Maybank IB Views

Monday, August 15, 2011

S P Setia RM3.85: Buy
"Setia Alam" in the making Shariah-compliant

Leading the new trend. SPSB is spearheading a new relatively untapped trend i.e. affordable housing via its latest sizeable land acquisition in Semenyih (south of KL CBD). The 1,011-acre land, which has been earmarked for affordable housing, would provide steady bread-and-butter sales and support SPSB’s long-term growth. The land could turn out to be another highly successful "Setia Alam" given SPSB's expertise and track record in township development. No change to our earnings forecasts and RM5.00 TP (10% premium to RM4.53 RNAV). Reiterate Buy.

Dialog Group RM2.52: Buy
Above par performance, optimism remains Shariah-compliant

Buy for earnings and dividends potential. Results were ahead of our expectation, on the back of a strong 4Q. We have raised our FY12-13 earnings forecasts by up to 28% (with further upside potential) and we remain optimistic on its long term growth prospect. Dialog remains among our preferred Buys in O&G with an unchanged RM3.35 target price (sum-of-part valuations). We continue to like its business model, focused management and steady dividend payments.

The FBM KLCI tumbled 40.76-points and closed at 1,483.67 last Friday. The local market remained very weak due to the global equity indices’ malaise. The volatile global equity rout last week also adversely affected the local market. The weaker support areas for the FBM KLCI are located in the 1,423 to 1,480-zone. The next resistance levels of 1,483 and 1,597 will see heavy selling and liquidation activities.

Trading Idea is a Take Profit call on BURSA.

Other Local News
Aviation: Airlines to pay higher landing, parking charges. Malaysia Airports Holdings Bhd is looking at a possible 30% hike in landing and a 64% increase in parking charges. MAHB is still holding discussions with airlines on whether the increase should be done on a staggered basis or at one go. In a dialogue with foreign airlines last Wednesday, MAHB said it had received the go ahead to raise airport tax for passengers as well as parking and landing charges for airlines. Minister of Transport Datuk Seri Kong Cho Ha has since confirmed the hike in passenger service charge. (Source: Business Times)

HLB: May sell MIMB Investment Bank licence. Hong Leong Bank Bhd (HLB) may sell MIMB Investment Bank Bhd's investment licence which it got following the acquisition of EON Capital's assets and liabilities. HLB has a choice of selling it to Hong Leong Investment Bank or other suitors who might be interested. (Source: The Star)

MISC: May bid for Maersk's LNG vessels. MISC Bhd may put in a bid for a fleet of eight liquefied natural gas (LNG) ships owned by AP Moller Maersk. The bids are understood to be due by end-August, with initial estimates valuing the fleet at USD1.3b (RM3.9b) to USD1.7b. (Source: The Edge Financial Daily)

MPHB: MCA in talks to buy Menara Multi-Purpose. The Malaysian Chinese Association (MCA) is said to be keen on buying Multi-Purpose Holdings Bhd's (MPHB) Menara Multi-Purpose, located near Dang Wangi in Kuala Lumpur. The price tag could in the range of RM350m to RM400m. (Source: The Edge Financial Weekly)

Biotech: ECER gets RM2b boost. South Korea's CJ CheilJedang Corp and France's Arkema SA have announced a RM2b joint venture (JV) to build the world's first bio-methionine plant to produce animal feed in Malaysia. Both companies would commit the amount to be invested over a 10-year period. The plant together with Asia's first thiochemical platform would be located in Terengganu's Kertih Polymer Park in the East Coast Economic Region's (ECER) special economic zone. (Source: The Star)


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