Friday, October 19, 2012

News Bits | 19 Oct 2012


Highlights of the day
§  Public Bank (Results Review): 3QFY12: In line with consensus (Maintain HOLD, TP: RM14.50) [download report]
9MFY12 results were within market expectations, with EPS growth of 4% on the back of a 3% growth in operating profit and a slight drop in provisions.  Loan and deposit growth of 12% and 14% respectively were offset by lower net interest margins which appear to have stabilized in 3Q2012.  Our EPS forecasts and target price of RM14.50 per share remain unchanged.  We maintain a HOLD recommendation and Public Bank remains one of our preferred banking stocks for its defensiveness and relatively stronger loan growth momentum.  (refer to report for details)
 
§  DRB-Hicom Bhd (Quick Bits): Disposing of Hicom Power to MMC (Maintain BUY, TP: RM3.45) [download report]
DRB-Hicom Bhd plans to dispose of the entire business of Hicom Power, its wholly-owned subsidiary, to Sterling Asia Sdn Bhd for a cash consideration of RM575m. Sterling Asia is a unit of Malakoff, a 51%-owned subsidiary of MMC Corp Bhd. The proposed disposal is in line with the Group’s intent in streamlining its operations and reducing debt by re-organizing its business divisions as well as disposing of assets of its non-core businesses. The RM575m proceeds will be used to repay loans obtained to acquire Proton. Incorporating a net gain on disposal of RM446.2m into our FY13 forecasts will increase EPS by 84%, while net gearing is expected to improve to 0.9x from 1.1x previously. Maintain BUY and our SOP-based target price of RM3.45.   (refer to report for details)
 
Other reports
§  Newz Bits [download report]
 
Other Malaysian news
§  MAS: Picks Md Nor Md Yusof as Chairman
§  Perwaja Holdings: Poised to reap huge cost savings
§  Scomi Engineering: Shah Hakim appointed as CEO
§  AIC-Jotech-AutoV: In RM696m merger plan
§  Construction: Indonesian companies keen to JV with Malaysian counterparts
§  Plantation: Australian timber law must be fair to all
§  Property: Short-term stable outlook expected
§  Rubber: Impact of EU ruling on rubber
§  Steel: MITI to meet Japanese embassy on steel impasse
 
Global news
§  US: Growth trails forecasts as consumers retrench
§  US: Lawmakers close to deal to avoid default
§  US: Michigan consumer-sentiment index fell to 63.7 in July from 71.5 in June
§  US: July Chicago purchasing managers index falls more than estimated to 58.8
§  Europe: Inflation unexpectedly slows to 2.5%
§  Germany: Retail sales surged in June as unemployment declined
§  Japan: June unemployment rate rises to 4.6% from 4.5%, matching estimates
§  Japan: Industrial output rose less than expected in June
§  Thailand: Records current-account surplus in June as exports rise
 
 
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