Maybank IB Views

US Economy
Blast from the (distant & recent) past

Waiting for Bernanke's speech at the Federal Reserve Annual Symposium...Low expectations of an announcement or hint of a third round of asset purchase programme (QE3) with a more likely outcome to be a complement to the FOMC announcement on 9 August to keep the 0%-0.25% federal fund rate until mid-2013 with the same commitment to maintain the current size of Fed's balance sheet.

Malaysia
2Q 2011 Balance of Payments

FDI net inflows in 1H 2011 after four consecutive years of net outflows. Portfolio investment net inflows surged to RM48.055b in 2Q 2011 (1Q 2011: RM8.375b) and to RM56.430b in 1H 2011 (1H 2010: RM26.684b). Sustained current account surplus of RM23.397b in 2Q 2011 (1Q 2011: RM25.894b) and RM49.292b in 1H 2011 (1H 2010: RM44.082b).

RESULTS REVIEW
Maxis RM5.40: Hold
A defensive proposition Shariah-compliant

Hold maintained. 1H11 results were decent but marginally below expectations at 45% of our full-year forecast and consensus, the miss primarily being slower-than-expected voice revenue growth, though this is expected to pick up in the 2H. Positively, margins were preserved. Maxis provides for defensive yields but the extent of margin erosion from the launch of its home broadband services remains an uncertainty to earnings. Our DCF-derived TP of RM5.50 is maintained on WACC of 7.5% and 1% terminal growth assumptions.


Sunway Bhd RM2.29: Buy
One-off costs hit earnings

Below expectations. Sunway's 1H11 RM132m core net profit accounted for 40% of our and consensus full-year estimates. We lower our 2011-13 earnings forecasts by 9-15% and RNAV-based TP to RM3.78 (-7sen). Sunway continues to trade at a steep 40% discount to our RNAV. Buy. Positive re-rating catalysts include potential MRT job wins. During times of uncertainties, stable rental/dividend/manager fees from investment properties would provide the cushion to its earnings.

AEON Co. (M) RM6.95: Buy
The Bandar Utama impact

Weaker 1H within expectation. 1H11 recurring net profit of RM64.5m, after excluding the fire insurance proceeds of RM10.9m received in 1Q11, was 36% of our full-year forecast and consensus. We look to a stronger 2H with renewed contributions from renovated Jusco Bandar Utama (JBU). Our Buy call and RM7.90 TP are maintained.

BIMB Holdings RM2.00: Buy
Still as liquid as ever

Buy maintained. What BIMB continues to offer is a turnaround story of what is now a well-capitalized commercial bank (15.6% core capital ratio) with a very liquid balance sheet (net financing/deposit ratio of just 54%), a well-managed and profitable composite insurance outfit as well as a potential M&A story, given the possibility of shareholding changes. Our Buy call is maintained with a SOP-derived target price of RM2.40.

Carlsberg Brewery (M) RM6.85: Buy
The desired taste

16.5% YoY growth in 1H11 net profit to RM80m, which was 52% of our and consensus full-year forecasts. Results were within our expectation and we maintain our Buy call on the stock while our RM8.00 TP is unchanged. Valuations are decent at current levels, with the stock trading at a prospective 2012 PER of 12.9x against a historical mean of 16.7x, with gross yields of 4.9%. Near term, however, we expect sentiment toward the stock be cautious ahead of Budget 2012 with uncertainties over possibly higher duties.

Media Chinese International Limited RM1.14: Hold
Paper cuts from higher newsprint prices Shariah-compliant

Higher newsprint prices and slower adex growth looms. Media Chinese International Limited's (MCIL) 1QFY12 results were within expectations. That said, higher newsprint prices have had an adverse impact on earnings. Furthermore, we understand that adex growth will decelerate further into 2HFY12. We trim our FY12-14 earnings estimates by 2%-6% and TP from RM1.40 to RM1.14 (-19%).

Sarawak Oil Palms RM4.20: Buy
Too good to ignore Shariah-compliant

Explosive 2Q. SOP's RM69m 2Q11 net profit (+132% YoY; +24% QoQ) exceeded our and market expectations, boosted by high FFB production and low all-in cost of production. We raised our 2011 earnings by 6% and reiterate our Buy call with unchanged RM6.80 TP (13x 2012 PER). With 42.5% of estates still immature, SOP offers robust 16% 3-year CAGR in FFB production, 21% 3-year CAGR EPS, and yet trades at 8x 2012 PER. Its traded EV/planted ha of RM32,000 is cheap relative to recently transacted prices exceeding RM50,000/ha.

Wah Seong Corporation RM2.14: Buy
In line; orders set to kick-in Shariah-compliant

Maintain Buy. 1H11 results tracked expectations despite a weaker QoQ performance. We retain our forecasts and anticipate more new contracts in 2H. WSC remains a Buy with a RM3.10 target price (14x 2012 EPS). The stock now trades at just 10x one-year forward PER, one standard deviation below mean, which we think, underscores its near-term job wins and earnings potential. Meanwhile, the board has decided to delay Wasco’s listing exercise, citing weak market condition.

Hock Seng Lee RM1.48: Buy
Constructive growth Shariah-compliant

On track for 23% full-year growth. 1H11 net profit of RM38.6m (+22% YoY) met 43% of our full-year forecast and 42% of consensus. We expect a stronger 2H, leading to a sizeable 23% expansion in core net profit for 2011. We remain positive on HSL benefiting from the expected strong work flows in Sarawak. We reiterate our Buy call with a RM2.30 target price based on 12x multiple on 2012 earnings.

CB Industrial Product RM3.84:Buy
Catalyst from cash Shariah-compliant

Maintain Buy. CBIP's RM24m 2Q11 net profit (+86% YoY; 9.7% QoQ) brings 1H11 net profit to RM46m (+84% YoY), within our expectation but ahead of consensus. Its recent strategic proposed disposal of two plantation subsidiaries for RM268m cash could add 9.5% to our present TP. Future plans to utilize disposal proceeds also act as a catalyst to share price. We maintain our forecasts and TP of RM4.75 based on 7x 2011 EPS pending further clarity on cash utilisation. Still a Buy.

Eastern Pacific Industrial Corp RM3.05: Accept Offer
Inline; just awaiting GO completion Shariah-compliant

1H earnings inline; GO determines the price now. 1H11 net profit of RM27m was in-line at 49% of our full year forecast. In-light of the impending Mandatory General Offer (MGO), no dividend was declared. We maintain our Hold call and leave our RM3.10 TP unchanged, pegged at the RM3.10 offer price, implying 1.6% upside.

Technicals
The FBM KLCI fell 4.41 points to close at the 1,464.74 yesterday. Its resistance areas of 1,464 and 1,488 will cap market gains, whilst the weaker support areas are located at 1,423 and 1,454. Due to the US markets’ weaker tone last night; we will see a softer for the local bourse today. Some pre-Hari Raya holiday liquidation activities may persist to depress the markets’ rebound from its recent 1,423.47 low.

Trading idea is a Take Profit call on Axiata.

Other Local News
MAS: New managing director found? It is learned that the executive committee decided on the new MD after a meeting yesterday. Ahmad Jauhari Yahya, the former CEO of power producer Malakoff Bhd, has been offered the job to lead the embattled national airline. (Source: Business Times)

Megasteel: Dissapointed with Miti’s decision. Megasteel Sdn Bhd says its disappointed that the Ministry of International Trade and Industry (Miti) has decided against implementing the 35% safeguard duty on the import of hot-rolled coil (HRC) the steel giant had petitioned for in June. (Source: The Edge Financial Daily)

SDB: To launch RM1b projects in next 12 months. Selangor Dredging Bhd (SDB) has in its pipeline property launches worth almost RM1b in GDV in Malaysia and Singapore by the end of 2012. The group expects contribution from Singapore to be at par with Malaysia’s in two years. (Source: The Edge Financial Daily)

LTKM: Counts on it recession proof sector. LTKM Bhd is planning to maintain its current level of egg production, as it looked to capitalise on the recession-proof nature its business. LTKM currently produces an average of 1.4m eggs per day. (Source: The Edge Financial Daily)

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Maybank IB Views

MISC RM7.10: Sell
Brace for further impact Shariah-compliant

Poor visibility. We cut our 2012 EPS forecast by a further 19% post analyst briefing for Apr-Jun 2011 results. Visibility continues to be poor, extending up to 2013. We do not see a recovery in the liner, chemical and petroleum divisions, hit by supply overhang and depressed rates. This offsets positives from the other divisions: heavy engineering, offshore, and LNG shipping. Our TP of RM6.44 remains unchanged, based on a 15% discount to our SOP valuation.

Malaysia Airports Holdings RM6.45: Buy
Higher charges, finally

Positive surprise. MAHB has confirmed that it has been granted the approval to impose higher charges on: (1) international passengers (passenger service charge or PSC); (2) landing for aircraft; and (3) parking for aircraft. This will take effect on 15 September 2011 and will positively impact future earnings. MAHB is our top aviation pick as it is well placed to enjoy the longer term growth in air travel. Maintain Buy, with an unchanged target price of RM7.55/share DCF-based.

Hock Seng Lee RM1.46: Buy
A new water job Shariah-compliant

Small replenishment; maintain Buy. HSL's RM45.7m job win will lift its outstanding order book to RM1.15b, and contribute RM5.5m in net profit into 2012, we estimate. We maintain our earnings forecasts having imputed job win assumptions earlier. We are still positive on HSL for an exposure to Sarawak construction. Our target price is unchanged at RM2.30 based on 12x 2012 PER. Share price has fallen back to single digit valuations alongside the weak broader market; the stock is looking more attractive at current levels.

RESULTS PREVIEW
AirAsia RM3.64: Hold
Challenging 2Q11 Shariah-compliant

Yields, fuel and Firefly. We expect AirAsia's 2Q11 to show a marginal YoY profit growth buoyed exclusively by its Thai associate. We expect the Malaysian and Indonesian operations to exhibit profit drop due to 28% rise in fuel prices and soft yield environment, consistent to the industry and further exacerbated by Firefly’s jet operations services to East Malaysia. We maintain our Hold call at RM3.36 target price, based on 9.0x 2011 PER which is 10% discount to global LCCs’ PER.

Malaysian Airline System RM1.66: Buy
2Q11: Expect losses

Yields, fuel and Japan. MAS will release its 2Q11 results on 23 Aug. 2Q11 is expected to be loss-making due to the impact of 28% higher fuel price YoY and some impact from the MENA civil unrest and Japanese natural disasters. Despite this negative environment, we advice investors to overlook this quarter as the Company’s future is much better now with stabilizing fuel price, new aircraft benefits and the tie-up with AirAsia. We maintain our Buy recommendation with a target price of RM2.70, pegged to 9.0x 2012 PER - on par with global peers.
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RESULTS REVIEW
UMW Holdings RM7.22: Hold
O&G sees red, auto loses traction Shariah-compliant

Challenging mid-term prospects. UMW's 2Q underperformance validates our contrarian view and concerns over its O&G and auto operations. Issues like the supply chain from Japan's March earthquake and tsunami and anti-dumping effect will persist in 2H. Maintain Hold with a RM7.20 target price, based on 12x 2011 EPS.

TSH Resources RM3.15: Buy
Windfall harvest Shariah-compliant

Outperformed. TSH's 1H11 net profit of RM60m (+165% YoY) accounted for 59% and 54% of our and consensus full year estimates respectively. TSH outperformed expectations backed by higher than expected FFB production. We raise our 2011 earnings forecast by 7.1% but trimmed 2012-13 forecasts by 0.6-0.7% on higher wages assumption by RM200 per month for Malaysian plantation workers. We maintain our Buy call with an adjusted TP of RM3.81 (15x 2012 PER; previously RM3.84) on the lowered earnings.
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Eversendai Corporation RM1.68: Buy
Buy ahead of job-flows Shariah-compliant

Results show strong growth. 1H11 net profit of RM57m was 46% of our full-year forecast and 49% of consensus. We initiate coverage on Eversendai with a Buy and TP of RM2.17 (based on 12x CY12 PER). Key attributes: (i) job-flow prospects are bright and we expect major wins in the next 6 months; (ii) Eversendai has built itself an above-industry margin business franchise yet valuation of 9x 2012 PER is at a 30% discount to big-cap peers; (iii) our belief that pump-priming is an obvious and politically easy tool in addressing macro-economic slump.

ACQUISITIONS / DISPOSAL
Star Publications (Malaysia) RM3.39: Hold
Revises terms of disposal for Section 13 land Shariah-compliant

More favourable terms. Star's new agreement with JAKS Island Circle (JIC) to raise the consideration for its Section 13 land sale by RM24m to RM135m is positive. The land disposal will add 14 sen/sh in value by end-2014. We however maintain our earnings estimates as the timing for the gain recognition is beyond our estimates horizon. We also maintain our Hold call and RM3.54 DCF-based TP.

Technicals
The FBM KLCI added a meagre 0.31-points and closed at 1,483.98 last Friday. The weaker support areas for the FBM KLCI are located in the 1,423 to 1,477-zone. The next resistance levels of 1,483 and 1,597 will see heavy selling and liquidation activities.

Trading Idea is Tenaga

Other Local News
SunCity and Sunway: To be delisted. The shares of Sunway City Bhd (SunCity) and Sunway Holdings Bhd would be delisted from the Main Market of Bursa Malaysia on Aug 23. The new entity would be known as Sunway Bhd. (Source: Bursa Malaysia)

MMHE: Secures RM952m contracts. Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) has secured two contracts worth RM952m from MISC Bhd for topsides fabrication, marine repair and conversion of two energy vessels. (Source: Bursa Malaysia)

Crescendo: Plans RM2.5b township. Crescendo Corp Bhd (CCB) is set to launch its new mixed development property project, Bandar Cemerlang township in Mukim Tebrau, Johor Baru with a gross development value (GDV) of RM2.5b by year-end. The completion of the Johor Baru-Kota Tinggi highway in June this year has improved accessibility and connectivity to its project. (Source: The Star)

Green technology: Green loans. Commercial banks, which are currently shying away from lending to green companies, may have to set aside an allocation to finance green technology projects. Malaysian Green Technology Corp (MGTC) CEO Dr Nazily Mohd Noor said this was one of the suggestions made during a discussion at the Green Technology and Climate Change Council, chaired by the Prime Minister Datuk Seri Najib Razak, two weeks ago. (Source: Business Times)

Property: Foreigners not shying away from prices. Malaysia property products are currently hot on the radar of international investors and property buyers, in view of the domestic real estate market potential to see a steady growth in prices. (Source: The Malaysian Reserve)

EPF: Confirms buying London office block for RM740m. The Employees' Provident Fund (EPF) has confirmed that it has purchased an office block in St James's Square, London, where one of the tenants has one of London's highest rents, for RM740m. This marks EPF's fourth property investment in London since announcing an allocation of RM1b for British property purchases about a year ago. Including this latest purchase, it has spent RM634m. (Source: The Star)

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Maybank IB Views

Multi-Purpose Holdings RM2.77: Buy
Buy now or forever hold your piece

Great long term play. We initiate coverage on Multi-Purpose Holdings (MPHB) with a Buy call and RM3.60 TP (10% discount to RM4.00 SOP/sh). Its current share price reflects only Magnum Corporation's value without any value ascribed to its other businesses. We expect 14% 3-year forward earnings CAGR with 100% ownership of Magnum Corporation. A major re-rating catalyst is the gradual disposal of non-core assets which could enable it to pay up to 44 sen in special DPS and 20 sen in recurring net DPS, offering a whopping 7% net yield.

RESULTS REVIEW
AMMB Holdings RM6.48: Buy
Treasury gains support momentum

Maintain Buy. While 1QFY12 results were slightly above expectations our forecasts are lowered marginally. AMMB remains a Buy for: (i) its decent valuations, (ii) its ongoing portfolio rebalancing, (iii) ongoing investment in business line expansion under ANZ, and (iv) its position as a beneficiary of the Economic Transformation Programme. Our target price is trimmed to RM7.40 (-10sen) on an unchanged FY13 P/B target of 1.8x (ROE: 14.3%), which we believe is reflective of fundamentals.

Technicals
The FBM KLCI rose 16.07 points to close at 1,499.74 yesterday. Its resistance areas of 1,501 and 1,530 will cap market gains, whilst the obvious support areas are located at 1,454 and 1,499.Due to the US markets’ rebound last night; we will see some volatile trading activities in the local bourse today. Some heavy profit-taking and liquidation activities will emerge later to depress the markets’ rebound from its opening “gap up” move.

Trading idea is a Short-Term Buy call on BRDB

Other Local News
Sunway: No plans to postpone listing. The listing of Sunway Bhd, the merged entity of Sunway Holdings Bhd and Sunway City Bhd, will proceed as planned despite recent turbulence in the stock market. The shares of Sunway Bhd are scheduled to be floated on Bursa Malaysia on August 23 and expected to have a market capitalisation of over RM3.5b. (Source: Business Times)

AirAsia: New AirAsia Philippines vows to be 'substantially' cheaper. AirAsia launched a new affiliate in the Philippines yesterday, promising to undercut its rivals on regional and domestic routes. To minimise costs and avoid Manila's crowded terminals, AirAsia Philippines will fly out of a former US air base that had been turned into an industrial zone in Clark about 90 minutes' drive north of the country's capital. (Source: The Star)

MAHB: In talks with BA and Qantas on using KLIA. Malaysia Airports Holdings Bhd (MAHB) is still in talks with British Airways and Qantas Airways on the possibility of both airlines mounting flights to KL International Airport (KLIA), a decade after these airlines suspended flights to KLIA owing to a lack of network connectivity here. Both airlines were considering the possibility of flying into KLIA, following Malaysia Airlines (MAS) joining the Oneworld alliance. (Source: The Star)

Parkson: Hires HSBC for Singapore listing. Parkson Holdings is spinning its retail operations in Malaysia, Indonesia, Vietnam and Cambodia in a separate listing in Singapore soon. HSBC has been hired to apply for the corporate exercise and the Singapore's listing. (Source: The Sun)

Dijaya: JV plans property development with GDV RM2.8b. Dijaya Corp Bhd’s joint venture with Iskandar Waterfront Sdn Bhd, Magical Heights Sdn Bhd (MHSB), plans to undertake property projects near Johor Baru with a gross development value (GDV) of RM2.8b. The projects would be built on two pieces of land which MHSB has proposed to acquire from Trident World Sdn Bhd for RM220m. Dijaya and Iskandar Waterfront Sdn Bhd each has a 50% stake in MHSB. (Source: Bursa Malaysia)

Iskandar: Gets RM95b pledges. Iskandar Malaysia attracted about RM95b in committed investments from January to June 2011. This was more than double the cumulative RM47b target for the five years up to 2010. From 2011 to 2015, Iskandar Malaysia is targeted to achieve RM73b in investments. (Source: The Star)

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RHBInvest Research

Top Story: QL Resources – Earnings to remain resilient, but valuations pricey Underperform

Visit Note

¨ QL’s new marine plant in Surabaya, which was completed in Mar 11, has begun commercial production of surimi and fishmeal in July and Aug 11 respectively with a total annual capacity of 5k mt p.a. each



Sector Call



Construction – 28 companies shortlisted for MRT jobs Overweight

Sector News Update

¨ Prasarana has shortlisted 28 companies for the bidding of 18 work packages comprising elevated civil works (8), stations (8) and depots (2), divided into categories of “open” (11) and “bumiputera” (7).

¨ It will call for the tenders for these packages in stages starting from Sep 2011 to Dec 2012, with the first two being the 5.4km Taman Bukit Ria – Plaza Phoenix stretch and the 5.2km Taman Suntex – Bandar Hussein Onn stretch.



Banks: Risk to earnings has increased Overweight (Under Review)

Sector Update

¨ Given heightened external risks and a weaker-than-expected global economic recovery, we had revised our real GDP growth forecasts to +4.3% for 2011 (from +4.8%) and +4.5% for 2012 (from +5.5%). Below is an extract from our recent strategy report “Rising Fears Of A Double Dip” dated 11 Aug.



Media: Adex growth to be weaker Underweight (down from N)

Sector Update

¨ Following our market strategy report yesterday (entitled Rising Fears Of A Double Dip), we are lowering our projected adex growth for 2011 to 9% (previously 10%) and 2012 to 9.5% (previously 11.5%).

¨ Accordingly, we have trimmed our FY11-13 earnings estimates for the media stocks by 2-10%, which have led to lower fair values for the media stocks under our coverage.



Corporate Highlights



MRCB: 1HFY12/11 net profit grows 84% yoy Trading Buy

2QFY11 Results / Briefing Note

¨ 1HFY12/11 net profit came in within expectations.

¨ To strengthen its case for the redevelopment of the 2,680-acre RRI land in Sungai Buloh, MRCB intends to soon secure a RM500m credit line/debt as well as a JV partner with a proven track record in building “award-winning townships”.



Sunway REIT: Dragged down by litigation costs Market Perform

4QFY11 Results

¨ 4QFY11 realised net profit of RM41.1m (-4.8% qoq) missed our estimate by 7.5%. Higher sequential revenue was offset by higher finance cost and legal expenses arising from the litigation of Sunway Putra Place of RM4.7m. A 1.62 sen DPU was declared during the quarter. Full year FY11 DPU amounted to 6.58 sen, slightly below our forecast of 6.8 sen.



MBM: Lacklustre 2Q11 Market Perform (down from OP)

2QFY11 Results

¨ MBM’s 2Q11 results were below our and street expectations. Net profit for the quarter of RM21.1m (-45.0% qoq and -45.3% yoy) brought cumulative 1H11 earnings to RM59.5m (-24.4% yoy) that reached just 42.3% of our previous 2011 estimate.

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Maybank IB Views

Construction: Overweight
MRT: Pro-gressing

Positive developments. Prasanara's release of the names of 28 companies shortlisted for the mass rapid transit (MRT), Sg Buloh-Kajang line elevated works portion is a positive move in buidling investors' confidence on the government's commitment in moving the project forward. The names are not totally new to us, except perhaps for the not listed ones. First works are expected in early-2012, we estimate. We maintain our Overweight call on the sector.

RESULTS REVIEW
Sunway REIT RM1.07: Buy
Short-term pain, long-term gain

Maintain Buy. SunREIT's RM167.3m FY11 core net profit came in within expectations. 6.6sen FY11 DPU was also in line. We do not expect significant contributions from the newly-acquired Sunway Putra Place (SPP) over the short-term as it would likely take 1-2 years for renovation works. We maintain our FY12-13 earnings forecasts and introduce FY14 estimates. Target price is RM1.18 (+3 sen) as we roll over our base year to 2012.

MBM Resources RM2.97: Hold
Less sanguine over outlook Shariah-compliant

The effect of the global supply chain disruption kicks in. 1H results are tracking expectation (47% of full-year forecast) on the back of a softer QoQ performance. Vehicle sales and earnings in 2Q, as forewarned, were affected by the global supply chain disruption post the Japan’s 11 March earthquake and tsunami. Going forward, we opine that this issue will continue to have an adverse effect on MBM's 2H performance. Maintain Hold with a RM3.10 target price.

Notion VTEC RM1.95: Buy
Earnings on track Shariah-compliant

Results in line. 9MFY11 net profit of RM34m (+17% YoY) made up 71% and 76% of our and consensus full-year forecast. We maintain our Buy call as valuation is inexpensive at 4.1x CY12 PER, backed by a solid growth trend (38% 2-year net profit CAGR). Our RM2.40 TP pegs NVB on 4.5x FY11 EV/EBITDA, reflecting regional peers' (ex-Japan) valuations. Our TP also indicates an undemanding forward PER of 5.1x, significantly below the 8x average for our small-cap universe.

Technicals
The FBM KLCI fell 4.06 points to close at 1,476.46 yesterday. Its resistance areas of 1,479 and 1,530 will cap market gains, whilst the obvious support areas are located at 1,423 and 1,475.

Trading Idea is YTLCMT

Other Local News
Construction: 28 firms shortlisted for MRT jobs. Syarikat Prasarana Negara Bhd has shortlisted 28 individual and joint-venture (JV) companies that are eligible to bid for various elevated civil works, stations and depot packages for its My Rapid Transit (MRT) project. Among the companies in the list are larger local players like IJM Construction Sdn Bhd, Ahmad Zaki Sdn Bhd, Sunway Construction Sdn Bhd and WCT Bhd. (Source: The Malaysian Reserve)

Aviation: Up to RM1.2b cost savings for MAS and AirAsia. The collaboration forged between Malaysia Airlines (MAS) and AirAsia Bhd on Tuesday can turn in up to RM1.2b in cost savings for both the airlines, said MAS newly appointed executive director Mohammed Rashdan Mohd Yusof. (Source: The Star)

MAHB: Board revamp at MAHB? A revamp of the boardroom of Malaysia Airports Holdings Bhd (MAHB) is next after the airline industry in Malaysia. Changes are afoot at MAHB but it would be more gradual than the wholesale changes seen at MAS. The idea behind the move to make changes to the board of MAHB is to infuse new blood and realign the interest of the shareholders by bringing people from diverse backgrounds and disciplines. (Source: The Star)

Bumi Armada: Signs FPSO contract. Bumi Armada Berhad’s jointly-controlled entity, Forbes Bumi Armada Offshore Limited (FBAOL) has signed a Floating Production, Storage and Offloading (FPSO) contract with Oil and Natural Gas Corporation Limited (ONGC) following the letter of award secured from ONGC referred to in the Prospectus of Bumi Armada. (Source: Bursa Malaysia)

Alam Maritim: Bags RM20m jobs. Alam Maritim Resources Berhad has clinched two offshore vessel leasing contracts from Petronas Carigali Sdn Bhd worth RM20m. The contract is for a duration of 138 days, with a maximum extension option of 30 days. (Source: Bursa Malaysia)

Catcha: Amends terms with Microsoft. Catcha Media Bhd announced substantial amendments to its strategic collaboration with US-based Microsoft. Changes in terms of the collaboration had prompted the company to reduce its four-year commercial target of up to RM90m for its online media operations by some 28% or RM25m. (Source: The Edge Financial Daily)

Sarawak Cable targets RM1b projects. Sarawak Cable Bhd (SCB) is pursuing potential projects worth more than RM1b and is looking to expand overseas, starting with Brunei and Kalimantan this year, followed by the Philippines. (Source: The Edge Financial Daily)

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RHBInvest Research

Top Story: WTK – Lower plywood production to weigh on 1H11 results Outperform

¨ WTK’s log production volume in 2Q11 was higher by +33% qoq and +28% yoy respectively due to normalised weather conditions. WTK has guided that its current realised price is US$220/m3 for meranti SQ up, which is lower than our expectation of US$260/m3 for FY11.

¨ We revised our fair value to RM2.55 based on unchanged target PER of 12x revised FY12 EPS of 21.2 sen. Maintain Outperform.



Corporate Highlights



Sunway Bhd: A single stock that gives all real estate exposure Outperform (Initiating coverage)

¨ Upon listing, Sunway Bhd will potentially become the 3rd/4th largest property player in Malaysia . The company will offer investors full fledge offerings of the real estate sector, ranging from property development to various property assets as well as construction arm. The key strength of Sunway Bhd after merger will be the leaner organisation and operating structure that will ultimately yield cost savings.

¨ We estimate an FY12-13 earnings growth of 7% and 11%, underpinned by RM1.6bn worth of unbilled sales, RM2bn worth of construction orderbook, as well as RM75-80m recurring income from property assets and Sunway REIT.



CIMB: CIMB Niaga 2Q11 results – Coming along nicely Outperform

¨ CIMB Niaga reported 2Q11 net profit of IDR818.6bn (+35.4% yoy; +12.5% qoq), bringing 1H11 net profit to IDR1,546.1bn (+37% yoy).

¨ Management guided for NIM to average around 5.4-5.5% for this year, roughly around current levels. Meanwhile, management now expects CIMB Niaga to post loan growth in excess of 20%, as compared to around 20% previously (1H1: 22.5% annualised). However, CASA growth ahead would be more challenging given that depositors are now seeking higher yields.

¨ No change to forecasts. Fair value of RM9.80 (15x CY12 EPS) and Outperform call maintained.



SapuraCrest: Buying Clough’s marine construction division Outperform

News Update

¨ Sapuracrest announced a proposal to acquire Clough’s “Marine Construction” business for AUD127m (RM400.5m) cash. Completion is expected by 4QCY11.

¨ The acquisition will: 1) Strengthen Sapuracrest’s international foothold (especially Australia ); 2) Increase its asset base; and 3) Spearhead an entry to the subsea market.

¨ Maintain Outperform and fair value of RM5.04/share (based on 21x FY13 EPS).

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Maybank IB Views

COMPANY UPDATE
IOI Corporation RM5.30: Hold
"Planting" investment properties Shariah-compliant

On accelerated property capex. The recent foray into South Beach and IOI Resort City's development plans are set to accelerate IOI Corp's property capex spending by ~RM2.3b over the next 3 years, with 78% of these channeled to build its property investment portfolio. Investors looking for greater exposure to plantation have been slowly shying away from IOI. IOI lacks immediate re-rating catalyst, especially with limited earnings upside from its matured plantation while the new property ventures do not bring in immediate earnings; they are largely for investments. Our revised TP of RM5.50 on 16x FY12 EPS is based on 1-SD below its 5-year historical mean PER. Maintain Hold.

Top Glove Corporation RM5.26: Hold
Needs more visibility on latex glove demand Shariah-compliant

Valuations not cheap. The upcoming 3QFY11 results (expect to be flat QoQ) could mark the long-awaited inflexion point for the company's earnings, as contributions from new capacity kick in, and as distributors start to replenish stockpiles. We nevertheless feel that valuations do not justify a buy on the stock at current levels, with Top Glove trading at a CY12 PER of 16x versus its peer average of 7x. We cut our FY11 earnings by 14% and 3-4% for FY12-13. Maintain Hold and DCF-derived TP of RM5.10.

Technicals
The FBM KLCI gained 7.68 points and ended at 1,556.19 yesterday. Its resistance areas of 1,558 and 1,576 will cap market gains, whilst the obvious support areas are located at 1,533 and 1,556.Due to the US markets’ weaker tone last night; we will see some initial low volume selling activities in the local bourse today.

Traiding idea is a Short-Term Buy call on AEONCR.

Other Local News
RHBCap: Aabar to buy ADCB's stake. Aabar Investments, the investment arm of Abu Dhabi government, intends to buy a 25% equity stake in RHB Capital Bhd from Abu Dhabi Commercial Bank at RM10.80 per share. (Source: The Edge Financial Daily)

Sunway-Suncity: Merger gets nod. Shareholders of Sunway Holdings Bhd and Sunway City Bhd have approved the proposed disposal of the two companies' assets and liabilities to Sunway Bhd at their EGMs. A new Sunway entity is expected to be listed on the Main Market of Bursa Malaysia in the third quarter of this year. (Source: The Edge Financial Daily)

TNB: Buys big supply of fuel oil. Tenaga Nasional Bhd (TNB) has bought more than 200,000 tonnes of fuel oil, for delivery between April and August, in addition to buying electricity from Singapore utility PowerSeraya. The fuel oil volumes were the largest TNB has purchased in at least five years. (Source: The Star)

Alam Maritim: Bids for RM400m to RM500m jobs. Alam Maritim Resources Bhd is bidding for RM400m to RM500m worth of contracts in offshore installation and construction (OIC) as well as offshore support vessel (OSV) services sector. (Source: The Star)

Construction: Eversendai to bid for RM1b-RM1.5b projects. Soon-to-be-listed structural steel construction and engineering company Eversendai Corp Bhd aims to bid for an additional RM1b to RM1.5b worth of projects for the rest of the year, after having secured almost RM350m so far this year. (Source: The Edge Financial Daily)

Property: 1MDB inks deal to kickstart Bandar Malaysia. 1MDB Bhd has signed several agreements that will pave way for the development of Bandar Malaysia, a mixed property project, on the site of the old Sungai Besi airport land. (Source: The Edge Financial Daily)

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Maybank IB Views

Sunway Holdings RM2.57: Hold
Results as expected; merger completion next Shariah-compliant

Tactical downgrade to Hold. Results were in line. RM31m 1Q11 core net profit (-13% YoY, -42% QoQ) made up 19% of our full year estimate. We maintain our 2011-12 earnings forecasts. The merger with SunCity is into its final stage with shareholders to vote on 15 Jun. An enlarged entity under the new Sunway Bhd is expected to be listed in 3Q11. With the share price closing in to the implied take-over price (+14.7% YTD), we downgrade the stock to Hold.
Maxis RM5.42: Hold
A seasonally slower quarter Shariah-compliant

Hold maintained. RM540m net profit was down 2% YoY and 12% QoQ. With 1Q11 being a seasonally slower quarter, net profit was within expectation at 22% of our full-year forecast and our numbers are maintained. Guidance remains for margins to come under further pressure with the roll-out of new wireless/fixed broadband services. Dividend yields aside, we see little share price catalyst and maintain our Hold call on the stock. Our DCF-derived TP of RM5.50 is maintained on WACC of 7.5% and 1% terminal growth assumptions.
Axiata Group RM5.00: Buy
Stable growth in regional ops Shariah-compliant

Buy call maintained. Some weakness from Dialog and Robi during the quarter but positively, Celcom continues to register stable earnings growth while XL continues to fare well despite aggressive price competition. Overall, nevertheless, Axiata’s regional operations continue to fare well and remain very much cash generating entities with growth potential. Our Buy call is maintained with an unchanged SOP-based target price of RM5.60.
Malaysia Airports Holdings RM6.37: Buy
Jumpstart to 2011

Within expectation. 1Q11 core net profit number reveals a healthy business that is flourishing on the back of strong traffic numbers and healthy retail business. We look forward to a promising 2011 as air travel momentum remains strong in the Asia Pacific region. Maintain Buy, with an unchanged target price of RM7.12/share DCF-based.

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Maybank IB Views

Kencana Petroleum RM2.75: Buy
Buys AME for RM400m; a positive Shariah-compliant

A strategic acquisition. We are upbeat on Kencana's purchase of AME, on financial and operational aspects. Valuations are decent, in our view, and the deal, secured with profit guarantees (RM40m p.a. for FY11-12) is mildly EPS accretive (+1 sen to EPS). The acquisition will provide Kencana a foothold into the subsea markets and ownership of 4 vessels. This 'all-share transaction' will turn vendors of AME into the 2nd largest shareholder of the Group with a 7.6% stake. Our forecasts and target price are under review pending further details. Buy.

QL Resources RM3.40: Buy
A regional player in the making Shariah-compliant

Regional expansion on track. QL is replicating its success formula regionally for each of its main divisions, and the ongoing expansion will fund its growth in the coming years. Although share price has risen 16.4% YTD, outperforming the KLCI, we believe there is still upside potential, banking on its expansion especially into Indonesia, which has yet to contribute significantly to group earnings. We lift our TP to RM3.75 after rolling over our valuation period. We continue to be positive on QL.

Technicals
The FBM KLCI rebounded 25.24-points and closed at 1,540.74 last Friday. The local market remained quite steady to firmer despite the global markets’ gyrations. Local funds pushed the market up especially last Thursday and Friday on firm bargain hunting activities.The obvious support areas for the FBM KLCI are located in the 1,507 to 1,540-zone. The firm resistance zone of 1,545 and 1,576 will see very heavy liquidation activities.

Weekly trading idea is a Firm Buy call on MEDIAC.

Other Local News
Sunway: To secure site of Jalan Duta complex. Sunway Group is said to have won a competitive bid to acquire the site of the Jalan Duta government complex. Sunway could be paying more than RM500m for the site and construct new offices for the IRB and Customs Department elsewhere. (Source: The Edge Financial Weekly)

MAS: Firefly takes delivery of 3rd 737 for KK ops. Firefly, subsidiary of MAS, took delivery of a third Boeing 737-800 aircraft to be stationed in Kota Kinabalu, officially marking the start of the city as its eastern hub. (Source: Malaysian Reserve)

IOI: Allegations against IOI 'just not true'. IOI Corp Bhd re-iterated that in October 2010, an RSPO-certified auditor SGS investigated the allegations and concluded the deforestation complaints were baseless. (Source: Business Times)

ECM, Kenanga: Close to sealing deal. ECM Libra Financial Group Bhd, whose substantial shareholders are long known to be looking to divest their equity stakes, is close to sealing a merger deal with K&N Kenanga Holdings Bhd. (Source: The Edge Financial Daily)

Masterskill: Seeks RM100m from STMB. Masterskill Education Group Bhd (MEGB), which has won its defamation suit against Sistem Televisyen Malaysia Bhd (STMB) for a total of RM250,000, is appealing to the High Court for the damages to be raised to RM100m. (Source: The Star)

FDI: Good response to Invest Malaysia NY. A total of 56 US fund managers have confirmed participation at the inaugural Invest Malaysia New York 2011 (IMNY 2011), which will be held tomorrow. (Source: Business Times)

Property: Demand for condos in KL. Condominium living is relatively new to KL and well designed projects are seeing strong sales performance, said Christopher Boyd, executive chairman of CB Richard Ellis Malaysia. The take up rate of condos in 1Q11 was between 65% and 88% in prime areas. (Source: Malaysian Reserve)

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Stocks to watch: IJM, Mitrajaya, K.Euro, Sunway, Sime Darby

KUALA LUMPUR: CONSTRUCTION stocks would be in focus in the week ahead, starting Monday, April 4 as the government rolls out more projects under the Economic Transformation Programme (ETP).

Prime Minister Datuk Seri Najib Razak has given the assurance that the government will announce a slew of new major and exciting projects in the next few months, providing traction in implementing effectively the ETP.

Meanwhile, analysts expect external newsflow to impact investors’ sentiment in the second quarter,

“Nevertheless, beyond the short-term volatility, we believe there is still room for the market to move higher in the 2H as investors’ worries are somewhat exaggerated and the global economic recovery will unlikely be derailed,” said RHB Research Institute.

It said the external headwinds that dragged down global equities will likely dissipate and transform into potential catalysts for the market to come back in the second half.

“These include: 1) Worst of the Japanese disaster over with reconstruction plans being put in place; 2) Political upheavals in the Middle-east and North Africa subside and oil price normalises; 3) Receding threat of accelerated inflation for Emerging Asia as weather conditions improve and food prices ease; and 4) Domestically, implementation of ETP gaining speed with cheers from general election news flow from time to time,” RHB Research Institute said.

Meanwhile, interest in biogas is expected to pick up with power giant TENAGA NASIONAL BHD signing an MoU on Monday with Sime Darby PLANTATION [] and Mitsui & Co., Ltd to study the potential of using biogas to generate power at Sime Darby’s oil palm estates.

The study, which will see a collaboration of facilities, skills-set and knowledge based on each company’s area of expertise, intends to take Sime Darby Plantation’s sustainability efforts to new heights.

Other stocks to watch would be IJM Corp, Mitrajaya Holdings, Kumpulan Europlus and Sunway Holdings following fresh corporate news.

IJM Corp Bhd’s unit New Pantai Expressway Sdn Bhd (NPE) has received the go-ahead from the Public Private Partnership Unit of the Prime Minister’s Department for the proposed New Pantai elevated highway extension to Ampang-Kuala Lumpur.

Mitrajaya’s unit has accepted the RM90.78 million contract for the extension project of the Ampang light rail transit (LRT) line in Kinrara.

Kumpulan Europlus said its 64.2% owned West Coast Expressway Sdn Bhd has received a letter from the Public Private Partnership Unit approving in-principle the proposed construction of West Coast Expressway (Taiping-Banting).

The project is to be privatised on a build-operate-transfer basis and the negotiation is expected to be completed within six months from the date of the letter.

Sunway Holdings has accepted a RM22.56 million contract from Singapore-based Sim Lian Group Ltd’s subsidiary to undertake the substructure of three blocks along Jalan Tun Razak here.

Its unit Sunway Geotechnics (M) Sdn Bhd accepted the letter of award for the contract from Sim Lian’s subsidiary Perumahan SLG Central Sdn Bhd for the piling of three blocks of commercial building.

SAM Engineering & Equipment (M) Bhd (formerly LKT INDUSTRIAL BHD) is acquiring the assets and manufacturing business of engine casing, a division of Singapore Aerospace Manufacturing Pte Ltd for RM135 million in cash and loan stocks. The acquisition was part of its long-term strategy to grow the business and diversify the customer base beyond the current backend business.

The proposed acquisition would interest investors after its major shareholder Singapore Precision Engineering Ltd (SPE) intends to retain the listing status of SAM Engineering and it would undertake a proposed rectification plan about its shareholding.

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Maybank IB Views

COMPANY UPDATE
Top Glove Corporation RM4.75: Hold
Tide is turning Shariah-compliant

Can't get any worse. We see limited downside from current level: (i) share price has fallen 22% since our downgrade in Sep '10 and is close to our old TP of RM4.70; (ii) earnings may bottom in 2QFY11 (expected to be flat QoQ) and sequentially, driven by new capacities in 2HFY11; (iii) latex cost has stabilised and is set to fall by May after the "wintering season". Our DCF-derived TP is lowered to RM4.55 (from RM4.70) after tweaking our FY11-12 forecasts (-5-11%). But, downside to our TP from current level is only 4%, hence we raise Top Glove to a Hold.


KNM Group RM2.53: Buy
Momentum rising Shariah-compliant

Earnings could surprise on the upside. We concur with KNM's industry perspective of an improving operating outlook. Post briefing, we cut 2011 EPS estimate by 13% but are keeping 2012-13 forecasts unchanged. There is room for upgrades, for our 2012 earnings forecast is 21% below guidance. KNM remains a Buy and we expect the stock to gain traction once it proves its ability to deliver on earnings.


Sunway Holdings RM2.20: Buy
Sunny skies: Another job win Shariah-compliant

Looking bright. The latest RM74m contract brings to total RM369m job wins for the year to date. We expect job win momentum to pick up, based on by a huge RM16b tender book. Sunway is a Buy with a fair value of RM2.85 (11x 2011 PER) and a merger offer price of RM2.60.


Technicals
The FBM KLCI slipped 6.87 points yesterday to close at 1,515.74. Its resistance areas of 1,515 and 1,530 will cap market gains, whilst the obvious support areas are located at 1,498 and 1,512.

Trading Idea is a Sell call on MAYBULK


Other Local News
Sime Darby: Plantation unit explores potential investment in vegetable oil plant in Europe. Sime Darby Plantation has identified the Languedoc-Roussillon region in France as a potential location to establish its multi-feedstock vegetable oil processing plant as part of its strategy to expand into key areas around the world. The proposed plant, to be located in the coastal town of Port-la-Nouvelle, will help to meet the growing demand for edible oil in Southern Europe and North Africa. (Source: Bursa Malaysia)

AirAsia: Thai AirAsia eyes at least USD150m from IPO. Thai AirAsia plans to raise at least USD150m (RM454.5m) from its initial public offering (IPO), which is targeted by the end of this year. Thai AirAsia has named Credit Suisse Securities (Thailand) Ltd, CIMB Securities (Thailand) Ltd and Thanachart Securities Public Co Ltd as its joint lead underwriters. (Source: Business Times)

Nestle Malaysia: Budgets up to RM120m for capex. Nestle Malaysia Bhd has budgeted RM100m to RM120m to expand its capacity this year. The increase in capacity allows the group to expand its export market, namely Indonesia and Philippines, as well as the domestic market. (Source: The Edge Financial Daily)

QSR: Sets up Cambodian unit. QSR Brands Bhd has incorporated a company in Cambodia, Integrated Poultry Industry (Kampuchea) Pte Ltd, for the purpose of operating a broiler and processing production in Phnom Penh. (Source: Bursa Malaysia)

FDI: Invest KL targets 10 MNCs annually. Invest KL, expected to be launched by end-April, is targeting to attract at least 10 multinational companies (MNCs) annually to invest in Kuala Lumpur and the Klang Valley. Invest KL had attracted two MNCs, Schlumberger and Vale, so far. (Source: The Star)

Transportation: Feasibility studies on high-speed KL-Singapore rail. The Government is currently undertaking feasibility studies on a high-speed rail connecting Kuala Lumpur and Singapore. The feasibility studies would take about eight weeks to complete. (Source: The Star)

Telco: P1 part of SK Telecom's larger plans. While investors may have turned sceptical towards loss-making WiMAX player Packet One Networks Sdn Bhd (P1), its new strategic partner SK Telecom (SKT) believes there is much value in P1's wireless business as a launchpad for SKT's aspiration to expand regionally in Southeast Asia. SKT said that either P1 or Green Packet could become part of SKT's expansion plans in Southeast Asia later. (Source: The Edge Financial Daily)

Economics: External reserves increased slightly in the second half of February 11 to RM338.6b (USD109.8b) as at 28 February 11 from RM338.0b (USD109.6b) on 15 February 11. The latest reserve amount is equivalent to 8.1 months of retained imports and 4.3 times short-term external debt. (Source: Bank Negara)

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Maybank IB Views

SECTOR UPDATE
Banking: Overweight
2010 in perspective, divining 2011

Overweight. The sector's value proposition lies in (i) stable economic growth which lends support to our aggregate net profit growth forecast of 11.6% in 2011 and 11.8% in 2012, (ii) benign inflation and bottoming margins, (iii) steady loan growth momentum, (iv) potential ETP upside surprises, (v) cross-synergies and burgeoning contribution from regional operations to group earnings, (vi) healthy capital ratios and (vii) decent valuations and dividend yields. RHB Capital and CIMB continue to be our top picks.


ECONOMICS
External Trade, January 2011
Slow start to 2011...

Exports got off to a slow start this year as it grew by +3.0% YoY in Jan '11 (Dec '10: +4.6 YoY). Sustaining the growth were commodity shipments amid declines in E&E. In contrast, imports growth accelerated to +13.5% YoY (Dec'10: +11.5 YoY) mainly due to intermediate goods, reflecting inventory management ahead of the Chinese New Year holidays. No change in our external trade growth for 2011(exports: +8.7%; imports: +10.4%; trade balance: +RM111.1b) amid steady global economic growth momentum so far in 2011 and the benefits of firm commodity prices to Malaysia.


Malaysia: Balance of Payment (BoP)
Capital flows the highlights in 2010 amid steady trade flows

Trends in capital accounts remained the highlights as current account surplus was sustained via surpluses in goods and services trades. Key points are: 1) Inward FDI bounced last year after the plunge in 2009; 2) Fourth consecutive year net FDI outflows as direct investment abroad (DIA) by Malaysians also rebounded; 3) Net inflows of portfolio funds in 2010 after net outflows in 2008-2009; 4) Record errors and omissions: which raised the issue of "disintermediation" of capital/money flows outside the formal financial/banking system.


Oil Trade
Sweet spot for Malaysia

We compare some key oil trade statistics as well as the trade balance impact analysis from crude oil price increases between major, large emerging and regional economies i.e. US, EU, China, India, South Korea, Taiwan, Singapore, Malaysia and Indonesia. Notwithstanding the risk to growth and inflation from crude oil price increase, being a net oil exporter puts Malaysia at a significant advantage in terms of positive trade balance effect from - and low vulnerabillity to - crude oil price increase.


COMPANY UPDATE
Sunway Holdings RM2.18: Buy
Wins Legoland works Shariah-compliant

Maintain Buy. RM258m job win in Johor has lifted outstanding order book to RM2.7b (+11%). We maintain our earnings forecasts which have imputed RM1.2b job wins for 2011 (2010: RM0.9m). Our fair value is RM2.85 based on 11x 2011 PER, while its merger with Sunway City, at RM2.60 offer price, offers a 19% upside. At current levels, the stock trades at a deep discount to its peers, at 8.4x 2011 PER.


The FBM KLCI rose 33.34-points and closed at 1,522.61 last week. The obvious support areas for the FBM KLCI are located in the 1,474 to 1,520-zone. The very firm resistance zone of 1,522 and 1,576 will see heavy liquidation activities.

Trading idea for today is a Buy call on PETDAG.


Other Local News
AirAsia: Indonesia IPO to raise USD200m, Sarawak offers land to AirAsia for LCCT. AirAsia Indonesia, a unit of AirAsia Bhd, aims to raise USD150m to USD200m via an initial public offering (IPO) in 4Q11. Separately, the Sarawak government has offered a piece of land next to the Kuching International Airport to AirAsia Bhd to build a dedicated low-cost carrier terminal (LCCT). (Source: The Star)

Maxis: In final stages to wrap deal with Barak Telecom. Maxis Bhd is close to securing a three-year deal to provide telecommunication services to Kuwait's Baraka Telecom Sdn Bhd in Malaysia. The agreement would mark Baraka's return to the mobile virtual network operator (MVNO) business in Malaysia. (Source: The Malaysian Reserve)

DRB-HICOM: To win RM7.5b project. DRB-Hicom Bhd is poised to receive a letter of award to supply 257 units of armoured personnel carriers (APCs) worth up to RM7.5b from the government. A group of banks led by Maybank, RHB Bank and AmBank are helping to arrange the syndicated loan and other financing, which could be worth as much as RM3.5b. (Source: Business Times)

Fajarbaru: Unit wins LRT jobs. Fajarbaru Builder Group Bhd's wholly owned subsidiary Fajarbaru Builder Sdn Bhd (FBSB) has received a letter of acceptance worth RM62.6m from Bina Puri Holdings Bhd-TIM Sekata joint venture for part of the light rail transit extension. Separately, FBSB has also received a contract worth RM87.3m from Trans Resources Corp Sdn Bhd to construct, complete, testing and commissioning of Station 1, 2 and 3 for Kelana Jaya line extension. (Source: Bursa Malaysia)

TRC Synergy: Expects new contracts. TRC Synergy Bhd (TRC) is expected to increase its order book this year with more contract wins, mainly from road projects in East Malaysia and also potential involvement in MRT (mass rapid transit) project. (Source: Malaysian Reserve)

Banking: Further tightening by Bank Negara in mortgage lending sector. Bank Negara would be taking pre-emptive measures in the mortgage lending sector to reduce risks. Banks will have to hold more capital for mortgage loans. Mortgages with loan-to-value (LTV) ratio of more than 90% will have to carry weightage of 100%, compared with 75% previously. The risk weightage for LTVs that are less than 80% remains 35% and for those between 80% and 90% remains at 50%. (Source: The Edge Financial Weekly)

Manufacturing: Investments hit RM4.6b. The manufacturing sector saw approved investments totalling RM4.6b in 67 projects in January. The largest domestic investment came from the oil and gas sector, led by Malaysia Marine and Heavy Engineering Bhd with a total investment of RM2.3b. Foreign investments approved totalled RM600m with Singapore, France, Japan, United Kingdom and India accounting for the major source of investments. (Source: The Star)

Economic: Malaysia's growth target remains despite Mideast turmoil. The Government is firm in achieving its 6% annual growth target this year despite the civil unrest in some Middle Eastern countries. The target was attainable by ensuring investments committed to Malaysia were implemented efficiently. (Source: The Star)

Read more...

Stocks to watch: Sunway, Fajarbaru, oil and gas, Allianz

KUALA LUMPUR: Stocks on Bursa Malaysia are expected to trade in a tight range with some downside pressure on Monday, March 7 as investors worry about the impact of record oil prices on the economy while consumers cope with the rising costs of food.

The revolt in Libya continues as Muammar Gaddafi's forces captured part of a town in western Libya on Friday, but rebels said they had taken the coastal oil town of Ras Lanuf, extending the territory they control in the east of the country.

The fighting appeared to confirm the division of the oil-producing desert state into a western area round the capital Tripoli held by forces loyal to Gaddafi and an eastern region held by those rebelling against his four-decade rule.

CIMB Economics Research had recently estimated the federal government’s fuel-related subsidies could reach RM14 billion based on the current oil price of US$90 to US$100 per barrel.

“If the oil price rises to US$130 to US$140 per barrel, the amount of subsidies could balloon to at least RM18 billion to RM20 billion,” it said in a recent report.

Under the Budget 2011, the federal government earmarked 6.3% of the total operating expenditure (opex) or RM10.3bn as subsidies for LPG, diesel and petroleum, based on an average oil price of US$85 per barrel. In 2008, subsidies for fuel and petroleum-related products amounted to RM17.6 billion or 11.4% of opex.

Meanwhile, Wall Street erased most of its weekly gains on Friday as fears of more geopolitical turmoil and higher oil prices threaten to stifle rallies in coming weeks.

The worries overshadowed strong labour market news. U.S. unemployment fell below 9% for the first time in nearly two years, but investors quickly turned to focus on intensified fighting in Libya and simmering unrest throughout the region. Brent crude prices rose above SUS$116 a barrel and the CBOE Volatility Index VIX, Wall Street's so-called fear gauge, rose 2.7% to 19.11.

Stocks to watch on Monday include SUNWAY HOLDINGS BHD, Fajarbaru Builder Group Bhd, oil and gas-related companies, UEM Group Bhd and ALLIANZ MALAYSIA BHD.

Sunway’s unit Sunway CONSTRUCTION Sdn Bhd Holdings Bhd has secured a RM257.96 million contract for the proposed construction of part of the Legoland Malaysia Theme Park in Johor. Sunway Construction had accepted the letter of award from IDR Assets Sdn Bhd to build package four of the theme park.

Fajarbaru’s unit has received the letter of acceptance from the BINA PURI HOLDINGS BHD []-TIM Sekata joint venture for part of the light rail transit (LRT) extension project valued at RM62.66 million.

Its unit Fajarbaru Builder Sdn Bhd was appointed by Syarikat Prasarana Negara Bhd as the nominated sub-contractor to the joint venture.

Oil and gas related companies will continue to trading interest, underpinned by the high oil prices and Petroliam Nasional Bhd’s RM250 billion plan in the next five years in exploration and asset replacement to maintain the exploration levels.

Other companies in the news are BANDAR RAYA DEVELOPMENTS BHD, whose unit BR Property Holdings Sdn Bhd has secured a RM450 million term loan to repay inter-company loans, payment of dividend and working capital purposes.

MUTIARA GOODYEAR DEVELOPMENT Bhd has launched its new phase of its lifestyle homes in Nadayu 92, Kajang with a gross development value (GDV) of over RM40 million.

UEM Group Bhd is looking into investing more in India’s infrastructure development projects particularly expressways, which presents tremendous growth potential. The projects would be undertaken by PLUS EXPRESSWAYS BHD and UEM BUILDERS BHD.

OSK Research has initiated coverage of Allianz Malaysia with a BUY, at a target price of RM5.68, derived from a sum of parts valuation.

Riding on potentially strong growth in the life insurance industry and a re-rating of motor insurance, Allianz as the biggest general insurance player is poised to benefit from the encouraging industry outlook.

“The company is also seeking to establish a foothold in the fast growing takaful industry to diversify its business,” the research house said.

OSK Research said apart from being the No. 1 one player in Malaysia’s general insurance industry with gross written premiums (GWP) totaling RM1.3bn in FY10, Allianz’s life insurance business is no less a consistent performer, chalking up RM1bn in GWP on the back of a robust double digit growth of 18.5% in FY10.

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Maybank IB Views

SECTOR UPDATE
Oil & Gas: Overweight
ETP Part 3: Oil majors spending to rise; Pengerang project to kick-off

Underscores our bullish stance. 3 entry point projects (EPP) relating to oil and gas (O&G) under the Economic Transformation Programme (ETP) unveiled by PM Najib yesterday solidify our view of a robust year ahead. The specific projects mentioned denote growth and opportunities for local service providers. MHB, Dialog, KNM and Kencana are the key beneficiaries. News flow will remain strong over the near term. We foresee a re-rating in valuations on some stocks when the marginal field projects are announced next. We are Buyers of Dialog, KNM, Kencana MHB, PGas and SapCrest.


COMPANY UPDATE
Sunway Holdings RM2.37: Buy
5th property development in Singapore Shariah-compliant

Maintain Buy. Sunway's 5th property project in Singapore strengthens its presence in the island state. It has won a tender for another piece of land at Jurong together with its "old" partner Hoi Hup for SGD131.6m. We estimate SGD328m GDV and RM28m net profit contribution. There is no change to our earnings forecasts as we await details. Sunway is a Buy with a RM2.85 price target (11x 2011 PER). Its merger with SunCity at RM2.60 per Sunway share is long-term positive.


JT International RM6.08: Buy
Bet on this cigarette

Time to inhale. JTI's share price rose 28% over 2010 to close at RM6.05 at the year-end. Whilst this was commendable, we believe that 2011 could outperform 2010 for two simple reasons. First, local crop failures will result in cost savings for JTI. Second, JTI's build-up of cash reserves suggests that valuations ex-cash will lag market valuations once more. Our updated DCF-valuation rises to RM8.10 (+34%) although we have left earnings forecasts unchanged.


Technicals
The FBM KLCI fell 0.58 points to 1,562.94 yesterday. Its resistance area of 1,562 and 1,576 will cap market gains, whilst its weaker support areas are located at 1,537 and 1,558.
Trading ideas for today are two BUY calls on THPLANT and SPCRES.


Other Local News
Affin: Unaware of CIMB bid. Affin Holdings Bhd deputy chairman Tan Sri Lodin Wok Kamaruddin said yesterday he was not aware of rumours that Affin Bank is being eyed for a takeover by CIMB Bank. Sources close to CIMB Group said the rumour completely goes against the group's ambition to become a major regional financial player and they also think that it is not true. (Source: Business Times)

Dialog: To start RM5b terminal project in April. Dialog Group Bhd plans to begin development work on its proposed RM5b Pengerang deep water terminal project in April. This is one of the 19 entry point projects (EPPs) under the Economic Transformation Programme (ETP) announced yesterday. (Source: Malaysian Reserve)

Economic: ETP goes into overdrive. The Economic Transformation Programme (ETP) switched into overdrive in the new year, with an additional 19 entry-point projects (EPP) and developments that are expected to contribute almost RM67b in investments, RM36b in gross national income (GNI) and create 35,000 new jobs. (The Edge Financial Daily)

AP Land:Low Yat to acquire for RM305m. Low Chuan Holdings, the investment vehicle of Low Yat group has offered to purchase Asia Pacific Land (AP Land), to which Low Yat group holds 33.98% stake, for RM305.2m or 45 sen per share. The purchase consideration will be settled by way of RM201.5m cash while RM103.7m will be treated as amount owed to AP Land. (Source: The Edge Financial Daily)

O&G: Gas Malaysia eyes Bursa listing this year. Gas Malaysia Sdn Bhd, a company that distributes natural gas to households and industries, is said to be eyeing a listing on Bursa Malaysia this year but that idea has not yet received the full backing of all of its shareholders. The company's controlling shareholder is MMC Bhd that owns 41.8% and other shareholders of the company are Petronas Gas Bhd, Shapadu Group and Tokyo Gas-Mitsui & Co. (Source: The Star)

Top Glove: To invest RM160m in Cambodian rubber plantation. Top Glove Corp Bhd is investing RM160m in Cambodia to plant rubber trees to reduce its dependency on latex, which is bought at market prices. The company is targeting to obtain 20% of its latex requirement from the plantation over time. (Source: The Star)

Read more...

Maybank IB Views

SECTOR UPDATE
Aviation: Overweight
Profits Galore, enter While You Can

Overweight. We are optimistic on the aviation sector because: (1) it is entering the fourth year of the industry cycle - a period renowned for strong profit growth and margin expansion; (2) healthy supply and demand relationship with the industry set to grow by 4-6%; (3) airlines have become more efficient, and there are fewer cases of irrational competition; (4) jet fuel prices are relatively stable; and (5) strong GDP growth in the region underpins strong demand for air travel.


INITIATING COVERAGE
Malaysia Marine and Heavy Engineering Holdings RM5.90: Buy
At the cusp of a super-cycle boom Shariah-compliant

Initiating coverage with a Buy and RM6.50 target price. Malaysia Marine and Heavy Engineering Holdings Berhad (MHB) is Malaysia's most prominent offshore fabrication operator directly benefiting from PETRONAS' development programmes. MHB offers strong earnings visibility, sustainable order book and tender pipeline. Its market leadership and PETRONAS' pedigree parentage put it on a higher perch in securing the major jobs. We expect MHB to be a strong beneficiary of sizeable E&C and marine conversion jobs soon.


COMPANY UPDATE
Sunway Holdings RM2.24: Buy
Ending 2010 with two new jobs Shariah-compliant

Maintain Buy. Two new construction contracts on 30 Dec lifted 2010 job wins to RM889m and outstanding order book to RM2.5b. Sunway remains a Buy with a price target of RM2.85 (11x 2011 PER) as it stays on course for record profits in 2010, and rising news flow in 2011. Among construction stock, Sunway is the cheapest. Its merger with SunCity at RM2.60 per Sunway share is positive in raising market values, trading liquidity and balance sheet to take on larger projects.


ECONOMICS
External Trade November, 2010
In the realm of single-digit growth...

Nov '10 export growth picked up for the first time in seven months to +5.3% YoY (Oct '10: +1.3 YoY; Maybank IB: +5.9% YoY; Consensus: +5.9% YoY) but imports slowed to +6.1% YoY (Oct '10: +12.5% YoY; Maybank IB: +11.7% YoY; Consensus: +11.0% YoY). From the previous month, both exports and imports fell by 4.1% and 9.2%. YTD, exports and imports are up 16.8% YoY and 22.8% YoY respectively versus our 2010 estimates of +15.0% and +19.5%. For 2011, we expect exports and imports to expand by 8.3% and 8.9% respectively. For 2012, we assume exports and imports growth to increase at roughly the same pace of 8.1% and 8.8% respectively. These forecasts are essentially based on the underlying assumptions that growth in global real GDP, trade and semiconductor sales in 2011-2012 will be slower than 2010, amid gradual appreciation of the Ringgit and continued firm prices of major export commodities.


SPECIAL TECHNICAL PERSPECTIVE
"Bull" on liquidity steroids
A slower paced "bull-run". Caution is wise

USA's persistent quantitative easing (QE) program moved into its 2nd phase in November 2010. As the American QE2 program commenced, the world is awash in liquidity. Given the large currency reserves in the Asia-Pacific countries, the monies from QE1 had flowed into this region and fuelled a strong run here for the past 2 years at least.


Technicals
The FBM KLCI surged 14.51 points to 1,533.42 yesterday. Its resistance area of 1,535 may cap market gains, whilst its firm support areas are located at 1,518 and 1,533. Due to the firm US markets last night, we may see the FBM KLCI in a solid trading mode today too.

Trading idea for today is a SHORT-TERM BUY call on HSPLANT


Other Local News
TM, Axiata: To probe alleged payments. Telekom Malaysia's Board (TM) has approved the formation of a Board Sub-Committee of the Board Audit Committee (BAC) to conduct an independent and comprehensive internal investigation into the alleged payments received by TM employees from Alcatel-Lucent SA. As the period under investigation concerns the previous integrated TM Group, TM is working closely with Axiata Group Berhad (Axiata) to extend all necessary cooperation with the relevant parties and authorities. TM and Axiata have jointly appointed KPMG Corporate Services Sdn Bhd and Shearn Delamore & Co as forensic accountant and legal adviser respectively to assist in the internal investigation. (Source: Bursa Malaysia)

MK Land: Plans to sell leasehold land for RM130m. MK Land Holdings Bhd's wholly-owned subsidiary, Saujana Triangle Sdn Bhd (STSB), is selling two plots of leasehold land in Sungai Buloh, Selangor to Foster Estate Sdn Bhd for RM130m cash. The disposal would unlock the value of the land which has not been earmarked for any immediate development. (Source: Bursa Malaysia)

Petra Energy: To bag RM100m Murphy Oil job. Petra Energy Bhd is close to winning a RM100m contract from Murphy Oil for hook up and commissioning works. The job from Murphy is said to be at the same rates offered by Petronas Carigali. In early December 2010, Petra Energy was awarded a RM400m job from Petronas Carigali Sdn Bhd. (Source: The Edge Financial Daily)

Parkson: Receives license to operate in Cambodia. Parkson Holding Bhd has received regulatory approval to operate department stores in Cambodia. (Source: Bursa Malaysia)

Media: Asia Media IPO oversubscribed by 21.5x. Asia Media Group Bhd, a digital out-of-home Transit TV company, saw the public portion of its initial public offering (IPO) oversubscribed by 21.46 times. At the close of the public offer on Dec 29, 2010, a total of 5,119 applications for 179.6m shares were received for the 8.0m made available to the Malaysian public. Asia Media's IPO involves an issuance of 98m new shares at 23 sen each, and the company is en-route to being listed on the Ace Market of Bursa Malaysia on Jan 11. (Source: The Star)

SME: Additional RM3b allocation for SMEs to be disbursed immediately. Disbursement of the additional RM3b Working Capital Guarantee Scheme (WCGS) allocation under 10th Malaysia Plan (10MP) will commence immediately. The scheme was first introduced in the second stimulus package in March 2009. It was fully utilised by year-end, despite being increased from RM5b to RM7b. In view of the encouraging response to the scheme, the Government provided an additional RM3b under the 10MP, bringing the total disbursement to RM10b. (Source: The Star)

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Maybank IB View

ACQUISITIONS / DISPOSAL
IJM Land / MRCB RM2.97 / RM2.12: Not Rated
A merger of equals

A win-win proposal. The IJML-MRCB merger will result in the largest property group with a potential market value of RM8.9b, a combined landbank of c.7,039 acres, and a combined GDV of RM36b, surpassing UEML-Sunrise's and SP Setia's. The merged entity will have a sizeable 39.8% public spread, hence raising liquidity. An enlarged balance sheet also improves its chances of taking part in the development of government land. IJML's shareholders gain better upside based on the share exchange prices of RM3.65 for IJML and RM2.30 for MRCB.


RESULTS REVIEW
IJM Corporation RM5.69: Buy
Property merger unlocks value Shariah-compliant

Upgrading target price. RM178m 1HFY11 core net profit (+29% YoY) before RM31m forex translation gain was in line, at 47% of our full-year forecast. No change to our core earnings forecast but we incorporate the RM31m forex gain, raising FY11 bottomline forecast by 6%. We lift our RNAV-based target price to RM6.40 (+16%) after incorporating new IJM Land's (IJML) implied value for its merger with MRCB and higher valuations for the construction business. IJM Corp stays a Buy.


Notion VTEC RM1.63: Buy
Fortune changes, risk abates Shariah-compliant

Upgrade to Buy. 4Q results were better than expected, with 4Q net profit rising 2.8-fold QoQ and EBITDA margin expanding by 10.2-ppt QoQ. We upgrade NVB to a Buy (non-consensus) with an unchanged RM1.95 TP. On balance we believe the negatives have been priced in after a 37% fall in share price following the disastrous 3Q results. Valuations are inexpensive, with a 4-6x FY11-12 PER and improving business outlook.


COMPANY UPDATE
Mah Sing RM1.79: Buy
Further expand its foothold in Penang Shariah-compliant

Buys land on Penang island. We are positive on the recent land acquisition in Penang island due to its attractive pricing and strategic location. The land is expected to enhance our RNAV by 4.8%. We continue to like Mah Sing given its undemanding valuation, 30% 3-year EPS CAGR and fast turnaround strategy. We lower our forecasts by 0.6-2.3%, but raise RNAV-based TP to RM2.60. Reiterate Buy.


IPO: Careplus Group RM0.23
Small glove-maker turns ambitious Shariah-compliant

Making debut on ACE Market. Careplus, a small latex glove-maker, is scheduled for listing on 6 Dec '10. The company expects capacity-driven earnings growth from FY12 onwards, but we see limited upside to its retail IPO price owing to: (i) fair valuation at its IPO price relative to small sized peers; and (ii) the presence of industry headwinds (i.e. persistently high latex prices, appreciating Ringgit).


Technicals
The FBM KLCI fell 15.67 points to 1,487.53 yesterday. Due to the significantly weaker tone in the USA last night, we may see the FBM KLCI in a bearish mode today too. Its resistance areas at 1,487 and 1,510 will cap market gains, whilst its weaker support areas are located at 1,465 and 1,480.

Our trading idea for today is a TAKE PROFIT call on LIONIND.


Other Local News
Sunway, SunCity: Shares suspended on merger talks. Shares of Sunway Holdings Bhd and Sunway City Bhd (SunCity) have been suspended from trading for two days since yesterday amid speculation that they may be merged. Both companies are expected to make an announcement today. (Source: Business Times)

Tan Chong: Teana to boost Nissan’s local market share. Edaran Tan Chong Motor Sdn Bhd (ETCM) expects the launch of its new Nissan Teana luxury sedan to boost the company's local market share. The company had already received over 1,000 bookings for the Teana. For the Malaysian market, the Teana will be sold with three engine options 136bhp, 2-litre and 182bhp V6, 2.5-litre which are assembled in Tan Chong Motor's Serendah factory, and the 252bhp V6, 3.5-litre which is fully imported from Japan. (Source: The Star)

Parkson Holdings: Acquires Shantou Parkson for RM37m. Parkson Holdings Bhd, via Hong Kong-listed unit Parkson Retail Group, has acquired 100% interest in Shantou Parkson Commercial Co Ltd for RMB80m (RM37.3m). Shantou Parkson was the owner and operator of the Parkson branded department store at South City Shopping Mall, Shantou City, Guangdong Province, China. (Source: The Star)

YTL, YTL Land: YTL Corp plans revamp of property division. Conglomerate YTL Corp Bhd plans to house all its property development assets and projects under YTL Land & Development Bhd (YTL Land). It would dispose its property assets and projects in Malaysia and Singapore to YTL Land net of outstanding intercompany balances for RM476.1m. (Source: The Star)

Gadang: Bids for more than RM2b jobs. Gadang Holdings Bhd is bidding for several engineering and construction projects totaling more than RM2b. Among the tenders are the proposed development of the Women and Children Hospital in Kuala Lumpur announced under the budget 2011, the 300MW Kimanis power plant in Sabah, 1,000MW Manjung power plant in Perak and the Shah Alam Hospital. (Source: The Edge Financial Daily)

Property: M'sian city apartment prices second lowest in region. The average price of city apartments in Malaysia is the second lowest compared with other countries in the region. Global Property Guide (GPG) said according to its research, only Indonesia offered city apartments that were priced lower than Malaysia. In comparison, the average price of city apartments in Singapore is almost eight times more than in Malaysia, beating even Australian prices, which are almost five times higher than Malaysian city apartments. (Source: The Star)

Market: Bursa plans to attract more SRI funds with ESG index. Bursa Malaysia Bhd plans to attract more Socially Responsible Investment (SRI) funds into Malaysia by constructing the Environment, Social and Governance (ESG) Index in 2012. Bursa Malaysia CEO Datuk Yusli Mohd Yusoff said the exchange is working with various relevant authorities of similar global-based listed indices. (Source: The Malaysian Reserve)

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RHBInvest Research Highlight 22 Nov 2010

Top Story: Axiata

Outlook for regional cellcos is largely stable.
Earnings forecasts maintained.
We reiterate our Outperform call with SOP fair value of RM5.52

Sector Call

Telecom:
Yes unlikely to spark an all-out price war
No change to our Neutral stance on the sector.


Corporate Highlights

WCT:
Potential upside to integrated complex at KLIA2
Short-listed for the Durkhan Highway 2 project
Fair value is RM2.55. Maintain Underperform.


KFC:
Offer to buy all of QSR’s business
Fair value on the stock at KFCH at RM5.85.
We are downgrading our call on the stock to Underperform


Sunway:

• Secures RM15m piling works in Port Dickson

• Fair value is raised from RM2.35 to RM2.74
• Maintain Outperform.

Technical Highlights

Daily Trading Strategy:

• Near-term choppy trend expected
• It must still surpass the critical 10-day SMA near 1,511, and to remove the 1,524.69 level before it could return to bullishness, in our view.
• Given that the regional markets’ sentiment remains fragile, local market sentiment is likely to track the regional performance in the near term.

Daily Technical Watch: Tebrau Teguh

• Bargain hunters to return nearer to RM0.75
• Immediate Support RM0.765
• Immediate Resistance RM0.835

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Views & News, Maybank IB (2010-10-28)

COMPANY UPDATE

Malaysia Airports Holdings RM5.86: Buy

Field Trip to Sabiha Gökçen

Leveraging on the East-West powerhouse. We visited MAHB's 20% investment in Turkey, Sabiha Gökçen Airport (SGA), and returned optimistic on its potential to become the premier low-cost carrier (LCC) hub of Istanbul and possibly Central Asia, leveraging on its unique location, tourist appeal and a population that has just begun to embrace air travel in a big way. We maintain our earnings forecasts as there is no P&L impact before 2014, but raise our TP to RM7.12. Maintain Buy.

RESULTS REVIEW

Amanah Raya REIT RM0.92: Buy

Boosted by new assets

An attractive yield play. AAREIT's 9M10 RM31.3m realised net profit (+38% YoY) was as we expected, but above consensus. We continue to like AAREIT for its attractive 8.9% 2011 yield (vs. 8.1% industry), earnings visibility and sustainability supported by long lease agreements with step-up features. We maintain our forecasts (+6% 3-year DPU CAGR) and RM1.19/sh DCF-derived TP.

Technicals

The FBM KLCI closed slightly higher by 2.17 points yesterday to end at 1,499.11 led by the finance and consumer sectors. Its resistance areas at 1,504 and 1,512 may cap market gains, whilst the support areas for the FBM KLCI are located at 1,483 and 1,499.
Trading idea for today is a SHORT TERM BUY call on CIHLDG.

Other Local News

Dialog: Exciting times ahead for Dialog. Dialog Group is gearing up for the independent deepwater petroleum terminal project at Pengerang, Johor which will turn into a regional oil storage and trading hub by 2017. The latest boost for the project was the Johor government’s decision to approve the site – 500 acres of reclaimed land – for a 60-year lease. The approval will enable Dialog, and its partners, Johor government and Vopak, world’s largest independent tank terminal operator, to own and develop an independent deepwater petroleum terminal with jetty and other marine facilities with water depth of up to 26m, capable of handling very large crude carriers. The combined investment in the terminal would be RM5b over a seven year period. (Source: The Edge Financial Daily)

SunCity: Mulls over new projects for REIT, JV for RM4.3b project in China. Sunway City Bhd (SunCity) is mulling over office and retail projects to be nurtured into yield-accretive assets which can later be injected into the Sunway real estate investment trust (REIT). The first project is The Pinnacle in Bandar Sunway, a 25-storey corporate office block with net lettable area of 560,000 sq ft that was scheduled for completion by 2013. Next would be the development of a parcel of land beside Sunway Pyramid Shopping Mall. Currently referred to as SP3, this would be a retail and service apartment development with vehicular and pedestrian links to the mall. Separately, Sunway City (S’pore) Pte Ltd (SCS), a wholly owned subsidiary of Sunway City Bhd (SunCity), has entered into a joint venture to develop a project with an estimated gross development value of RM4.3b in Sino-Singapore Tianjin Eco-City, China. (Source: The Star)

MK Land: Clinches RM4b project in Bangalore. MK Land Holdings Bhd sealed an agreement with Embassy Group of India to develop a RM4b "affordable homes" project in North Bangalore, India. The development will be carried out by MK Embassy Land Sdn Bhd, which is a joint venture between MK Land (47.5%), Star Dreams Pte Ltd (47.5%) – a subsidiary of Embassy Group, and MKN Embassy Development Sdn Bhd (5%) – a subsidiary of the Emkay Group. The development will be on land measuring approximately 185 acres in North Bangalore and will comprise 14,400 residential units with some two million sq ft of commercial space. (Source: The Edge Financial Daily)

Mutiara Goodyear: Plans RM1.6b projects. Property developer Mutiara Goodyear Development Bhd targets to launch several high-end property projects with a total gross development value (GDV) of about RM1.6b in the next 12 months. The property projects that would be launched were the Nadayu Melawati high-end property development comprising luxury bungalows, semi-detached homes, super links and commercial units (GDV: RM850m) that is slated for completion by 2012. Other projects to be launched next year are the Nadayu 92 Kajang (GDV: RM250m), Nadayu 28 Sunway (GDV: RM300m) and Nadayu Penang (GDV: RM450m). (Source: The Star)

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