Newz Bits 210212

Highlights of the day

§         UEM Land Holdings (Initiating Coverage): Key proxy to Malaysian property exposure (HOLD, TP: RM2.25) [download report]

UEM Land Holdings (UEML) is the country’s largest property player in terms of market capitalization of RM10.0bn and total asset of RM7.8bn. Its acquisition of Sunrise completed in early 2011 has improved its earnings outlook. We initiate coverage on UEM Land as we view positively its progress and developments in Nusajaya which should reach its “tipping point” by end 2012. However, we are concerned with Nusajaya’s ability to attract sufficient human traffic to the area as well as the sudden increase in development projects in Iskandar Malaysia (IM). Hence, we recommend a HOLD on the counter with target price based on UEML’s RNAV of RM2.25.

§         Economics (Update): 1Q2012: Prepare for cooling [download report]

We expect the Malaysian economy to grow slower by approximately 4.0% from 5.1% in 2011. Slackening global demand growth will reduce inflationary pressure and so, we expect the inflation rate to grow slower as well from 3.2% in 2011 to 2.7%. This provides the Monetary Policy Committee some room to cut the Overnight Policy Rate by at least 25bps to minimize unfavorable output fluctuation. Meanwhile, the ringgit may strengthen to around 2.95 against the US dollar.

Other reports

§         Newz Bits [download report]

§         Economics (Leading Economic Indicator): December 2011: Solidifying pessimism [download report]

Other Malaysian news

§         Mitrajaya: Gets three projects worth RM182m

§         MAHB: In talks with Russian airline

§         KSL: Expected to launch RM2.5bn Bandar Bestari this year

§         Iris Corp: Unit Iris Land in PNG housing project

§         Compugates Holdings: Plants seeds of growth with timber foray

§         Automotive: Vehicle sales down 25%

§         Building Materials: Tax spotlight on green building materials

§         Construction: CRC in high-speed rail game?

§         Plantation: CPO prices at 8-month high, may rise further

§         Technology: Silterra aims to grow in step with industry

Global news

§         Europe: ECB settles no bond purchases for first time since August

§         Europe: French business sentiment halts slump on recovery signs

§         Europe: Bundesbank sees improved German prospects from 2Q

§         Japan: Trade deficit widens to record as exports slump

§         Thailand: Economy shrinks more than estimated after floods

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