On The Platter
PADINI (FV RM1.80 'BUY) Company Update ' Rising to The Occasion We had a follow up visit toPadini, which is one of our Top Buys in 2012. We continue to like this stockgiven its resilient performance amid a more turbulent operating environment.Despite the volatility in cotton prices and intense competition in the retail space,we are confident that it will still be able to do well thanks to its highinventory level and wider retail outlet coverage relative to its peers.Maintain BUY with a FV of RM1.80 based on 14x FY12 EPS.
REGIONAL TELECOM(OVERWEIGHT) Sector News Flash 'Lower 3G Reserve Price?
IJM (FV RM6.55 ' TRADING BUY) Corporate News Flash ' Buys 20% of WCE Caretaker
Market Review
Cautiously optimistic. The FBM KLCI closed 0.73 pts lower to 1,564.02 on continued concerns overthe slowdown in China's economy. Key corporate news today include: IJM Corporationto buy a 20% stake in West Coast Highway, TNB remains confident that the Governmentwill resolve the gas subsidy issue soon, Ramunia has secured a RM23.6m oil andgas contract, and MMC Corporation has asked for more time to complete the proposedlisting of Gas Malaysia Bhd. On theglobal front, the Dow closed 217.97 pts higher on the back ofstronger-than-anticipated consumer data points and positive results reported bylarge US banks for their capital adequacy stress tests. We expect our local bourseto trade positively today amid an improvement in market sentiment globally.
MEDIA HIGHLIGHTS
Stocks record biggestgains of year; Dow up 218 pts
Bank stocks turbocharged a rally across the financialmarkets Tuesday, and all three major stock indexes posted their biggest gainsof the year. The Dow Jones industrial average rose 218 pts and closed at13,177.68, its highest level since the last day of 2007. The Nasdaq compositeclosed above 3,000 for the first time since Dec 2000, when dot-com stocks werecollapsing. There was already plenty of good news driving the market higherTuesday: Retail sales in Feb increased the most since Sept, and the FederalReserve said it expected the unemployment rate to keep falling. (Bloomberg)
MAS set for growth asIndia JV gets clearance for take-off
Malaysian Airlines System (MAS) expects further growthpotential through its involvement in the Indian aviation maintenance, repairand overhaul space through MAS GMR Aero Technic Ltd (MGAT) ' a joint venture between MAS and GMR HyderabadInternational Airport Ltd. MAS senior vice president Khairuddin Hamzah saidMGAT received the approval of the European Aviation Safety Agency (EASA) lastweek, enabling it to service all aircraft leased from European by Indianoperators. (Malaysian Reserve)
Notion VTec buysRM17.5m land in Klang, acquires subsidiary
Notion Vtec subsidiary Notion Ventures SB (NVSB) has enteredinto a sale and purchase with Dulon Industries SB for the purchase of a land inKlang together with an industrial factory for RM17.5m. The proposed acquisitionwould allow NVSB to expand itsmanufacturing operations. It is a cost effective measure contributing toenlarged economies of scale to expand and maintain the operations. (MalaysianReserve)
Nicorp to participatein Shell LPG business buy
Naim Indah Corp (Nicorp) has been invited to participate inthe purchase of Shell Malaysia liquefied petroleum gas (LPG) business andassets. Oman-based National Gas Company (NGC) recently won the bid to buy ShellMalaysia Trading SB's LPG business for an estimated RM275m. NGC in partnershipwith Aspire SB set up a 40-60 special purpose vehicle to undertake theproposal. (BT)
IJM buys 20% of WestCoast Expressway
IJM Corp is buying a 20% equity interest in West CoastExpressway SB (WCE) for RM6.75m. In an announcement to Bursa Malaysia, IJM saidits wholly-owned subsidiary Road Builder (M) Holdings SB has entered into ashare sale and purchase agreement with Prominent Xtreme SB for the 20% in WCE,consisting of 5.8m RM1 shares. In late January, WCE received an approval letterfrom the Public Private Partnership Unit of the Prime Minister's Department toundertake the proposed privatization of the construction of the West CoastExpressway. The approval was based on a build-operate-transfer basis.(Financial Daily)
ECONOMICHIGHLIGHTS
South Korea:Unemployment rate rose to 3.7% in february
South Korea's unemployment rate unexpectedly jumped to thehighest level in almost a year as college graduates entered the labor marketand government job openings encouraged more people to seek work. The joblessrate rose to 3.7% in February from 3.2% the previous month, Statistics Koreasaid in Gwacheon today. The median estimate in a Bloomberg News survey of 11economists was for the rate to stay at 3.2%. Policy makers are grappling with aslowing economy by supporting the job market, accelerating spending and keepinginterest rates unchanged for a ninth month. The Bank of Korea said last weekthe economy appears not to be slowing further and will likely return to itslong-term growth track, although downside risks persist because of Europe'sdebt crisis and higher oil prices. (Bloomberg)
Australia: Consumerconfidence slumps 5%, most in three months
Australian consumer confidence fell the most in three monthsafter the nation's four biggest lenders raised mortgage rates even as thecentral bank left the benchmark borrowing cost unchanged, a private survey showed.The sentiment index for March dropped 5% to 96.1, the lowest level sinceDecember, Westpac Banking Corp. and Melbourne Institute survey taken 5-9 Marchof 1,200 consumers showed today in Sydney. (Bloomberg)
EU: German investorconfidence surges to a 21-month high
German investor confidence jumped to a 21-month high inMarch after the European Central Bank flooded financial markets with cash andthe sovereign debt crisis showed signs of abating. The ZEW Center for EuropeanEconomic Research in Mannheim said today its index of investor and analystexpectations, which aims to predict economic developments six months inadvance, advanced to 22.3 from 5.4 in February. That's the fourth straightincrease and the highest reading since June 2010. Economists forecast again to 10, according to the median of36 estimates in a Bloomberg News survey. (Bloomberg)
US: Retail salesclimb by most in five months
Americans heartened by an improving labour market boostedspending at stores and malls by the most in five months, adding to signs thatthe world's largest economy is gaining strength. The 1.1% advance followed a 0.6%increase in January that was larger than previously estimated, according toCommerce Department data issued yesterday in Washington. Sales rose in 11 of 13categories, including auto dealers and clothing stores, showing gains in demandwere broad based. Stocks and bond yields rose as the report indicated that thebest six-month streak of employment growth since 2006 is bolstering spendingeven as gasoline costs rise. Job gains have not been large enough to satisfyFederal Reserve officials, who today reaffirmed a commitment to keep interestrates low. (Bloomberg)
US: Fed says labourmarket improves, leaves policy unchanged
Federal Reserve policy makers raised their assessment of theeconomy as the labour market gathers strength and refrained from new actions tolower borrowing costs. 'The unemployment rate has declined notably in recent monthsbut remains elevated,' the Federal Open Market Committee said in a statement atthe conclusion of a meeting yesterday in Washington. It also said, 'strains inglobal financial markets have eased, though they continue to pose significantdownside risks to the economic outlook'. (Bloomberg)
