KLSE looks resillient

The FBMKLCI gained 10.41 points to close at 1,776.74 yesterday. Its resistance levels of 1,780 and 1,826 may cap market gains, whilst obvious support levels are at 1,748 and1,776.
2013 YE KLCI target raised to 1,840 from 1,815, pegged to 15.5x 12M forward earnings (15x previously), on a further re-rating of Malaysian equities, due to their rising appeal. The re-rating is supported by solid domestic fundamentals – stable macroeconomic conditions, a strong banking system, healthy corporate balance sheets, and continuous corporate earnings growth. Despite gaining 4.2% in just one month after the 13GE and 4.6% YTD, the KLCI has still underperformed its regional peers.

MAHB
Estimate KLIA2 will be ready for operations in end-1Q14, nine months from its latest 28 Jun 2013 target. Project cost could rise to MYR4.3b, up from the original MYR3.9b estimate. Despite this, upgrading the earnings and target price on the premise of higher traffic growth of 6% p.a. in 2014-2020 (from 5% p.a.) and assume MAHB will receive an investment tax allowance (ITA). Once there is a firm date for KLIA2's completion, people will refocus on MAHB's solid fundamentals and the fact that its share price has lagged the World Airports Index (WAI) and regional peers. MAHB is a  BUY, with a DCF-based TP of MYR7.20/share (from MYR6.60/share).


SapuraKencana
While the USD35m offshore installation contract from PTSC is relatively small, it reflects: (i) SAKP's continuous aspiration in growing its regional/global footprint and (ii) improving orderbook replenishment, locally and abroad. SAKP's potential inclusion in the FBMKLCI 30 Index and the possibility of it securing the Petrobras multi-billion contract are two near-term catalysts that will further fuel interest on the stock. Our TP is pegged to 20x FY1/15 PER.

Others

Alam Maritim: Clinches MYR71.5m. Alam Maritim Resources Bhd has won an MYR71.5m contract from an oil and gas company to supply an anchor handling tug supply vessel. The five-year contract is expected to commence in the second half of this year. (Source: Bursa Malaysia)

IPO: Cardiff, 7-Eleven listing one of options. Billionaire Tan Sri Vincent Tan Chee Yioun has not ruled out the possibility of listing Cardiff City Football Club and 7-Eleven to raise funds. Confirming this, he said, the decision will only be made in the next few months. "We will consider. We are looking at several options to raise money to pay the banks. I have invested so much, so now I need to raise some money. Listing is one of the options. Nothing firm or definite yet," he told reporters. Pressed further, he said, the possible listing will probably happen this year. (Source: Business Times)

UEM, Bina Puri: Seeking RM300m from MAHB. The UEM-Bina Puri joint venture (JV) is seeking as much as MYR300m from Malaysia Airports Holdings Bhd (MAHB) for additional works being done at the Kuala Lumpur International Airport 2 (klia2) project, a person with first-hand knowledge of the matter says. It is learnt that MAHB has requested the joint venture to expand the floor area at the airport’s main terminal and satellite buildings to cater to requirements from various government agencies. A source said extra floor space is also required at the three-storey main terminal building to cater to Malindo Air, Malaysia’s newest domestic low-cost carrier, which plans to move to klia2 when it opens next year. (Source: Business Times)

MMC Corporation: Che Khalib tipped to head MMC. Former Tenaga Nasional Bhd (TNB) chief Datuk Seri Che Khalib Mohamad Noh (pic) is tipped to head MMC Corp Bhd, taking over from group managing director Datuk Hasni Harun whose contract expires end-June. An announcement on this could be made as early as next month. Sources said the appointment was likely, owing to the expertise of Che Khalib in the area of utilities, specifically power and energy. Che Khalib, 48, is currently DRB-Hicom Bhd chief operating officer (COO) of finance, strategy and planning. (Source: The Star)

F&N Holdings: F&N distributor for Oishi green tea. Fraser & Neave Holdings Bhd's unit, F&N Beverages Marketing Sdn Bhd, has been appointed the exclusive distributor of Oishi ready-to-drink green tea products. (Source: Bursa Malaysia)