Highlights of the day
Our market outlook for 2Q2012 proved to be generally
correct, but our market strategy did not fare so well with our sole Overweight
call on Construction and Building Materials disappointing. For 2H2012, our view is that the FBMKLCI will
trade around 1604 (± 1.6%), until Parliament is dissolved for GE13 (General
Elections) which could then trigger a correction to 1487. As our expected trading range of 1487-1630 is
a swing of 10%, we continue to be Neutral on the Malaysian market as a whole,
with more downside risk. We maintain our
Overweight on Construction and Building Materials. (refer to
report for details)
§
Economics
(Leading Economic Indicator): April
2012: Leading indicator grows slower still, slightly [download
report]
The leading indicator lost some pace in April. It grew by 2.1% y-o-y in
the month after growing at a revised growth of 2.2% y-o-y in March. Growth of
coincident index was halved, somewhat reflecting weak export figures in the
same month. It grew by 1.8% after 3.4% y-o-y growth in March. We are
maintaining our GDP growth forecast of 4.0% for 2012. (refer to
report for details)
§
SP
Setia (Results Review): 2QFY12:
Revenue up, but earnings flat (Maintain HOLD, TP: RM3.60) [download
report]
SP Setia 1HFY12 net profit of RM166.4m was within
market expectation but below ours, making up 46% and 41% of consensus and house
full-year estimates, respectively. 2QFY12 revenue of RM617.2m rose 24% y-o-y
contributed by its property development projects in the Klang
Valley , Johor Bahru and Penang . However, revenue growth was offset by higher
operating expenses which led to a flat net profit growth. As at 31 May 2012,
the Group achieved total property sales of RM2.1bn. We maintain our Hold
recommendation on SP Setia with RNAV-based target price of RM3.60. The Group
declared a 5 sen first net interim dividend.
(refer to report for details)
Other reports
Other Malaysian news
§
Construction:
MRT awards
31 work packages worth RM13.8bn
§
Bumi Armada: To double fleet size by 2016
§ UMW: Cautiously optimistic on O&G
§
MAS: Delays turnaround by another year
§
Wah Seong: Wins bid for stake in Petra Energy
§
Eversendai: Wins RM46m contract
§
Hock Seng Lee: Gets RM26m Demak Laut job
§
BLD Plantation
§ KUB: To sell A&W Thailand
§
George
Kent: Led consortium tipped to win Ampang LRT job
§
Banking: Indonesia
§ Oil
& Gas: Petronas signs 3 PSC contracts with Hess
Global news
§ US
§ US : Manufacturing
in Philadelphia
§ US
§ Europe : Manufacturing,
services output contracted in June
§ China
§ Global: Moody's cuts ratings of 15 global banks
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