Regional - xinhua08.comupload.xinhua08.com/2012/0914/1347607839281.pdf · is further improvement in the outlook of the real estate sector. - We expect sentiment on high beta stocks

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

10 September 2012

Regional Daily

Top Views Regional: Concerted easing ahead P.K. Basu P5 FOMC and PBoC Likely to Act This Week - Non-farm payrolls disappointed in the US (96,000 vs consensus of

130,000); with the ISM manufacturing production and new orders readings falling below 50, we expect the Fed to lower the interest rate on banks’ excess reserves and also announce modest QE at its Sept 12-13th meetings.

- ECB’s Draghi has delivered a credible program of conditional backstops for sovereign bond yields – but first the governments of Spain and Italy will need to apply for EFSF conditionality. With ESM likely to be endorsed by the German constitutional court this week, an additional avenue of support for periphery banking systems will be in place. We expect the ECB to be able to cut interest rates next month, after the OMT has helped stabilize markets in the Eurozone.

- China’s IP decelerated to 8.9% YoY and FAI to 18.8% YoY in August 2012. We expect another 50bp of policy rate cuts and 100bp of RRR cuts by the PBoC by February 2013, with the first rate cut likely this week. In the absence of the latter, we will need to revisit our current real GDP growth forecast (7.7% in 2012, 7.3% in 2013, 5% on average in 2014-15).

HK: Strategy Tham Mun Hon 9 Not Losings Its Punch | NEUTRAL

- Notwithstanding the recent weakness, we believe that Hong Kong’s economy will stand up well against the stiff global economic headwinds, given its increasing integration with China. CY Leung’s immediate challenge is not about job creation, but striking a balance in housing policy.

- Thus Hong Kong’s problems fade in comparison with some of its Asian neighbours and at a PBR of 1.2x, valuations look undemanding compared to the region’s 1.4x. We are Neutral on the market, until there is further improvement in the outlook of the real estate sector.

- We expect sentiment on high beta stocks to improve in 3Q12 and possibly early 4Q12, due to policy reflation in the Western economies. Our key overweight is in the financials, industrials and IT sectors. Further out, we expect consistent dividend payout by some of the banks, property (including REITs) and utilities stocks to be the key support for the Hong Kong market.

P K Basu [email protected] (65) 6432 1821 ONG Seng Yeow [email protected] (852) 2268 0644 Jeremy TAN [email protected] (852) 2268 0635

Today’s Content… Country Regional Economics Hong Kong Strategy China Lead-Acid Battery Sector Singapore S-REITs Sector Regional Ebbs & Flows India Steel authority of India Philippines Metro Pacific Corp Indonesia Holcim Indonesia Malaysia Steel Sector Malaysia External Trade, July 2012

Top Buys…

Company Ticker Spot Target Upside (%)

LICHF LICHF IN 247.80 332.00 33.98 B. Armada BAB MK 3.69 4.88 32.25 Yes Bank YES IN 335.00 434.00 29.55 First Philippine Holdings FPH PM 76.90 97.80 27.18 China State Construction 3311 HK 8.50 10.80 27.06 Siam Makro MAKRO TB 380.00 478.00 25.79 SembMarine SMM SP 4.98 6.20 24.50 Venture Corp VMS SP 7.86 9.65 22.77 STPI STPI TB 39.75 47.50 19.50 Charoen Pokphand Indo CPIN.IJ 2800.00 3300.00 17.86 SapuraKencana SAKP MK 2.34 2.68 14.53 KLCC Property KLCC MK 5.60 6.38 13.93

Top Sells…

Company Ticker Spot Target Downside (%)

Ajisen China 538 HK 5.23 3.21 38.62 Jai Prakash Associates JPA IN 68.15 47.00 31.03 GMA Network Inc GMAP PM 9.70 6.90 28.87 Cosco Corp COS SP 0.97 0.75 22.28

Maybank-KE Events Date Event Location 10-12 Sep Hemaraj | NDR US 17-21 Sep Thai Strategy | Analyst Marketing US 17-28 Sep Asia Macro| Regional Head Research &

Economics US

18-19 Sep Philippines Strategy Roadshow SG/MY 20-21 Sep Philippines Strategy Roadshow HK

10 September 2012

Regional Daily

CN: Lead-Acid Battery Sector Alex Yeung 10 Domination of Large Players Continues - The leading lead-acid battery manufacturers have been stellar

outperformers YTD. Tianneng and Chaowei did not disappoint the market and reported strong earnings growth in 1H12, driven by robust volume growth and market share expansion amid industry consolidation in China.

- We believe that 2H earnings will be driven by volume. In addition to organic growth, both Tianneng and Chaowei are looking for acquisition opportunities to drive each battery sales volume. Therefore, we expect further market share gains at the end of 2012.

- We continue to favor leading players in the sector as we believe that they are likely the beneficiaries under the industry consolidation. Among the stocks in the sector, our top pick is Tianneng owing to its better net margin, more diversified business and longer history of track record.

SG: S-REITs Sector ONG Kian Lin 11 The Allure Of S-REITs | Overweight - We recently pointed out that S-REITs has one of the highest yield

spreads globally in our last report. We think the Asian REITs outperformed the non-Asian REITs in terms of yield spreads partly due to higher borrowing costs in the West (consequence of US/European deleveraging) and Australia.

- S-REITs further edged out other Asian REITs because of its relatively higher capitalization rates. This enables S-REITs to offer DPU yields of ~6% without trading at discount to book. On the other hand, in order to offer DPU yields of ~5%, HK-REITs and J-REITs have to trade at ~0.8x PBR.

- Our top BUYS remain with the more defensible industrial and retail REITs with total returns of 10%-19%. We think their risk-reward proposition still appear favorable to yield-driven investors. Maintain OVERWEIGHT on the overall S-REITs sector.

Company Notes RG: Ebbs & Flows Jeremy Tan/Tham MH 12 What a Difference a Day Makes - For the week ending 5 Sep, investors sold down USD10.6b of global

equities ahead of ECB’s policy meeting on 6 Sep. - Asia ex-Japan equities were hit with an USD1.3b outflow, offsetting the

previous 5 weeks of inflows, driven primarily by Taiwan and China. - Investor’s sentiment should improve after ECB’s unlimited bond

purchase announcement. With little risk on legality of ESM, high beta stocks should recover from the latest round of selling.

10 September 2012

Regional Daily

1Q13 REVIEW Mcap USD5.8b ADTV USD7.4m IN: Steel Authority of India (SAIL IN) Anubhav Gupta 13 Materials | Falling Coal Prices To Support Rise In EPS | BUY | Upside 40% - In the last 1 month, SAIL’s stock price fell 10% despite strong 1Q

performance (recurring EPS +12% QoQ). This has been due to uncertainty over recovery in domestic steel demand.

- However, we are confident of 15% increase in SAIL’s FY13 profit even though we assume increase in demand of just 4% and price decline of 2%. Profit will come from savings on coal costs as prices have declined 35% since April.

- Currently, SAIL is trading at 40% discount to its historic 5-yr avg PER of 12x. We see 2 positive triggers for the stock in the medium term: news of recovery in the local economy and announcement of share sale by gov’t.

1H12 REVIEW Mcap USD2.5b ADTV USD1.7m PH: Metro Pacific Investments Corp (MPI PM) Laura Dy-Liacco 14 Conglomerates | Decent Growth Continues in 2Q12 | HOLD | Upside 8.8% - Net of exceptional items, MPI’s 1H12 core income grew 30% YoY to

PHP3.46b. This implies 2Q12 core income reached PHP1.87b, up 22% YoY. All units contributed higher equitized earnings in 1H12, increasing by a combined 17% to PHP4.04b. The results were better than expected as profit contribution from its power distribution and toll units exceeded our estimates.

- Factoring our earnings revisions, we now forecast MPI’s core income to reach PHP6.48b in 2012 and PHP7.71b in 2013, higher by 5% and 1% previously. For its part, MPI raised its 2012 profit guidance by 5% to PHP6.3b.

- Using our revised sum-of-parts NAV estimate of PHP5.61/sh, while maintaining a 15% discount to NAV, we derived a new price target of PHP4.67/sh from PHP4.46/sh previously. With our price target just offering an 8.8% upside to MPI’s current share price of PHP4.21/sh, inclusive of a 0.6% dividend yield, we maintain our HOLD rating on MPI.

1H12 REVIEW Mcap USD2.2b ADTV USD1.4m IJ: Holcim Indonesia (SMCB IJ) Anthony Yunus 15 Materials | Below Expectations | HOLD | Upside 0.9% - Holcim Indonesia (SMCB) booked a 1H12 net profit of IDR504b, up by

10% YoY. This figure was below our expectations, constituting just 42% of our FY estimates. On a QoQ basis, net profit grew by 2% QoQ to IDR255b.

- We expect SMCB’s domestic sales to grow by 11% YoY in 2012 to 8.3m tonnes from 7.5m tonnes in 2011. There is an upside to our 10% volume forecast in 2013 given the additional capacity of 1.7m tonnes from its new plant in Tuban.

- SMCB has been lowering its debt; it is expected to have a debt-to-equity ratio of 0.2x by the end of this year. We maintain our TP of IDR2,750; however, we have tweaked our estimates to be in line with the company’s results. HOLD.

10 September 2012

Regional Daily

MK: Steel Sector Lee Yen Ling 16 Sliding Into Recession | UNDERWEIGHT - Despite our expectation of stronger domestic demand, Malaysia steel-

makers are faced with a more challenging outlook in 2H12-2013. - This is due to: (i) Malaysia/export steel ASPs are under pressure to track

closer to China’s depressed ASPs, which will squeeze margins; (ii) dumping activities from China will also result in lower sales volume.

- We recently downgraded AJR and Kinsteel from Buy to Hold during the 2Q12 results season and now further downgrade AJR to SELL with a lower TP of MYR1.30 (-19%) while Kinsteel remains a HOLD with an unchanged TP of MYR0.40.

Economics MY: External Trade Statistics, July 2012 Suhaimi Ilias 17 Dual Track Economy... - Exports shrank 1.9% YoY in July 2012 (June 2012: +5.4% YoY), worse

than our (+1.1% YoY) and consensus (+3.5% YoY) estimates as weakness in the global economy beginning to bite.

- In contrast, import growth quickened to +9.5% YoY (June 2012: +3.6%% YoY) on the back of the domestic demand proxies i.e. consumption goods (July 2012: +14.1% YoY; June 2012: +10.9% YoY) and capital goods (July 2012: +34.7% YoY; June 2012: +15.5% YoY) which offset further decline in the external demand gauge i.e. intermediate goods (July 2012: -2.9% YoY; June 2012: -5.3% YoY).

- The data confirmed Malaysia’s dual track economy witnessed in 1H 2012 is continuing into 3Q 2012 i.e. robust and resilient domestic demand underpinned by consumer spending and investment that offset weak external demand.


Economics 10 September 2012

Regional

Co. Reg No: 198700034E MICA (P) : 099/03/2012

Concerted easing ahead FOMC and PBoC to reinforce ECB

FOMC needs to forestall the rising spectre of 1937. The weaker-than-expected rise in US non-farm payrolls (96,000, versus consensus expectations of 130,000) in August 2012 (with numbers for the previous two months also revised down by 41,000) makes it all but inevitable that the US Federal Open Market Committee (FOMC) will ease monetary policy this week. We think the FOMC is likely to lower the interest rate on banks’ excess reserves (from 0.25% to 0.1%), and also announce a mild form of quantitative easing (much smaller than the US$600bn in QE2). Fed chairman Bernanke had stated in late-August (at the annual Jackson Hole conclave of central bankers) that the economy (and especially the job market) was “far from satisfactory”. The Fed chairman and vice-chair Yellen have reiterated that they would take out “insurance against the realization of downside risk”. In particular, they are especially cognizant of the risk of a repeat of 1937 (when the FDR administration’s attempt to eliminate the fiscal deficit led to a severe recession); the 2013 equivalent (albeit smaller) is the “fiscal cliff”.

Chart 1: Anemic gains in non-farm payrolls fail to compensate for 2008-09

Source: Maybank-KE, CEIC

The FOMC has made clear that further easing will occur in the absence of a “substantial and sustainable strengthening in the pace of economic recovery”. Neither the job data (chart 1) nor the ISM manufacturing data (chart 2) show any evidence of any such strengthening, instead pointing to a further weakening of the US recovery. The ISM manufacturing PMI moderated further to 49.6 in August (the third consecutive reading below 50, and the lowest since July 2009). Crucially, the new orders index (which is an excellent 6-month leading indicator of US demand for Asian exports; chart 2) slumped further to 47.1 in August, a level which suggests that Asia's exports to the US will decelerate to just 3%YoY growth in February 2013 (remaining at 3-5%YoY growth in Dec12-Feb13).

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Prasenjit K. Basu [email protected] (65) 6432 1821

10 September 2012 Page 2 of 10

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Chart 2: US demand for Asian exports set to weaken


Contagion from Europe is dragging the world (including Asia) down. Asia's exports to the US had held up very well until July 2012, and ISM manufacturing new orders (in the 58-60 range in March-May 2012) had suggested close to 10%YoY growth in Asia's exports to the US in Sep-Nov12. That trajectory now looks in jeopardy, as the ISM Production index (a good coincident indicator of US industrial production) slipped sharply to 47.2 in August, the first reading below 50 since the dark days of May 2009 (and down sharply from July's 51.3 reading). The deepening slump in Europe is now beginning to drag the world --including the hitherto-strong US and already fragile China -- down with it. The weak ISM numbers make it almost inevitable that the FOMC will break with tradition and ease monetary policy at this week’s meeting (despite it being in the middle of the election season).

ECB president Mario Draghi delivered on his July 26th promise to “do whatever it takes” to secure the survival of the Eurozone. On September 6th, the ECB effectively provided a conditional backstop to sovereign bond yields in the Eurozone. Any country agreeing to the conditions of an EFSF (or in future ESM) package (with conditionality imposed and monitored by the IMF) will qualify for unlimited intervention in the secondary market for its 1-3 year bonds by the ECB. Such intervention will cease as soon as a country is judged as being non-compliant with EFSF/ESM conditionality (as determined by the IMF or troika). The aggressive, credible action by the ECB has forestalled the worst danger of a synchronized global recession in 2013 (and we continue to judge that probability to be 0.25 – although it could have risen to 0.5 in the absence of credible action by the ECB).

The policy ball is now in Spain’s court (to accept EFSF conditions). Neither Spain nor Italy has yet agreed to an EFSF package. But their sovereign bonds had rallied last week (in anticipation of the ECB move, and even more sharply after the announcement on Thursday), with Spanish 10-year yields declining 35bp to a 6-month low after the ECB announcement and Italian 10-year yields falling 15bp to a 4-month low. If the German Constitutional Court affirms the legality of German participation in the ESM this Wednesday (Sept 12th), the Eurozone will also be able to resume moving toward a banking union by year-end. This will provide for ECB regulation of banks across the Eurozone (and centralized deposit insurance) in exchange for ESM capital injections into weaker banks (e.g., in Spain's Bankia, and Ireland's nationalized banks). There will thus be a dual process

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available to improve the "transmission mechanism" for monetary policy in the Eurozone -- and reduce the divergence of interest rates across the Eurozone. (Greece, which is currently non-compliant with its troika conditions, will not qualify, but Ireland and Portugal will, as will Spain once it agrees to an EFSF program).

The OMT intervention will be sterilized, so it does not constitute any further easing of monetary policy. By effectively promising to (conditionally) contain periphery sovereign bond yields, the ECB has effectively lowered the cost of borrowing across the Euro-periphery in the past month. Continuing its calibrated moves, we expect the ECB to cut its policy rate by 25bp next month -- after the markets (and Spain's government) digest the impact of the conditional OMT program. Such a rate cut can be justified with reference to the “second pillar” of ECB monetary policy, which stipulates a target for M3 growth of 4.5% YoY: the Eurozone remains well below that (currently 2.5%YoY), as banks prefer to hold excess reserves or lend to sovereigns (rather than to non-government and non-bank borrowers), thereby causing the money multiplier to deteriorate further (chart 3).

Chart 3: M3 growth in the Eurozone remains anemic


Asia has greater capacity to absorb liquidity flows, as currencies are under-valued (except PHP) and foreign reserves flat for the past year. Asia’s foreign reserves (US$5.27bn at end-June 2012) are lower than they were in August 2011 (US$5.37bn), so Asia has no real challenge of excessive capital inflows – of the sort that it experienced during QE1 and QE2. The only exception is the Philippines (where foreign reserves are up 10.3% YoY, and the central bank cut rates last month to fend off additional capital inflows). For the rest of Asia, any improvement in risk-appetite – arising from the likely easing in the US, and the credible moves by the ECB – will present a welcome opportunity to reverse the depreciation of Asian currencies in the year-to-date, and allow external liquidity to boost asset markets.

Chart 4: Asia’s foreign reserves flat for the past year

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China cyclical weakness suggests PBoC will ease

Industrial output and FAI continue to decelerate in August. The early release of China’s cyclical data for August (on Sunday evening, September 9th) suggests a degree of growing cyclical concern among policy makers in Beijing. Crucially, industrial output decelerated further to 8.9% YoY growth in August (from 9.2% YoY in July, and compared with a Bloomberg consensus expectation of 9.1%). Excess capacity in most capital-intensive industries (especially in construction-related sectors) is acting as a restraint. Fixed asset investment (FAI) decelerated to 18.8% YoY growth in August 2012 – although the crucial disaggregated data for investment in residential building will not be released until Monday evening. Amid large inventories of unsold homes in urban China, a moderation in such construction will be a positive sign that the imbalances in the economy are being reduced. Chart 5: China’s broad-based cyclical deceleration continues

Source: Maybank-KE, CEIC PBoC rate cut is imminent, in our view. We continue to expect China to ease monetary policy further, cutting its benchmark lending and borrowing rate by at least 25bp this month, and also reducing banks’ cash reserve requirements (CRR) by 100bp by the end of 2012; we also expect a further 25bp cut in policy rate in 1Q 2013. Monetary policy works with a lag of about two quarters in China, so the economy is only likely to respond in 4Q 2012 to the monetary easing (increased pace of lending, and rate cuts) that began in June 2012. However, with the economy still decelerating – while inflation remains low (at 2% YoY for CPI in August, albeit up slightly from July’s 1.8%YoY), there is room for

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China: IP and FAI weaken further in August

Industrial Prodction YoY % Fixed asset investment: YTD: YoY %FAI: residential building: YTD: YoY %



an interest rate cut. If the PBoC chooses not to lower interest rates (for fear of bolstering property prices), we would laud them for prudence – but would have to consider lowering our real GDP growth forecasts for 2012 and 2013 (from 7.7% and 7.3% respectively at present).


Regional Market Strategy 10 September 2012

The Big Picture Not Losing Its Punch Silver lining. In the past year, Hong Kong has had more than its fair share of controversies and divisive issues, and the economy has also weakened significantly in 1H12, with growth falling to 0.9% YoY from 3.7% YoY in 2H11. Notwithstanding the recent weakness, we believe that Hong Kong will stand up well to the stiff global economic headwinds, given its increasing integration with China.

Services exports. A higher quota for tourism under the individual travel scheme, the expanding scope for Renminbi trading and the joint development of Qianhai will provide Hong Kong with sufficient growth opportunities, we believe. Moreover, the current unemployment rate remains at a low 3.2%.

Real estate a priority. As such, CY Leung’s immediate challenge is not about job creation, but striking a balance in housing policy. Hopefully his policy addresses in Jan 2013 will set a clear direction, to avoid an asset bubble and promote healthy growth in real estate prices.

A relative call. Thus Hong Kong’s problems fade in comparison with some of its Asian neighbours and at a PBR of 1.2x, valuations look undemanding compared to the region’s 1.4x. On a 3-month view, we are Neutral on the market, until there is further improvement in the outlook of the real estate sector.

Sector strategy. We expect sentiment on high beta stocks to improve in 3Q12 and possibly early 4Q12, due to policy reflation in the Western economies. Export-oriented stocks will see some relief rally, as they are trading at attractive valuations; our key overweight is in the financials, industrials and IT sectors. Further out, we expect the consistent dividend payout by some of the banks, property (including REITs) and utilities stocks to be the key support for the Hong Kong market.

Figure 1: Affordability ratio (%)

Source: CEIC

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Neutral THAM Mun Hon, CFA [email protected] (852) 2268 0630 Jeremy TAN [email protected] (852) 2268 0635 Hong Kong Research Team


Hong Kong Sector Report 10 September 2012

Lead-Acid Battery Sector Domination of Large Players Continues Impressive 1H12 results among industrials. The top players in the lead-acid battery industry enjoyed extraordinary growth in 1H12 despite the economic slowdown in China. Thanks to the huge market opportunities arising from the government-led industry consolidation, Tianneng (819, BUY) and Chaowei (951, Not Rated) were able to capture market shares from small battery players during the period, which resulted in robust earnings growth of 87% and 127% YoY respectively. Leoch (842, Not Rated) is not a direct comparable as it focuses on reserve power battery (not motive power battery like Tianneng and Chaowei do) and its weak 1H12 results were attributed to the execution error of new production plant.

Chaowei leads the market in sales volume. In 1H12, Chaowei and Tianneng operated at almost full capacity and their sales volume increased to 35m units (up by 100% YoY) and 32m units (up by 55% YoY) respectively. Both companies have been aggressively ramping up production capacities in order to gain market shares for the e-bikes battery market. We expect the e-bike battery sales of both parties to grow faster than the average growth rate of the industry in 2H12, as the government continues to tighten control over lead-acid battery production.

M&A targets in sight. Due to the rising entry barrier and increasing maintenance costs, it has become increasingly difficult for small players to operate in this environment. We believe that existing lead-acid players are likely to ramp up their capacities further in order to extend their dominance over small players. In addition to organic growth, Tianneng and Chaowei are actively looking for acquisition targets that are operating at the cost breakeven level and have well-established production facilities and advanced technologies. Though such aggressive expansion strategies would result in high Capex investment and a surge in gearing ratio for 2012, they are likely to benefit in the long-term. These big players are essentially capitalizing on growth opportunities, as the industry undergoes a rapid consolidation phase.

Good start in 2H12. According to CEIC, lead-acid battery production rose by 45% YoY in July and production volume reached 14.9m KVAH. We suggest that the strong growth in July could be partly attributed to the low-base in 2011 owing to the government inspection last year, however, we believe that current numbers are indicating that the demand for lead-acid battery is going strong as we see rising demand in the replacement (secondary) market for leading players like Tianneng and Chaowei.

Industry consolidation continues; Reiterate BUY on Tianneng. We maintain our positive stance to the leading players in the lead-acid battery sector, as they are in a better position to benefit from the increasing concentration in the e-bike battery market. Tianneng is our top pick in the sector. The launch of lead recycling plant would offer first mover advantage to its peers in the industry, as its key rival Chaowei does not have a plan to do that yet. In addition to its diversified business nature, Tianneng also enjoys a better net margin than Chaowei in the past few years. Tianneng’s current share price is also well supported by its undemanding valuation (5.8x FY12F PER) and dividend yield (5.2% FY12F).

Alex YEUNG [email protected] (852) 2268 0636 Tianneng Power (819)

Chaowei Power (951)

Leoch International (842)

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Sector Update 10 September 2012

Singapore

Co. Reg No: 198700034E MICA (P) : 099/03/2012

S-REITs The allure of S-REITs Defying Gravity: Highest Yield-Spreads and Returns Globally.

• S-REITs has risen 28.7% YTD, outperforming even major REITs markets such as US, Australia and Japan etc (Figure 1).

• We pointed out that S-REITs has one of the highest yield spreads globally in our previous report dated 3 Sep 2012. We took a deeper look at global/regional peers and below are our assumptions and proposed theses why this may be the case:

• Why Asian REITs have much higher yield spreads.

o The Asian REITs (S-REITs, J-REITs, and HK-REITs, excluding M-REITs), outperformed the non-Asian REITs (US-REITs, UK-REITs, A-REITs) in terms of yield spreads partly due to higher borrowing costs in the West (consequence of US/European deleveraging) and Australia.

o With the exception of M-REITs, the Asian REITs incur average cost of borrowing (sector average) of ~1.5%-3.1%, much lower than the 5.5%-6.9% expensed by non-Asian REITs.

o We noted that despite risk-free rates being low in the US (1.6%) and UK (1.6%), the actual borrowing costs to companies on the ground are relatively higher, compared to Asia. Western banks have become parsimonious in their lending vis-à-vis the robust loan growth situation amongst Asian banks.

o From our observations, A-REITs and UK-REITs have average cost of borrowings much higher than normalized cap rates, rendering DPU yields to be trading near cap-rates levels (Figure 4 & 5). As a result, yield spreads are much lower in comparison. For US-REITs, the high borrowing costs are partly offset by their higher cap rates, but this is still insufficient to cover the 178-211 bps yield spread lag behind Asian REITs (excluding M-REITs).

o In M-REITs case, both the cost of borrowing and risk free rates are much higher than S-REITs, J-REITs and HK-REITs, resulting in much lower yield spreads.

Stocks

Mkt Cap

(US$m) Current

Price Rating Target

Price

2012f DPU yield

(%)

Total return

(%) TOP BUYs Ascendas REIT 4,222 2.34 BUY $2.45 5.9% 11% CapitaMall Trust 5,372 2.00 BUY $2.25 5.0% 17% Starhill Global REIT 1,167 0.745 BUY $0.81 5.7% 14% Frasers Centrepoint Trust 1,195 1.8 BUY $1.87 5.3% 10%

Source: MBKE estimates

OVERWEIGHT ONG Kian Lin [email protected] (65) 6432 1470


Regional Market Strategy 10 September 2012

Ebbs & Flows What A Difference A Day Makes Investors were jittery ahead of ECB’s policy meeting on 6 September,

selling down USD10.6b of global equities for the week ending 5 September. The outflow was mainly driven by ETF investors, whose selling amounted to USD7.2b, overshadowing the non-ETF selling of USD3.4b.

After five consecutive weeks of inflows, Asia ex-Japan equities were hit with an outflow of USD1.3b, more than offsetting the inflows of the previous five weeks. Net selling was seen in all sectors with the IT sector suffering the biggest outflow (1% of total assets) while in dollar terms, financials recorded most significant outflows of USD337m.

On a country level, Philippines was the hardest hit, at 10% of total assets, as institutional investors continue to take profit due to its rich valuations. High beta markets such as Taiwan and China also saw heavy selling after the latter reported a lower than expected official Purchasing Manager’s Index (PMI) figure of 49.2 for August, down from 50.1 a month earlier.

With ECB’s announcement on 6 September that it will commit to unlimited bond buying (on condition that the Eurozone nations seek help under the EFSF/ESM framework), investor sentiment should improve in the week ahead. The next event to watch out for is on 12 September, when German courts will rule on the legality of the ESM. We see a small risk that it will not be approved; high beta sectors and stocks should therefore recover from the latest round of selling.

Weekly sector flows

% of assets Weekly flow (USDm) Year-to-date flows Country 5-Sep-12 5-Sep-12 29-Aug-12 22-Aug-12 15-Aug-12 USDm % YoY Consumer Discretionary (0.55) (117.9) 94.6 27.1 51.2 (370) 65.1 Consumer Staples (0.67) (74.4) 29.9 8.7 23.9 (191) 69.9 Energy (0.58) (93.3) 56.5 (2.1) 14.9 (107) 89.4 Financials (0.58) (337.3) 125.6 (24.4) 77.1 (846) 73.1 Health Care (0.88) (32.1) 2.3 (3.2) 2.2 (93) 65.6 Industrials (0.59) (101.9) 57.0 4.5 38.3 (484) 51.7 Information Technology (1.01) (294.9) 64.6 17.3 (23.7) (913) (79.4) Materials (0.76) (101.9) 42.5 7.3 4.8 (403) 42.4 Telecom Services (0.64) (71.4) 30.9 (6.7) 3.7 (89) 78.3 Utilities (0.59) (24.0) 2.3 (9.2) 9.1 (29) 89.4 Source: EPFR, Maybank-KE

Jeremy TAN [email protected] (852) 2268 0635 THAM Mun Hon, CFA [email protected] (852) 2268 0630


Company update 10 September 2012

India

Steel Authority of India (SAIL) Falling Coal Prices To Support Rise In EPS

Current PER of 7.3x FY13F is lowest in 5 yrs. In the last 1 month, the SAIL stock price fell 10% despite strong Q1 performance (recurring EPS +12% QoQ). This has been due to uncertainty over recovery in domestic steel demand. However, we are confident of 15% increase in SAIL’s FY13 profit even though we assume increase in demand of just 4% and price decline of 2%. Profit will come from savings on coal costs as prices have declined 35% since April. Currently, SAIL is trading at 40% discount to its historic 5-yr avg PER of 12x. We see 2 positive triggers for the stock in the medium term: news of recovery in the local economy and announcement of share sale by gov’t. Maintain BUY. RM cost declined sharply whereas steel prices are holding up. Since July, coal prices declined 15% compared with the mere 2% decline in steel price. This would increase SAIL’s Q2 cash spread by 5% QoQ. For full year, we forecast cash spread to rise 10% to Rs8.5k/ton after factoring in 2% decline in steel prices. Sales volume to remain weak thru FY13. SAIL’s Apr-Aug steel production increased 3% YoY. Demand continues to suffer due to a slowing economy. For full year, we assume 4% rise in sales volume. Commissioning of new plants has finally begun. Last quarter, SAIL started two coke oven batteries with total capacity of 1.6m ton. This will allow the company to cut power and fuel costs. SAIL's volume increase from capacity expansion is still a few quarters away (SAIL targets to add 3.5m ton of new steel capacity by Mar’13). We are confident of 15% EPS growth this year. SAIL’s earnings are sensitive to volatility in coal prices. The company confirmed that it is currently locking coal at Rs9.5k/ton for the rest of FY13. For full-year, we have assumed coal prices at Rs11.3k/ton, at 20% above the current price. Despite this, FY13F cash spread would rise 10% to Rs8.5k/ton. 30% discount to book is unjustified, Maintain BUY. SAIL’s P/BV of 0.7x FY13F is too low, given that its ROE would rise to 10.2% this year from 9.6%. Compared with peers, SAIL will benefit the most from economic recovery due to complete focus in the local market and secured RM supply. We value SAIL at PER of 10x FY13F - Rs111/sh. SAIL – Summary Earnings Table FY Mar 31 (Rs bn) FY10 FY11 FY12 FY13F FY14F Revenue 405.7 428.1 466.6 480.7 541.4 EBITDA 94.2 73.7 64.0 78.2 94.2 Recurring Net Profit 68.5 50.2 38.6 44.4 52.8 Recurring Basic EPS (Rs) 16.6 12.1 9.3 10.7 12.8 EPS growth (%) 10 -27 -23 15 19 DPS (Rs) 3.3 2.4 2.0 2.0 2.0 PER (x) 4.7 6.4 8.4 7.3 6.1 EV/EBITDA (x) 3.4 4.4 5.0 4.1 3.4 Div Yield (%) 4.2 3.1 2.6 2.6 2.6 P/BV(x) 1.0 0.9 0.8 0.7 0.7 Net Debt/Equity (%) 0.0 9.3 37.4 57.6 63.4 ROE (%) 20.3 13.3 9.6 10.2 11.0 ROA (%) 9.7 6.4 4.9 5.0 5.3 Consensus Net Profit (Rsm) - - - 38.4 43.8

Source: Company data, Bloomberg, KESI estimates

BUY (unchanged) Share price: Rs78/sh Target price: Rs111/sh (unchanged)

Anubhav Gupta [email protected] (91) 22 66232605

Stock Information Description: SAIL is country's largest steel producer with capacity of 12.5m ton. It is an integrated producer with own iron ore mines. Ticker: SAIL IN Shares Issued (m): 4,131 Market Cap (US$ bn): 5.8 6-mth Avg Daily Volume (US$m): 7.4 SENSEX: 17,683 Free float (%): 14.2 Major Shareholders: % Gov’t of India 85.8 Life Insurance Corporation of India 4.7

Key Indicators (FY13F) ROE – annualised (%) 10.2 Net debt (Rs bn): 250.9 NTA (Rs/sh): 105.3 Interest cover (x): 4.1

Historical Chart

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SAIL SENSEX

(%)

Performance: 52-week High/Low Rs123/73 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) -10.8 -18.3 -14.7 -36.1 -4.4 Relative (%) -11.3 -24.5 -17.9 -39.7 -18.9

mailto:[email protected]


Philippines Interim Results 10 September 2012

Metro Pacific Investments Corp Decent growth continues in 2Q12

Higher earnings across all business units. Net of exceptional items, Metro Pacific Investments Corp’s (MPI) 1H12 core income grew 30% YoY to PHP3.46b. This implies 2Q12 core income reached PHP1.87b, up 22% YoY and 18% QoQ. All units contributed higher equitized earnings in 1H12, increasing by a combined 17% to PHP4.04b. The results were better than expected as profit contribution from Manila Electric Co (MER – HOLD) and Metro Pacific Tollways (TOL–Not rated) exceeded our estimates. Maynilad Water Services contributed most to equitized earnings with 43% or PHP1.73b, followed by MER with 33% or PHP1.31b, TOL with 19% or PHP787m and hospitals with 5% or PHP207m. Profit contribution from MER and TOL adjusted upwards. We raised our 2012 profit contribution forecasts on MER and TOL by 5% to PHP2.51b and 12% to PHP1.44b, respectively. Both contributed higher profits in 1H12, with MER, through its parent Beacon Electric Asset Holdings, posting a 21% increase. On a stand-alone basis, MER registered a 15% increase in 1H12 core income, boosted mainly by the recovery of local franchise taxes in 2Q12. Meanwhile, TOL’s income contribution was 9% higher in 1H12. This exceeded our forecasts as operating expenses came in lower than expected. For 2013, we upgraded our profit estimates on MER/Beacon and TOL by 6% each to PHP2.90b and PHP1.47b, respectively.

Other units performed broadly as expected. Maynilad’s earnings contribution grew 12% in 1H12 due to a 9.2% increase in volume sales and a 7.0% effective tariff increase. Although we maintained our 2012 profit target on Maynilad at PHP3.95b, we lowered our 2013 forecasts by 3% to PHP4.71b to factor in a lower CPI-based rate adjustment. For MPI’s hospital business, we maintained our 2012 and 2013 profit forecasts at PHP429m and PHP503m, respectively. Maintain HOLD. Factoring our earnings revisions, we now forecast MPI’s core income to reach PHP6.48b in 2012 and PHP7.71b in 2013, higher by 5% and 1% previously. For its part, MPI raised its 2012 profit guidance by 5% to PHP6.3b. Using our revised sum-of-parts NAV estimate of PHP5.61/sh, while maintaining a 15% discount to NAV, we derived a new price target of PHP4.56/sh from PHP4.46/sh previously. With our price target just offering an 8.8% upside to MPI’s current share price of PHP4.21/sh, inclusive of a 0.6% dividend yield, we maintain our HOLD rating on MPI. Metro Pacific Investments Corp– Summary Earnings Table FYE 31 Dec (PHPm) 2009A 2010A 2011A 2012F 2013FRevenue 16,108 18,564 22,070 28,255 31,392 EBITDA 6,223 8,333 9,940 12,927 14,269 Recurring Net Profit to Common 2,047 3,856 5,101 6,479 7,715 Recurring Basic EPS to Common (PHP) 0.17 0.19 0.23 0.26 0.31 EPS growth (%) 71.9 11.3 22.4 12.4 19.1 DPS (PHP) 0.00 0.01 0.03 0.03 0.03 PER 26.2 22.0 18.9 16.0 13.4 Div Yield (%) 0.0 0.2 0.6 0.6 0.6 PBV(x) 1.7 1.6 1.4 1.3 1.2 Net Gearing (%) 73.4 54.9 36.8 35.5 25.1 ROE (%) 5.8 7.3 8.0 8.4 9.3 ROA (%) 1.9 3.0 3.5 4.0 4.6 Consensus Net Profit (PHPm) n/a n/a n/a 6,750 7,736 Source: MPI, Bloomberg, Maybank ATR Kim Eng Securities, Inc

HOLD (unchanged) Share price: PHP4.21 Target price: PHP4.56 (upgraded from PHP4.46) Laura Dy-Liacco [email protected] (632) 849 8840

Stock Information Description: MPI is a holding company for the First Pacific Group’s investments in infrastructure projects. It holds interests in water, sewerage, and power utilities, toll roads, and hospitals. Ticker: MPI PM / MPI.PS Shares Issued (m): 24,599.5 Market Cap (PHPm): 103,563.8 Market Cap (USDm): 2,484.7 3-mth Avg Daily Turnover (USDm): 1.69 PSEi: 5,201.32 Free float (%): 41 Major Shareholders: % First Pacific Group 59.0 Key Indicators

ROE – annualised (%) 8.4 Net debt (PHPm): 34,082 NTA/shr (PHP): 3.24 Interest cover (x): 3.0

Historical Chart

MPI PM

2.5

3.0

3.5

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Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Performance: 52-week High/Low PHP4.65/PHP2.56 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 1.45 (0.24) 16.30 29.54 15.03 Relative (%) 3.01 (3.79) 10.61 9.00 (3.94)


Results Review 10 September 2012

Indonesia

Holcim Indonesia Below Expectations

1H12 earnings grew by 10% YoY. Holcim Indonesia (SMCB) booked a 1H12 net profit of IDR504b, up by 10% YoY, mainly supported by 18% YoY growth in revenue. The bottomline was below our expectations, constituting just 42% of our FY estimates. On the operating front, operating profit grew by 11% YoY. On a quarterly basis, net profit grew by 2% QoQ to IDR255b.

Slight margin pressure due to rising costs. We expect gross profit margin will decline slightly to 37% in 2012 from 38% in 2011, as the cost/tonne is expected to rise by 4%. We think that SMCB will be able to increase the average selling price by 3-4% this year to help offset the rising costs. Given its Java focus (74% of its sales are from Java) and strong demand from the region, we think that there may be an upside to the selling price. Margin should recover in 2013 given stabilising energy costs.

Tuban new plant to add capacity in 2013. SMCB has the excess capacity to grab market shares this year. We expect SMCB’s domestic sales to grow by 11% YoY in 2012 to 8.3m tonnes from 7.5m tonnes in 2011. There is an upside to our 10% volume forecast in 2013 given the additional capacity of 1.7m tonnes from its new plant in Tuban. Additional capacity is planned for 2016. We also expect the “Solusi Rumah” franchise network to grow, thus further supporting demand.

Healthy balance sheet. SMCB has been lowering its debt; it is expected to have a debt-to-equity ratio of 0.2x by the end of this year. Its capex is set to rise this year with the construction of the new Tuban plant. With manageable capex and plenty of cash, the company has been distributing a decent cash dividend: it recently raised its payout ratio from 21% to 40% this year, providing a dividend yield of around 2%.

Estimates tweaked, maintain HOLD. We maintain our TP of IDR2,750; however, we have tweaked our estimates to be in line with the company’s results. We raise our COGS estimate by 3% for FY12, thus lowering the bottomline by 4% (see the forecast changes in the table below). Our TP translates to an upside of only 0.9% from the current level. Reiterate HOLD.

Holcim Indonesia– Summary Earnings Table FYE Dec (IDR b) 2010A 2011A 2012F 2013F 2014FRevenue 5,961 7,524 8,610 9,429 10,463 EBITDA 1,854 2,214 2,347 2,753 3,019 Recurring Net Profit 828 1,063 1,153 1,468 1,706 Recurring Basic EPS (IDR) 108 139 150 192 223 EPS growth (%) -7.5 28.3 8.4 27.3 16.2 DPS (IDR) 0 22 28 30 38

PER (x) 25.2 19.6 17.4 13.7 11.8 EV/EBITDA (x) 11.8 9.6 8.6 7.1 5.9 Div Yield (%) 0.0 0.8 1.1 1.1 1.5 P/BV(x) 3.1 2.8 2.3 2.0 1.8

Net Gearing (%) 15.4 5.2 2.0 Net cash Net cash ROE (%) 16.3 14.8 14.3 15.9 16.2 ROA (%) 9.4 9.9 10.1 12.0 13.2 Consensus Net Profit (IDR b) 916 999 1,187 1,406 1,611 Source: Kim Eng

HOLD (unchanged) Share price: IDR2,725 Target price: IDR2,750 Anthony Yunus [email protected] (62 21) 2557 1136 Stock Information Description: Holcim Indonesia is a leading fully integrated producer of cement, ready mixed concrete and aggregates with a unique and expanding retail franchise offering the most complete end-to-end solution to home building. Ticker: SMCB.IJ Shares Issued (m): 7,663 Market Cap (US$ m): 2,177 3-mth Avg Daily Turnover (US$ m): 1.4 IDX index: 4144 Free float (%): 19.4 Major Shareholders: % Holderfin BV Netherlands 80.6 Key Indicators

ROE – annualised (%) 14.4 Net cash (IDR b): 431 NTA/shr (IDR): 1,563 Interest cover (x): 15.3

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IDR Millionshares

Performance: 52-week High/Low IDR2,850/IDR1,650 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 3.8 14.7 9.0 32.9 28.2 Relative (%) 2.4 6.8 3.9 29.4 19.5


Sector Update 7 September 2012

PP16832/01/2013 (031128)

Malaysia

Steel Sector Sliding Into Depression

Symptoms manifested. Despite our expectation of stronger domestic demand, Malaysia steel-makers are faced with a more challenging outlook in 2H12-2013: (i) Malaysia/export steel ASPs are under pressure to track closer to China’s depressed ASPs, which will squeeze margins; (ii) dumping activities from China will also result in lower sales volume. We recently downgraded AJR and Kinsteel from Buy to Hold during the 2Q12 results season and now further downgrade AJR to SELL with a lower TP of MYR1.30 (-19%) while Kinsteel remains a HOLD with an unchanged TP of MYR0.40.

Steel overhang depressing ASPs. The recent sharp fall in ASPs of benchmark iron ore (-39% YTD) and steel bar in China (-18%) indicate a steel overhang situation in China (accounts for 48% of global steel production). The steel overhang is due to: (i) faltering steel demand in China on weaker property sales - growth in China’s total YTD floor space under construction has slowed to 17% YoY (vs. 33% in 2011 and a record low of 12% in 2005); and (ii) the slow implementation of steel production cuts - China’s steel production is up 4% YoY in Jul 2012.

China leading global ASPs. Currently, steel bar ASP in China is USD540/mt (-7% MoM), 16% lower than international market prices and 22% lower than Malaysia’s. In our view, global steel ASPs will decline and track closer to China, given that steel is a widely-traded commodity.

Increasing dumping risk. In Malaysia, there is already an influx of wire rods from China (since three months ago) and local steel-makers are selling wire rods at break-even. Additionally, we also believe Malaysia steel bar ASP will eventually succumb to the fall. This will result in a margin squeeze and potentially a recurrence of the industry-wide losses in 2005 (led by dumping from China). Though Malaysia MITI is investigating the alleged dumping activities from China, a clear measure (i.e. anti-dumping duties) may take time to materialise.

No M&A excitement. In 2Q12, Lion Group indicated that it was still in talks with a major China steel miller for a potential stake sale and that a positive decision was imminent. However, we do not expect the M&A to materialise in the short- to medium-term given the depressed steel market outlook and similarly depressed valuations in China (0.6x P/BV).

Pegging to trough valuations. Earnings going forward will continue to be volatile as the fall in input/output ASPs will see steel-makers writing down their inventories. We are negative on the sector and peg AJR and Kinsteel at their respective trough 0.6x (from 0.7x) and 0.5x P/BV.

Steel Sector – Peer Valuation Summary Source: Maybank KE Stock Rec Shr px Mkt cap TP PER (x) PER (x) P/B (x) ROAE (%) ROAE (%) Div yld Div yld

(RM) (RMm) (RM) CY12E CY13E CY12E CY12E CY13E CY12E CY13E Ann Joo (AJR) Sell 1.46 763 1.30 12.2 9.6 0.7 5.6 6.8 2.8 3.6 Lion Industries NR 1.09 783 NR 6.9 4.8 0.2 3.8 4.9 2.0 2.5 Kinsteel Hold 0.40 414 0.40 11.2 4.5 0.6 5.1 11.5 2.5 2.5 Southern Steel NR 1.73 726 NR 8.7 6.9 0.8 9.1 10.9 4.0 4.5 Perwaja NR 0.58 322 NR 12.8 3.6 0.5 3.0 11.4 0.0 0.0 Masteel NR 0.92 193 NR 7.0 4.4 0.4 4.9 8.9 0.8 1.3 Simple Average 9.8 5.6 0.5 5.2 9.0 2.1 2.4

UNDERWEIGHT (from Overweight) Lee Yen Ling [email protected] (03) 2297 8691


Economics 10 September 2012

PP16832/01/2013 (031128)

Malaysia

Dual Track Economy

Trade growth in July 2012 highlighted a dual speed economy as exports contracted by -1.9% YoY (Jun 2012: +5.4% YoY; Maybank-KE: +1.1% YoY; Consensus: +3.5% YoY) while imports growth accelerated to +9.5% YoY (Jun 2012: +3.6% YoY; Maybank-KE: +2.0% YoY; Consensus: +5.1% YoY). The resulting trade surplus of MYR 3.6b (Jun 2012: MYR 9.1b) was the smallest since April 2002. From the previous month, exports contracted by -4.7% while imports grew by +5.3%. In the first seven months of 2012, overall exports expanded by +3.3% YoY (7M2011: +6.9% YoY) while imports gained +8.2% YoY (7M2011: +8.7% YoY).

Underscoring weak external environment and robust domestic demand. Imports of intermediate goods (Jul 2012: -2.9% YoY; Jun: 2012: -5.3% YoY) which is a good proxy to external demand contracted for the fourth time over the past five months. In comparison, domestic demand which was the primary driver of economic growth in 1H 2012 sustained its momentum into 3Q12 as imports of consumption goods (Jul 2012: +14.1%; Jun: 2012: +10.9% YoY) and capital goods (Jul 2012: +34.7%; Jun: 2012: +15.5% YoY) accelerated further, underlining the resilient consumer spending and investment activities.

Malaysia: External Trade Summary May-12 Jun-12 Jul-12 YTD 2012 2011 Exports (MYR b) 58.8 61.0 58.1 409.3 694.5

% YoY 6.7 5.4 (1.9) 3.3 8.7 % MoM 1.8 3.7 (4.7) -- --

Imports (MYR b) 54.2 51.8 54.5 354.6 574.2 % YoY 16.2 3.6 9.5 8.2 8.6 % MoM 7.9 (4.4) 5.3 -- --

Total Trade (MYR b) 113.0 112.8 112.6 764.0 1,269 % YoY 11.1 4.6 3.3 5.5 8.7 % MoM 4.6 (0.2) (0.1) -- --

Trade Balance (MYR b) 4.6 9.2 3.6 54.7 120.3 Import Components Consumption (MYR b) 3.8 3.9 4.2 25.9 41.0

% YoY 14.8 10.9 14.1 15.1 19.0 % MoM 7.6 1.6 8.3 -- --

Capital (MYR b) 8.9 8.1 8.3 54.8 80.9 % YoY 41.8 15.5 34.7 25.8 9.7 % MoM 11.2 (8.3) 1.5 -- --

Intermediate (MYR b) 33.8 31.7 33.2 222.1 375.3 % YoY 6.6 (5.3) (2.9) (0.9) 3.1 % MoM 6.1 (6.3) 4.8 -- --

Source: Department of Statistics

External Trade, July 2012 Suhaimi Ilias [email protected] (603) 2297 8682 Ramesh Lankanathan [email protected] (603) 2297 8685 William Poh [email protected] (603) 2297 8683





Malaysia External Trade, Jul ‘12

Recession in Europe and weaker demand from China were the major drags on exports. Exports growth to EU fell for the fifth straight month as it contracted by -20.6% YoY in Jul 2012 (Jun 2012: -8.4% YoY) led by declines in shipments to France (Jul 2012: -35.7% YoY), Germany (Jul 2012: -23.7% YoY), UK (Jul 2012: -18.4% YoY) and the Netherlands (Jul 2012: -14.4% YoY). Exports to China fell by -13.1% YoY (Jun 2012: +13.2% YoY) on the back of lower shipments of commodity-related items such as palm oil, crude petroleum and LNG alongside E&E-related manufactured goods such as monolithic integrated circuits. Exports were also down to other major destinations such as South Korea (Jul 2012: -28.2% YoY; Jun 2012: +4.3% YoY), Japan (Jul 2012: -1.4% YoY; Jun 2012: ++24.9% YoY), Hong Kong (Jul 2012: -0.7% YoY; Jun 2012: +12.8% YoY) and India (Jul 2012: -13.6% YoY; Jun 2012: -10.8% YoY).

ASEAN and the US were the only bright spots, indicating the uneven global economy currently. Shipments to the ASEAN region grew by +17.8% YoY (Jun 2012: +4.2% YoY) mainly on the strong double-digit growth to neighboring Singapore (Jul 2012: +25.8% YoY; Jun 2012: +1.4% YoY) and Indonesia (Jul 2012: +56.2% YoY; Jun 2012: +32.4% YoY). Meanwhile, exports to the US accelerated to its fastest pace in 28 months as it registered growth of +14.6% YoY in Jul 2012 (Jun 2012: +4.9% YoY) on higher shipments of E&E products such as photosensitive semi-conductor devices alongside optical and scientific equipment which included oscilloscope and spectrum analysers.

Commodity exports down prices and demand dropped. Palm Oil was the biggest drag on topline exports figure as it fell by -28.3% YoY in Jul 2012 (Jun 2012: -14.2% YoY) on both lower YoY average price (Jul 2012: MYR3,011/t vs Jul 2011: MYR3,100/t) and volume (Jul 2012: 1.2mt vs Jul 2011: 1.7mt). The second biggest drag on overall exports growth was LNG shipments which declined by -26.9% YoY (Jun 2012: +25.6% YoY) mirroring declines in shipment growth to Japan which is its largest destination. These added to the third consecutive month of fall in the exports of crude oil (Jul 2012; 29.9% YoY; June 2012: -6.1% YoY).

Amid lackluster manufacturing exports. E&E export growth were back in the red for the first time in two months Jul 2012: -4.8% YoY; Jun 2012: +2.1% YoY) on lower shipments of semiconductor devices and automatic data processing equipment in line with the book-to-bill ratio of global chip sales which fell for a fourth consecutive month (Jul 2012: 0.87; Jun 2012: 0.93). Refined Petroleum Products in the meantime helped cushion overall exports as it surged by +98% YoY (Jun 2012: +38.4% YoY) to reach MYR 5.24b or 9% of overall exports.

Most major trading nation’s recent trade and PMI figures were in the red. Countries that registered a notable streak of declining growth trends in exports measured in USD over the past few months include Taiwan, Indonesia, Australia, South Korea, Singapore and India while the likes of Japan, Thailand and Hong Kong registered back to back contractions. Forward looking global manufacturing PMI figures in the meantime fell to 48.1 in Aug 2012 from 48.4 in the preceding month suggesting that manufacturing activities continue to be sluggish in 3Q12 with almost all major reporting nations registering negative numbers with exception to India. Global services PMI on the other hand came in slightly lower at 52.3 compared to 52.7 registered in Jul 2012.



Malaysia: Export Growth, Import Growth & Trade Balance Malaysia: Breakdown of Imports Growth (% YoY)

(40)

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20

30

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0

2

4

6

8

10

12

14

16

18

Feb

-06

May

-06

Aug

-06

No

v-06

Feb

-07

May

-07

Aug

-07

No

v-07

Feb

-08

May

-08

Aug

-08

No

v-08

Feb

-09

May

-09

Aug

-09

No

v-09

Feb

-10

May

-10

Aug

-10

No

v-10

Feb

-11

May

-11

Aug

-11

No

v-11

Feb

-12

May

-12

Trade Balance (RM b, LHS) Exports (% YoY) Imports (% YoY)

(40)

(20)

0

20

40

60

May

-07

Aug

-07

No

v-07

Feb

-08

May

-08

Aug

-08

No

v-08

Feb

-09

May

-09

Aug

-09

No

v-09

Feb

-10

May

-10

Aug

-10

No

v-10

Feb

-11

May

-11

Aug

-11

No

v-11

Feb

-12

May

- 12

Intermediate Consumption Capital

Sources: Dept. Of Statistics, Maybank-KE Sources: Dept. Of Statistics, Maybank-KE

Malaysia: Contribution to Export Growth by Region / Country (ppt)

Malaysia: Contribution to Export Growth by Products & Commodities (ppt)

4.4

1.2

(2.1)

(0.2)

(1.8)(1.0)

(0.0)

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

ASEAN USA EU Japan China Korea Hong KongMay-12 Jun-12 Jul-12

(1.7)(0.5)

(1.3)(1.9)

(2.9)

0.2

4.4

0.1

(4.0)

(2.0)

0.0

2.0

4.0

6.0 E&

E

Chem

. & C

hem

. Pro

duct

s

Crud

e Pe

trol

eum

LNG

Palm

Oil

Mac

hine

ry, A

pplia

nces

&

Part

s

Refin

ed P

etro

leum

Pr

oduc

ts

Mfg

. of M

etal

May-12 Jun-12 Jul-12 Sources: Dept. Of Statistics, Maybank-KE Sources: Dept. Of Statistics, Maybank-KE Malaysia: Share of Exports by Destination (%) Malaysia: Share of Exports by Products (%)

29.5%

9.4% 8.4%

11.5% 12.1%

2.7%4.5%

21.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

ASEAN USA EU Japan China Korea Hong Kong

Others

% Share Total Exports

33.8%

6.8%

3.2%5.4%

7.4%

3.8%

9.0%

3.1%

27.5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

E&E

Chem

ical

s &

Chem

ical

Pro

duct

s

Crud

e Pe

trol

eum

LNG

Palm

Oil

Mac

hine

ry, A

pplia

nce

s & P

arts

Refin

ed P

etro

leum

Pr

oduc

ts

Man

ufac

ture

s of

Met

al Oth

ers

% Share Total Exports

Sources: Dept. Of Statistics, Maybank-KE Sources: Dept. Of Statistics, Maybank-KE



Malaysia: Exports (% YoY) Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Total Exports 15.4 8.0 6.1 0.4 14.5 (0.1) (0.1) 6.7 5.4 (1.9) Exports by Key Country

ASEAN 16.2 5.0 (2.2) 1.2 23.5 4.6 8.9 19.7 4.2 17.8 USA (5.5) (1.8) (2.8) 1.0 14.5 2.3 (1.7) 10.2 4.9 14.6

EU 5.6 3.4 4.6 (14.5) 1.6 (16.2) (14.0) (3.2) (8.4) (20.5) Japan 29.6 30.2 18.3 26.6 13.2 15.2 (3.4) 12.1 24.9 (1.4) China 33.7 3.3 10.8 (12.2) 18.2 (11.0) 16.0 1.4 13.2 (13.1) Korea 3.2 15.5 9.6 22.6 (4.7) 11.4 (18.5) (26.3) 4.3 (28.2)

Hong Kong (2.6) (10.3) (9.2) (7.9) (7.7) (8.6) (17.9) (2.7) 12.8 (0.7) Exports by Major Products

E&E (9.0) (3.5) (2.2) (5.5) 7.8 (6.0) (6.8) 1.1 2.1 (4.8) Chemicals & Chemical Prod. 21.1 9.7 5.9 0.3 9.5 (1.2) 6.0 (3.6) 9.9 (6.9)

Crude Petroleum 89.0 15.1 9.2 (3.7) 54.4 (0.5) 35.6 (20.8) (6.1) (29.9) LNG 82.0 48.7 50.5 56.2 36.1 45.3 (3.2) 40.6 25.6 (26.9)

Palm Oil 53.3 1.6 7.6 (1.0) 7.9 (17.5) (12.4) (0.6) (14.2) (28.3) Machinery, Appliances &

Parts 11.2 17.2 17.9 (4.3) 35.9 13.4 8.8 15.1 18.3 6.2 Refined Petroleum Products 20.7 24.8 (3.3) 40.3 5.3 8.5 39.2 77.8 38.4 98.0

Manufactures of Metal 38.5 12.6 3.2 (18.0) 5.6 (3.2) (1.7) 10.5 3.5 2.6 Sources: Dept. Of Statistics, Bloomberg

Malaysia: Exports (% MoM) Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Total Exports 8.0 (10.2) 6.8 (9.3) 3.3 8.7 (6.6) 1.8 3.7 (4.7) Exports by Country

ASEAN 15.2 (10.6) 4.1 (5.0) 8.9 6.2 (2.4) 1.9 (4.6) 11.9 USA 0.9 (10.7) 13.2 (9.3) 2.0 11.4 (7.7) 6.7 2.3 4.2

EU 10.5 (11.8) 9.7 (20.3) 5.8 5.8 (7.7) 5.4 (1.4) (9.4) Japan 4.7 1.0 (1.9) 4.7 (11.3) 9.8 (13.3) 2.2 5.4 (6.1) China (1.6) (13.3) 4.4 (21.7) 18.2 8.6 5.6 (12.3) 16.6 (15.3) Korea 6.7 (10.5) 22.3 3.5 (15.4) 12.2 (19.2) (18.2) 59.4 (36.6)

Hong Kong (4.5) (14.5) 10.8 (19.6) 5.6 25.2 (15.3) 10.4 13.5 (9.9) Exports by Products

E&E (1.5) (7.6) 11.5 (17.2) 8.6 9.8 (9.5) 4.3 6.1 (4.1) Chemicals & Chemical Prod. (1.8) (6.1) 6.0 (12.6) 15.6 6.1 (9.5) (1.6) 4.3 (3.0)

Crude Petroleum 17.9 3.6 (12.3) 12.8 25.9 (23.4) 30.5 (29.8) (0.7) (24.0) LNG 11.1 (9.7) 6.9 8.6 (18.1) 20.2 (25.1) 6.3 7.2 (33.4)

Palm Oil 19.0 (18.6) 4.7 (10.6) (6.6) (0.7) (5.1) 25.0 (3.5) (15.7) Machinery, Appliances & Parts 6.2 (7.1) 17.3 (19.2) 14.7 15.9 (5.8) 2.1 (5.0) 1.9

Refined Petroleum Products 31.9 (21.4) 4.2 30.8 (20.0) 16.5 5.8 (12.1) 15.1 23.9 Manufactures of Metal 24.1 (9.3) (2.6) (26.2) 6.4 20.0 (3.3) 4.2 3.9 (5.2)

Sources: Dept. Of Statistics, Bloomberg



Global: Manufacturing PMI Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Global 49.7 50.5 51.3 51.2 51.1 51.4 50.6 49.1 48.4 48.1 US 52.2 53.1 54.1 52.4 53.4 54.8 53.5 49.7 49.8 49.6 EU 46.4 46.9 48.8 49.0 47.7 45.9 45.1 45.1 44.0 45.1 Germany 47.9 48.4 51.0 50.2 48.4 46.2 45.2 45.0 43.0 44.7 France 47.3 48.9 48.5 50.0 46.7 46.9 44.7 45.2 43.4 46.0 Italy 44.0 44.3 46.8 47.8 47.9 43.8 44.8 44.6 44.3 43.6 Japan 49.1 50.2 50.7 50.5 51.1 50.7 50.7 49.9 47.9 47.7 UK 47.7 49.7 52.0 51.5 51.9 50.2 45.9 48.4 45.2 49.5 China 49.0 50.3 50.5 51.0 53.1 53.3 50.4 50.2 50.1 49.2

China* 47.7 48.7 48.8 49.6 48.3 49.3 48.4 48.2 49.3 47.8 Brazil 48.7 49.1 50.6 51.4 51.1 49.3 49.3 48.5 48.7 49.3 India* 51.0 54.2 57.5 56.6 54.7 54.9 54.8 55.0 52.9 52.8 S. Korea* 47.1 46.4 49.2 50.7 52.0 51.9 51.0 49.4 47.2 47.5 Taiwan* 43.9 47.1 48.9 52.7 54.1 51.2 50.5 49.2 47.5 46.1 Singapore 48.7 49.5 48.7 50.4 50.2 49.7 50.4 50.4 49.8 49.1 Source: Bloomberg * HSBC/Markit

Global: Trade Values and Volume Growth (% YoY) Global Chips: Sales Growth vs. Book-to-Bill Ratio

(40)

(30)

(20)

(10)

0

10

20

30

40

Jan

-01

Jul-

01Ja

n-0

2Ju

l-02

Jan

-03

Jul-

03Ja

n-0

4Ju

l-04

Jan

-05

Jul-

05Ja

n-0

6Ju

l -06

Jan

-07

Jul -

07Ja

n-0

8Ju

l-08

Jan

-09

Jul-

09Ja

n-1

0Ju

l-10

Jan

-11

Jul-

11Ja

n-1

2

World Trade Volume Growth (% YoY) World Trade Value % YoY

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

(45)

(30)

(15)

0

15

30

45

60

75

Jan

-00

Jul-

00Ja

n-0

1Ju

l-01

Jan

-02

Jul-

02Ja

n-0

3Ju

l-03

Jan

-04

Jul-

04Ja

n-0

5Ju

l-05

Jan

-06

Jul-

06Ja

n-0

7Ju

l-07

Jan

-08

Jul-

08Ja

n-0

9Ju

l-09

Jan

-10

Jul-

10Ja

n-1

1Ju

l-11

Jan

-12

Jul-

12Global Chip Sales (LHS) Book-to-Bill Ratio (RHS)

Sources: Netherlands Bureau for Economic Policy Analysis, Maybank-KE, Bloomberg

Sources: CEIC, Maybank-KE



Global: Export Growth (% YoY, in USD) % YoY Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 2011 YTD ‘12 YTD ’11

Global 11.0 2.9 0.4 2.2 0.9 - 18.5 3.2 23.0 US 12.3 6.4 3.0 6.0 8.0 - 16.5 7.1 18.9 EU 7.5 (1.7) (5.5) (9.0) (2.1) - 19.9 (1.2) 27.7 Germany 5.0 (5.5) (7.8) (13.3) (6.3) - 18.1 (4.4) 25.3 Japan (1.7) 6.1 9.8 14.1 (1.4) (9.2) 6.5 1.8 8.3 UK (1.8) 5.8 (3.1) (4.6) (5.6) - 17.1 (1.0) 22.6 Canada 9.6 3.3 2.6 (1.9) 1.1 - 18.7 3.8 19.6 Mexico 10.5 16.3 3.4 11.6 6.7 (0.4) 19.4 7.7 23.4 Australia 12.6 (3.2) (2.9) (8.3) (2.0) (6.6) 28.7 (0.3) 33.6 China 18.3 8.8 4.9 15.3 11.2 1.0 20.3 7.8 23.4 Russia 16.6 6.8 (2.2) 1.8 (8.6) - 30.2 5.9 30.8 India 4.2 (5.7) 3.2 (4.2) (5.4) (14.8) 34.0 (2.3) 45.7 Brazil 7.7 8.4 (3.0) 0.0 (18.3) (5.6) 26.8 (1.7) 31.5 S. Korea 20.5 (1.5) (5.0) (0.8) 1.0 (8.8) 19.0 (0.8) 23.2 Taiwan 10.2 (3.3) (6.6) (6.4) (3.2) (11.6) 12.3 (5.8) 17.0 Singapore 27.2 (2.1) 0.3 (1.1) (3.5) (3.1) 16.4 1.5 21.9 Hong Kong 14.5 (6.6) 5.8 5.4 (4.5) (3.0) 10.0 (0.0) 14.3 Malaysia 16.5 (1.3) (2.2) 1.2 0.8 (6.7) 14.0 2.2 16.3 Thailand 4.1 (5.0) (1.8) 9.2 (2.3) (3.9) 13.1 (0.4) 21.1 Indonesia 8.9 5.4 (2.3) (8.0) (16.0) (7.3) 29.0 (2.5) 36.5 Vietnam 67.5 33.7 15.5 21.1 35.3 7.4 34.4 22.3 34.5 Philippines 12.8 (0.8) 7.6 19.7 4.2 - (6.2) 7.7 4.7 Source: Bloomberg

Global: Export Growth (% YoY, in Local Currency) % YoY Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 US 11.7 8.4 7.4 12.3 6.4 3.0 6.0 8.0 - EU 10.4 9.9 10.9 11.0 4.6 5.9 5.7 12.3 - Germany 8.2 4.9 9.4 8.4 0.6 3.3 0.8 7.4 - Japan (4.5) (8.0) (9.2) (2.7) 5.8 7.9 9.9 (2.3) (8.1) UK 7.7 11.0 5.0 0.2 6.3 (0.4) 1.7 (3.2) - Canada 12.8 14.5 13.8 13.2 9.9 15.0 14.0 15.9 - Mexico 24.0 24.3 16.0 16.7 25.2 16.7 37.6 21.8 13.0 Australia 12.9 13.7 5.6 6.3 (3.3) 2.0 0.3 2.6 (2.3) China 8.9 8.4 (4.8) 13.3 4.7 1.5 13.3 9.4 (0.1) Russia 35.7 14.0 32.0 18.0 10.2 5.0 21.6 6.4 - India 12.9 23.8 18.7 13.1 7.7 23.0 19.9 17.8 7.4 Brazil 30.0 18.7 10.8 11.2 21.4 16.7 27.3 5.2 24.6 S. Korea 9.9 11.4 (6.8) 19.6 1.6 0.6 8.5 8.0 (2.3) Taiwan 0.8 4.5 (15.1) 8.8 (3.0) (4.7) (2.4) 0.1 (8.3) Singapore 8.2 7.5 (4.6) 24.8 (2.3) 1.5 3.2 (0.5) 0.3 Hong Kong 2.0 7.4 (8.6) 14.0 (6.8) 5.6 5.2 (4.8) (3.5) Malaysia 8.0 6.1 0.4 14.5 (0.1) (0.1) 6.7 5.4 (1.9) Thailand (11.5) (3.6) (2.4) 3.6 (3.3) 1.1 14.5 0.5 1.7 Indonesia 10.8 3.3 6.2 11.4 11.0 4.9 2.1 (8.0) 3.1 Vietnam 50.7 35.7 (1.2) 52.4 33.0 22.5 22.0 41.1 6.3 Philippines (20.4) (18.4) (0.3) 10.6 (1.8) 6.4 20.6 0.8 - Source: Bloomberg

10 September 2012

Regional Daily

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ONG Seng Yeow Regional Products & Planning (852) 2268 0644 [email protected]

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10 September 2012

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10 September 2012

Regional Daily

DISCLOSURES Legal Entities Disclosures Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: MATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Kim Eng Vietnam Securities Company (“KEVS”) (License Number: 71/UBCK-GP) is licensed under the State Securities Commission of Vietnam. Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority. Disclosure of Interest Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies. Singapore: As of 10 September 2012, Maybank KERPL does not have any interest in the companies mentioned in this report. The covering analysts have positions in CapitaMalls Asia. CWT Ltd, Cosco, Global Logistics Properties, SingTel, SPH & Singapore Exchange.Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report. Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.

As of 10 September 2012, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report. MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment. OTHERS Analyst Certification of Independence The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report. Reminder Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.

Definition of Ratings Maybank Kim Eng Research uses the following rating system: BUY Total return is expected to be above 15% in the next 12 months HOLD Total return is expected to be between -15% to +15% in the next 12 months SELL Total return is expected to be below -15% in the next 12 months

Applicability of Ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.

Some common terms abbreviated in this report (where they appear): Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings BV = Book Value FV = Fair Value PEG = PE Ratio To Growth CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity DPS = Dividend Per Share

NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date EV = Enterprise Value PBT = Profit Before Tax

10 September 2012

Regional Daily

Malaysia Maybank Investment Bank Berhad (A Participating Organisation of Bursa Malaysia Securities Berhad) 33rd Floor, Menara Maybank, 100 Jalan Tun Perak, 50050 Kuala Lumpur Tel: (603) 2059 1888; Fax: (603) 2078 4194

Singapore Maybank Kim Eng Securities Pte Ltd Maybank Kim Eng Research Pte Ltd 9 Temasek Boulevard #39-00 Suntec Tower 2 Singapore 038989 Tel: (65) 6336 9090 Fax: (65) 6339 6003

London Maybank Kim Eng Securities (London) Ltd 6/F, 20 St. Dunstan’s Hill London EC3R 8HY, UK Tel: (44) 20 7621 9298 Dealers’ Tel: (44) 20 7626 2828 Fax: (44) 20 7283 6674

New York Maybank Kim Eng Securities USA Inc 777 Third Avenue, 21st Floor New York, NY 10017, U.S.A. Tel: (212) 688 8886 Fax: (212) 688 3500

Stockbroking Business: Level 8, Tower C, Dataran Maybank, No.1, Jalan Maarof 59000 Kuala Lumpur Tel: (603) 2297 8888 Fax: (603) 2282 5136

Hong Kong Kim Eng Securities (HK) Ltd Level 30, Three Pacific Place, 1 Queen’s Road East, Hong Kong Tel: (852) 2268 0800 Fax: (852) 2877 0104

Indonesia PT Kim Eng Securities Plaza Bapindo Citibank Tower 17th Floor Jl Jend. Sudirman Kav. 54-55 Jakarta 12190, Indonesia

Tel: (62) 21 2557 1188 Fax: (62) 21 2557 1189

India Kim Eng Securities India Pvt Ltd 2nd Floor, The International 16, Maharishi Karve Road, Churchgate Station, Mumbai City - 400 020, India Tel: (91).22.6623.2600 Fax: (91).22.6623.2604

Philippines Maybank ATR Kim Eng Securities Inc. 17/F, Tower One & Exchange Plaza Ayala Triangle, Ayala Avenue Makati City, Philippines 1200 Tel: (63) 2 849 8888 Fax: (63) 2 848 5738

Thailand Maybank Kim Eng Securities (Thailand) Public Company Limited 999/9 The Offices at Central World, 20th - 21st Floor, Rama 1 Road Pathumwan, Bangkok 10330, Thailand Tel: (66) 2 658 6817 (sales) Tel: (66) 2 658 6801 (research)

Vietnam In association with Kim Eng Vietnam Securities Company 1st Floor, 255 Tran Hung Dao St. District 1 Ho Chi Minh City, Vietnam Tel : (84) 838 38 66 36 Fax : (84) 838 38 66 39

Saudi Arabia In association with Anfaal Capital Villa 47, Tujjar Jeddah Prince Mohammed bin Abdulaziz Street P.O. Box 126575 Jeddah 21352 Tel: (966) 2 6068686 Fax: (966) 26068787

South Asia Sales Trading Connie TAN [email protected] Tel: (65) 6333 5775 US Toll Free: 1 866 406 7447

North Asia Sales Trading Eddie LAU [email protected] Tel: (852) 2268 0800 US Toll Free: 1 866 598 2267

www.maybank-ke.com | www.kimengresearch.com

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Regional - xinhua08.comupload.xinhua08.com/2012/0914/1347607839281.pdf · is further improvement in the outlook of the real estate sector. - We expect sentiment on high beta stocks