Newz Bits 190112

Highlights of the day

§         WCT (Initiating Coverage): Time to play catch up (BUY, TP: RM3.02) [download report]

We initiate coverage on WCT with a BUY call. Despite the stock selldown last year, we think the worst is over for WCT and investors can look forward to sunnier days in FY12 with the potential doubling of its outstanding orderbook to RM4.4bn should it secure jobs from its current tender book of RM5.0bn. Property sales at its mature township Bandar Bukit Tinggi, Klang and upcoming mixed commercial developments in Medini Iskandar is also likely to gain traction. Future recurring income from KLIA2 Integrated Complex and Paradigm Mall is forecast to spearhead 23% average 2-year earnings growth over FY12-13. Our target price of RM3.02 is based on sum-of-parts (SOP), implying a forward P/E of 11.7x on CY12 earnings. (refer to report for details)

§         Economy (Consumer Price Index): December 2011: Inflation loosens up as the world slows down [download report]

The December inflation rate grew slower at 3.0% y-o-y compared 3.3% y-o-y in November. This confirms the suspicion that inflation has been moderating for the past several months. The slowdown is likely due to weaker demand growth pressure exerted on prices as the world economy braces for slower economic growth. We expect the inflation to slow further to 2.8% y-o-y in January 2012 as the weakening global economy will loosen up demand-pull inflation worldwide. (refer to report for details)

Reports

§         Newz Bits [download report]

Other Malaysian news

§         IOI Corp: Targets project at Singapore

§         DRB-Hicom: To pay for Proton stake with loans, internal funds

§         DRB-Hicom: Keeps options open on Lotus, no plans to re-list Proton

§         Malaysia Building Society: Targets RM8bn retail financing in 2012

§         HELP International Corp: To invest RM20m for international school

§         Xidelang Holdings: Plans share placement, bonus issue

§         CI Holdings: Mulls new investment opportunities

§         Brahim's Holdings: Offered 60% stake in Admuda

§         IPO: China Stationery inks underwriting agreement

Global news

§         US: Wholesale prices unexpectedly decreased in December

§         US: Factory production climbs by most in a year

§         US: Confidence among homebuilders climbs to highest since 2007

§         US: Obama rejects Keystone XL permit as TransCanada plans to file

§         China: Foreign direct investment drops for a second month

§         China: Treasury holdings fell in November as yields declined

§         China: Government said to let biggest banks boost lending by 5% this quarter

§         Indonesia: Second rating upgrade in a month

§         Global: IMF seeks to raise lending capacity by up to US$500bn

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