REGIONAL DAILY

December 26, 2012

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.

MALAYSIA

Malaysia Daybreak | 15 December 2014

▌What’s on the Table…

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Alpha Edge - MAXJ below 200-day SMA

The MSCI Asia ex-Japan (MAxJ) has just broken below the 200-day SMA, which is not a good sign. If we are right about the near-term dollar weakness, crude oil price should find its short-term bottom soon. US$58 is the major support for crude oil. Malaysia’s KLCI could be forming a head & shoulder (H&S) with the H&S target at 1,638.

▌News of the Day…

—————————————————————————————————————————————————————————————————————— • Current electricity tariff in Peninsular Malaysia will maintain until 30 Jun

• Tan Sri Azman considering selling its stake in AMMB Holdings

• MAHB bagged RM192m repair/maintenance services contract in Doha airport

• MISC has appointed Datuk Ab Halim Mohyiddin its new chairman

• QL Resources determined to secure board representation at Lay Hong Bhd

• Alliance Bank appointed Joel Kornreich its group chief executive officer

• China’s industrial production growth slumped 7.2% yoy in Nov

• OPEC will stand by its decision not to cut crude output

Sources: CIMB. COMPANY REPORTS

Sources: CIMB. COMPANY REPORTS

Key Metrics

FBMKLCI Index

1,700

1,750

1,800

1,850

1,900

Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14

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FBMKLCI

1732.99 -11.58pts -0.66%Dec Futures Jan 15 Futures

1725 - (-0.98% ) 1726 - (1.00% )———————————————————————————

Gainers Losers Unchanged178 690 252

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Turnover1451.97m shares / RM1784.654m

3m avg volume traded 2022.34m shares

3m avg value traded RM1968.74m———————————————————————————

Regional IndicesFBMKLCI FSSTI JCI SET HSI

1,733 3,324 5,160 1,515 23,249 ————————————————————————————————

Close % chg YTD % chg

FBMKLCI 1,732.99 (0.7) (7.2)

FBM100 11,616.85 (0.7) (7.7)

FBMSC 14,777.27 (2.1) (5.8)

FBMMES 5,552.50 (2.7) (2.2)

Dow Jones 17,280.83 (1.8) 4.2

NASDAQ 4,653.60 (1.2) 11.4

FSSTI 3,324.13 0.2 4.9

FTSE-100 6,300.63 (2.5) (6.6)

SENSEX 27,350.68 (0.9) 29.2

Hang Seng 23,249.20 (0.3) (0.2)

JCI 5,160.43 0.2 20.7

KOSPI 1,921.71 0.3 (4.5)

Nikkei 225 17,371.58 0.7 6.6

PCOMP 7,224.21 2.2 22.7

SET 1,514.95 (0.8) 16.7

Shanghai 2,938.17 0.4 38.9

Taiwan 9,027.33 0.2 4.8————————————————————————————————

Close % chg Vol. (m)

MAS 0.265 (1.9) 70.9

SAPURAKENCANA 2.200 (7.2) 55.5

SUMATEC 0.185 (7.5) 38.4

COMPUGATES 0.055 0.0 38.0

PERISAI 0.410 (8.9) 34.3

PUC FOUNDER MSC 0.190 8.6 24.5

BUMI ARMADA 1.020 (1.0) 23.0

TIGER SYNERGY 0.135 3.8 22.5————————————————————————————————

Close % chg

US$/Euro 1.2475 0.09

RM/US$ (Spot) 3.4955 (0.01)

RM/US$ (12-mth NDF) 3.6025 0.25

OPR (% ) 3.23 0.00

BLR (% , CIMB Bank) 6.85 0.00

GOLD ( US$/oz) 1,221.61 (0.07)

WTI crude oil US spot (US$/barrel) 57.81 (3.57)

CPO spot price (RM/tonne) 2,146.50 (0.07)

Market Indices

Top Actives

Economic Statistics

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Terence WONG, CFA T (60) 3 2261 9088 E terence.wong@cimb.com

Show Style "View Doc Map"

Daybreak│Malaysia

December 15, 2014

2

Global Economic News

OPEC will stand by its decision not to cut crude output even if oil prices fall as low as US$40 a barrel and will wait at least three months before considering an emergency meeting, the United Arab Emirates’ energy minister said.

“We are not going to change our minds because the prices went to US$60 or to US$40,” he said. “We’re not targeting a price; the market will stabilize itself.” (Bloomberg)

The US Thomson Reuters/University of Michigan preliminary index of consumer sentiment increased to 93.8 in Dec (88.8 in Nov), the highest since Jan 2007. (Bloomberg)

US producer-price index (PPI) for final demand decreased a seasonally adjusted 0.2% mom in Nov (+0.2% mom in Oct). Stripping out food and energy costs, PPI were unchanged in Nov (+0.4% mom in Oct). On year, PPI was up 1.4% yoy in Nov (+1.5% yoy in Oct), the weakest 12-month advance since Feb. (WSJ, Bloomberg)

The US Senate passed a US$1.1tr bill to fund most of the government through Sep and avert a shutdown.

The 56-40 vote follows House passage of the spending bill on 11 Dec and sends the measure to President Barack Obama for his signature. (Bloomberg)

Eurozone industrial production during Oct was up 0.1% mom (+0.5% mom in Sep) and rose 0.7% yoy (+0.2% yoy in Sep). (WSJ, Bloomberg)

The number of people employed in Eurozone rose by 0.2% qoq in 3Q14 (+0.3% qoq in 2Q14). (WSJ)

Japan’s industrial production index (IPI) climbed a seasonally adjusted 0.4% mom in Oct (+0.2% mom estimated earlier). On a yearly basis, IPI fell 0.8% yoy in Oct (-1.0% yoy initially estimated). Overall capacity utilization rose a seasonally adjusted 0.7% mom in Oct (+3.6% mom in Sep). (RTT)

China’s industrial production growth slumped 7.2% yoy in Nov (+7.7% yoy in Oct). (WSJ)

Retail sales in China showed slight improvement of +11.7% yoy in Nov (+11.5% yoy in Oct). (WSJ)

China’s fixed-asset investment (FAI) in non-rural areas rose 15.8% yoy YTD in 11M14 (+15.9% yoy YTD in 10M14). (WSJ)

China’s housing sales totalled Rmb633.7bn (US$102.4bn) in Nov, down 12.0% yoy (-3.1% yoy in Oct), according to calculations by the WSJ. (WSJ)

Daybreak│Malaysia

December 15, 2014

3

China's economy could see growth slow to 7.1% in 2015 from about 7.4% this year as a domestic-property slump weighs on its economy, according to a working paper published by the People's Bank of China (PBoC).

The paper said this would reflect what ruling Communist Party leaders have called a "new normal" of slower but higher-quality growth, reflecting government efforts to address widespread pollution and conserve energy to achieve a more sustainable economic expansion. (WSJ)

China has set a bottom line of 7% for economic growth in 2015 and a pace below that level would hurt confidence in the country, the National Development and Reform Commission said. (WSJ)

Aggregate financing in China rose to Rmb1.15tr (US$186bn) in Nov (Rmb662.7bn in Oct). New yuan loans were RMb852.7bn (Rmb548.3bn in Oct), and M2 money supply grew 12.3% yoy in Nov (+12.6% yoy in Oct). (Bloomberg)

India's industrial output declined 4.2% yoy in Oct (+2.8% yoy in Sep). (WSJ)

India’s consumer inflation (CPI) eased to 4.38% yoy in Nov (+5.52% yoy in Oct), thanks to falling food and fuel prices. (WSJ)

India needs to produce and sell more at home to avoid overly relying on exports to a world that is forecast to see sluggish economic growth, Reserve Bank of India (RBI) Governor Raghuram Rajan said.

He cautioned against using an undervalued exchange rate to boost exports and recommended the implementation of a goods and services tax, while repeated that the main role of the central bank is to keep inflation low and stable. (Bloomerg)

The Conference Board Leading Economic Index (LEI) for Korea increased 0.2% mom in Oct to 122.2 (+0.7% mom in Sep). Coincident Economic Index (CEI) fell 0.2% mom in Oct to 117.8 (-0.3% mom in Sep). (WSJ)

Hong Kong’s industrial production for manufacturing industries fell 1.8% yoy in 3Q14 (+2.2% yoy in 2Q14). (RTT)

The Bangko Sentral ng Pilipinas is mindful that oil prices can be volatile and cheaper crude won’t necessarily prompt interest-rate cuts, Governor Amando Tetangco said, signalling little change in monetary policy for months. (Bloomberg)

Daybreak│Malaysia

December 15, 2014

4

Malaysian Economic News

Retailers are prohibited from using the “pre-GST prices” tag line to promote the sale of goods. Domestic Trade, Cooperatives a nd Consumerism Minister Datuk Seri Hasan Malek said some retailers created a false impression that price increases would occur following the implementation of the Goods and Services Tax (GST) on 1 Apr. He said the ministry would take action against offenders under the Trade Descriptions Act 2011.

Hasan issued the warning after the ministry found a number of retailers were offering “pre-GST prices” to promote discounts on selected items. A local daily reported of consumers going on a buying spree, grabbing electronic and luxury items including television sets, game consoles, watches and handbags, in fear of higher prices after the GST takes effect.

“Although many retailers are offering year-end sales, some are using ‘pre-GST prices’ for sales promotions and this is wrong. “When we ask them what the tag line means, they say it stood for Government Service Tax and not Goods and Services Tax, which is also wrong. “This has created a confusing environment for consumers,” Hasan said. (NST)

Government agencies involved in channelling information on the implementation of the Goods and Services Tax (GST) are asked to intensify briefing programmes and go down to the target groups before the date of enforcement in Apr next year. The government said it was important for government agencies and community leaders to understand in depth the subject matter before giving explanation to the public besides making efforts to curb the negative perception played up by the opposition. (Bernama)

The first payment of BR1M 4.0 will be made by the end of next month. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said existing recipients and new applicants would get their money by then. He said new applications have been given until 31 Dec to submit their applications.

"As for those without bank accounts, they should open one up soon. Also, if any changes, the need to update their particulars. We hope they will do so earliest so that we can process the applications fast," he said. (NST)

The government is conducting a comprehensive study on the ringgit's depreciation, says International Trade and Industry Datuk Seri Mustapa Mohamed. He said the study was jointly undertaken by his ministry, Bank Negara Malaysia, Ministry of Finance (MOF) and the Economic Planning Unit (EPU) of the Prime Minister's Department to ascertain the impact of the falling ringgit on the economy. "We have experts in the government, Bank Negara Malaysia, MOF and EPU who are carrying out studies to determine if the depreciating ringgit is good or bad and if it has a positive effect on the economy," he said. (Bernama)

The just-established National Export Council will focus on three major aspects to strengthen Malaysia's export structure, namely the export chain, logistics and output, says the government. (Bernama)

A provisional safeguard duty of 23.93% ad-valorem is to be imposed on imports of hot-rolled steel plate (HRP) with effect from Dec 14 for a period of 200 days. The Ministry of International Trade and Industry (MITI), said the provisional safeguard duty was to reduce the effects of serious injury to the domestic industry caused by the surge in HRP imports. (Bernama)

Daybreak│Malaysia

December 15, 2014

5

The current electricity tariff for domestic and industry consumers in Peninsular Malaysia will maintain until 30 Jun following the government’s decision to absorb the RM1.68bn fuel and generation costs by renegotiating Power Purchase Agreements (PPAs). The government, through Tenaga Nasional Bhd (TNB), would manage the cost by renegotiating PPAs with first generation Independent Power Producers (IPPs) and maintaining the piped gas price by Petronas. (New Straits Times)

Short-term interest rates are expected to remain stable next week as Bank Negara Malaysia (BNM) would continue to intervene to stabilise the money market. For the week just-ended, BNM had intervened daily to flush the system of surplus funds. (NST)

The number of companies registered for the Goods and Services Tax (GST) stood at 208,540 (surpassing government's year-end target of 140,000), said the Royal Malaysian Customs Department.

Meanwhile, a total of 10,541 companies in Sarawak have registered for GST (approaching the target of 12,000), Sarawak Royal Customs Department said. (Bernama)

The establishment of a RM1.6bn international airport in Kulim will change the economic landscape of Kedah from agriculture-oriented to an industrial state, said the state government, who also planned to turn many areas in the state into technology and industrial parks. (Bernama)

The Strategic Initiatives Hawkers and Petty Traders Development 2015-2020 will benefit over one million hawkers and petty traders nationwide. Trade minister Datuk Seri Hasan Malek, said the plan would ensure an orderly and structured development of the sector.

"The plan will be based on four strategies -- reinforcing the ecosystem; strengthening competitiveness; developing human capital; and, financial sustainability," he said, adding that a better funding model would be set up to ensure a more effective distribution of the financial assistance to the hawkers and petty traders. (Bernama)

The franchise industry is expected to contribute RM25.4bn to the gross domestic product (GDP) this year. Trade minister Datuk Seri Hasan Malek said the expected figure was an increase from last year where RM24.6bn was recorded.

He said since the franchise business concept was introduced, 757 franchises with 7,525 franchise businesses from various sector was registered. "It is different when the franchise concept was introduced 22 years ago as there were only 15 franchisees registered," he said. (Bernama)

Perlis is set to become a prominent hybrid seed centre producer with the establishment of a Tropical Seed Development Centre under an initiative spearheaded by the Northern Corridor Implementation Authority (NCIA). Hybrid seeds produced from the centre, would be exported to the European countries, besides the local market and regional market. The centre is expected to benefit some 7,000 farmers in the state while positioning the Northern Corridor Economic Region (NCER) as a modern food zone by modernising current farming techniques. (NST)

Daybreak│Malaysia

December 15, 2014

6

Political News

Without mincing his words, former Election Commission chairman Tan Sri Abdul Rashid Abdul Rahman told Prime Minister Datuk Seri Najib Razak to stop lying to the public about the real situation in the country. "Please stop lying to the rakyat and go do your work. Please also tell the Malay leaders to be honest and do whatever they can (to help the Malays)," said Abdul Rashid, a Perkasa vice-president, at the Malay rights group's annual general meeting yesterday.

Abdul Rashid also told the government to stop harping about a report which said Malaysians were earning about RM24,000 per capita. Without stating the study or where he got the figures from, Abdul Rashid told Putrajaya to stop "bragging" about the figure as it was a big lie. Abdul Rashid took issue with corruption in Umno and the government, saying he did not mind if Umno supporters were to get upset with him for openly criticising Najib, saying he had nothing to hide. (Malaysian Insider)

Corporate News

In an interview by the Edge Weekly, Tan Sri Azman Hashim, the founder and major shareholder of AMMB Holdings said that (1) he is considering a sale of his stake in AMMB Holdings as none of his children are in the business, (2) he does not expect ANZ to divest its interest in AMMB Holdings but rather see the possibility for ANZ to raise its stake, and (3) there are no plans for a merger of Maybank and AMMB at the moment. (The Edge Weekly)

Tan Sri’s intention to dispose off its stake in AMMB is well expected as this was quoted in an Edge article previously. However, we are surprised by Tan Sri’s opinion that ANZ would want to raise its stake in AMMB rather than paring it down. We think that the possibility for this to happen is not high as the more stringent capital requirements under the BASEL III accord make it punitive from the perspective of capital ratios for a bank to increase its stake in a subsidiary. Furthermore, Malaysia’s financial services sector is rather matured and does not offer good growth prospects in the longer term relative to other emerging markets like Indonesia and the Philippines.

A joint-venture made up of IJM Corp Bhd and Kumpulan Europlus Bhd (KEB) has been awarded a contract to undertake and complete the construction works for the West Coast Expressway. IJM Corp said the joint-venture accepted the letter of award yesterday from West Coast Expressway Sdn Bhd (WCE) to be the engineering, procurement and construction contractor to undertake and complete the construction works for the West Coast Expressway (Taiping – Banting) for an amount not exceeding RM5.04bn. The construction period of the project is five years. The joint venture is formed by IJM Construction Sdn Bhd and KEB on a 70:30 basis. (StarBiz)

This news is expected given earlier guidance that the official award of IJM Corp's portion will come through after the finalisation of the second supplementary concession agreement (CA). From this LOA, IJM Corp's share of works effectively works out to RM2.8bn representing 5 packages of the total 11 packages of the West Coast Expressway (WCE). This job more-than-doubles the group's outstanding order book to RM5.1bn.

Benalec announced that parties to the Tanjung Piai land reclamation contract have mutually agreed to extend the period of validity of the term sheet for an additional duration of six months from the expiry date to finalise the terms and conditions of the sale and purchase agreement (SPA). The extended duration shall come into effect from 12 December 2014 until 11 June 2015 or such other date as the parties may agree in writing. (BMSB)

Daybreak│Malaysia

December 15, 2014

7

This represents the fourth extension of time (EOT) relating to the 1,000-acre reclamation contract in Tanjung Piai and not a major surprise as the EIA submission was only done in Nov-14. The earnings impact from the delays in signing this deal is backed by incoming profits from land sale gains in Melaka.

Petronas has signed a contract with EQ Petroleum Production Malaysia, Petronas Carigali and E&P Malaysian Ventures (EPMV) for the extension of the Production Sharing Contract (PSC) for Block PM8 located off the coast of Peninsular Malaysia. The agreement will see possible developments of East Raya and Pantai fields. The tripartite partnership marks the continuation of the development and production of petroleum resources until 2033 from Seligi field and the fields within the PM8 sub-blocks, namely North Raya, South Raya, Serudon, Yong, Lawang and Langat. Under the extended contract, EnQuest will be the operator with participating interest of 50%, while Petronas Carigali and EPMV will hold 40% and 10% of participating interests, respectively. (Bernama)

Petronas Carigali has signed agreements with four companies for the development of engineering and technology solutions to effectively develop and monetise high carbon dioxide (CO2) concentration gas fields. The company will jointly develop the conceptual engineering design for an offshore cryogenic distillation facility with Technip. It will also jointly develop the marinisation, intensification and miniaturisation of cryogenic distillation technology for CO2 separation offshore with UOP Malaysia. At the same time, Petronas will jointly develop supersonic technology for CO2 separation with Twister BV and work to develop membrane technology for CO2 separation system with Generon Asia. (Bernama)

The bearish crude oil prices may allow low-cost carrier AirAsia to reduce airfares and boost its regional network. AirAsia CEO Aireen Omar, however, declined to say how much the fares would go down but added that it was the airline’s objective to offer low fares. She said lower oil prices would allow the company to have more room to add value to the business.

“With more than 50% drop in oil prices, there is a chance of rebuilding our network in Southeast Asia. We are mindful that 2014 has been a challenging year for the aviation industry. We moved to a new and bigger airport and had to change the way we do things in order to maintain cost efficiency,” she said. (BT)

Shares of Malaysia Airlines (MAS) closed half a sen lower at 26.5 sen on its last trading day on the Main Market of Bursa Malaysia last Friday. There were 70.914m shares actively traded, with the price moving between 26.5 sen and 27 sen throughout the session. The counter will be suspended at 9 am today to execute the company's selective capital reduction and repayment exercise (SCR). "Under the SCR, ordinary shareholders of MAS, other than Khazanah whose names appear on the company's record of depositors as at 5pm on 19 Dec, shall be entitled to receive a cash amount of 27 sen for each MAS share," said MAS. MAS said the capital repayment is expected to be made within 10 days from the entitlement date. (Bernama)

Malaysia Airports Holdings Bhd’s (MAHB) unit, Malaysia Airports Consultancy Services Middle East LLC, has bagged a RM192m repair and maintenance services contract at the Hamad International Airport in Doha, Qatar. In a filing to Bursa Malaysia, MAHB said it had received the nod from the New Doha International Airport Steering Committee for the three-year contract. “The contract includes providing qualified management, manpower and supervision, spare parts and consumables to deliver a preventive and corrective maintenance programme,” MAHB said. (BT)

Daybreak│Malaysia

December 15, 2014

8

The plan to build an international airport in Kulim will change the economic landscape of Kedah from an agriculture-oriented state to an industrial one. Kedah Menteri Besar Datuk Seri Mukhriz Mahathir said the state government also planned to turn many areas in the state into technology and industrial parks.

“One of the areas identified is Bandar Baharu where the state government plans to set up ‘Kedah Medical City’ where all industries related to medicines would be sited.“Another area near the proposed airport will be turned into ‘Aerocity’ to accommodate all industries related to air transportation,” he said. Kedah plans to build an international airport in Kulim costing RM1.6bn. The Ministry of Transport is studying the proposal. (Bernama)

MISC Bhd has appointed Datuk Ab Halim Mohyiddin its new chairman effective Monday and Yee Yang Chien its new president and chief executive officer with effect from Jan 1, 2015. MISC said Ab Halim would replace Datuk Manharlal Ratilal, while Yee would take over from Datuk Nasarudin Md Idris who will be retiring on Dec 31. Ab Halim joined KPMG/KPMG Desa Megat & Co in 1977 and had his accounting training both in Malaysia and the US. Yee was appointed chief operating officer of MISC on July 1, 2013 and also held the position of vice-president, corporate planning and development of MISC since April 1, 2008. (StarBiz)

Kossan Rubber Industries Bhd’s subsidiary, Ideal Quality Sdn Bhd, has signed a sale and purchase agreement with Himpun Menang Sdn Bhd to acquire a piece of industrial land in Klang, Selangor for RM39m. “The acquisition is in line with the group’s strategy to replenish its land bank to generate long-term sustainable income and viability,” it said. It said the proposed acquisition was expected to be completed by 1Q15. (Bernama)

Felda chairman Tan Sri Isa Samad is no longer fit to lead the organisation and should step down to take responsibility for the poor performance of Felda Global Ventures (FGV) which has done badly since its listing in 2012, says the leader of the settlers.

National Felda Settlers' Children's Association (Anak) said Isa could no longer work with his subordinates, as seen from the recent suspension of Felda director-general Datuk Faizoull Ahmad for two months.

Faizoull is the second director-general to be suspended by Isa after Datuk Dzulkifli Abd Wahab, who was transferred to the Agriculture and Agro-Based Industry Ministry.

Anak president Mazlan Aliman said several senior Felda officers faced uncertain futures as Isa was expected to continue taking drastic action.

"It is time that Isa and Faizoull be replaced by Felda's own children," Mazlan told a press conference. (Malaysian Insider)

Felda director-general Datuk Faizoull Ahmad has been suspended for two months by chairman Tan Sri Isa Samad, the National Association of Settlers (Anak) revealed. Anak president Mazlan Aliman said all is not well between Isa and Faizoull, alleging that a dispute has been going on between the two for the past few weeks.

"I can confirm he has been suspended. There was some issue between the both of them. Isa was not happy with Faizoull's actions of late.

"It has something to do with staff appointments which were not decided by the Felda board of directors and the Public Services Department," Mazlan

Daybreak│Malaysia

December 15, 2014

9

told The Malaysian Insider in Kuala Lumpur. "That is only one of the reasons. There are other reasons as well," he said. (Malaysian Insider)

Consortiums have until January 28 to submit bids for RM3bn superstructure contract. Six groups, including a UEM Group Bhd-led consortium, have been shortlisted by Permodalan Nasional Bhd (PNB) to submit their bids for the KL118 Tower (Warisan Merdeka) project. The superstructure or engineering, procurement and construction (EPC) contract the groups are vying for is valued at around RM3bn, said sources with knowledge on the matter. Business Times understands that KL118 is expected to generate a gross development value (GDV) of more than RM6bn over 10 years. “The GDV has increased because of the components, concepts and designs. More value is being added to enhance KL118 and make it one of the world’s best iconic structures. This is to attract multinational companies and other foreign players to operate here,” said a source. PNB president and group CEOTan Sri Hamad Kama Piah Che Othman had said PNB wanted to select the best group with an excellent track record and experience in mega constructions for KL118. (BT)

QL Resources Bhd is determined to secure board representation at Lay Hong Bhd, which could pave the way for a proxy fight at the latter, unless an amicable solution is found.

“Going forward, we will continue to seek avenues to protect our interest, including writing in to Lay Hong to request for board representation especially now that QL is the single largest shareholder in Lay Hong. QL’s shareholding in Lay Hong is around 38.4%, above Innofarm’s,” QL executive director Chia Mak Hooi told StarBiz.

Innofarm Sdn Bhd is the Yap family’s private vehicle, which has 37.77% of Lay Hong. But the Yap family, who are the founding shareholders of Lay Hong, control a further 6.8% in the poultry producer, meaning that their effective stake is about 44.5%. (Starbiz)

Alliance Bank Malaysia Bhd has appointed Joel Kornreich its group chief executive officer, effective Jan 1, 2015. The bank said Kornreich, who has over 23 years of experience in the financial services industry, was with Citigroup for 20 years in various roles around the world before joining Alliance Bank. “Kornreich’s last position was as the country business manager of Citibank Global Consumer Group, South Korea. Prior to this, he managed Citi’s consumer businesses in Indonesia, Russia, Spain, Belgium and Greece. (StarBiz)

Battersea Consortium chairman Tan Sri Liew Kee Sin said Phase 1 purchasers of the Battersea Power Station project are already seeing a premium of between 24% and 40% in their investments and assured them that the value of their properties would be secure despite Britain’s May elections and a general cooling of the wider Central London property market. Liew, who is heading Battersea Project Holding Co Ltd, said the premium for studio units is about 25%, one bedders 40.5%, two bedders 29.9% and three-room units 24%. (StarBiz)

Malayan United Industries Bhd (MUI) is planning to sell its 69.2% equity stake in Pan Malaysia Holdings Bhd (PMH) to Datuk Dr Yu Kuan Chon for RM77.1m cash or 12 sen per share, in a move to divest its non-core assets and reduce its bank borrowings. MUI said its six subsidiaries, namely Acquiline Sdn Bhd, Loyal Design Sdn Bhd, Malayan United Management Sdn Bhd, MUI Media Ltd, MUI Property Services Sdn Bhd and Megawise Sdn Bhd, had signed a share sale agreement with Yu to sell 642.7m shares in PM Holdings. "About RM60m of the proceeds will be used to repay MUI's bank borrowings, while the balance will be for other working capital purposes," it said. (The Sun)

Daybreak│Malaysia

December 15, 2014

10

Port and logistics operator NCB Holdings Bhd could likely see synergies and collaborations with its new substantial shareholder MMC Corp Bhd that owns two ports in Johor, sources close to the company say. NCB is the parent company of Northport Malaysia Bhd and Kontena Nasional Bhd while MMC owns Johor Port Bhd and holds a 70% stake in Port of Tanjung Pelepas Sdn Bhd (PTP). Sources say MMC’s presence in NCB could pave the way for the two parties to synergise their port operations. Northport is one of the two main ports in the country’s maritime gateway, Port Klang. MMC dominates the port industry in Johor and Penang. According to sources, an MMC representative is also likely to be appointed on NCB’s board soon. They said that an NCB board meeting, to take place sometime this week, could give a clearer picture of plans and synergies that could be derived from the two port giants. (Starbiz)

Only World Group Holdings Bhd (OWG), which will be listed on the Main Market of Bursa Malaysia on 18 Dec, plans to widen its network of food service outlets (FSOs) in Genting Highlands and upgrade the group's three Wet World water theme parks in Shah Alam, Batu Pahat and Pedas post listing. Half its 10 new outlets will be in Genting Highlands, where Only World is one of the largest third-party operators with an existing stable of 17 FSOs. Penang and Putrajaya will play host to OWG's FSO brands for the first time in 2015. It will also refurbish five floors of Komtar Tower in Penang and transform it into a ticketed destination and will offer combination packages for activities with a view from the tower. "We cannot give a forecast but as a guide, we have about 48,000 sa ft generating revenue throughout Malaysia. The Komtar tower alone is 130,000 sq ft," said Datuk Richard Koh, CEO of OWG. (Financial Daily)

Property tycoon Datuk Dr Yu Kuan Chon entered into a share sale agreement to acquire 642.7m shares from Pan Malaysia Holdings (PMH) for a cash consideration of RM77.1m. Upon completion of the acquisition, Yu’s aggregate interest will increase from 49.5m PMH shares, representing about 5.3% stake, to 692.2m PMH shares, or about 74.5% of the issued and paid-up share of PMH. (BT)

Red Sena Bhd, the first food and beverage (F&B) special purpose acquisition company (SPAC) in Malaysia, is looking to raise RM400m from its initial public offering (IPO). In its prospectus exposure, the company said it will offer 800 million new shares at an issue price of 50 sen each. The shares will also entail the issue of 800m free detachable warrants with exercise price of 50 sen each, on the basis of one warrant for every one new share. The company, which intends to make its QA in the branded packaged F&B business, will offer 80m shares together with 80m free warrants to the public. The remainder 720m shares and equal warrants will be placed out to selected investors. The 800m new shares will make up for approximately 80% of Red Sena’s enlarged share capital. (StarBiz)

Prasarana Malaysia Bhd will start dishing out major work packages of the RM9bn light rail transit line three (LRT 3), most probably from the beginning of the second half of next year, following the appointment of the project delivery partner (PDP) for the development. Group managing director Datuk Seri Shahril Mokhtar said the floating tender document for the PDP had closed on Dec 8, and so far, about 18 companies are interested to be the ‘project manager’ of the urban line linking Bandar Utama to Johan Setia in Klang. He explains that Prasarana will have two evaluation stages before deciding the best bidder to undertake the responsibilty of managing the project.

Prasarana, which is currently busy completing its RM7bn LRT extension programme (LEP) for its existing Kelana Jaya and Ampang Lines, has decided to emulate the PDP concept, which was first used in the Sungai

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Buloh-Kajang mass rapid transit (MRT) line under MRT Corp Sdn Bhd. (StarBiz)

Bank Simpanan Nasional (BSN), in an effort to get close to the people, introduced two new savings products on Saturday which will be available through a chain of more than 5,200 registered agents nationwide. "The new service is also in line with the government's call for recipients of the 1Malaysia People's Aid Programme (BRIM 4.0) to have a savings accounts," said BSN.

Customers have to bring along their MyCard, for biometric confirmation, and a minimum cash of RM20 to the nearest registered agent to open an account. The service is connected directly to a Point-of-Sale terminal which is hooked up directly with the BSN system for the transaction to be made without filling up any forms.

As of October 2014, BSN has more than 8.5 million customers, nationwide, with deposits amounting to RM12.9bn. (Bernama)

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BMSB: Changes in shareholdings

Type of No of Ave Price

12-Dec-14 Date transaction securities Company (RM)

EPF 8/12-9/12 Disposed 3,706,300 AIRASIA

EPF 8/12-9/12 Disposed 2,125,200 UMW HOLDINGS

EPF 4/12-8/12 Disposed 1,462,200 TENAGA NASIONAL

EPF 9/12 Disposed 1,000,000 BUMI ARMADA

EPF 9/12 Disposed 710,400 UEM SUNRISE

EPF 9/12 Disposed 671,000 AMMB HOLDINGS

EPF 9/12 Disposed 433,800 AFG

EPF 9/12 Disposed 388,100 KPJ HEALTHCARE

EPF 9/12 Disposed 313,700 IHH HEALTHCARE

EPF 8/12-9/12 Disposed 165,700 GAMUDA

EPF 9/12 Disposed 120,000 WCT HOLDINGS

EPF 8/12-9/12 Disposed 42,500 DRB-HICOM

EPF 9/12 Disposed 3,700 PERISAI PETROLEUM

MERCURY PACIFIC MARINE PTE LTD 5/12-8/12 Disposed 12,353,400 PERISAI PETROLEUM

Mitsubishi UFJ Financial Group, Inc 8/12 Disposed 826,500 CIMB GROUP

EPF 8/12-9/12 Acquired 6,576,200 DIGI.COM

EPF 8/12-9/12 Acquired 6,115,800 MALAYAN BANKING

EPF 8/12 Acquired 5,000,000 AXIATA GROUP

EPF 9/12 Acquired 4,068,400 SAPURAKENCANA PETROLEUM

EPF 8/12-9/12 Acquired 2,849,900 SIME DARBY

EPF 9/12 Acquired 1,458,300 TELEKOM MALAYSIA

EPF 8/12-9/12 Acquired 1,118,500 TOP GLOVE

EPF 4/12-5/12 Acquired 930,400 MISC

EPF 8/12-9/12 Acquired 840,800 IJM CORPORATION

EPF 9/12 Acquired 422,900 SUNWAY BERHAD

EPF 9/12 Acquired 400,000 PUBLIC BANK

EPF 9/12 Acquired 398,200 CAHYA MATA SARAWAK

EPF 9/12 Acquired 333,400 PETRONAS GAS

EPF 9/12 Acquired 202,200 SP SETIA

EPF 9/12 Acquired 195,000 UOA REIT

EPF 9/12 Acquired 180,000 HONG LEONG BANK

EPF 8/12 Acquired 106,700 TIME DOTCOM

EPF 9/12 Acquired 70,200 TAN CHONG MOTOR

EPF 9/12 Acquired 38,000 MBM RESOURCES

EPF 9/12 Acquired 2,700 NESTLE (MALAYSIA)

Skim Amanah Saham Bumiputera 5/12 Acquired 2,533,700 TENAGA NASIONAL

Skim Amanah Saham Bumiputera 8/12 Acquired 1,221,400 TELEKOM MALAYSIA

Skim Amanah Saham Bumiputera 8/12-10/12 Acquired 1,180,000 UMW HOLDINGS

Skim Amanah Saham Bumiputera 9/12 Acquired 966,000 MAXIS

Kumpulan Wang Persaraan 5/12 Acquired 100,000 WCT HOLDINGS

Lembaga Tabung Angkatan Tentera 3/12-9/12 Acquired 1,535,800 BOUSTEAD HOLDINGS

Odyssey Reinsurance Company  5/12-10/12 Acquired 909,400 MUDAJAYA HOLDINGS

T. Rowe Price Associates, Inc 5/12 Acquired 626,800 ASTRO MALAYSIA

Mitsubishi UFJ Financial Group, Inc 5/12-8/12 Acquired 3,900 BAT

WCT HOLDINGS 12/12 Shares Buy Back 332,500 WCT HOLDINGS 1.49

EKSONS CORPORATION 12/12 Shares Buy Back 112,300 EKSONS CORPORATION 1.34

TAN CHONG MOTOR 12/12 Shares Buy Back 50,000 TAN CHONG MOTOR 3.42

WAH SEONG CORPORATION 12/12 Shares Buy Back 30,000 WAH SEONG CORPORATION 1.52

DAIBOCHI PLASTIC 12/12 Shares Buy Back 6,000 DAIBOCHI PLASTIC 4.26 SOURCES: BMSB

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BMSB: Off-market transactions

12-Dec-14 Vol

SEG-WA 23,500,000

IGBREIT 10,000,000

ARK 5,056,000

ZECON 3,000,000

EATECH 1,000,000

MQTECH 700,000

IWCITY 500,000 Notes:CN-Crossing deal on board lots, MN-Married deal on board lots, MO-Married deal on odd lots

SOURCES: BMSB

BMSB: Dividends

Company Particulars Gross DPS (Sen) Ann Date Ex-Date Lodgement Payment

MCIL Interim dividend - single tier 1.44 26-Nov-14 15-Dec-14 17-Dec-14 15-Jan-15

TENAGA NASIONAL  Final dividend - single tier 19.00 20-Nov-14 17-Dec-14 19-Dec-14 31-Dec-14

LAFARGE MALAYSIA 3rd interim dividend - single tier 8.00 18-Nov-14 17-Dec-14 19-Dec-14 14-Jan-15

MALAYSIA AIRPORTS Interim dividend - single tier 2.00 8-Dec-14 22-Dec-14 24-Dec-14 22-Jan-15

ASTRO MALAYSIA 3rd interim dividend - single tier 2.25 11-Dec-14 24-Dec-14 26-Dec-14 12-Jan-15

SUPERMAX  Interim dividend - single tier 4.00 7-Nov-14 26-Dec-14 30-Dec-14 28-Jan-15

UMW OIL & GAS  Interim dividend - single tier 1.00 24-Nov-14 26-Dec-14 30-Dec-14 15-Jan-15

KPJ HEALTHCARE Interim dividend - single tier 2.00 25-Nov-14 29-Dec-14 31-Dec-14 22-Jan-15

UCHI TECHNOLOGIES Interim dividend - single tier 5.00 12-Dec-14 29-Dec-14 31-Dec-14 27-Jan-15

BERJAYA AUTO 2nd interim dividend - single tier 3.25 8-Dec-14 2-Jan-15 6-Jan-15 20-Jan-15

BERJAYA FOOD 1st interim dividend - single tier 2.50 9-Dec-14 6-Jan-15 8-Jan-15 22-Jan-15

MY E.G. SERVICES Final dividend - single tier 2.00 24-Nov-14 6-Jan-15 8-Jan-15 30-Dec-14

TOP GLOVE  Final dividend - single tier 9.00 11-Nov-14 12-Jan-15 14-Jan-15 29-Jan-15

BENALEC HOLDINGS Final dividend - single tier 0.30 27-Nov-14 26-Jan-15 28-Jan-15 23-Feb-15

KUALA LUMPUR KEPONG Final dividend - single tier 40.00 19-Nov-14 19-Feb-15 23-Feb-15 17-Mar-15 SOURCES: BMSB

BMSB: Proposed cash calls & trading of rights…

15-Dec-14 Ann Date Proposed

ECO WORLD 25-Apr-14 1 Rights @ 2, 4 Free Warrants @ 5, Private Placement

ASIA FILE CORP 6-Aug-14 Bonus issue 3:5

EASTERN & ORIENTAL 5-Sep-14 Bonus issue 1:10, Free Warrants 1:5

BUMI ARMADA 12-Sep-14 1 Rights : 2 shares @ RM1.35

BENALEC HOLDINGS  12-Sep-14 > RM200m of 7-year Redeemable Convertible Secured Bonds

TH HEAVY ENGINEERING 24-Sep-14 Private placement of up to 10% of the issued shares of THHE

TH HEAVY ENGINEERING 3-Oct-14 Rights issue with bonus issue, 1 bonus issue : 5 Rights shares

MY E.G. SERVICES 30-Oct-14 Bonus issue 1:1

MAH SING GROUP 20-Nov-14 Rights issue with Warrants; Bonus issue 1:4

MALAYSIA AIRPORTS 28-Nov-14 Right issue 1:5 SOURCES: BMSB

BMSB: New Listing

Company Issue price Listing sought Tentative

Public Issue Offer for sale Private placement listing date

KRONOLOGI ASIA 0.29 59,247,000 - - ACE Market 15-Dec-14

ONLY WORLD GROUP 0.88 56,408,900 - 43,158,900 Main Market 18-Dec-14

No of shares

SOURCES: BMSB

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Corporate Actions

December 2014

SUN MON TUE WED THU FRI SAT

1 2 3 4 5 6

External Trade, External Reserves (month-end data)

7 8 9 10 11 12 13

Berjaya Auto 2Q SapuraKencana 3Q, Berjaya Food 2Q

Eco World 13-mths results & briefing

Astro 3Q & conf. call, Industrial Production

14 15 16 17 18 19 20

SP Setia 4Q CPI

21 22 23 24 25 26 27

Foreign Reserves (mid-month data)

Christmas Day

28 29 30 31

Money Supply

Source: Company, BNM, DOS, CIMB estimates

SOURCES: Company, BNM, DOS, CIMB estimates

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15

Corporate Actions

January 2015

SUN MON TUE WED THU FRI SAT

1 2 3

New Year Prophet Muhammad’s Birthday

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 26 27 28 29 30 31

BNM OPR

Source: Company, BNM, DOS, CIMB estimates

SOURCES: Company, BNM, DOS, CIMB estimates

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16

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United Kingdom and Europe: In the United Kingdom and European Economic Area, this report is being disseminated by CIMB Securities (UK) Limited (“CIMB UK”). CIMB UK is authorised and regulated by the Financial Conduct Authority and its registered office is at 27 Knightsbridge, London, SW1X 7YB. This report is for distribution only to, and is solely directed at, selected persons on the basis that those persons: (a) are persons that are eligible counterparties and professional clients of CIMB UK; (b) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”); (c) are persons falling within Article 49 (2) (a) to (d) (“high net worth companies, unincorporated associations etc”) of the Order; (d) are outside the United Kingdom; or (e) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with any investments to which this report relates may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This report is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this report relates is available only to relevant persons and will be engaged in only with relevant persons.

Only where this report is labelled as non-independent, it does not provide an impartial or objective assessment of the subject matter and does not constitute independent "investment research" under the applicable rules of the Financial Conduct Authority in the UK. Consequently, any such non-independent report will not have been prepared in accordance with legal requirements designed to promote the independence of investment research and will not subject to any prohibition on dealing ahead of the dissemination of investment research.

United States: This research report is distributed in the United States of America by CIMB Securities (USA) Inc, a U.S.-registered broker-dealer and a related company of CIMB Research Pte Ltd, CIMB Investment Bank Berhad, PT CIMB Securities Indonesia, CIMB Securities (Thailand) Co. Ltd, CIMB Securities Limited, CIMB Securities (Australia) Limited, CIMB Securities (India) Private Limited, and is distributed solely to persons who qualify as "U.S. Institutional Investors" as defined in Rule 15a-6 under the Securities and Exchange Act of 1934. This communication is only for Institutional Investors whose ordinary business activities involve investing in shares, bonds and associated securities and/or derivative securities and who have professional experience in such investments. Any person who is not a U.S. Institutional Investor or Major Institutional Investor must not rely on this communication. The delivery of this research report to any person in the United States of America is not a recommendation to effect any transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. CIMB Securities (USA) Inc, is a FINRA/SIPC member and takes responsibility for the content of this report. For further information or to place an order in any of the above-mentioned securities please contact a registered representative of CIMB Securities (USA) Inc.

Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (Thai IOD) in 2014.

AAV – Very Good, ADVANC – Very Good, AEONTS – not available, AMATA - Good, ANAN – Very Good, AOT – Very Good, AP - Good, ASK – Very Good, ASP – Very Good, BANPU – Very Good , BAY – Very Good , BBL – Very Good, BCH – not available, BCP - Excellent, BEAUTY – Good, BEC - Good, BECL – Very Good, BGH - not available, BH - Good, BIGC - Very Good, BJC – Good, BLA – Very Good, BMCL - Very Good, BTS - Excellent, CCET – Good, CENTEL – Very Good, CHG – not available, CK – Very Good, CPALL – not available, CPF – Very Good, CPN - Excellent, DELTA - Very Good, DEMCO – Good, DTAC – Very Good, EA - Good, ECL – not available, EGCO - Excellent, GFPT - Very Good, GLOBAL - Good, GLOW - Good, GRAMMY - Excellent, HANA - Excellent, HEMRAJ – Very Good, HMPRO - Very Good, ICHI - not available, INTUCH - Excellent, ITD – Good, IVL - Excellent, JAS – not available, JUBILE – not available, KAMART – not available, KBANK - Excellent, KCE - Very Good, KGI – Good, KKP – Excellent, KTB - Excellent, KTC – Good, LH - Very Good, LPN – Very Good, M - not available, MAJOR - Good, MAKRO – Good, MBKET – Good, MC – Very Good, MCOT – Very Good, MEGA – Good, MINT - Excellent, OFM – Very Good, OISHI – Good, PS – Very Good, PSL - Excellent, PTT - Excellent, PTTEP - Excellent, PTTGC - Excellent, QH – Very Good, RATCH – Very Good, ROBINS – Very Good, RS – Very Good, SAMART - Excellent, SAPPE - not available, SAT – Excellent, SAWAD – not available, SC – Excellent, SCB - Excellent, SCBLIF – Good, SCC – Very Good, SCCC - Good, SIM - Excellent, SIRI - Good, SPALI - Excellent, STA – Very Good, STEC - Good, SVI – Very Good, TASCO – Good, TCAP – Very Good, THAI – Very Good, THANI – Very Good, THCOM – Very Good, THRE – not available, THREL – Good, TICON – Good, TISCO - Excellent, TK – Very Good, TMB - Excellent, TOP - Excellent, TRUE – Very Good, TTW – Very Good, TUF - Good, VGI – Very Good, WORK – not available.

Daybreak│Malaysia

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CIMB Recommendation Framework

Stock Ratings Definition:

Add The stock’s total return is expected to exceed 10% over the next 12 months.

Hold The stock’s total return is expected to be between 0% and positive 10% over the next 12 months.

Reduce The stock’s total return is expected to fall below 0% or more over the next 12 months.

The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and (ii) the forward net dividend yields of the stock. Stock price targets have an investment horizon of 12 months.

Sector Ratings Definition:

Overweight An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation.

Neutral A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation.

Underweight An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation.

Country Ratings Definition:

Overweight An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark.

Neutral A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark.

Underweight An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark.

*Prior to December 2013 CIMB recommendation framework for stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand, Jakarta Stock Exchange, Australian Securities Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange were based on a stock’s total return relative to the relevant benchmarks total return. Outperform: expected to exceed by 5% or more over the next 12 months. Neutral: expected to be within +/-5% over the next 12 months. Underperform: expected to be below by 5% or more over the next 12 months. Trading Buy: expected to exceed by 3% or more over the next 3 months. Trading Sell: expected to be below by 3% or more over the next 3 months. For stocks listed on Korea Exchange, Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Outperform: Expected positive total returns of 10% or more over the next 12 months. Neutral: Expected total returns of between -10% and +10% over the next 12 months. Underperform: Expected negative total returns of 10% or more over the next 12 months. Trading Buy: Expected positive total returns of 10% or more over the next 3 months. Trading Sell: Expected negative total returns of 10% or more over the next 3 months.