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DJ MARKET TALK: Maybank Raises Kinsteel To Buy; Ups Target 19.4%
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0228 GMT [Dow Jones] STOCK CALL: Maybank upgrades Kinsteel (5060.KU) to Buy from Hold, raises target price to MYR1.23 from MYR1.03 after raising FY10 EPS forecast by 13% and on higher target P/E of 8X 2011 earnings vs previous 6X. Says has turned positive following margin expansion in 1H FY10, with April-May billets sold forward at $550/ton vs inventory procured at $110/ton; analyst Lee Yen Ling says with sufficient iron ore inventory to last 3 months, company yet to commit to 2Q FY10 iron ore contracts, seeking more favorable pricing from domestic reserves. "We think the shares offer a better risk-reward ratio now, given higher steel prices, positive global steel fundamentals, and low foreign shareholding (less than 10%)," Lee says. Kinsteel +1.9% at MYR1.05



DJ MARKET TALK: Tenaga +3.8% On Better Power Demand Outlook
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0407 GMT [Dow Jones] Tenaga Nasional (5347.KU) +3.8% at MYR8.41, may test psychological MYR8.50 later, on better power demand outlook, says dealer with local brokerage. "The improved economic conditions have led to higher demand for power and that will translate to higher earnings," says dealer. AmResearch's analyst Alex Goh, who has Buy call, MYR10.00 target, says Tenaga's valuations are "highly attractive" at 2010 forecast P/E of 11X vs 5-year average of 14X. Cites rising power demand (+5% in FY10 vs +4% earlier), strengthening MYR, which reduces fuel, interest costs, improving economies of scale on declining power reserve margin and revival of foreign interest (shareholding which has fallen to 8.6% from 28.4% in May 2007) as catalysts that will fuel share prices.


DJ MARKET TALK: KLCI +0.2% Midday; Oil & Gas Stocks Lead
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0448 GMT [Dow Jones] KLCI +0.2% at 1344.56 midday, led by oil & gas-related stocks, select index heavyweights; "The external environment has been positive and domestically, newsflow has been generally favorable as well. There is room for further upside, at least, in the near-term," dealer says. Benchmark index tipped to rise to 1354 resistance in near-term, with support at 1338. OSK Research technical analyst Shin Kao Jack says market "far from being overbought". "The trend is obviously up and we are maintaining our bullish bias view," he adds. Among gainers, Tenaga (5347.KU) +3.5% at MYR8.38 on bullish power demand outlook, Petra Perdana (7108.KU) +10% at MYR1.76 after CIMB Research raised target price to MYR2.00; oil industry support services stocks among most active, with Kencana (5122.KU) +2.5% at MYR1.76, Dialog (7277.KU) +2.7% at MYR1.15. Among decliners, CIMB (1023.KU) down 0.4% at MYR14.68.



DJ MARKET TALK: Affin Keeps UMW As Add, Ups Target To MYR7.00
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0531 GMT [Dow Jones] STOCK CALL: Affin Research keeps UMW Holdings (4588.KU) as Add, ups target to MYR7.00 from MYR6.40 earlier; this, after according a higher P/E multiple for UMW's oil and assets (from 10X to 15X P/E). Analyst Chong Lee Len says key re-rating catalysts for stock include product pipeline visibility for 51%-owned UMW Toyota Motor Sdn Bhd, potential listing of oil and gas unit and active capital management. The "initial overhanging fear, at least on our part, of sharp decline in domestic Toyota car sales given the massive global Toyota car recalls have been proven unfounded," says Chong; adds UMW is house's top pick in automotive sector as earnings may surprise on upside given aggressive oil and gas expansion, bright prospects and management prowess. Stock +0.2% at MYR6.34.
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DJ MARKET TALK: EON Capital May Rise On Revived HL Bank Offer
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0011 GMT [Dow Jones] EON Capital (5266.KU) may rise to test MYR7.10 vs yesterday's close at MYR7.03 (unchanged) says dealer; this following Hong Leong Bank's (5819.KU) MYR4.92 billion (MYR7.10/share) revived offer Tuesday for EON Capital's assets, liabilities. "The revived offer from Hong Leong Bank is not a surprise after the appointment of seven new (EON Capital) directors who are in favor of a deal with Hong Leong," says dealer. "The offer price has not changed...whether or not this will be accepted by the new board remains to be seen, but the chances have improved." Hong Leong Bank's offer in January was rejected by EON Capital's then directors as it "significantly undervalues" the company. EON Capital has to revert to Hong Leong Bank on this offer by April 5 or it will lapse


DJ MARKET TALK: IOI Corp May Rise On Asset Acquisition Plans
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0008 GMT [Dow Jones] IOI Corp (1961.KU) may rise to test resistance at MYR5.45 (March 19 high) on optimism company will soon make key acquisitions to expand plantation, property businesses; this after Executive Director Lee Yeow Chor tells Dow Jones Newswires IOI has identified acquisition opportunities, including planted oil palm estates in Indonesia, land for property development in Malaysia and Singapore. Lee adds, despite drop in palm oil production in 1H FY10, there's chance recovery in output in 2H FY10 may be enough to help IOI match FY09 production; tips 3-5% growth in output in FY11; Lee also says IOI set to launch S$1.1 billion Singapore property project in April. "It will be positive for the company if it indeed acquires estates that are already planted and are productive these will immediately contribute to earnings," dealer says; adds, however, lack of details on timing, pricing of acquisitions may cap gains. IOI ended 0.2% lower at MYR5.39 yesterday.


DJ MARKET TALK: Tenaga May Rise On Higher Power Demand Forecast
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2352 GMT [Dow Jones] Tenaga Nasional (5347.KU) may rise to test 200-day moving average of MYR2.13, says dealer with local brokerage; this after Tenaga CEO Che Khalib says FY2010 power demand growth likely to come in at 6%-7%, higher than earlier guidance of 2%-3%; adds PM's comments on New Economic Model, tariffs, subsidies, positive and may reignite foreign interest in stock; also government may announce power tariff before June. "The higher power demand guidance and possible electricity hike may rekindle interest in the stock," says dealer. Tuesday, stock closed flat at MYR8.02.


DJ MARKET TALK: Malaysia NEM "A Positive Step" -Capital Economics
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2349 GMT [Dow Jones] Malaysia's New Economic Model (NEM), published Tuesday, "is a positive step toward promoting long-term economic reform," says Capital Economics. Notes, boosting foreign investment, lifting education standards, reducing role of government is right way to increase trend GDP growth. House awaits more details to come in 3Q, says "implementation of reforms will surprise on the upside and lift KL equities." Adds, NEM aims to lift Malaysia to developed country status by 2020; requires boosting GDP growth to 6.5% on-year from the 4%-5% since late-1990s; "strategy outlined today for doing this looks about right." Notes, markets already expect more state sector sell-offs; "this should lift KL stocks, which have gained in recent weeks. The price/earnings ratio is still reasonable at around 16 times 2010 earnings and provides scope for more upside too." Forecasts KLCI at 1,500 by end-2010, +14% from Tuesday's close at 1,319. Maintains long-held view GDP will expand by 5.0% this year, noting Bank Negara recently lifted GDP forecast, is now broadly in line with house's 2010 view.


DJ MARKET TALK: KPJ Healthcare May Rise On Higher Profit Guidance
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2348 GMT [Dow Jones] KPJ Healthcare (5878.KU) may rise to test MYR3.00 (yesterday's intraday high) vs yesterday's close at MYR2.86 (down 3.7%) says dealer; this after MD of country's largest private healthcare Siti Sa'diah Sheikh Bakir says expects 2010 net profit to grow minimum 19% this year on expansion in number of hospitals, rising healthcare demand. Siti Sa'diah tells Dow Jones KPJ "will at least sustain" 19% of net profit growth recorded in 2009. Adds, group will continue to maintain expansion policy of adding minimum of two hospitals per year to meet revenue target of MYR2 billion by 2012. Dealer says previous reported target was for earnings to grow 10%-15% per annum over next few years; "with the new guidance, it looks like the management is more optimistic on healthcare demand... it also exceeds street estimates." KPJ posted a net profit of MYR101.9 million on revenue of MYR1.45 billion in 2009.


DJ MARKET TALK: Favelle May Rise On MYR79.8M Orders Clinched
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2338 GMT [Dow Jones] Favelle Favco (7229.KU) may rise to test 90 sen psychological resistance after clinching MYR79.8 million worth of orders for supply of cranes to be delivered in 2010-2011. "The contracts are expected to contribute positively to earnings and net assets...for the financial year ending 31 December 2010 and beyond," company says; dealer says contract size considerable for Favelle Favco as boosts orderbook by 20% (orderbook totaled MYR418 million as at February 2010). Favelle Favco ended down 1.2% at 84 sen.

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