Saturday, November 13, 2010

驚中升息‧深滬股崩跌6%‧歐亞股全倒‧馬股失守1500點



(吉隆坡12日訊)中國10月通膨4.4%,市場擔心中國當局調升利息應對通膨壓力,同時傳言中國限制外資購買當地房地產,導致上海及深圳股市在賣壓涌現下崩盤暴跌6%,拖累亞太主要股市驚慌失措急挫,馬股受累,失守1500點關口。

馬股今日早市已經面對套利壓力,但仍力守1500點,惟午盤在中國股市大跌的利空,即使綜指直線下挫,跌破1500點關口。

馬股一度重挫25.64點
馬股綜指一度重挫25.64點,或1.69%,至1488.06點的全天最低點。較後出現一些趁低扯購買盤,遏止跌勢惡化,惟全天收市時,綜指仍跌13.89點,或是0.92%至1499.81點。

愛爾蘭或倒債
加深驚恐
除了中國拖累,市場傳愛爾蘭或倒債,成冰島第二,也打擊市場情緒,歐洲主要股市開市後,也因紛紛上演滑鐵盧,英國、法國及德國股市,在交易約1個小時後,主要指數跌幅介於1.12%至2.01%之間。
中國傳限外資買房產

市場擔心中國會調高利率應付通膨,及預估會限制外資購買房產的利空,這將使投資包括持有產業及股票等成本增加,使上海及深圳股市賣壓如涌泉般涌至,分別重挫5.16%及6.12%,股市一片愁雲苦雨。

中國股市近崩盤,使亞太股市在一片慌亂中受挫。東京股市較早收市,略為避過最壞時刻,惟日經指數在收市時,仍跌136.65點,或是1.39%至9724.81點。

台灣股市也遭殃,加權指數全天跌120.90點,或是1.43%至8316.05點。而首爾、馬尼拉及悉尼股市的主要指數,跌幅介於0.08%至1.63%。

香港股市受拖累最深,恒生指數全天挫477.72點,或是1.93%至24222.58點。新加坡、印尼、泰國及印度股市的主要指數,也紛紛滑落介於1.30%至2.10%之間。

分析員表示,全球市場突然傳來多項利空消息,除了擔心中國升息外,據說韓國也有意要採取措施對付熱錢流入

source: sinchew.com.my

MIDF:Competition heats up

 Competition heats up. AirAsia’s domestic competitor, Firefly has announced the launching of its maiden Boeing 737-800 flights from 15 January 2011, with the Kuala Lumpur-Kota Kinabalu (KK) and Kuala Lumpur-Kuching being the first routes. The move by Firefly will create a head-on competition with one of AirAsia’s more profitable routes. Firefly expects the delivery of 30 new Boeing 737-800 from 2011 to 2015 with 6 being delivered in 2011.

 Kuching and KK are profitable routes. The Kuching and KK routes are popular routes as a tourist destination. Hence, we believe the increased competition in these routes may cause downward pressure on prices to intensify and would dampen AirAsia’s revenue.

 Stiffer competition envisaged from Firefly who could be eying for more routes. Going forward into FY11, we are not ruling out the possibilities for AirAsia to experience further competition from Firefly in other domestic routes. Likely routes which Firefly could be eyeing are Miri, Tawan and Bintulu.

NRA: SaizenREIT Resolving refinancing issue at YK Shintoku will lift distribution

SaizenREIT
Maintain HOLD
Current Price S$0.16
12 November 2010
Fair Value S$0.16

Resolving refinancing issue at YK Shintoku will lift distribution _ 1QFY11 distributable cash was above our expectations. Net property income (NPI) of JPY0.7m declined 2% YoY, in line with a 2% YoY fall in revenue, due to the divestment of five properties in FY2010 as well as a marginal decline in rental rates of new contracts entered into after 1QFY2010. On a QoQ basis, the property operations remained stable with rental revenue of JPY1.03bil, unchanged from 4QFY10. NPI improved 6.5% QoQ due to a 12.5% QoQ fall in property operating expenses. Overall occupancy rates remained healthy at 90.9% in 1QFY11. 1QFY11 distributable cash of JPY179.2m was above our expectations due to lower-than -expected loan amortisation.

_ Orderly sale of assets continues. Management remained committed to an orderly asset divestment plan to reduce the outstanding YK Shintoku loan, which further reduces the likelihood of a foreclosure on YK Shintoku, and to secure selling prices close to or above valuation. To-date, a total of 16 properties from YK Shintoku have been disposed at an average discount to valuation of 4.3% and the collective gross sales proceeds of JPY2.17b has reduced the remaining balance of YK Shintoku loan to JPY5.6b. Taking into account cash reserves of about JPY0.6b, the net outstanding loan of YK Shintoku is lowered to about JPY5b, a 37% reduction from the original loan of JPY7.9b. Several divestments of YK Shintoku’s properties can be expected in the coming months which will reduce the loan amount further.


_ Focused on securing refinancing facilities. Management also remained focused on securing refinancing facilities for the YK Shintoku loan. There were earlier discussions with a financial institution on the terms and timing on a loan. To-date, efforts are made to form a syndication and potential syndicate partners are conducting their internal reviews and assessment. As at 30 Sep 2010, Saizen also has an aggregate of about JPY12.0 b of unencumbered properties which can serve as collateral for new loans. Undeployed warrant proceeds of about JPY0.9b (S$14.9m) could also be another source of fund to refinance the YK Shintoku loan.

_ Rebalancing property portfolio to enhance quality and growth potential. Management is exploring opportunities to divest existing properties and make new acquisitions to enhance the portfolio’s quality and growth potential. In particular, management is looking at the mass market residential property in Tokyo where valuation gap is wider than the regional cities, prices have depreciated by 15% to 20% since the height of the global financial crisis and there is relatively higher population growth from an influx of people from the regional cities.

_ Valuation and Recommendation. Currently, distributions are from operational cash generated from the property portfolios of eight subsidiaries, excluding YK Shintoku. Using DDM and assuming distributions continuing only from these eight subsidiaries, we value Saizen at 16 Scts (on a fully diluted basis), as previously. Further, Saizen offers DPU yield of about 6.1% (FY11F). Upside catalyst includes resolving the loan re-financing issues at YK Shintoku, which will further lift distribution yield and valuation. Maintain HOLD

Source: netresearch

Friday, November 12, 2010

Singapore’s GMG Global sees rubber output growing

HLG: Consolidation but uptrend still intact



 Yesterday’s correction was healthy after hitting record high levels for three consecutive days. Moreover, its uptrend since May 2010 remains intact. Given the current liquidity driven market, further consolidation should be well absorbed unless there is substantial reversal in foreign flows. We would only turn negative if the FBM KLIC convincingly breaks below the uptrend line at 1453 on high volume. Immediate support levels are situated around 1513 (10-d SMA), 1494-1502 (30-d and 20-d) and 1453 (uptrend line). Immediate resistance would be the recent high of 1532.

Thursday, November 11, 2010

HLG: KLCI Going for 4th consecutive record high



 Although it is not unusual to experience volatility and profit taking consolidation after recording all time high three days in a row, the shift of funds from developed to emerging markets, positive expectations of a good Nov reporting season, persistent rotational plays, robust trading volume and improving technicals augur well for the FBM KLCI to climb higher in the short to medium term to 1540-1550 zones. Immediate support levels are situated around 1511 (10-d SMA), 1492 (30-d) and 1486 (40-d).

Kenanga: MAS Amplifying Firefly’s LCC Model

Malaysian Airline System
HOLD
RM2.12 / Target Price: RM2.14

Amplifying Firefly’s LCC Model
The plan. The highlight of the briefing was the introduction of FireFly (FF a 100% MAS subsidiary) new fleet using 30 B737-800s for the next 5 years (FY11 to FY15) which will serve KL – Kota Kinabalu and KL – Kuching starting from Jan 15, 2011. The new fleet will operate mainly in KLIA’s main terminal building (MTB). We believe that the expansion plan will compliment MAS BTP2 plan through enhancing better yield and connectivity. The 2 B737s to be delivered by Jan 2011 and aiming to
increase the fleet to 6 by end of FY11.

l ATR72-500 operation already profitable. The management was a bit reluctant to reveal the FF’s net margin and other financials statistics but indicated that the FF net margin are currently above industry average which suggest c. more than 15% (core net margin). The average seat factor for the current ATRs is 75% which is in line with AirAsia. We think that the new fleet should be positive on MAS as a group to leverage on cost efficiency whilst departing more passengers.

l Overlapping routes? Based on MAS management explanation, MAS domestic routes is to be maintained although in the present of FF. We do not see any price wars or cannibalisation to MAS at this point as either way it’s going to benefit the Group (MAS).

l Price competition to AirAsia? In contradiction to AirAsia, FF will use the aerobridge while charging higher PSC/airport tax due as it will operate in MTB. We believe the price war is inevitable but we envisaged it should not be a threat to AirAsia due to its flexibility in frequencies, routes, cost effective as well as price offering, which we believe AirAsia have already set the benchmark.

l Positive move to MAS. We are positive on the FF expansion plan to MAS bottom-line as we have factored in better yield for MAS in our forecast. We believe that the FF expansion bodes well for MAS overall operation amidst of MAS loss making position.

l HOLD maintained on higher TP RM2.14 from RM2.04, previously. Higher TP was mainly due to rolling over our valuation to FY11 but maintain at 1x NTA. No change to our forecast as we have already imputed better yield assumptions going forward.

Wednesday, November 10, 2010

HLG: A liquidity driven market



 The shift of funds from developed to emerging markets, positive expectations of a good Nov reporting season, persistent rotational plays and robust trading volume should ugur well for the FBM KLCI to climb higher in the short to medium term to the 1540-1550 zones. On the other hand, strong buying interests will ensure solid support around 1508 (10-d SMA), 1490 (30-d) and 1484 (40-d).

Can the M'sian market surge be sustained?

Heavy liquidity inflow gives positive near-term outlook
PETALING JAYA: The local bourse’s benchmark FTSE Bursa Malaysia KL Composite Index (FBM KLCI) continued to chart highs that were last seen on the eve of the global financial crisis in early 2008 when it closed 0.44% higher at 1,526.53 yesterday, surpassing the 1,524.69 achieved on Jan 14, 2008.

Among the companies that helped boost the index were Malayan Banking Bhd, CIMB Group Bhd and telecommunications stocks such as Maxis Communications Bhd and DiGi.Com Bhd.
But can the market’s strong surge be sustained?

Analysts said that since the pace of economic growth had slowed in G3 economies – the United States, the European Union and Japan – with the outlook for the forseeable future continuing to look unexciting, investors were now looking to other markets and asset classes to place their money.





Year-to-date, several Asian markets including Indonesia and the Philippines have broken passed their record levels while the FBM KLCI has risen more than 20% since the beginning of the year.

Besides emerging-market equities, commodities have also seen their prices go up.
Spot gold surged to an all-time intra-day high of US$1,414.85 an ounce in London trade while crude oil has risen to near US$87 per barrel.

HwangDBS Investment Management Bhd chief investment officer David Ng said at a briefing yesterday that the local market could very well experience the bullrun of the early nineties when stocks were traded up to 30 times price-to-earnings ratio largely as a result of all the cheap money.

He said that Asian emerging markets’ fundamentals such as positive demographics, young population, urbanisation and rising middle class would continue to drive domestic demand.

Ng said the “sweetest place” to park money was in this region as the liquidity created by accommodative monetary policies in developed economies chased higher returns in this part of the world.

However, Morgan Stanley Research analyst Gerard Minack said in a Nov 5 report that there seemed to be a disconnect between the markets and the macroeconomic outlook.
He said what was not clear was whether the US Federal Reserve’s US$600bil plan to purchase government bonds over the next eight months to boost economic growth would work fast enough to significantly reduce recession risk.

Minack asked how long could markets run on the Fed’s latest stimulus without confirmation from macro data that things were improving.

“I’d characterise the macro data as mixed over the past month or so. More telling was the upside-down reaction to incoming news.

“For example, equity markets rallied after the weak September US non-farm payroll report because bad data meant more stimulus,” he said.

Minack pointed out that the S&P 500 finished lower after the stronger-than-expected Institute for Supply Management’s manufacturing index was revealed.

“It’ll be important when markets return to a good-news-is-good or bad-is-bad behaviour,” he said.

ECM Libra Investment Bank Bhd research head Bernard Ching told StarBiz that the Fed’s quantitative easing would merely stabilise developed economies and prevent them from spiralling into a double dip or deflation.

“The stimulus will not be able to change the outlook on US growth seeing as the jobs lost to-date will take six or seven years to replace,” he said.

As a consequence, Ching did not see demand picking up in the G3 economies as debt levels were high and consumption was “tepid”.

Meanwhile, UOB KayHian (M) Holdings Sdn Bhd research head Vincent Khoo said emerging markets, including Malaysia, would continue to have a positive near-term market outlook until inflationary pressure brought on by the rise of commodity prices reversed the low-interest rate regime.

“The near-term market outlook will be positive, at least through the next few months, but if the threat of inflation is higher, central banks may be less accommodating,” he said.

Khoo cautioned that crude oil price reaching US$100 a barrel would cause some worries.

“Commodity prices just need to be carefully monitored to gauge for inflation,” he added.

source: thestar.com.my

CIMB: STI breakout is facing resistance





STI breakout is facing resistance. STI’s breakout has been strong but is coming up against resistance levels. The immediate resistance is at 3,313, the channel resistance, followed by 3,322, the 78.6% Fibonacci retracement level of the 2007- 2009 downtrend. The daily RSI and MACD could form bearish divergences, which would suggest that a price reversal is around the corner. The support channel trend line is at 3,310.

Tuesday, November 9, 2010

HwangDBS: MAS Entering the low-cost segment in a big way

Malaysia Airlines (RM2.12; Hold; Price Target: RM1.90; MAS MK)

Entering the low-cost segment in a big way
MAS presented Firefly’s expansion plan during its analyst briefing yesterday. The airline is expected to venture into the low-cost segment in a big way. It will be receiving 2 leased B737-800s from MAS and will begin operations in Jan- 2011. Initially, these aircraft will be used for Kuala Lumpur (KL)-Kuching and KL-Kota Kinabalu routes.

It was highlighted that Phase 1 of the expansion will see Firefly operating up to thirty 189-seat B737-800s in 2011- 15. The airline will begin flying 6 of such aircraft from KLIA main terminal next year before adding another 7 in 2012.

We understand that these will be mostly leased and not necessarily new aircraft. Focus will be on trunk routes, largely domestic, where Firefly has the luxury to choose profitable, high load potential routes to operate.

Management also guided that fares will be as competitive as We think the lowest cost/ ASK target is possible considering that Firefly could ride on MAS’ existing infrastructure and resources such as ground handling, aircraft maintenance and existing staff. Additionally, we understand that B737- 800s are generally more fuel efficient compared to A320s (which are used by AirAsia) due to its blended winglets which help reduce fuel burn. Firefly could also determine its own fuel hedging policy which may be different from MAS’. This could be positive for Firefly as MAS had locked in at higher than spot prices, which is one of the main drags to its bottom line.

However, the rapid expansion of Firefly could spark another price war between low-cost carriers that could affect Firefly’s already lower yield. Apart from that, there could be potential cannibalization of existing MAS’ domestic offerings although Firefly is supposed to cater for a different segment i.e. the low-cost segment.

All in all, it remains to be seen whether the plan will succeed as the low-cost market is currently largely dominated by AirAsia. In addition, the size of Firefly’s fleet would still be small relative to MAS. Therefore, we think the impact should be relatively insignificant over the next 2 years. Maintain Hold with RM1.90 TP based on 15x CY11 EPS.

Phillip: STI Technical review



STI has pushed past the 3220 swing high on the back of the surge in the US market last week.

Trend for the STI is strongly biased to the upside though. We foresee higher prices to come. Especially given the strong economic numbers coming out of SG and also the
fact that Asian indices has been showing relative strength when compared to US and
Europe.

Current risk: heavy resistance is expected in the 3335/50 (-/+ 15points) region. From the weekly chart above, we can observe that the STI respected the support/resistance cluster in the 3335/50 region as the market topped out in 4Q2007. STI likely to respect this historical resistance region again. The high RSI readings on the daily/weekly timeframes make this region a good place for a pullback to start.

UOBKH: Singapore Strategy

STRATEGY: The market is trading at a 2011F PE of 14.3x, which is at a 19% discount to its long-term PE mean of 17.7x (since 1993).

On our estimates, a "blue-sky scenario" could imply a 3,300 target for the FSSTI over the next 6-12 months, based on a "bottom-up" analysis of stocks under our coverage.

In our view, key themes that could continue garnering investor interest include M&As (reinforced by the recent mandatory general offer for Thomson Medical), hospitality, office/industrial REITs and high-yield stocks. Our picks include Ezion, M1, OCBC, StarHub, Swiber, CDLH-T and Wing Tai.

MAS : Firefly Flies Further (OSK)

Malaysian Airline System
Firefly Flies Further
Target RM2.10
Previous RM2.10
Price RM2.12

While we view Firefly’s expansion into flying jet airplanes positively, we remain concerned on the potential cannibalization of MAS’ domestic routes and progressive encroachment into MAS’ international routes as Firefly grows. This is in view of Firefly’s cheaper airfare and newer fleet. With MAS not cutting capacity on the same routes served by Firefly and the fierce competition with other LCCs, we see a cap on yield upside. With Firefly currently contributing an estimated RM7m-RM8.5m net profit, we anticipate its revenue potentially growing by 30%-40% at the expense of profitability. For now, factoring in the potential cannibalization does not change our earnings forecast, and we continue to value MAS at 18x PE on its FY11 earnings. Maintain NEUTRAL and TP of RM2.10 unchanged.

A growing fleet. MAS announced yesterday that it is expanding 100% subsidiary Firefly’s fleet from the current 7 aircraft, all of which are Turboprops (ATRs), to 30 Boeing 737-800s (B-738s) by 2015, in line with Firefly’s expansion plans. This plan will see the low cost carrier (LCC) spreading its wings to other parts of ASEAN as more routes are secured. Note that the B738s can fly up to 6 hours on full load. Going by a recent recruitment ad from Firefly a few months ago, the airline’s long term plan could potentially see it flying to China and India. In the immediate term, Firefly will take delivery of 3 more ATRs and lease 6 and 7 B-738s respectively for FY11 and FY12. Its upcoming B-738s will be operated at the KLIA Main Terminal and will serve East Malaysia (Kota Kinabalu and Kuching) routes by January, kicking off with 3x and 4x flights daily respectively. Aircraft delivery over the FY11-FY12 period will be on a lease basis. However, from FY13 onwards, management intends to start acquiring its own planes, for which we think MAS is likely to exercise the option to taking up to 20 additional aircraft on top of its current firm order for 35 B738s as Firefly’s financial capacity strengthens. Expanding Firefly as an LCC allows MAS to focus on being a full carrier service without competing head-on with other LCCs in the region in terms of airfare.

How much Firefly contributes. There was little disclosure on Firefly’s operating statistics and its financials, although Management assured us that the LCC is currently earning an industry average profit and recording an average load factor of 75%. With its current fleet of 7 aircraft, we estimate that Firefly is serving 15,000-16,000 sectors per annum and generating revenue of RM170m to RM190m, and a net profit of RM7m-RMRM8.5m, assuming a conservative net profit margin range of 4%-5%. Firefly is targeting to be the lowest CASK airline in the region as it can leverage on MAS’ current infrastructure i.e. ground handling and MRO.

VALUATION AND RECOMMENDATION
Possible cannibalization for MAS. With the doubling of its fleet by year-end (from 7 ATRs to a total of 6 B-738s and 10 ATRs) and the introduction of ancillary income on its B738s (bundled as RM30 per pax for a premier service as opposed to a la carte on AirAsia), we are likely to see revenue contribution from Firefly potentially doubling for FY11 and growing at an average of 20%-30% over the next few years given its small fleet. While we are positive on Firefly’s expansion, we feel that this is highly likely to cannibalize MAS’ Revenue Passenger Kilometers (RPK). As Firefly’s upcoming B738s are relatively new compared with MAS’ evolving fleet of 734s and 738s, although it would mainly serve the domestic routes, we also do not rule out the possibility of it progressively encroaching into MAS’ ASEAN routes as Firefly grows further. Since MAS has no plans to reduce frequency or capacity on the same routes serviced by Firefly, this may cap any further upside in passenger yield. In view of the potential of cannibalization and taking into account of there being no massive capex spending as the planes will be leased, we make no changes to our earnings estimates for now pending further disclosure by Management on Firefly’s financials and operating statistics.

Maintain NEUTRAL. We maintain our NEUTRAL recommendation with our TP unchanged at RM2.10, on which our valuation is premised at 18x FY11 EPS. The higher PE 18x multiple pegged on MAS vs 12x on AirAsia reflects regional full service carriers’ valuation of 15x-16x, and the national carrier’s potential turnaround in view of its upcoming fleet expansion, which will see a delivery of 35 738s over FY10-FY15 to replace part of its aging fleet. MAS expects a total of 10 planes to be delivered by 2011, with another 18 in FY12. Our forecast remains conservative as we see yields continuing to remain pressured by the existence of LCCs. For aviation, we prefer AirAsia (BUY. TP RM3.32) and Malaysia Airports (BUY. TP RM8.47), whose valuations we deem more attractive given their upcoming expansion plans, with the latter also benefiting from the higher propensity for spending among Firefly’s passengers’ on airfare savings when they fly on the new B738 fleet from the main terminal. Maintain NEUTRAL with our TP unchanged at RM2.10.

Source/转贴/Extract/Excerpts: OSK Research
Publish date:09/11/10

MAS Joining the LCC race (AM)

MALAYSIAN AIRLINE
Joining the LCC race
BUY (Unchanged)
Price RM2.12
Fair Value RM3.50
52-week High/Low RM2.60/RM1.80

Investment Highlights
• We maintain our BUY rating on Malaysian Airline System Bhd (MAS) with an unchanged fair value of RM3.50/share – following an analyst briefing yesterday. Our valuation continues to peg MAS at P/BV of 1.8x, at par to historical average.

• MAS’ wholly owned unit, Firefly, announced plans to acquire a fleet of 30 B737-800 between 2011 and 2015 to enable it to penetrate into the low-cost carrier (LCC) segment. Operations will start with the high-yielding Peninsular-East Malaysia routes to Kota Kinabalu and Kuching from KLIA, from mid-January onwards. Firefly will likely remain domestic focused in the foreseeable future, targeting an 80:20 cut between domestic and regional capacity within the next 2 years (which is when almost half of its planned fleet would have been delivered).

• Firefly’s initial strategy is to “cherry pick” lucrative domestic routes, tap on the under-capacity in connecting flights for the domestic market and leverage on its parent’s international connectivity via code sharing. As an indication, 20% of AirAsia X’s traffic feed into AirAsia’s regional routes.

• With the jet aircraft, Firefly’s claim of the lowest unit cost in the country (at an estimated 11.2sen/RPK versus AirAsia’s 11.7sen/ASK) - by virtue of a higher number of seats per aircraft (189) versus largely A320s (180 seats) operated by peers - allows it flexibility in terms of pricing.

• While we would expect a certain extent of yield dilution at MAS arising from traffic cannibalisation i.e. from full service yields of 24sen/RPK to LCC yields of 15-16sen/RPK (i.e. 30%-40% lower based on AirAsia’s existing systemwide yields), the latest development is positive as MAS’ LCC foray plugs existing revenue leakage to competitors.

• However, we prefer AirAsia Bhd for exposure to an LCC play given AirAsia’s far superior route network and fleet size, which enables it to better tap the growing regional demand and provides it the critical mass (in terms of passenger base and website traffic) to enable it to capitalise on ancillary initiatives. AirAsia trades at par to MAS in terms of forward PE, but at a 30- 40% discount to LCC peers.

• We are longer-term positive on MAS’ LCC strategy as it enables the group to claw back some market share that was lost to AirAsia, but value enhancement is not likely to materialize within the next 12 months due to initial losses expected to be incurred from new routes for between 1 and 2 years.

• Nonetheless, we like MAS for its: (1) massive fleet replacement story which will lead to significantly lower cost, (2) its status as a laggard in terms of valuation and share price performance versus regional peers, as well as (3) potential earnings turnaround over the next 12 months.

FORAY INTO THE LCC SEGMENT
Firefly to buy 30 B737-800s for LCC market. Below are key takeaways from the analyst briefing yesterday:

_ Itching to join the LCC hype?
MAS’ 100% owned unit, Firefly, announced plans to acquire its first fleet of jet aircraft (B737-800) to enable it to penetrate into the low cost carrier (LCC) market. Under its Phase 1 expansion, the group plans to build up the B738 fleet to 30 aircraft between 2011 and 2015, where deliveries will be frontloaded (see Table 1). Firefly currently operates a fleet of seven ATR 72—500s (turbo props) from Subang airport, deployed mainly on domestic routes within a 1-hour flight range.

Orders for the B737-800s have yet to be firmed up and chances are Firefly may utilise MAS’ existing B737-800 options for some of its purchases. To recap, MAS has firmed up orders for 35 B737-800s, which comes with an option for another 20 aircraft of the same type.

Firefly’s fleet will operate strictly a point-to-point network and single class fleet, similar to existing short-haul LCC peers. Between 13 and 20 aircraft, which will be delivered by 2012-13, will be secured via an operating lease, resulting in a minimal capital layout, but typically higher operating cost. Leases for four out of 6 expected deliveries in 2011 have already been secured.

Going by its expansion plans up till 2015, we do not foresee Firefly attempting to outgrow larger peer, AirAsia. The latter currently operates 50 A320s for its Malaysian operations and this will grow further to 76 aircraft by 2015 – which will be more than double Firefly’s fleet during the same period.

_ Domestic focus over foreseeable future
Firefly will kick start its jet aircraft operations with the Peninsula-East Malaysia crossing routes. From 15 January 2011, Firefly will operate 2x daily from KLIA to Kota Kinabalu and 2x daily KL-Kuching flights. Meanwhile, from 24 January 2011, frequencies will be increased to 3x daily for KL-KK flights and 4x daily KL-Kuching flights. These routes will be operated by two leased B737-800s.

More destinations will be announced as Firefly takes further aircraft deliveries in 2011 and we anticipate more routes involving East Malaysia from KL and potentially from Singapore to other parts in Malaysia – given strong traffic flows on these routes.

We note that these initial routes are higher yielding routes due to the lack of alternative transportation. Our chat with AirAsia in the past underlines this fact – AirAsia’s top three highest yielding routes by sequence are: (1) KL-Kota Kinabalu; (2) KL-Kuching; (3) KL-Singapore.

While the B737-800 attains flight range of up to 5,665km i.e. able to serve India and China markets, Firefly will remain focused on domestic routes for the foreseeable future. Over the next 2 years, management foresees an 80:20 division between domestic and regional capacity outlay – despite the fact that almost half its total orders would be delivered by 2012.

Management indicated that Firefly gets to “cherry-pick” higher yielding routes to operate in the near future, which should provide it with strong revenue base and a core network, before further expansion. The idea is for Firefly to tap on the existing under-capacity in the local domestic routes.

Case in point, flights from Europe typically arrive early on the morning (local time) but there are very few connecting flights to other destinations in the country during this specific period. Firefly’s initial strategy is to fill in this gap during its initial stages of growth before undertaking more competitive regional routes. At present, however, there is no plan for MAS to give up any of its local routes to Firefly.

_ MAS’ connectivity gives Firefly a competitive edge
Firefly’s route network, as an independent LCC, will be far smaller than AirAsia, but on a positive note, it will be able to tap on MAS’ existing robust international traffic. Currently, MAS’ feeder traffic that flows to Firefly is relatively small, but as an indication, 20% of AirAsia X’s traffic feed into AirAsia’s regional flights. Bear in mind that MAS’ international traffic is six times the size of AirAsia X’s and MAS entails much better long-haul connectivity than AirAsia X.

To further seal the feeder traffic to Firefly, management indicated that Firefly will embark on codeshare arrangements with MAS for connecting flights to local destinations. Should this strategy work out, we would not rule out Firefly expanding in a big way into the ASEAN region in the future to further expand the hub and spoke network that MAS is creating for the LCC arm. For the international markets, Firefly will need to negotiate for its own landing rights.

_ Operating out of KLIA
Firefly will be operating out of the main terminal at KLIA given the congestion at the LCCT and its planned codeshare arrangements with MAS. Despite using aerobridges, management indicated that Firefly will still strictly maintain a 30-minute aircraft turnaround time. The downside, however, is that Firefly will have to bear more expensive airport charges at KLIA versus the LCCT. Passenger service charge is 50% (or RM3) higher than the LCCT’s charge of RM6 per pax for domestic flights. For international flights, passenger service charges at KLIA’s main terminal go as high as RM51/pax versus LCCT’s RM25/pax.

Nonetheless, we note that an additional RM3 charge (for domestic flights) is negligible versus benefits that passengers attain from: (1) aerobridge usage; (2) more comfortable airport; (3) better connectivity given the larger number of airlines operating out of KLIA. To note, two other major LCCs currently operate out of KLIA, namely
Tiger and Jetstar.

_ Lowest unit cost in Malaysia
Firefly’s B738 aircraft will entail 189 seats per aircraft – circa 9 seats (or 5%) more than a typical A320 configuration of 180 seats.

Due to the higher number of seats per aircraft – Firefly is expected to manage lower unit cost than AirAsia, which operates a full A320 fleet for its Malaysian operations. As an illustration, AirAsia reported CASK of circa11.7sen in its recent 2QFY10 results.

Our back of the envelope calculation suggests that Firefly’s unit cost will likely be 5% lower than that of AirAsia’s – at 11.2sen/ASK. This is purely coming from a higher seat count per aircraft, all else being equal. The lower than peer unit cost should allow Firefly flexibility in managing pricing. Firefly is targeting a similar ancillary income contribution to the industry’s, i.e., circa 18% of total revenue and RM43/pax based on AirAsia’s 2QFY10 numbers. For a start, Firefly’s ancillary initiatives include the typical in-flight meals, checked-in baggage charges, excess baggage allowance, travel insurance, priority seating and priority baggage.

_ Ancillary income
From our meetings with AirAsia in the past, its top ancillary revenue contributors are priority seating, food & beverage, baggage charges as well as insurance. Based on our checks, Firefly’s baggage charge is similar to AirAsia’s i.e. at RM20 for a 15kg allowance while meals are priced cheaper at RM9/meal versus AirAsia’s predominantly RM12/meal.

OUR VIEWS
We gather that although Firefly’s existing turboprop operation is profitable, it will face initial losses from the new jet aircraft routes, which typically take 1-2 years to break even.

While we would expect a certain extent of yield dilution at MAS arising from traffic cannibalisation i.e. from full service yields of 24sen/RPK to LCC yields of 15-16sen/RPK (i.e. 30%-40% lower based on AirAsia’s existing systemwide yields, the latest development is positive as MAS’ LCC foray plugs existing revenue leakage to competitors, particularly AirAsia.

However, in our opinion, investors are better off with AirAsia for exposure to LCC play given its far superior route network and fleet size, which enables it to better tap the growing regional demand and provides it the critical mass (in terms of passenger base and website traffic) to enable it to capitalise on ancillary initiatives. AirAsia trades at par to MAS in terms of forward PE, but at a 30%-40% discount to LCC peers.

We are longer-term positive on MAS’ LCC strategy as it enables the group to claw back some market share that was lost to AirAsia, but value enhancement is not likely to materialise within the next 12 months due to initial losses expected to be incurred.

Nonetheless, MAS remains a BUY in our books with an unchanged fair value of RM3.50/share, pegging the group at P/BV of 1.8x, at par to historical average. We like MAS for its: (1) massive fleet replacement story which will lead to significantly lower cost, (2) its status as a laggard in terms of valuation and share price performance versus regional peers, as well as (3) potential earnings turnaround over the next 12 months.


Source/转贴/Extract/Excerpts: AmResearch
Publish date:09/11/10

OCBC: Retail REITs Common themes of 3QCY10 results










ECM: MAS Growing the “value” business

Malaysia Airlines
Hold@ RM2.12
Target Price: RM2.08
52-week Range (RM) 1.80 – 2.60
Growing the “value” business

· Expansion plans revealed
In a special briefing held yesterday, Malaysia Airlines’ (MAS) whollyowned subsidiary, Firefly, revealed its expansion plans. Under Phase 1 (2011-2015), Firefly plans to increase its current fleet size of seven ATR72-500 Turboprop aircrafts by adding 30 Boeing 737-800. Firefly is set to receive the first aircraft in Dec 2010, and five more in 2011 (refer to Figure 1 for the delivery schedule). The first six 737-800s will be leased from MAS, and will fly out of the Main Terminal in KLIA starting from 15 Jan 2011, with two daily flights each to Kota Kinabalu and Kuching. Presently, Firefly operates seven ATR aircrafts from the Subang and Penang. The airline will receive two more ATRs in Dec 2010, and another in Jan 2011.

· Focus on the “value” segment
We see the planned expansion as a win-win situation for MAS and Firefly as it allows both to expand capacity and network routes. We understand that Firefly will continue its code-sharing agreement with MAS. In line with its growing fleet size, Firefly will gradually increase its flight frequencies to current network routes. This would enable it to capture a bigger market share in the low-cost sector. With Firefly focusing on the low-cost segment MAS can concentrate on the full-service operations and work on lifting its yields by commanding higher fares.

· Lower CASK expected
We expect cost per ASK (CASK) to be lower with Firefly leveraging on MAS’ existing infrastructure in engineering, maintenance, ground handling, flight operations, planning and control. It is important for Firefly to push its costs down in order to compete with other LCCs, especially AirAsia. Note that management has guided that Firefly’s CASK will be the lowest in the country. As at 30 Jun 2010, AirAsia’s CASK was 11.7 sen, while MAS (ex Firefly and MASWings) was 27.1 sen.


· Maintain Hold with target price of RM2.08
At this juncture, we see minimal impact of Firefly’s contribution to MAS bottom line, as the latter is still at loss-making. Furthermore, management did not disclose any financial details. As such, we leave our numbers unchanged pending the release of MAS 3QFY10 results due at end- November. Maintain Hold, target price RM2.08.

KLCI up 0.5% to hit new high of 1,519.84



KUALA LUMPUR: Stocks on Bursa Malaysia felt the liquidity rush from the fresh round of quantitative easing by the United States as the continued inflow of money arising from the attractiveness of the ringgit and the economies of emerging markets sent the benchmark index to a record high.

FTSE Bursa Malaysia KL Composite Index (FBM KLCI) closed up 0.5%, or 8.1 points, to 1,519.84, eclipsing the previous record close of 1,516.22 set on Jan 11, 2008 on keen buying of plantation and consumer-related counters.

“There is more upside. One of the key drivers is the shift of funds from developed to emerging markets,’’ said CIMB Investment Bank Bhd research head Terence Wong.
The push towards the all-time high has been in a large part driven by inflows of institutional funds into large-cap stocks.

Analysts explain that Malaysia is grouped in a category of markets that have a low correlation to the US stock market and with the growing strength of Asia as a source of growth, the country might be even less so dependent on the health of the US economy.

They said although foreign participation in the local stock exchange had been slowing in recent months compared with the past, interest in picking up blue chips had driven the FBM KLCI to lofty valuation levels, with the index yesterday closed at 18.29 price-to-earnings ratio.

“Fundamentally, earnings have so far been within expectations,’’ said Kenanga Investment Bank Bhd research head Yeonzon Yeow, adding that while earnings in general had not hammered estimates, the liquidity-driven rally was pushing the market’s price-to-earnings ratio to the upper strata in historical terms.
High valuations, however, might not be a deterrent at the moment, as stocks were propelled by the huge amounts of liquidity that was swirling in the market rather than the fundamentals of companies, analysts said.

They said a number of mid-cap stocks had kept stride with the rise of their larger brethren and that investors and punters would look at such stocks once larger stocks became too pricey.

source: thestar.com.my

CIMB: Technical Review



The next resistance is at 3,313, followed by 3,322, the 78.6%FR level of the 2007- 2009 fall. We are bullish in the near term though the RSI and MACD could potentially form bearish divergences. 3,169 and 3,123 are the key supports in the near term. A deeper correction to below the 3,000 levels is likely if this is breached.

HwangDBS: KLCI probably step-by-step –towards its all-time peak of 1,525

From a technical perspective, the FBM KLCI is still rising inside a short-term upward sloping passage (see chart overleaf). This suggests that the benchmark index is on track to climb – probably step-by-step –towards its all-time peak of 1,525 (which is also our immediate resistance target). A breakout could then send the bellwether to scale greater heights thereafter, possibly making its way to the next resistance barrier of 1,550.

While a market pullback remains possible at this juncture – considering the index’s almost uninterrupted winning streak of 242.6-point or 19.1% in the past 23 weeks – any correction will likely be modest and temporary based on recent patterns. Our first and second support lines are drawn at 1,495 and 1,465, respectively.

美資產收購效應延燒‧亞股普遍走高



吉隆坡5日訊)聯儲局擴大資產收購計劃引發資金效應,帶動美股收在2年新高,亞股也一片“漲”聲,創下自2009年12月以來最大單週漲幅。

聯儲局週三祭出新一輪資產收購計劃,促使資金大舉湧向風險性資產,帶動隔夜道瓊斯工商指數收盤升約2%至11434.80點,創下2008年9月雷曼兄弟破產以來新高。

澳洲鴨嘴獸資產管理公司(Platypus Asset Management)分析員指出,風險資產進攻趨勢持續增強,次輪量化寬鬆政策屬市場預期,且相關傳言未令投資者過度恐慌,也是未見顯著賣壓的原因。

Source: sicnhew.com.my

Monday, November 8, 2010

東森關鍵時刻 20101108 B (1/5) ~ 美鈔海嘯

東森關鍵時刻 20101108 B (1/5) ~ 美鈔海嘯

東森關鍵時刻 20101108 B (2/5) ~ 美鈔海嘯

東森關鍵時刻 20101108 B (3/5) ~ 當外匯.利率又來到熟悉點...

東森關鍵時刻 20101108 B (4/5) ~ 索羅斯再度出發...

東森關鍵時刻 20101108 B (5/5) ~ 日本流血奉還的"洛克斐勒之夢"

Source/转贴/Extract/: youtube
Publish date:08/11/2010

apex: KLCI Technical review



Closing: 1511.74
Support: (S1) 1500 / (S2) 1470
Resistance: (R1) 1515 / (R2) 1525

Comments: The FBM KLCI climbed 4.14 points to 1511.74 yesterday after touching a high of 1513 in early trade. Total market volume fell to 1.27 billion shares from 1.33 billion shares previously.

Technical indicators were flat as the RSI move sideways barely over the overbought line while the MACD hovered below its signal line. Despite the recent flat performance, the index’s long-term uptrend is still intact with support from the 9-day SMA. If the index is able to hold above the 1500 level, it may go on to break its all time high of 1524. For the downside, the immediate support level is pegged at 1470 followed by 1440.
Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
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