: Still on track, dependably steady Shariah-compliant

Gradual progress in earnings. 1H11 results, expected to be released in mid August, are projected to be stronger YoY with earnings growth of 10-12%. A 5sen interim dividend (+100% YoY) could be declared as we estimate EPIC has about RM100m cash on its balance sheet (RM0.60/share) and should enjoy solid cash-flows going forward. We maintain our Hold call but nudge up our TP to RM2.70 (+6%) as we roll forward our valuation basis to 2012 with an unchanged 8x PE multiple.

The FBM KLCI lost 16.25-points and closed at 1,548.81 last Friday. The local market remained weak due to the US debt ceiling woes. Until the weekend, a US political impasse over the debt ceiling led to a much weaker global market tone. The weaker support areas for the FBM KLCI are located in the 1,507 to 1,543-zone. The next resistance levels of 1,548 and 1,597 will see heavy selling and liquidation activities.

Trading Idea is a Short-Term Buy on IVORY.

Other Local News
MAS: Appoints Md Nor as chairman. Malaysia Airlines (MAS) has announced the appointment of Tan Sri Md Nor Md Yusof (pic) as chairman effective Monday. Md Nor is an old hand and well-versed with the workings of MAS, having served as its managing director from 2001 to 2004. (Source: The Star)

Ivory: To double sales with reclaimed land project. Ivory Properties Group Bhd expects its newly acquired 102 acres of reclaimed land in Penang, with an estimated GDV of RM10b, to generate sales of about RM1.2b a year on average if the project is completed in eight years. Ivory is targeting sales of RM600m to RM700m this year from its existing projects compared to RM600m last year. (Source: The Edge Financial Weekly)

Press Metal: Unit secures RM400m loan facility. Press Metal Bintulu Sdn Bhd (PMB), a wholly-owned subsidiary of Press Metal Bhd, has secured a RM400m syndicated term loan facility to expand the second phase of its aluminium smelting plant in Samalaju, Sarawak. When fully commissioned, the new plant is expected to triple PMB's smelter capacity in Malaysia to 360,000 tonnes. (Source: The Star)

Jotech, AIC, AutoV: In RM696m merger plan. Temasek Foundation Sdn Bhd(TFSB), a special purpose company, is acquiring the entire interest, including assets and liabilities, of Jotech, AIC Corp Bhd and AutoV Corp Bhd for a total of RM696m. TFSB owned by Jotech Executive chairman Datuk Goh Tian Chuan, will then merge the companies to create a larger entity. (Source: Bursa Malaysia)

Plantation: Malaysia plans own palm oil cert scheme. Malaysia plans to come up with its very own national certification scheme on the sustainable production of palm oil to tell the world that its oil palm plantations are grown in a sustainable manner and do not involve the clearing of virgin forest. The certification scheme will cover areas not covered before such as deforestation. (Source: Business Times)


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