- Positive investors’ traction on 13 ASEAN O&G corporates at our one-day event last week.
- Perdana and Ezion are our picks for OSV play while Yinson is for FPSO. KNM is an emerging renewable energy play.
- The AusGroup angle, on the supply base operations in Australia, is an interesting prospect, if executed well.
| AXIATA GROUP: XL finalising its tower sale Shariah-compliant |
- Positive on XL’s sale of 3,500 towers for IDR5,600b, or USD132k per tower.
- Proceeds to pare down USD500m shareholder loan extended by Axiata for Axis acquisition.
- Bumper dividend unlikely at Axiata, but a YoY increase in DPS is highly probable. Reiterate BUY.
| ECONOMICS/Fuel Subsidy Rationalisation: Another 20 sen per litre hike |
- RON95 petrol and diesel prices raised by 20 sen to MYR2.30 per litre and MYR2.20 per litre respectively effective today.
- Maintain our 2014 inflation rate forecast of 3.5%, but adjust 2015 inflation rate projection to 4.5%-5.0% from 4.0%-4.5%.
- The move sends a clear message of the Government's commitment to fiscal reform.
TECHNICAL: A very unstable index tone today
The FBMKLCI inched down by 0.99 points to 1,845.32 yesterday, while the FBMEMAS and FBM100 also closed lower by 19.75 points and 17.79 points, respectively. We expect weaker buying interest at the supports of 1,830 to 1,843, whilst heavy liquidation would be at the resistances of 1,845 and 1,870.
Trading idea is a Take Profit call on OLDTOWN with downside target areas at MYR1.65 & MYR1.51.
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