Maybank IB Views

Wednesday, September 14, 2011

Axiata Group RM4.81: Hold
Lacking catalysts in the short term Shariah-compliant

Hold maintained. Axiata's Analyst Day was a much welcomed opportunity to catch up on latest developments at the individual subsidiaries. Overall, however, we see little share price catalyst for the group in the near term amid a challenging environment, with stiff competition particularly in the Indonesian, Cambodian and domestic markets. Reflecting this outlook, our cost of equity is raised to 11.8% from 11.1% and our sum-of-parts TP is cut to RM5.10 from RM5.50.

The FBM KLCI rose 1.74-points to close at 1,448.00 yesterday. Its resistance areas of 1,448 and 1,467 will cap market gains, whilst the weaker support areas are located at 1,423 and 1,445. Despite the US markets’ minor rebound tone last night; we may see a volatile tone for the local bourse today.In the longer-term, we foresee an eventual move to 1,378.66 (the next EW extension target).

Trading Idea is a Take Profit call on HLBANK.

Other Local News
TNB: May have to raise funds to keep going. Tenaga Nasional Bhd (TNB) may look to the market to raise funds to sustain itself amid concerns on the continued gas shortage as it has to spend an additional RM3b on power generation this year. (Source: The Malaysian Reserve)

MAS: Sponsorship for Queen Park Rangers jersey to cost RM18m. Malaysia Airlines' (MAS) recently-announced sponsorship for the Queen Park Rangers (QPR) home jersey in the Barclays Premier League will cost the national carrier some RM18m. The total sponsorship fee for both MAS and AirAsia for the English professional football club, which involves a term of two years, would cost some RM30m. (Source: The Star)

Bursa: FCPO volume hits new high. Bursa Malaysia Derivatives' (BMD) crude palm oil (CPO) futures set a new record at the close of mid-day trading yesterday, with a total of 4.07m contracts traded YTD. Open interest for FCPO contracts on BMD has also risen steadily on the back of an even mix of players in the futures market. (Source: The Edge Financial Daily)

Ramunia: Confident of Bursa approval. Ramunia Holdings Bhd is confident it will get its regularisation plans approved as soon as it sorts out safety issues associated with its newly-acquired Pulau Indah Oilfab fabrication yard. Some parts of the Oilfab fabrication yard were found to be without a valid Certificate of Fitness, an official document that states that a building is safe to be occupied. (Source: Business Times)

Iskandar: Farglory may invest in Iskandar Malaysia. Taiwan-based Farglory Group has expressed interest in setting up industrial parks in Iskandar Malaysia in Johor. If the interest were to materialise, it would attract investments from Taiwan and other countries as well. Farglory is Taiwan's leading international land development and construction company that operates in Taiwan, China, the US and France. (Source: The Malaysian Reserve)

O&G: M'sia proposes two oil and gas related projects in Brunei. Malaysia has proposed to undertake two oil and gas (O&G)-related projects in Brunei. One of the projects is Petronas to build a petrochemical complex with BASF in Pulau Muara Besar, involving an investment of about USD1.6 bilion, while the other is the development of a fabrication yard by Petronas' subsidiary, Malaysia Marine and Heavy Engineering Holdings Bhd. (Source: The Star)


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