Highlights of the day
§ Sapura Kencana Petroleum (Initiating Coverage): A merger of strengths (HOLD, TP: RM2.32) [download report]
Sapura Kencana Petroleum Bhd (SKB) will list as a merged entity by end-March 2012 (tentatively). We view the merger positively as it will create the first Malaysian full-fledged EPCIC player, to be on par with global champions such as Saipem, Technip and McDermott. As the share prices of Sapura and Kencana are already reflecting this, we recommend a HOLD on both stocks.
§ Sime Darby (1HFY12 Results): On track for a stronger year (Maintain HOLD, TP: RM9.82) [download report]
Sime Darby’s 1HFY12 adjusted net profits came in strong, making up 49% of house and 53% of consensus estimates. 6MFY12 earnings were driven by plantation and industrial segments which both increased by 38% y-o-y. The group recorded CPO ASP of RM2,872/mt during 1HFY12. Earnings surprise came from the E&U segment, where RM99.4m of revenue (to flow directly to bottomline) was recognized. A dividend of 10 sen was declared. We maintain our HOLD call for Sime with an unchanged TP of RM9.82.
Other reports
§ Economics (Money and Banking): January 2012: Repayment drags, spread improvement and holiday blip [download report]
Other Malaysian news
§ RHBCap-OSK: Merger likely to be all-share deal
§ MMC: Unit Malakoff signs RM6.5bn financing pacts
§ MAS: RM2.5bn loss shocker
§ Proton Holdings: 3Q results down
§ IJM Plantation: Sees record profit on better price, yield
§ Mah Sing Group: Buys Gombak land for RM41m
§ Scomi Group: Merges businesses to grow upstream drilling services
§ Sozo Global: To spend RM16m on halal food venture
§ Masteel: To retable proposal for Iskandar rail project
§ Hua Yang: To launch 3 property projects in Johor Baru
§ Silver Bird Group: Woes come to light
§ Aviation: Thai AirAsia parent files for IPO in Bangkok
Global news
§ US: Economy grew at 3% annual pace in 4Q
§ US: Fed says economy expanded at ‘modest to moderate’ pace
§ US: Bernanke affirms low-rate pledge without offering easing options
§ US: Bernanke says Volcker rule won’t be ready by July deadline
§ US: Business activity improves more than forecast
§ Europe: ECB said to purchase Portuguese notes as bank returns to market
§ Europe: Banks flock to ECB for record amount of three-year cash
§ Europe: Germany’s jobless rate remains at lowest in two decades
§ UK: BOE’s Weale says there may not be a case for more stimulus
§ India: GDP grows the least since ’09
§ South Korea: Output rises in Jan. after three months of declines
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