RHBInvest Research

Top Story: UEM Land – Too big to be ignored
Market Perform (New Coverage)

New Coverage
Key investment case: i) The largest property stock by market cap and landbank, and will be the only pure property stock if included into the FBM KLCI 30 Index; (ii) The inclusion of Sunrise will reduce execution risk with RCPS to ensure alignment of interest of Datuk Tong with downside being capped; (iii) The entrance of Temasek via the iconic wellness township projects a strong repricing catalyst for land and property values in Nusajaya; (iv) Continued diversification of landbank either via outright acquisition of land parcels or property companies to minimise concentration risk; and (v) Quality of earnings to improve.

Fair value of RM2.80, at its RNAV. News flow on the development of Singapore land parcels will be the key re-rating catalyst, which will potentially raise RNAV/share to RM3.19.

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Maybank IB Views

ACQUISITIONS / DISPOSAL
PLUS Expressways RM4.69: Hold
The loner in UEM-EPF Shariah-compliant

Nothing at offer close. MMC Corp did not throw in a new bid for PLUS as speculated. Jelas Ulung did not put in a RM50m cash deposit which means that it is out of the race. All eyes will now be back on UEM-EPF, which is the lone "bidder". The offer implies RM4.60 per PLUS share. PLUS is now officially a Hold; our call has been put under review since its share price started trending close to the UEM-EPF offer price. UEM-EPF's offer is fair, close to our RM4.70-DCF derived target price.


COMPANY UPDATE
Gamuda RM4.21: Buy
New water offer significantly undervalues Shariah-compliant

Another long drawn affair. The Selangor Government's latest offer for SPLASH values its equity value at RM297.5m, we estimate. Gamuda's short announcement yesterday only quoted the offer price on a per share basis, but not the total amount. If our calculation is right, the offer prices SPLASH at just 0.63x book. We think that the offer will be rejected by SPLASH's three shareholders, including Gamuda. Water consolidation in Selangor seems like another long drawn affair.


Sunrise RM3.12
Ceasing coverage Shariah-compliant

Stock to be delisted. The take-over offer by UEM Land at RM2.80 a piece has received 96.4% acceptances. UEM Land does not intend to maintain the listing status of Sunrise, which has been suspended since 31 Dec 2010. We are ceasing research coverage of Sunrise. Investors should no longer depend on our financial forecasts of Sunrise in making investment decisions, nor infer an adverse opinion as a result of our decision to cease coverage.


ECONOMICS
Industrial Production Index Nov '10
Stabilising after slowdown

Industrial production in Nov '10 picked up to +5.1% YoY (Oct '10: +3.1% YoY). However, on MoM basis, output fell across the board by 3.7%. YTD, the industrial production index (IPI) was up +7.8%. For Oct-Nov '10, it increased by +4.1% YoY (3Q10: +4.3% YoY; 2Q10: +10.8% YoY, 1Q10: +11.1% YoY). Using this to estimate real GDP, we came to a figure of around +5.0% YoY for 4Q10 (3Q10: +5.3% YoY; 2Q10: +8.9% YoY; 1Q10: +10.1% YoY). Our 2010 economic growth estimate of +7% reflects a 4% YoY expansion in the final three months.


Technicals
The FBM KLCI fell 8.69 points to 1,563.52 yesterday. Its resistance area of 1,563 and 1,576 will cap market gains, whilst its weaker support areas are located at 1,535 and 1,560.


Other Local News
Proton: In talks with to assemble vehicles in India. Proton Holdings Bhd could be in talks with Indian automobile manufacturer, Hindustan Motors to assemble its vehicles for the Indian market. Proton is in favour of using Hindustan Motors' Chennai plant, set up for assembling the Mitsubishi Lancer, to locally produce its Exora multi-purpose vehicle. (Source: The Star)

SapuraCrest: Gets RM750m loan. SapuraCrest Petroleum Bhd's wholly-owned subsidiary, Aurabayu Sdn Bhd was granted a syndicated Islamic financing facilities of up to RM750m comprising ringgit Malaysia and US dollar denominated tranches from Maybank Investment Bank Bhd. Maybank Investment acted as the mandated lead arranger and bookrunner. (Source: The Star)

Transmile: Sells four aircraft to FedEx for RM209m. Transmile Group Bhd has sold four MD-11F aircraft to Federal Express Corp (FedEx) for RM208.8m. The funds raised from the disposal would be used to partially settle the outstanding debt of the company, which amounted to RM528.9m as at Sept 30, 2010. (Source: The Star)

Integrax: Perak allows Vale of Brazil to build its jetty in Lumut. Vale International SA has been allowed by the Perak state government to construct its own jetty in Lumut to accommodate its proposed iron ore transshipment project. Vale was originally supposed to use Integrax Bhd's Lekir Bulk Terminal (LBT), but the facility upgrade has been on hold since 2009 due to the feud between two brothers who hold a combined 37% stake in Integrax through Halim Rasip Holdings. (Source: The Star)

Property: Tambun Indah IPO oversubscribed by 14.9x. Property developer Tambun Indah Land Bhd's initial public offering (IPO) of 11.1m shares was oversubscribed by 14.9 times where 10,751 applications for 175.7m shares with a total value of RM123m were received. (Source: The Edge Financial Daily)

Construction: Benalec oversubscribed by 4.9times. Benalec Holdings Bhd, which will be listed on the Main Market of Bursa Malaysia, has received an oversubscription rate of 4.92 times for the 36.5m shares made available for public subscription. (Source: The Edge Financial Daily)

Plantation: Planters appeal to abolish windfall profit levy. Malaysian oil palm planters will appeal collectively to Prime Minister Datuk Seri Najib Tun Razak to abolish the windfall profit levy on crude palm oil (CPO) after their requests were turned down by the Finance Ministry recently. The joint appeal is expected to be made by the Malaysian Palm Oil Association (MPOA), Malaysian Estate Owners' Association (MEOA), East Malaysia Planters' Association (EMPA) and Sarawak Oil Palm Plantation Owners' Association (SOPPOA). (Source: The Star)

Conglo: JCorp's directors may not attend EGMs. Johor Corp (JCorp) directors representing the Johor and Federal governments are unlikely to attend the EGM's of Johor Corp's three public listed companies (Kulim, Damansara Realty, KPJ Healthcare) this month to remove Tan Sri Muhammad Ali Hashim as their respective chairman. (Source: The Star)

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RHBInvest Research

Top Story:

Construction:

• The prospects of the construction sector will be bright in 2011.
• Maintain Overweight.
• Our top “tactical” pick is Gamuda (FV=RM4.51) T
• Top “value” pick is Fajarbaru (FV=RM1.37).

Corporate Highlights


KNM:

• The company has won a huge EPC contract worth GBP450m (RM2.2bn) from the UK’s Peterborough Renewable Energy Limited (PREL).
• Upgrading our FY11-12 core EPS estimates by 22.4% and 17.3% correspondingly.
• We maintain our Outperform call on the stock
• Upgraded target price of RM3.78/share (from RM3.09)

Sunrise:

• A cheaper entry to the enlarged UEM
• New fair value of RM3.25 for Sunrise (from RM2.80), based on a swap ratio of 1.33 under Option 1-direct share swap.
• Upgrade our call to Market Perform.

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Maybank IB Views

ACQUISITIONS / DISPOSAL
PLUS Expressways RM4.36:Buy
RM5.20 offer, but what is the return? Shariah-compliant

Highly enticing but .... Jelas Ulung's RM26b offer is 13% higher than the RM23b offer by UEM-EPF. It promises not to seek any tax waiver, government compensation, nor toll increases. While extremely enticing for shareholders, we fail to see the investment return for Jelas Ulung as the offer price is 11% above our RM23.4b DCF value based on existing concession terms. Without that comfort, we are concerned on financial implications or recourse later. The government must reveal the revised concession terms sought by Jelas Ulung, before the offer proceeds.

Technicals
The FBM KLCI tumbled 4.00 points to 1,495.88 yesterday. The FBM 100 and FBM EMAS closed lower by 21.45 points and 24.48 points respectively.
Trading idea for today is a SHORT TERM BUY call on DIALOG.


Other Local News
TdC: To jointly offer IPTV services with Astro. TIME dotcom Bhd's (TdC) is collaborating with Astro, via its wholly owned subsidiary TT dotcom Sdn Bhd to offer Internet Protocol Television (IPTV) and broadband services in the Klang Valley and Penang. Under the collaboration, Astro's high-definition, video on demand and B.yond TV services will be bundled with TdC's broadband and telephony services. (Source: The Edge Financial Daily)

Supermax: ADR to broaden foreign interest in its share. Supermax Corporation Bhd has obtained approval from the US Securities and Exchange Commission for its Sponsored Level-1 American Depositary Receipt (ADR) programme which facilitates the trading of Supermax's shares by American investors. The Bank of New York Mellon would be the depository bank whilst Malayan Banking Berhad (Maybank) serves as the custodian of Supermax's shares in Malaysia. (Source: The Edge Financial Daily)

UEM Land, Sunrise: Takeover becomes unconditional, deadline extended. UEM Land's conditional take-over offer for Sunrise became unconditional after the acceptance has crossed the 50% threshold yesterday. The closing date and time for acceptance of the takeover has been extended to 5p.m. on Jan 7, 2011. (Source: The Edge Financial Daily)

MAS: Revamps fleet, adds capacity to India. Malaysia Airlines (MAS) plans to revamp its fleet and scale up operations to achieve 30 to 40% passenger growth in the Indian sector next year. MAS will switch from the B777, used at present, to the A380 aircraft to India by 2012. The carrier would also revamp its frequency to its regular destinations and allocate additional 40% capacity in India. (Source: Business Times)

RHB Capital: RHB Bank to hold Bank Mestika stake. Having consulted the relevant authorities, RHB Capital will now park its Bank Mestika stake under RHB Bank, from RHB Venture Capital previously. (Source: The Star)

MTDCap: Gets RM2.6b takeover offer. MTD Capital Bhd (MTDCap) has received a takeover offer from a consortium of four local firms in a deal that values the construction company at about RM2.6b. The four companies, namely Nikvest Sdn Bhd, Alloy Consolidated Sdn Bhd, Alloy Concrete Engineering Sdn Bhd and Alloy Capital Sdn Bhd which collectively own 131.48m shares or 53% stake in the company, offered RM9.50 a share to acquire the balance 116.0m shares or 47% stake they did not already own. The joint offerors do not intend to maintain its listing status. (Source: The Star)

Bina Puri: Wins job in Brunei. Bina Puri Holdings Bhd's unit Bina Puri (B) Sdn Bhd has entered into a sub-contract worth RM158.4m in Brunei with Chuon Tzu Construction Co Sdn Bhd. Bina Puri will undertake infrastructure works for a housing project which is expected to be completed in 36 months. (Source: The Star)

Iskandar Malaysia: Records RM64.4b in investments. The total value of investments recorded by Iskandar Malaysia from the start of the development corridor project in 2006 until September 2010 was RM64.4b, which exceeded the RM47b target set for this year. A total of RM37.26b or 58% from the total investments were by domestic investors while the balance of RM27.12b from overseas. Of the overall investment recorded, RM25.7b was in the service sector, RM12.8b in the tourism sector, RM19.6b in properties and RM6.28b in the government sector. (Source: Bernama)

Infrastructure: Plans for bridge between Malacca, Dumai. Malacca state government is seeking approval for the longest sea-crossing bridge connecting Malacca with Dumai in Sumatra from the federal government, while the Governor of Riau, Rusli Zainal, will attempt to secure Jakarta's approval. The proposed 127.9km highway costs USD12.8b (RM40.1b) and will be privately funded. Construction is expected to be completed in 10 years. The bridge will be built by Straits of Malacca Partners Sdn Bhd, with financial support guaranteed by China Exim Bank and other financial institutions. (Source: New Straits Times)

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Views & News, Maybank IB (2010-11-12)

MARKET STRATEGY


Here we go again

Moving the target. We move our index targets to 1,550 for end-2010 and 1,660 for end-2011. It seems trivial now to suggest the beginnings of a liquidity-driven market; we point instead to a number of areas and stocks that remain good value. In addition, we look to previous liquidity runs to assess how stretched valuations can become, and potential canary-in-the-coal mine events that may be turning points.

RESULTS REVIEW
Star Publications RM3.48: Hold
Plodding giant Shariah-compliant

Momentum fading. RM43m net profit (+32%YoY/-14%QoQ) took 9M to RM134m (+54%). This was within expectations. 9M growth was off the low 1H09 recession-hit base and high newsprint costs. The latest quarter underlines the anemic prospects. Circulation is falling, demographics shifting and corporate transparency remains weak. We are Holders for the yield but much prefer Media Prima.


JT International RM5.93: Buy
Thriving in adversity

Maintain Buy; forecasts and TP raised. JTI's continued top-line growth and profit margin expansion reassure us that it will continue to thrive in a shrinking market. We have raised our 2010-12 earnings forecasts by 2-7% on better market share assumptions and consequently raise our DCF-based TP by 8% to RM6.50 (from RM6.00).


MBM Resources RM3.02: Buy
Beats street, Perodua provides the beat Shariah-compliant

Target price raised to RM5.00 (+10%). MBM's 3Q results were sequentially softer but 9M10 net profit of RM113m was still ahead of our and consensus full-year forecasts of RM123-124m, driven mainly by stronger Perodua earnings. We lift our 2010-12 EPS by 9-12% as we raise our Perodua vehicle sales by 5%. Our target price is raised to RM5.00, based on 8x PER; and Buy recommendation unchanged.


Technicals
The FBM KLCI tumbled 14.31 points to 1,513.70 yesterday. Its resistance area at 1,513 and 1,531 will cap market gains, whilst its weaker support areas are located at 1,490 and 1,507.

Trading idea for today is a SHORT TERM BUY call on TASCO.


Other Local News
Maybank: BII's rally benefits Maybank. Maybank 97.5%-owned PT Bank Internasional Indonesia Tbk (BII) saw its share price run over the past two days, jumping 24.5% from 490 rupiah (17 sen) to end at all time high of 610 rupiah yesterday. Maybank's blended cost of acquiring BII ranged between 429 rupiah to 455 rupiah. In FY2009, Maybank wrote down its carrying value of BII by some 20% to 364 rupiah per share due to a goodwill impairment charge. (Source: The Edge Financial Daily)

MAHB: Khazanah raises RM396m through MAHB shares placement. Khazanah Nasional Bhd raised gross proceeds of RM396m after a successful placement of 66m Malaysia Airports Holdings Bhd (MAHB) shares at RM6 each. The disposal has reduced Khazanah’s stake to 54% from 60% previously. RHB Investment Bank, HSBC and Nomura Singapore Ltd, as joint placement agents successfully executed a placement of the 66m shares. There was strong demand from both foreign and domestic institutional investors for the placement. (Source: Bernama)

Proton: Offers Mitsubishi platforms to widen tie-up. Proton Holdings Bhd has offered its strategic partner Mitsubishi Motor Corp (MMC) access to its Exora multi-purpose vehicle and Persona sedan platforms. Proton is also developing a new model to replace the current Persona sedan. (Source: Business Times)

Sunrise: Publika announces Big as its anchor tenant. Publika, the retail gallery developed by Sunrise Bhd at Dutamas will be the first shopping gallery to have an aisle-less marketplace with Big Sdn Bhd as its anchor tenant. Big, which is engaged in the food and beverage products business and retailing of quality food produce, will cover 49,000 sq ft in Publika. Other prominent retailers would include British India and Shanghai. Publika is expected to open mid-2011. The current take up rate for Publika stands at 30%. (Source: Bernama)

Tan Chong: Launches new Renault car. Tan Chong Motor Holdings Bhd's subsidiary TC Euro Cars Sdn Bhd yesterday launched a new Renault model called Megane Renaultsport 250 Cup. It will be sold at RM229,800 on the road with a three years warranty, excluding insurance. (Source: The Edge Financial Daily)

Boustead: Sells assets to REIT unit, and then leases them back. Boustead Holdings Bhd plans to sell for RM189.2m its Sabah's Sutera estate, Taiping rubber plantation and Trong oil mill to Al-Hadharah Boustead REIT, and then lease back these assets. The disposal and leaseback will allow Boustead to realise the underlying value of the plantation assets while retaining the productive use of the assets. The move will result in a cash inflow for the group and its subsidiaries, which will be used to reduce bank borrowings by the group and potentially save RM9.5mil interest expense per annum for the group. (Source: The Star)

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Views & News, Maybank IB (2010-11-08)

Sunrise RM2.52: Accept offer
Cheaper entry to UEM Land Shariah-compliant

Take up the offer. We view UEM Land's (UEML) conditional takeover offer (CTO) for Sunrise shares positively as the price offered is fair. We advise Sunrise shareholders to take up the share swap instead of the redeemable convertible preference shares (RCPS) option. The enlarged UEML will offer an exposure into the largest property developer in Malaysia. Based on 20sen net DPS declared by Sunrise earlier and our estimate of RM2.15-2.20 RNAV per UEML share post-Sunrise acquisition, the deal offers a cheaper entry to UEML.


Technicals
The FBM KLCI gained 6.08-points last week as some further investor enthusiasm boosted above the 1,510-mark.The market remains strong in the weeks ahead. But do remain cautious as technically we are in very high chart territory. The obvious support areas for the FBM KLCI are located in the 1,476 to 1,511-zone. The key resistance areas of 1,513 and 1,524 may cap any rebound activity.

Weekly trading idea is a SHORT-TERM BUY call on KFC.


Other Local News
Axiata: Signs 5-year pact with Ericsson. Axiata Group Bhd will streamline its procurement of products and services with Ericsson to realise business efficiencies and competitive advantage through cash flow improvement for the next five years. Last week, it signed an agreement to facilitate regular exchange of information on technical and technology areas relating to products, works and services purchased by Axiata group of companies. (Source: Business Times)

Maybank: Fixes new shares under dividend reinvestment at RM7.70. Malayan Banking Bhd has fixed the issue price of new Maybank shares to be issued under the dividend reinvestment plan at RM7.70 per share. On behalf of the Board, Maybank IB, announced the Book Closure Date pursuant to the Final Dividend and Dividend Reinvestment Plan has been fixed for 18 November 2010. The new Maybank Shares arising from the Dividend Reinvestment Plan will be listed on the Main Market of Bursa Malaysia Securities Berhad on 21 December 2010. (Source: Bursa Malaysia)

Star Pubs: MCA buys 42% stake in Star for RM1.28b. MCA announced it has bought a 42.4% stake in Star Publications (M) Bhd for RM1.28b, or RM4.09 a share, from its wholly-owned subsidiary Huaren Holdings Sdn Bhd and is in the process of maintaining its beneficial interests in Star. (Source: The Star)

LBS Bina: China Project expected to start next year. LBS Bina Group Bhd's China project in the southern city of Zhuhai with an estimated gross development value of (GDV) of RM5b is expected to start in the third or fourth quarter of next year. Last month, LBS Bina announced that it will sell a 10% equity stake in its Chinese joint ventures (JV) to its JV partner, Zhuhai Special Economic Zone Long Yi Enterprises Co for RMB200m (RM9.25m). Each party will own 50% of the JVs post transaction. The agreement would pave way to kick-start the property project which was deadlocked in the past. (Source: The Edge Financial Daily)

Mulpha: Goldman Sachs increases Mulpha stake to 5.74%. Mulpha International Bhd, which saw active trading recently on news that its associate FKP property was a takeover target, saw The Goldman Sachs Group Inc accumulate more shares in Mulpha. Goldman Sachs increased its shareholding to 135.2m shares or 5.74% equity interest. It was reported that FKP was a possible takeover target by Stockland, a leading Australian property developer. (Source: The Edge Financial Weekly)

Sapura Resources: Disposes of stakes in APIIT, UCTI. Sapura Resources Bhd (SRB) has proposed to dispose of 51% equity interest each in APIIT Sdn Bhd and Asia Pacific UCTI Sdn Bhd (UCTI) to Ontime Sdn Bhd for RM102m. SRB said net proceeds from the proposed disposal may be channelled towards the acquisition of new businesses, expansion of existing business and to pare down borrowings. The proposed disposal is expected to result in a one-off net gain of RM68.9m and upon completion of the exercise. (Source: The Star)

External reserves: Higher in the second half of October 2010. External reserves increased slightly in the second half of October 2010 to RM324.9b (USD105.3b) as at 29 October 2010 from RM322.7b (USD104.6b) on 15 October 2010. The latest reserve amount is equivalent to 8.8 months of retained imports and 4.5 times short-term external debt. (Source: Bank Negara)

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Views & News, Maybank IB (2010-11-04)

COMPANY UPDATE

Mah Sing Group RM1.88: Buy
Continues aggressive landbanking Shariah-compliant

Two new land parcels in Klang Valley. Mah Sing (MSGB) bought two pieces of freehold residential and commercial land located in Cyberjaya and Jln Ampang for RM166.5m cash. We are positive on the deals given their fair pricing and strategic locations. The land with e. RM1.2b total GDV are expected to boost our FY12 forecast by 3% and RNAV by 8%. Maintain Buy with higher RM2.48 RNAV-based TP.

QL Resources RM5.61: Buy
Raising capital to accelerate growth Shariah-compliant

The good news and the better news. QL yesterday announced proposals to raise funds and trading liquidity as its fast-growing operations continue to outpace free cash generation. We are simultaneously raising our forecasts by 5% p.a. in FY12-13 taking into account the faster-than-expected progress at its Integrated Livestock (IL) farms in Cianjur, Indonesia. Our TP is raised to an SOP-derived RM5.91 (ex-price: RM2.92) after adding the value of its stakes in Lay Hong and Boilermech to our DCF-derived RM5.77 (ex price: RM2.85).

RESULTS REVIEW

Sunrise RM2.52: Buy
Potential tie-up with a GLC? Shariah-compliant

On track. Sunrise's 1QFY11 RM36.7m net profit was within expectations. We see potential for acceleration of the new Quintet developments in Canada given the recent strong take-up registered. However, we believe that the short-term focus on Sunrise would be on the potential tie-up with a GLC. We lower our FY11-12 forecasts by 1-5% but raise FY13 by 6%. Maintain Buy with a higher RM2.83 TP (30% discount to new RM4.05 RNAV/sh).
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Guinness Anchor RM8.83: Buy
Anchored to a tidal wave

At 10-year highs. GAB's 1QFY11 results brought its 12-month moving average (MA) revenue and pretax profit to record highs. Whilst 8-11% p.a. net profit growth in FY11-13 is not spectacular, this already assumes an annual excise duty hike of 5% p.a. from 2QFY12. Maintain Buy with an unchanged RM9.60 DCF-based TP on unchanged forecasts for resilient earnings and reasonable dividend yields of 5-6% net p.a.
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ECONOMICS
External Trade September 2010
Slip in growth

Export growth slowed sharply to 6.9% YoY in Sep '10 (Aug '10: +10.6% YoY; Maybank IB: +16.5% YoY, Consensus: +10.1% YoY). Import growth also moderated to +14.6% YoY (Aug '10: +16.5% YoY; Maybank IB: +14.7% YoY, Consensus: +16.3% YoY) resulting in a RM7b trade surplus (Aug '10: +RM8.3). YTD, exports and imports increased by 20.4% and 26.4% respectively to give RM84.7b trade surplus. With the nine month figures in, we have adjusted 2010 export growth, import growth and trade surplus forecast to 15%, 19.5% and RM116.6bn from 17.5%, 18.4% and RM135.2b previously. Our current 2011 export and import growth forecast of 8.1% and 8.7% are under review, but in general we still expect another year of import growth outpacing export growth.
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Technicals
The FBM KLCI rose slightly by 1.03 points to 1,507.60 yesterday. Its resistance areas at 1,509 and 1,524 may cap market gains, whilst its support areas are located at 1,491 and 1,507.

Trading idea for today is a SHORT TERM BUY call on HIRO.


Other Local News
MAS: Domestic Firefly flights from KLIA by early 2011. Firefly, which now operates turboprops from Subang, will begin flying jets on several domestic routes from the KL International Airport (KLIA) as early as January or February. The idea is to beat competition with a low-cost model rather than a full service one and Firefly will take over some of the B737-400 aircraft from parent Malaysia Airlines (MAS) to ply the domestic routes. It will have four to six B737-400 aircraft to begin with and more will be added to the system over time. Firefly is likely to do more of the cross-over flights to Sabah and Sarawak. (Source: The Star)

Tanjung Offshore: Secures USD3.3m contract from Egypt. Tanjung Offshore Bhd subsidiary Citech Energy Recovery Systems UK Ltd (CERS), has received a purchase order from Egyptian Maintenance Company (EMC) for the supply of four units of waste heat recovery for the Egypt Liquefied Natural Gas retrofit project. The waste heat recovery package is valued at around USD 3.3m. The transaction is expected to contribute positively to the earnings of Tanjung for the financial years ending Dec 31, 2010, and 2011. (Source: Bernama)

Futures trading: Brokers get direct access to US customers. Nine Malaysian futures brokers received recognition by the National Futures Association to solicit and accept orders and customer funds directly from US customers as permitted by the United States Commodity Futures Trading Commission. The nine futures brokers were: AmFutures Sdn Bhd, CIMB Futures Sdn Bhd, JF Apex Securities Bhd, Kenanga Deutsche Futures Sdn Bhd, LT International Futures (M) Sdn Bhd, Okachi Malaysia Sdn Bhd, Oriental Pacific Futures Sdn Bhd, OSK Investment Bank Bhd and TA Futures Sdn Bhd. (Source: The Star)

Crude Oil: RON 97 price up 5 sen. The price of RON 97 is up 5 sen to RM2.15 per litre from Tuesday and reflects the price of petrol in the global market. Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said petroleum companies monitored the price of petrol for the first 28 days of the month and then would decide on whether to increase or reduce the price of RON97 for the following month. Meanwhile, government will not increase the price of RON95 at least until end of the year. More than 95% of private cars run on RON95. (Source: Business Times)

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Views & News, Maybank IB (2010-10-29)

RESULTS REVIEW

Tenaga RM8.87: Sell
It's going to get even more challenging Shariah-compliant
RM2.5b FY10 net profit ex-forex (+22% YtD) below consensus. 4Q net profit plunged 23% QoQ to RM414m on seasonally high "other costs" and rising coal prices. The final dividend was raised to 20 sen/share, but
the 3% gross full-year yield is still not particularly compelling. We tweak our EPS forecasts on post-result housekeeping and still expect FY11 net profit contraction on higher coal prices.


Nestle (Malaysia) RM43.60: Buy
It's marvellous what Milo can do! Shariah-compliant

Tried and tested recipe. Nestle's 10% share price gain since our upgrade on 30 August was nearly double the main Index's gain during the same period. 9M10 results outperformed. We tentatively raise our earnings a further 6-8% for 2010-12 and DCF-based TP by 3% to RM45 (from RM43.86) as we await its analysts' briefing later today for further details. Buy as we foresee further upside to its earnings and TP.


COMPANY UPDATE

Loh & Loh Corporation RM4.80: Accept offer
Ceasing coverage Shariah-compliant

Stock to be delisted. The mandatory take-over offer by PetroSaudi International and ultimately, Sheikh Tarek Essam Ahmad Obaid for Loh & Loh shares at RM4.85 a piece, has received 96.82% acceptances. The offerer does not intend to maintain the listing status of Loh & Loh. The stock will accordingly be suspended from trading on 8 Nov 2010.


Technicals

The FBM KLCI rose slightly higher by 0.33 points yesterday to end at 1,499.44. Its resistance areas at 1,504 and 1,512 may cap market gains, whilst its support areas are located at 1,483 and 1,499. Due to the mixed tone in the USA last night, we may see the FBM KLCI in a muted mode today - with later blue chip and mid-cap nibbling that may curtail some initial profit-taking activities.

Trading idea for today is a SHORT TERM BUY call on KFC.


Other Local News

MAHB: In Maldives JV. Malaysia Airports Holdings Bhd signed a 23:77 joint-venture agreement with GMR Infrastructure Ltd, to expand and operate the Male International Airport in Maldives. The joint-venture firm will have a paid-up capital of USD30m (RM93m) and based on the construction cost of USD373m (RM1.16b), MAHB's portion of the cost is USD86m (RM267m). (Source: Business Times)

Sunrise: Launching four projects next year. Property developer Sunrise Bhd plans to launch four projects with a total gross development value (GDV) of RM3.2b next year. The immediate project would be the Solaris Tower (GDV: RM480m) launching this year or early next year. Next would be the second phase of Vancouver, Canada project- the Quintet expected to launch in February or March 2011. Following that, Sunrise will unveil its MK20 (GDV: RM1b), with a build-and-sell mixed development project in Mont' Kiara by mid of next year and a premium landed development in Kajang, next to the Mines Resort (GDV: RM500m) by year-end. (Source: The Star)

Plenitude: To launch seven projects in FY11. Property developer Plenitude Bhd plans to launch seven projects in the financial year ending June 30, 2011, which could generate a total gross development value of about RM400m. These projects comprising mix development with a combination of residential and commercial properties are located in Johor, Penang, Sungai Petani and Selangor. (Source: The Star)

Southern Acids: To unlock value of land in Kota Kemuning. Southern Acids (M) Sdn Bhd (SAB) is set to unlock its holding of 644.5 acres of land bordering Kota Kemuning, Shah Alam, although its board of directors are still exploring the options. The land is known as Thangamallay Estate, which is the home to SAB's palm oil plantation. The value of the plot of land is estimated to worth RM20 per sq ft, amounting to RM561m, which is more than SAB’s current market capitalization of RM376.57m. (Source: The Edge Financial Daily)

Property: Mortgage cap decision soon. The media is reporting that the central bank would meet with banks next week to discuss plans for a mortgage cap whereby loans would be limited to a portion of the property value. "The expectation is a cap of about 70-80%. We think a directive will be issued to cap," said two sources with knowledge of the meeting. (Source: Business Times)

REIT: i-REIT from GCC may list next year. Bursa Malaysia Bhd expects an Islamic real estate investment trust (i-REIT) from the Gulf Cooperation Council (GCC) to be listed on the exchange next year, adding to its three existing i-REITS. It did not identify the issuer, but market speculation is that that it may be Qatar-listed property group Ezdan. (Source: Business Times)

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