SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

19 Jul 2012

Regional Daily

Top Views RESULTS REVIEW McapUS$11.1b ADTV US$10.7m HK: Wynn Macau (1128 HK) Yin Shao Yang 4 Gaming | Losing Market Share In A Slowing Market | Hold | Upside 2% - Wynn Macau’s 2Q12 results were below expectations as competitors,

namely Sands China Limited, gained market share. - With Chinese M1 growth and thus, Macau GGR growth slowing,

earnings visibility for existing operations and Wynn Cotai is dimming. - Thus, we revert our valuation basis from DCF to a more short “termist”

11x EV/EBITDA and cut our TP from HKD28.10 to HKD16.88. Mcap USD7.7b ADTV USD31m HK: China Pacific Insurance (2601 HK) Ivan Li 5 Financials | Don’t be Fooled by the Profit Warning | BUY | Upside 22% - China Pacific’s 1H12 profit warning was well expected, and would not

affect our positive view on the company. - Recent premium income growth of CPIC has been impressive, and we

believe the momentum can be sustained, given CPIC’s strong capital base.

- The low interest rate environment is also positive to CPIC’s bancassurance business. Maintain our BUY rating with TP HKD32.0.

2Q12 REVIEW Mcap USD771m ADTV USD2.01m TB: Kiatnakin Bank (KK TB) W. Woraphon 6 Finance | 2Q12 Beat Estimates, Raising Price Target | BUY | Upside 28% - KK’s 2Q12 net profit was Bt818mn, beating our estimate by 29%. Excl the

extraordinary items, profit beat our estimate by 10% and consensus by 15%. We expect the market will upgrade earnings post 2Q12.

- We have upgraded our 2012-13F earnings by 4%, and rolling over the price target to 2013. Our fair value rises to Bt49 and we re-iterate BUY – KK is also our top sector pick

- The strong 2Q12 result is likely to prompt consensus upgrades, which should underpin share price performance. The strong earnings growth profile and synergy benefits from PHATRA make KK a compelling growth story for us. KK remains cheap at 0.9x 2013F PBV, 7.1x PER and a high 6-7% yield.

1H12 RESULTS Mcap USD5.2b ADTV USD10.1m SG: CapitaMall Trust (CT SP) Wilson Liew 7 REITS | More Uplift in Store | BUY | Upside 15% - CapitaMall Trust (CMT) reported a 2Q12 DPU of 2.86 cents – an increase

of 5% YoY and 4% QoQ. 1H12 DPU now stands at 4.86 cents, largely in line with expectations.

- We expect more uplift to come in the coming quarters, as a number of assets progressively complete their respective AEIs. Rental reversions also remained positive at 6.4% in 1H12, while the portfolio occupancy is a very healthy 98.6%.

- We maintain our BUY recommendation with a slightly improved target price of SGD2.25, as we update our beta assumption from 1.07 to 1.05. In the current low interest rate environment, our FY13F DPU yield of 5.6% is at a fairly attractive 400-bps spread over the current 10-year bond yield.

P K BASU pk.basu@maybank-ke.com.sg (65) 6432 1821 ONG Seng Yeow ongsengyeow@maybank-ke.com (852) 2268 0644 Jeremy TAN jeremytan@kimeng.com.hk (852) 2268 0635

Today’s Content… Country Hong Kong Wynn Macau Hong Kong China Pacific Insurance Thailand Kiatnakin Bank Singapore CapitaMall Trust India Bajaj Finance Ltd Singapore OCBC Indonesia Cement Sector Philippines RFM Corporation Malaysia Bursa Malaysia Malaysia Consumer Price Index, June 2012 Top Buys…

Company Ticker Spot Target Upside (%) Philex Mining Corp PX PM 22.00 30.61 39.1 Vinamilk VNM VN 87500 118000 34.9 LICHF LICHF IN 262.05 332.00 26.7 First Philippine Holdings FPH PM 78.00 97.80 25.4 Yes Bank YES IN 347.05 434.00 25.1 SembMarine SMM SP 4.960 6.200 25.0 Venture Corp VMS SP 7.790 9.650 23.9 China State Construction 3311 HK 7.72 9.45 22.4 B. Armada BAB MK 4.00 4.88 22.0 AAPICO Hitech AH TB 15.40 18.00 16.9 SapuraKencana SAKP MK 2.34 2.68 14.5 Asian Property Development AP TB 7.45 8.50 14.1 Top Sells…

Company Ticker Spot Target Downside (%) Jai Prakash Associates JPA IN 76.15 47.00 -38.3 GMA Network Inc GMAP PM 10 6.90 -31.5 Uni-President 220 HK 7.89 5.60 -29.0 Ayala Land ALI PM 20.35 15.00 -26.3 Maybank-KE Events

Date Event Location 19-20 Jul Singapore HoR & REIT analyst marketing SG 19-20 Jul Regional Head, Research & Economics

marketing HK

23-24 Jul Malaysia Head of Research & Chief Economist, and Regional Strategist marketing

SG

24-25 Jul Malaysia Oil & Gas, and Petrochem analysts marketing

SG

26 – 27 Jul Malaysia Oil & Gas, and Petrochem analysts marketing

HK

19 July 2012

Regional Daily

Company Notes SMID CAPs | 1Q13 REVIEW Mcap USD0.7b ADTV USD0.4m IN: Bajaj Finance Ltd (BAF) | EST. UPGRADE Ganesh Ram 8 Financials | Positive Earnings Suprprise Now a Tradition | BUY | Upside 22% - Positive surprises continue, led by AUM growth and asset quality. Q1

EPS of Rs 33.6/sh increased 53% YoY and 28% QoQ led by strong AUM growth (60% YoY and 11% QoQ) and asset quality improvement (net NPL -0.1%).

- We upgrade our FY13F EPS by 9% to Rs130 (+25%) driven by 25% loan growth to Rs 162bn. We have conservatively factored in NIM compression of 50bp and provisions cost at 1.5% underpinned by macro-economic and regulatory changes.

- ROE of 24% supports our new TP of Rs1200/sh (+18%) based on P/B of 2x FY13F. BUY.

Mcap USD25.4b ADTV USD25.3m SG: OCBC (OCBC SP) Desmond Ch’ng 9 Financials | Gains from Sale of F&N & APB | HOLD - OCBC and 87.2%-owned Great Eastern (GE, SGD13.68, Not rated) will

dispose off their cumulative 8% in APB to Kindest Place Groups for SGD920.2m and their cumlative 18.1% shareholding in F&N to Thai Beverage Public Co Ltd for SGD2.29b.

- The disposals will result in an exceptional gain of SGD1.15b, which would augment our 2012 net profit forecast by 42% and enhance our book value forecast by 5%.

- Correspondingly, our target price is raised to SGD8.80 from SGD8.30 to reflect this, on an unchanged 2012 P/BV multiple of 1.27x. Hold maintained.

IJ: Cement Sector Anthony Yunus 10 A Pause in June’s Demand | NEUTRAL - Domestic cement consumption in June 2012 increased by 9.5% YoY to

4.7m tonnes. However, on a monthly basis, cement demand was 4.9% lower than the 4.7m tonnes recorded in May 2012. This figure is in line with our expectations.

- Cement demand from ourter Java reached 1.87m tonnes, slipping 11% MoM. We believe that the slowdown in natural resources and cement overstocking were the main reasons for sluggish volumes in June 2012.

- We think that the big boost in demand will come from the acceleration of infra development as the land reform bill gets implemented. However, we think that realistically, this will happen in 2014 at the earliest. Maintain NEUTRAL stance on the sector.

19 July 2012

Regional Daily

SMID CAPs | VISIT NOTE Mcap USD0.3b ADTV USD0.3m PH: RFM Corporation (RFM) Lovell Sarreal 11 Cons. Staples. | Potential Benefits of Swift Play | HOLD | Upside 4.36% - RFM Corp earlier disclosed that it received unsolicited offers from a

number of local food companies to buy out or participate in a joint-venture (JV) in the company’s processed and canned meats business that carries the Swift brand.

- We believe it is likely at least one of RFM’s competitors could be interested in an acquisition or JV, as the Swift brand still has strong recall among consumers despite a 5% market share in the hotdogs and canned meat market. Competitors could also be interested to augment their capacities.

- RFM’s processed and canned meats business was a drag to earnings last year with an estimated operating loss of around PHP100m. A sale could result in an immediate increase in recurring earnings on top of one-time gains, while a JV which we believe will be the likely outcome could result in faster turnaround to profits. Maintain HOLD.

1H12 REVIEW Mcap USD3.5b ADTV USD2.7m MY: Bursa Malaysia (BURSA MK) Wong Chew Hann 12 Financials | No Surprises | HOLD | Upside 7% - MYR79m 1H12 net profit (+3% YoY) made up 49-53% of house’s and

street’s 2012 estimates. - There is no change to our forecasts and target price as we continue to

peg Bursa at a 20% discount to our target 25x for SGX i.e. at 20x current year earnings plus excess cash of MYR0.91/sh (30 Jun 2012).

- Current valuations reflect its near-term potential. We prefer SGX SP (Buy; TP: SGD7.43) for its structural growth potential.

Economics MY: Consumer Price Index, June 2012 Suhaimi Ilias 13 Third month of sub-2% inflation rate - CPI slowed to +1.6% YoY in June 2012 (May 2012: +1.7% YoY, Maybank-

IB: +1.7% YoY; Consensus +1.7% YoY). MoM, inflation gained by +0.1% (May 2012: +0.2%). For 1H 2012, CPI rose by +2.0% versus +3.1% in 1H 2011.

- Our forecast is 2% inflation rate this year (2011: 3.2%) before it quickens to 3.1% in 2013. The key factor contributing to the slowing domestic inflation rate is the suspension of the Subsidy Rationalisation Programmes (SRP) since mid-2011 to keep the prices fuel, essential food items (sugar, cooking oil, flour) and energy (gas, electricity) stable. We expect this to continue until up to mid-2013 amid speculation of a snap general election later this year or next year. In our meeting with Bank Negara Malaysia (BNM) early last week, the central bank also indicated its expectation of a gradual upward trend in inflation rate over the next 1-2 years.

- Stable OPR well into 2013 as monetary policy stance in “finely-calibrated”. BNM has had four rounds of Monetary Policy Committee (MPC) meetings this year i.e. 31 Jan, 9 Mar, 11 May and 5 July. Overnight Policy Rate (OPR) was left at 3.00% thus far, in line with our expectations. In our recent meeting with BNM, the central bank official described the current monetary policy as being “finely-calibrated”, implying there is little incentive for BNM to cut or raise OPR. Therefore, we expect the OPR to stay at 3.00% until up to 2Q 2013 or 3Q 2013, before a hike to 3.25% by end-2013 as inflation rate picks up next year.

RESEARCH OFFICES REGIONAL

P K BASU ECONOMICS

Suhaimi ILIAS

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Hong Kong Company Update 19 July 2012

Wynn Macau Losing Market Share In A Slowing Market Downgrade to Hold. Wynn Macau’s (WM) 2Q12 results were below expectations as competitors, namely Sands China Limited (SCL) (Not Rated), gained market share. With Chinese M1 growth and thus, Macau GGR growth slowing, earnings visibility for existing operations and Wynn Cotai is dimming. Thus, we revert our valuation basis from DCF to 11x EV/EBITDA and cut our TP from HKD28.10 to HKD16.88. Results below expectations. 2Q12 core net profit of USD220.9m (-1% YoY) brought 6M12 core net profit to USD427.8m (+4% YoY) or HKD3.3b, comprising 44% of our full year estimate. 6M12 revenue of USD1.9b (+1% YoY) or HKD14.4b comprised 43% of our 2012 estimate. More worryingly, 2Q12 VIP volumes fell 7% YoY, mass market drop eased 3% YoY and slot handle fell 20% YoY. Counter measures underway. Management attributed the poor performance due to SCL raising their junket commission rates to 1.35% (1.1-1.2% at WM), tight credit policies (2-3 month credit repayment terms at SCL vs 1 month at WM) and higher promotional allowances to attract mass market gamblers at other casinos. They conceded that they can be more aggressive going forward and are replacing some junkets with sub-junkets promoted to principal junkets. Albeit, unlikely to be enough. That said, their focus continues to be on preserving margins and earnings. Thus, we do not believe that WM will raise junket commission rates or relax credit policies enough to regain market share. We trim our earnings estimates by 20-30% to account for lower VIP volume, mass market drop, slot handle growth (Table 2) assumptions going forward. Earnings visibility dimming. Not only was the 2Q12 results poor, slowing Chinese M1 growth will adversely impact Macau GGR growth. If this continues, Wynn Cotai will still open in 2015-2016 but cannibalize existing operations significantly. Therefore, we revert back to our 11x current year EV/EBITDA basis to arrive at a TP of HKD16.88. Our previous basis of DCF on existing operations and ½ of the potential value of Wynn Cotai is unhelpful if earnings visibility for both is not high. Wynn Macau – Summary Earnings Table FYE Dec (HKDm) 2011A 2012F 2013F 2014F Revenue 29,498.1 29,308.5 32,647.0 36,382.6 EBITDA 7,951.3 7,301.6 8,293.1 9,421.7 Recurring Net Profit 6,664.6 6,000.6 7,159.7 8,422.1 Recurring Basic EPS (cents) 128.5 115.6 138.0 162.3 EPS growth (%) 48.1 (10.0) 19.3 17.6 DPS (cents) 120.0 - - - PER 12.9 14.3 12.0 10.2 EV/EBITDA (x) 10.8 10.8 8.5 6.5 Div Yield (%) 7.2 - - - P/BV(x) 21.3 8.6 5.0 3.4 Net Gearing (%) Cash Cash Cash Cash ROE (%) 160.1 85.4 52.6 39.4 ROA (%) 42.0 31.2 29.3 26.8 Revision In Net Profit (%) N/A -19.8 -25.1 -29.6 Consensus Net Profit (HKDm) N/A 6,994 8,118 9,172 Source: Company data, Kim Eng Securities

Hold (from Buy) Share price: HKD16.54 Target price: HKD16.88 (from HKD28.10) Yin Shao Yang samuel.y@maybank-ib.com (603) 2297 8916 Ong Seng Yeow ongsengyeow@maybank-ke.com (852) 2268 0644

Stock Information Description: Casino operator Ticker: 1128 HK Shares Issued (m): 5,187.5 Market Cap (USDm): 85,802.1 3-mth Avg Daily Turnover (USDm): 10.68 HSI: 1,645.00 Free Float (%): 27.71 Major Shareholders: % WM CAYMAN HOLDINGS L 72.3 Historical Chart

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1128 HK Equity

Performance: 52-week High/Low HKD29.1/HKD15.68 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) (4.1) (25.2) (12.3) (36.7) (15.2) Relative (%) (3.1) (18.7) (10.0) (24.6) (19.5)

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Hong Kong Company Update 19 July 2012

China Pacific Insurance

Don’t Be Fooled By The Profit Warning 1H12 profit warning a false alarm, implies 2Q12 profit 3x that of 1Q12. CPIC’s warning that 1H12 net profit would fall by ~55% YoY was a false alarm to us, given that CPIC’s 1Q12 net profit has already fallen 81% YoY. From the “profit warning”, the implied 2Q12 net profit is CNY1.97b, a threefold increase over 1Q12, which also means that 2Q12 would be the most profitable quarter since 2Q11 (Fig. 1).

Premium growth accelerated, fastest among peers. From CPIC’s recent announcement, we also notice that its premium income growth accelerated in Jun 2012, mainly driven by the life segment (Fig. 2). While this seems to be an industry-wide phenomenon, we note that its Jun 2012 premium growth was the highest among life insurers (Fig. 3).

Premium growth sustainable due to high SMR. We believe that CPIC’s strong premium growth is sustainable, due to its high solvency margin ratio (SMR) (Fig. 4). The SMRs of CPIC Life and CPIC P&C are the highest among peers in their respective segments. With its high SMR, CPIC can continue underwriting polices without raising funds.

Lower interest rate environment positive for policy sales; CPIC likely to benefit most. The PBOC has cut interest rates in June and July12 . A low interest rate environment is positive for sales of life insurance products, especially bancassurance, as these products become more attractive to potential policyholders relative to bank deposits. We believe that CPIC would benefit most, as its portion of bancassurance is the highest among the three life insurers.

PBOC’s rate cut would not have much negative impact to deposit interest income. As insurers are big depositors, banks are willing to offer high interest rates to keep their deposits. On the other hand, low interest rates are positive for bond prices and thus investment income.

We maintain our BUY rating on CPIC, with TP raised slightly to HKD33.0, equivalent to 1.7x FY12E P/EV. Further positive trends in premium income would be share price catalysts.

China Pacific Insurance – Summary Earnings Table FYE Dec (CNYm) 2010A 2011A 2012F 2013F Revenue 141,327 155,517 177,473 205,501 Profit before tax 10,670 10,399 10,733 13,331 Recurring Net Profit 8,557 8,313 8,496 10,654 Recurring Basic EPS (CNY) 1.00 0.97 0.99 1.24 EPS growth %) 4% -3% 2% 25% PER (x) 21.5 22.1 21.6 17.3 DPS (CNY) 0.35 0.35 0.30 0.37 EVPS (CNY) 12.80 13.21 15.16 17.48 EVPS growth (%) 12% 3% 15% 15% P/EV (x) 1.7 1.6 1.4 1.2 BVPS (CNY) 9.34 8.93 9.68 10.60 P/BV(x) 2.3 2.4 2.2 2.0 ROE (%) 11.04% 10.58% 10.62% 12.22% ROA (%) 1.96% 1.59% 1.37% 1.48% Consensus Net Profit (CNYm) N/A N/A 9,154 11,473 Source: Company data, Kim Eng Securities

BUY (unchanged) Share price: HKD26.30 Target price: HKD33.00 Ivan LI, CFA ivanli@kimeng.com.hk (852) 2268 0641

Stock Information Description: China Pacific Insurance is the third largest insurer in China. It operates both Life and P&C insurance business. Ticker: 2601 HK Shares Issued – H (m): 2,313 Shares Issued – All (m): 8,600 Market Cap – H (USDm): 7,517 3-mth Avg Daily Turnover (USDm) 31 HSI: 19,240 Free float (%): 44.7 Major Shareholders: % Shanghai Baogang Group 14.9 Shenergy Group 14.3 Carlyle Group 4.9 Key Indicators ROE – annualised (%) 10.6 Net cash (CNYm) N/A NTA/shr (CNY) 9.68 Interest cover (x): N/A Historical Chart

Performance: 52-week High/Low HKD32.0/HKD19.78 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 4.8 4.6 14.3 (15.4) 19.0 Relative (%) 5.7 12.0 16.6 (3.7) 14.6

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PRICE PRICE REL. TO HANG SENG INDEX

Source:

Source: Bloomberg

Maybank Kim Eng Securities (Thailand) is a subsidiary of Malayan Banking Berhad

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Earnings Results 19 July 2012

Thailand

Kiatnakin Bank (KK) 2Q12 beat forecast; raising price target

Raise target and maintain BUY. KK’s 2Q12 net profit was Bt818mn, beating us by 29%. Excl the extra items, profit beat our estimate by 10% and consensus by 15%. We expect earnings upgrade to follow. We have upgraded our 2012-13F earnings by 4%, and rolling over the price target to 2013 KK’s fair value rises to Bt49. Maintain BUY – the best pick in the sector.

2Q12 result – beats the street. KK posted 2Q12 earnings of Bt818mn, up 42% qoq and +8% yoy. Extra items this quarter are: 1) ~Bt200mn special interest income from debt restructuring, 2) Bt50mn gains on foreclosed property and 3) Bt120mn extra provisioning. Excluding the extras, normalised profit was ~Bt700mn, beating us by 10% and consensus by 15%. Loans grew by 6% qoq (+13.5% Ytd) driven mainly by auto and SMEs. NIMs (core basis) rose to 3.32% vs 3.0% in 1Q12. Fee income rose 11% qoq, 31% yoy - driven by bancassurance. Cost-to-income ratio fell to 44% from 61% in 1Q12. However, credit costs vacillated from the abnormally low Bt156mn in 1Q12 to abnormally high Bt560mn, but this vacillation is sort of typical in HP business. NPLs remained low at 3.3% and the L/D ratio dropped from 181% in 1Q12 to 140% as deposits were replacing B/Es to reduce funding costs.

Earnings and target price upgrades. The 1H12 earnings reached ~44% of our 2012 forecast. With a better-than-expected 2Q12 performance and resilient NIM outlook, we revised up our 2012-13F earnings by 4% by raising our NIM assumption to 3.49% from 3.44% and fee income by 4%. We also assume ~Bt210mn profit contribution from PHATRA in 4Q12. We keep our 26% loan growth target. A stronger recovery in SAM’s business is potential upside to our numbers. In 2013 we expect a bumper 39% earnings growth underpinned by strong KK core and full year contribution from PHATRA. The higher earnings stream and the rolling over of target to 2013, our fair value rises from Bt41.0 to Bt49 -1.18x 2013F PBV; L/T ROE at 14.5%.

High synergy expected. We are positive on KK’s merger with PHATRA and high synergy could lead to outperformance in earnings growth & ROE expansion. Baseline ROE forecast is 11.5% in 2012 to 13.4% in 2013 and 15.2% in 2014. KK is our top pick. The strong 2Q12 result is likely to prompt consensus upgrade, supporting share price performance. Strong earnings growth and scope to beat our forecast due to synergy benefits makes KK a compelling growth story for us. Our valuation remains cheap at 0.9x 2013F PBV, 7.1x PER and a high 6-7% yield. We reiterate our BUY rating on KK and keep it as the top pick in the sector. KK – Summary Earnings Table FYE: Dec 31 (Btmn) 2010 2011 2012F 2013F 2014F Operating Income 9,075 9,530 11,355 14,463 17,232 Pre-provision Profit 4,550 4,699 5,554 7,484 9,295 Profit Before Tax 4,080 3,421 4,068 5,647 6,950 Recurring Net Profit 2,840 2,859 3,185 4,427 5,449 Recurring Basic EPS (Bt) 4.97 4.50 4.66 5.35 6.58 EPS growth (%) 16.6 -9.5 3.6 14.8 23.1 DPS (Bt) 2.40 2.40 2.00 2.50 3.00

PER (x) 7.5 7.1 8.2 7.1 5.8 Div Yield (%) 6.2 7.5 5.2 6.5 7.8 P/BV (x) 1.1 0.8 1.0 0.9 0.8

Book Value (Bt) 36.53 37.65 38.32 41.43 45.27 ROAE (%) 14.7 12.8 11.5 13.4 15.2 ROAA (%) 2.1 1.7 1.5 1.7 1.8 Source: Company reports and KELIVE Research estimates.

Buy (unchanged) Share price: Bt38.25 Target price: Bt49.00 (from Bt41.00) Woraphon Wiroonsri, CFA Woraphon.W@maybank-ke.co.th (02) 658 6300 Maria Lapiz Maria.l@maybank-ke.co.th +662 257-0250

Stock Information Description: KK is a commercial bank providing full range of financial services, but with focus on auto hire purchase loans, residential projects and corporate loans. Presently it is in the process of merging with Phatra Securities, and this is expected to be complete by the end of 3Q12 Ticker : KK Shares Issued (mn) : 637 Market Cap (Btmn): 24,358 Market Cap (US$mn): 771.06 3-mth Avg. Daily Turnover (Btmn): 63.35 SET Index: 1,224.21 Free float (%): 69.81 Major Shareholders : % Thai NVDR 7.44 Wattanavekin family 10.79

Historical Chart

Performance 52-week High/Low Bt38.75/Bt25.75 1-mth 3-mth 6-mth 1-yrs YTD Absolute (%) 9.3 4.1 26.4 12.5 19.5 Relative (%) 3.9 -1.4 8.6 -0.4 0.1

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Results Review 19 July 2012

Singapore

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

CapitaMall Trust More Uplift In Store

Delivering steady growth. CapitaMall Trust’s (CMT) distributable income rose by 5% YoY in 1H12 to SGD156.2m, with DPU rising marginally by 1% YoY to 4.86 cents. For 2Q12, DPU came in at 2.86 cents, a rise of 5% YoY and 4% QoQ, largely in line with expectations. We expect greater contributions from assets affected by AEIs in the coming quarters. On the back of the stable portfolio outlook, we maintain our BUY recommendation.

Tenants reported steady sales. Excluding the assets that underwent or are undergoing AEIs, CMT’s malls experienced a marginal 3% decrease in shopper traffic, but tenant sales nevertheless still managed to grow by 1.5% YoY in 1H12, thanks in part to the Great Singapore Sale. Rental reversions during the period remained positive at 6.4% while portfolio occupancy rate stood at a very healthy 98.6%.

AEI assets to play a bigger part in subsequent quarters. JCube resumed operations in April, while Bugis+ was soft-opened only in early June. As a result, neither asset contributed significantly to CMT’s 1H12 earnings. Looking ahead, Bugis+ should complete its AEIs by end-July and as of now, 97% of its NLA is already committed. The Atrium’s AEI works are also on track to complete in 4Q12 and close to 90% of the total space is already committed, which will include American fashion retailer GAP’s largest store in Singapore.

2012 debt refinancing almost done. Of the SGD783m of debt due this year, CMT has already secured financing for SGD659.3m, comprising SGD505.2m fixed at 3.29% due in 2018, and SGD190.1m fixed at 3.45% due in 2022. CMT’s gearing is at a very comfortable 37.5% with an average cost of debt of 3.3%.

Safe-haven buy. CMT has proven its ability to deliver consistent results, with a solid track record for yield enhancements via AEIs. We emphasise that the uplift from the recent and ongoing AEIs will flow in more strongly in FY13, which we forecast will translate to a decent DPU yield of 5.6% - a 400 bps spread over the 10-year bond yield. We maintain our BUY recommendation, with a slightly improved target price of SGD2.25, as we update our beta assumption to 1.05 from 1.07.

CapitaMall Trust – Summary Earnings Table FYE Dec (SGD m) 2010A 2011A 2012F 2013F 2014F

Revenue 581.1 630.6 669.0 731.9 762.4 Net property income 399.1 418.2 461.3 498.4 517.1 Distributable income 304.9 297.8 326.4 362.7 365.4 DPU (SGD cts) 9.3 9.4 9.9 10.8 10.9 DPU growth (%) 4.4 1.2 6.0 9.1 0.5 DPU yield (%) 4.7 4.8 5.1 5.6 5.6 P/BV (x) 1.3 1.2 1.2 1.2 1.2 Gearing (debt to deposited assets) (%)

39.5 38.1 37.9 38.2 38.0

ROE (%) 5.2 5.1 5.7 6.3 6.4 ROA (%) 3.1 2.9 3.3 3.7 3.7 Consensus DPU (SGD cts) 9.9 10.7 11.2

Source: Maybank KE

Buy (unchanged) Share price: SGD1.965 Target price: SGD2.25 (previously SGD2.20) Wilson LIEW wilsonliew@maybank-ke.com.sg (65) 6432 1454 Stock Information Description: Managed by CapitaMalls Asia, CMT is the first and largest REIT listed in Singapore by market cap and asset size, with a pure-Singapore portfolio of retail mall assets predominantly catered to necessity shopping. Ticker: CT SP Shares Issued (m): 3,329.98 Market Cap (USD m): 5,190.3 3-mth Avg Daily Turnover (USD m): 10.1 ST Index: 3,017.21 Free float (%): 66.1 Major Shareholders: % CapitaMalls Asia 28.6 Key Indicators ROE (%) 5.1 Debt to deposited assets (%): 38.1 NAV/shr @ Mar 2012 (SGD): 1.57 Interest cover (x): 3.3

Historical Chart

Performance: 52-week High/Low SGD1.97/SGD1.615 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 9.8 6.8 12.6 1.8 15.6 Relative (%) 2.8 6.2 4.3 3.9 1.4

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CT SP Equity

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Result Review 19 July 2012

India

Bajaj Finance (BAF) Positive earnings surprise now a tradition

Positive surprises continue, led by AUM growth and asset quality. Q1 EPS of Rs 33.6/sh increased 53% YoY and 28% QoQ led by strong AUM growth (60% YoY and 11% QoQ) and asset quality improvement (net NPL -0.1%). We upgrade our FY13F EPS by 9% to Rs130 (+25%) driven by 25% loan growth to Rs 162bn. We have conservatively factored in NIM compression of 50bp and provisions cost at 1.5% underpinned by macro-economic and regulatory changes. ROE of 24% supports our new TP of Rs1200/sh (+18%) based on P/B of 2x FY13F. BUY. Q1 AUM growth of 60% YoY supported by consumer, SME loans. BAF’s Q1 AUM growth came from market share increase in consumer durables (+150bp) and successful launch of lifestyle product financing. In SME/ commercial loans BAF gained share from gov’t banks. The company’s customer base increased 38% YoY to 752k (new borrowers for LCD/LED TV, Air conditioners). After above-expectation growth in Q1 AUM to Rs145bn, we have now increased our year end AUM forecast by 7% to Rs162bn (+25% YoY). The company hinted at increasing its target AUM growth in H2 if the current momentum continues. Q1 NIM stable at 12.1% YoY. For Q1, BAF’s NIM is better than our FY13F NIM of 11.6%. Loan yields for most of the products of BAF are holding up despite competition from Axis Bank and ICICI Bank. BAF’s cost of funds is one of the lowest among private financiers due to its strong credit rating. Banks form 58% of its borrowings and it sources the balance funds from the debt market. The cooling of short-term rates, coupled with the company’s equity raising plans of Rs7.5bn, will provide upside to NIM in H2 (not in our forecast). No negative surprise on asset quality. Despite QoQ AUM growth of 11%, BAF’s loan loss provision (LLP) fell 6% YoY. BAF’s net NPL of 0.1% is among the best in the sector and its provision cover is 91%. Following strong asset quality in Q1, we have now lowered our estimate for LLP-to-total assets to 1.5% from 1.8% earlier. . Rising ROE and ROA justify upgrade in P/B and TP. BAF’s strong loan book growth of 25% for FY13, ROE of 24% and ROA of 3.7% justify our new TP of Rs1,200/sh based on P/B of 2x FY13F.

BAF – Summary Earnings Table FYE March (Rsm) FY10 FY11 FY12 FY13F FY14F Operating Income 7,145 10,282 14,210 18,374 21,870 Pre-provision Profit 3,953 5,745 7,566 10,082 11,635 Profit before Tax 1,343 3,699 6,022 8,010 8,774 Recurring Net Profit 894 2,466 4,064 5,406 5,921 Recurring Basic EPS 24.4 67.4 104.3 130.8 143.3 EPS growth (%) 163.6 175.8 54.8 25.5 9.6 DPS 6.0 10.0 12.0 14.5 16.8 PER (x) 39.8 14.4 9.3 7.4 6.8 Div Yield (%) 0.6 1.0 1.2 1.4 1.4 P/BV (x) 3.1 2.6 1.9 1.6 1.4 Book Value (Rs) 315 371 522 601 714 ROAE (%) 8.0 19.6 24.0 23.9 22.0 ROAA (%) 2.3 3.8 3.8 3.7 3.3 Source: Company data, Bloomberg, KESI estimates

BUY (Unchanged) Share price: Rs971/sh Target price: Rs1,200/sh (Upgraded from

Rs1,020/sh) Jigar Shah Jigar@maybank-ke.co.in (91) 22 66232632

Stock Information Description: BAF is one of the most diversified and fastest growing consumer finance co. It is backed with strong promoter group of Bajajs’. As on June 2012, it has AUM of Rs145bn. Ticker: BAF IN Shares Issued (m): 41.3 Market Cap (US$ bn): 0.7 6-mth Avg Daily turnover (US$m): 0.4 SENSEX: 17,105 Free float (%): 39.0 Major Shareholders: % Bajaj Finserv Ltd. 61.0

Key Indicators (FY13F) ROE – annualised (%) 23.9 ROA (%): 3.7 NIM (%)) 11.4 Loan growth (%) 25.0

Historical Chart

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(%)

BAF SENSEX

Performance: 52-week High/Low Rs1,010/ 585 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 14.4 10.8 45.6 36.7 62.6 Relative (%) 12.3 12.8 41.9 44.5 52.3

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Results Preview 19 July 2012

Singapore Co. Reg No: 198700034E

MICA (P) : 099/03/2012

OCBC Gains from sale of F&N & APB

Hold maintained. The disposal of the OCBC group’s stakes in Fraser & Neave Ltd (F&N) and Asia Pacific Breweries (APB) will result in an exceptional gain of SGD1.15b, which would augment our 2012 net profit forecast by 42% and enhance our book value forecast by 5%. Correspondingly, our target price is raised to SGD8.80 from SGD8.30 to reflect this, on an unchanged 2012 P/BV multiple of 1.27x.

Disposes stakes in F&N and APB. OCBC and 87.2%-owned Great Eastern (GE, SGD13.68) will dispose off their cumulative 8% in APB to Kindest Place Groups for SGD920.2m and their cumlative 18.1% shareholding in F&N to Thai Beverage Public Co Ltd for SGD2.29b.

A premium to traded prices. The disposal at SGD45/APB share and SGD8.88/F&N share represents a premium of 18% and 12% to the closing share prices of the respective stocks. This also translates to a historical P/BV of 9.2x and 1.8x respectively.

Exceptional gain of SGD1.15b. Against holding costs of just SGD0.16/share for APB and SGD0.27/share for F&N, the disposals will result in a sizeable exceptional gain of SGD1.15b for the OCBC group. A point to note is that GE stands to realize a pretax gain of SGD2.18b from its disposals. However, most of the gains will accrue to the insurance funds and the portion that will accrue to the shareholders’ funds is just SGD421.6m, of which OCBC’s 87.17% share works out to be SGD367.5m. Adding on OCBC’s own post-tax gain of SGD785.9m translates to a total post-tax gain of SGD1.15b for the group.

Impact to OCBC’s financials. We expect this gain to augment OCBC’s 2012 reported net profit forecast by 42% and enhance book value by 5%. We also expect it to raise our Tier-1 capital ratio estimate by 70 bps to 15.2% from 14.4% and our RWCR to 16.6% from 15.7%.

OCBC – Summary Earnings Table FYE Dec (SGD m) 2010A 2011 2012F 2013F 2014FOperating income 5,325.0 5,661.0 6,495.7 6,925.4 7,440.5 Pre-provision profit 3,071.4 3,231.0 3,892.8 4,165.8 4,530.3 Recurring net profit 2,263.7 2,280.0 2,691.4 2,930.7 3,199.7 Recurring basic EPS (cents) 66.2 64.7 75.4 82.4 90.2 EPS growth (%) 11.8 (2.4) 16.6 9.2 9.5 Net DPS (cents) 30.0 30.0 35.0 38.0 42.0

PER (x) 14.0 14.4 12.3 11.3 10.3 Div yield (%) 3.2 3.2 3.8 4.1 4.5 P/BV (x) 1.6 1.5 1.3 1.2 1.2

Book value (SGD) 5.66 6.02 6.89 7.45 8.06 ROAE (%) 12.0 11.2 17.1 11.5 11.7 ROAA (%) 1.3 1.1 1.6 1.1 1.1

Consensus net profit (SGD m) n.a. n.a. Earnings revision n.a. n.a. - - - Source: Maybank KE

Hold (unchanged) Share price: SGD9.30 Target price: SGD8.80 (from SGD8.30) Desmond Ch’ng, ACA desmond.chng@maybank-ib.com (603) 2297 8680 Stock Information Description: Banking Ticker: OCBC SP Shares Issued (m): 3,434.4 Market Cap (USD b): 25.4 3-mth Avg Daily Turnover (USD m): 25.3 ST Index: 3,017.21 Free float (%): 80.6 Major Shareholders: % SELAT PTE LTD 10.7 ABERDEEN ASSET MANAG 7.0

Historical Chart

Performance: 52-week High/Low SGD10.09/SGD7.68 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 6.3 3.3 9.7 (1.4) 18.8 Relative (%) (0.5) 3.1 1.5 1.2 4.8

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Sector Update 19 July 2012

Indonesia

Cement Sector A Pause In June’s Demand

Sluggish June cement consumption. The Indonesia Cement Association reported that domestic cement consumption in June 2012 increased by 9.5% YoY to 4.5m tonnes, bringing 1H12 volume to 25.9m tonnes (+15.1% YoY). However, on a monthly basis, cement demand was 4.9% lower than the 4.7m tonnes recorded in May 2012. This is in line with our expectations. 1H12 cement consumption accounts for 49% of our FY12 estimate of 52m tonnes.

Lower contribution from outer Java. Cement demand from outer Java reached 1.87m tonnes, slipping 11% MoM from 2.1m tonnes in May 2012, whereas cement demand in Java was flat MoM. We believe that the slowdown in the natural resources sectors in Kalimantan and Sumatra, as well as cement overstocking as distributors were expecting a fuel price increase in May 2012, were the main reasons for the sluggish volumes in June.

Indocement saw below-industry volume growth. Semen Gresik saw a 4.4% MoM reduction in its sales volumes to 1.78m tonnes, bringing 1H12 volume to 10.3m tonnes (+11.8% YoY). This translates into a slightly higher MoM market share of 39.7% in Jun 2012 for SMGR. By contrast, Indocement’s market share slipped by 1.5ppts MoM to 32.9% in Jun 2012. Its June sales volumes dropped 9.1% MoM, more than the industry’s 4.9% MoM volume contraction, to 1.47m tonnes, bringing its 1H12 volume to 8.6m tonnes (+18.1 YoY).

Expect strong multi-year demand growth. We think that cement consumption can grow at a CAGR of 9-10% in the future given rising GDP/capita and low consumption/capita. This assumes that growth is driven by retail demand, with minimal infrastructure development. The big boost in demand will come from the acceleration of infrastructure development as the land reform bill gets implemented. However, we think that realistically, this will happen in 2014 at the earliest.

Remain NEUTRAL on the sector. We maintain our TPs for Semen Gresik (SMGR.IJ, HOLD) and Holcim (SMCB.IJ, HOLD) at IDR13,000, and IDR2,750, respectively, but slightly raise our TP for Indocement (INTP.IJ, HOLD) to IDR21,000 (from IDR20,700) on the back of higher ASP estimates. Overall, we maintain our NEUTRAL stance on the sector.

Source: Kim Eng estimates

NEUTRAL (unchanged)

Anthony Yunus ayunus@kimeng.co.id (62 21) 2557 1136 Stock Information Cement, Basic Industry Index 435 IDX index: 4082

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Volume (mil. shares) Close

(Index) (Million shares)

Performance: 52-week High/Low 447/330 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 4.7 -0.5 0.1 4.2 6.9 Relative (%) -1.1 1.5 -2.5 3.0 -0.2

Action & Recommendation Company Name Rec T. Price Upside Target PER

(Rp) (%) FY12F FY13F Semen Gresik HOLD 13,000 12.5 17.1 14.2 Indocement HOLD 21,000 11.1 17.0 14.9 Holcim HOLD 2,750 11.1 16.9 13.9

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Philippines Company update 19 July 2012

RFM Corp Potential benefits of Swift play

Sale or JV of meat business possible. RFM Corp (RFM) disclosed early this week it has received unsolicited offers from a number of local food companies to buy out or participate in a joint-venture (JV) involving its processed and canned meats business that carry the Swift brand, a heritage brand owned by RFM. In line with this, management said it is open to “win-win opportunities” that would further grow the Swift brand.

Valuable brand and manufacturing capacities. We believe it is likely at least one of RFM’s competitors in processed and canned meats could be interested in an acquisition or JV mainly because the Swift brand still has strong recall among consumers notwithstanding its relatively small market share (below 5% in hotdogs and canned meat). Competitors are likely to be interested as well in augmenting their capacities. RFM’s meat processing facility in Cabuyao, Laguna has the capacity to produce monthly 1,200 MT of hotdogs, 100,000 cases of canned meat products, 150 MT of patties and nuggets and 40 MT of ham and bacon.

Potential parties interested could include PF and URC. Among RFM’s competitors in the processed and canned meats are San Miguel Pure Foods Inc (PF – Not rated), non-listed firms Pacific Meat Co Inc and CDO Foodsphere. These are the top three players in the industry. Universal Robina Corp (URC – HOLD) could also be interested because Swift products complement URC’s existing branded consumer foods grocery products at the same time the addition of Swift products could result in vertical integration. URC’s agro-industrial business is capable of supplying the meat requirements for Swift products.

Benefits to RFM. RFM’s processed and canned meats business was a drag to earnings last year when it posted an estimated operating loss of around PHP100m. A sale could result in an immediate increase in recurring earnings on top of a one-time gain. Meanwhile, a JV, which we believe will be the likely outcome, could result in a faster return to profits. It is interesting to note RFM has been quite successful in its JV with Unilever Philippines in ice cream even though they compete in the noodles business (RFM’s Fiesta competes with Unilever’s Royal in spaghetti noodles). For now, we maintain our forecasts and HOLD rating on RFM.

RFM Corp– Summary Earnings TableFY 31 Dec (PHPm) 2009A 2010A 2011A 2012F 2013FRevenue 8,334 9,099 10,336 11,650 12,733 Net Profit to Common 364 625 510 649 766 EPS (PHP) 0.12 0.20 0.16 0.21 0.24 EPS growth (%) 50.5 71.4 (18.4) 27.4 18.0 DPS (PHP) 0.02 0.02 0.06 0.05 0.06 PER 29.5 17.2 21.1 16.5 14.0 EV/EBITDA (x) 16.6 13.5 12.5 9.8 8.3 Div Yield (%) 0.5 0.5 1.7 1.4 1.8

Net Gearing (%) 15.6 21.9 43.2 43.7 41.2 Consensus Net Profit (PHPm) na na na na na Source: RFM, Maybank ATR Kim Eng estimates

HOLD (unchanged) Share price: PHP3.40 Target price: PHP3.50 Lovell Sarreal Lovell_Sarreal@maybank-atrke.com (632) 849 8841

Stock Information Description: RFM is a food and beverage company in the Philippines. It is primarily engaged in the processing and manufacture of flour, flour-based products, milk and juice drinks, canned and processed meats, ice cream, and bottled mineral water. Ticker: RFM PM / RFM.PS Shares Issued (m): 3,160 Market Cap (PHPm): 10,744 Market Cap (USDm): 258 3-mth Avg Daily Value (USDm): 0.322 PSEi: 5,220.55 Free float (%): 51% Major Shareholders: % Horizons Realty Inc. 20.87 Triple Eight Holdings 20.86 Key Indicators

ROE-annualised (%) 12.0 Net debt (Pm) 2,473.2 NTA/shr (P) -BVPS 1.8 Interest cover (x) 6.0

Historical Chart

RFM PM

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Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Source: Bloomberg Performance: 52-week High/Low PHP3.78 / PHP1.01 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 16.44 47.19 146.38 183.33 183.33 Relative (%) 9.25 44.71 132.54 164.80 163.14

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Results Review 19 July 2012

PP16832/01/2013 (031128)

Malaysia

Bursa Malaysia No surprises

Maintain Hold. MYR79m 1H12 net profit (+3% YoY) made up 49-53% of house’s and street’s 2012 estimates. There is no change to our forecasts and target price as we continue to peg Bursa at a 20% discount to our target 25x for SGX i.e. at 20x current year earnings plus excess cash of MYR0.91/sh (30 Jun 2012). Within the Maybank-KE coverage, we are Buyer of SGX SP (TP: SGD7.43) for its structural growth potential; Sellers of HK Exchange (388 HK; TP: HKD90.00).

Flattish YoY, at net level. Lower trading revenue from equity in 1H12 (-10% YoY) was partially offset by improvement in stable revenue (+11% YoY). Together with lower depreciation charges (-16% YoY), this led to a small 4% YoY rise in pretax profit (net profit: +3% YoY). The lower trading revenue from equity was, in turn, due to slower trading value of MYR212b (-10% YoY), with average daily trading value (ADV) at MYR1.74b (1H11: MYR1.93b). A 13.5sen net interim DPS (+4% YoY), representing a 91% payout of net profit, was in line.

Weaker QoQ. MYR38m 2Q12 net profit was down 7% QoQ on 16% lower trading revenue from equity which was offset by a 33% rise in trading revenue from derivatives, and higher stable income (+17%). Equities ADV fell 23% QoQ to MYR1.52b with velocity down 7-ppt to 27%. The derivatives market however was active with average daily contracts up 30% QoQ to 40.4k, the highest on record.

Maintain forecasts. Internal focus are on improving the infrastructure and services, new and attractive product offerings, widening distribution channels, increasing sales force and providing greater accessibility. We maintain our forecasts for a 10-11% growth in 2012-13 net profit with the main assumptions being MYR1.82b equities ADV in 2012 (2011: MYR1.8b), and improving to MYR2b in 2013. We project revenue from equities to contribute 48-49% of operating revenue in 2012-13.

MSCI reclassification. Recent selling pressure on Bursa (the stock hit a low of MYR5.91 on 31 May) was due to foreign funds exit, after Bursa was reclassified from MSCI’s Mid Cap Index to Small Cap Index in June 2012. Foreign shareholding on the stock has since plunged to a low of 10% as at end-June 2012, from 16.8% at end-May 2012 (versus a peak of 41.7% as at end-Dec 2007, before the global financial crisis).

Bursa Malaysia – Summary Earnings Table Source: Maybank KE FYE Dec (MYR m) 2010A 2011A 2012F 2013F 2014F Operating Revenue 331.3 381.3 414.2 456.5 508.3 Operating Profit (EBIT) 164.4 206.7 220.6 242.8 272.4 Recurring Net Profit 113.0 146.2 161.7 178.0 199.7 Recurring Basic EPS (sen) 21.3 27.5 30.4 33.5 37.6 EPS growth (%) 10.9 28.9 10.6 10.1 12.2 Net DPS (Sen) 20.0 26.0 28.5 31.5 35.0 PER (x) 30.5 23.7 21.4 19.4 17.3 EV/EBITDA (x) 14.4 12.2 11.4 10.4 9.3 Net Div Yield (%) 3.1 4.0 4.4 4.8 5.4 P/BV(x) 4.1 4.0 4.0 3.9 3.9 Net Gearing (%) Cash Cash Cash Cash Cash ROAE (%) 13.4 17.1 18.7 20.3 22.5 ROAA (%) 6.5 8.6 9.4 9.9 10.5 Consensus Net Profit (MYR m) n.a. n.a. 150.1 168.6 185.6

Hold (unchanged) Share price: MYR6.51 Target price: MYR7.00 (unchanged) Wong Chew Hann wchewh@maybank-ib.com (03) 2297 8686

Stock Information Description: Fully integrated stock exchange operator in Malaysia. Ticker: BURSA MK Shares Issued (m): 532.0 Market Cap (MYR m): 3,463.5 3-mth Avg Daily Turnover (US$ m): 2.66 ST Index: 1,645.00 Free float (%): 55.8 Major Shareholders: % CAPITAL MARKET DVLP 18.3 MOF 16.2 EPF 9.5

Historical Chart

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Performance: 52-week High/Low MYR8.12/MYR5.76 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 5.5 (12.3) 2.2 (14.7) (2.8) Relative (%) 1.6 (16.9) (12.8) (20.4) (10.3)

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Economics 19 July 2012

PP16832/01/2013 (031128)

Malaysia

Third month of sub-2% inflation rate

Inflation rate in Jun 2012 continued to head south as CPI slowed to +1.6% YoY (May 2012: +1.7% YoY, Maybank-IB: +1.7% YoY; Consensus +1.7% YoY). Our in-house measure of core inflation, which excludes food, fuel and housing components, also eased to +1.2% YoY (May 2012: +1.3% YoY). MoM, inflation gained by +0.1% (May 2012: +0.2%). For 1H 2012, CPI rose by +2.0% versus +3.1% in 1H 2011.

Malaysia: Consumer Price Index (CPI, 2010=100)

% YoY Mar 12 Apr 12 May 12 Jun 12 YTD 12 2011

Total 2.1 1.9 1.7 1.6 2.0 3.2

Food and Non-Alcoholic Beverages 2.9 2.3 3.0 2.9 3.1 4.8

Alcoholic Beverages & Tobacco 0.0 0.0 0.1 0.0 0.0 4.7

Clothing and Footwear (0.4) (0.3) (0.3) (0.6) (0.4) (0.2)

Housing, Water, Electricity, Gas and Other Fuels

1.8 1.8 1.6 1.5 1.7 1.8

Furniture, Household Equipment and Routine Household Maintenance

2.4 2.4 2.3 2.2 2.3 1.8

Health 2.2 2.2 2.1 2.0 2.2 2.7

Transport 1.3 1.0 0.4 0.2 1.0 4.4

Communication (0.7) (0.7) (0.6) (0.6) (0.6) (0.3)

Recreation Services and Culture 2.8 1.3 1.3 1.3 2.1 2.0

Education 2.6 2.6 2.6 2.4 2.8 2.2

Restaurants & Hotels 3.5 3.3 3.0 2.9 3.5 5.9

Miscellaneous Goods & Services 2.9 2.6 2.2 2.2 2.6 2.4

Source: Dept. of Statistics

Current disinflation trend largely reflects continuation of price subsidies. In particular, Transport which accounts for 14.9% of CPI was up by just +0.2% YoY in Jun 2012 (May 2012: +0.4% YoY) compared to +5.8% YoY recorded a year ago amid diminishing effect of last year’s fuel price increases, which was reflected in the sub-index for Operation of Personal Transport Equipment (June 2012: +0.3% YoY; May 2012: +0.6% YoY). Other sub components of Transport namely Purchase of Vehicles continued to register negative growth since Mar 2008 while Transport Services inched up to +1.4% YoY (May 2012: +1.1% YoY). Meanwhile, food price inflation was somewhat sustained as Food & Non-Alcoholic Beverages (FNAB) prices rose by +2.9% YoY last month (May 2012: +3.0% YoY), among others due to continued increase in the prices of Fish & Seafood (Jun 2012: +8.1% YoY; May 2012: +8.1% YoY).

Consumer Price Index (CPI), June 2012 Suhaimi Ilias suhaimi_ilias@maybank-ib.com (603) 2297 8682 Ramesh Lankanathan ramesh@maybank-ib.com (603) 2297 8685 William Poh william.poh@maybank-ib.com (603) 2297 8683

19 July 2012 Page 2 of 8

Malaysia CPI, June ‘12

Slower inflation rate this year at 2% (2011: 3.2%) before it quickens to 3.1% in 2013. The key factor contributing to the slowing domestic inflation rate is the suspension of the Subsidy Rationalisation Programmes (SRP) since mid-2011 to keep the prices fuel, essential food items (sugar, cooking oil, flour) and energy (gas, electricity) stable. We expect the SRP suspension to continue until up to mid-2013 amid speculation of a snap general election later this year or next year. Notwithstanding the observed disinflationary effect of the SRP freeze, our full-year forecasts implies gradual upward pressures on consumer prices to emerge in 2H 2012 on both seasonal factor (i.e. higher demand for food items, hence prices, during 3Q 2012 with the start of the Muslims’ fasting month in mid-July and the subsequent festive month) as well as policy factor (i.e. adjustment in prices by businesses to reflect the upcoming implementation of the Minimum Wage). The SRP resumption priced in after mid-2013 will further maintain the gradual upward momentum in inflation rate. In our meeting with Bank Negara Malaysia (BNM) early last week, the central bank also indicated its expectation of a gradual upward trend in inflation rate over the next 1-2 years.

Stable OPR well into 2013 as monetary policy stance in “finely-calibrated”. BNM has had four rounds of Monetary Policy Committee (MPC) meetings this year i.e. 31 Jan, 9 Mar, 11 May and 5 July. Overnight Policy Rate (OPR) was left at 3.00% thus far, in line with our expectations, and is still accommodative as it is below the pre-2008/2009 peak of 3.50%. In our meeting with BNM, the central bank official described the current monetary policy as being “finely-calibrated”. To us, this implies that the mixture of challenging external demand environment; the strength and resilience of domestic demand; the temporary moderation in inflation; the need to maintain prudent monetary and banking policies to manage the household debt issue; and the continued well-functioning financial intermediation process in the economy mean there is little incentive for BNM to cut or raise OPR. Therefore, we expect the OPR to stay at 3.00% for the rest of the year. We also see this level of OPR staying until up to 2Q 2013 or 3Q 2013, before a hike to 3.25% by end-2013 as inflation rate picks up next year.

Malaysia: Headline & Core CPI, PPI (% YoY) Malaysia: Key CPI Components (% YoY)

(9)

(6)

(3)

0

3

6

9

12

(15)

(10)

(5)

0

5

10

15

20

Jan

-07

May

-07

Sep

-07

Jan

-08

May

-08

Sep

-08

Jan

-09

May

-09

Sep

-09

Jan

-10

May

-10

Sep

-10

Jan

-11

May

-11

Sep

-11

Jan

-12

May

-12

Core CPI (ex-Food & Non-Alcoholic

Beverages, Transport ), RHS

CPI (RHS)

PPI (LHS)

(25)

(20)

(15)

(10)

(5)

0

5

10

15

20

25

0

2

4

6

8

10

12

14

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

Transport (RHS)

Utilities, Housing & Other Fuels

Food &Non-Alcoholic Beverages

Source: Dept of Statistics, Maybank-KE Source: Dept of Statistics, Maybank-KE

19 July 2012 Page 3 of 8

Malaysia CPI, June ‘12

CPI: Monthly contribution to growth (ppts) FNAB: Growth in Components (% YoY)

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and

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Res

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as &

Oth

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Fuel

s

Oth

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Feb-12 Mar-12 Apr-12 May-12 Jun-12

1.1

(0.7)

8.1

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2.4

(2.6)

0.5

(8.0)(6.0)(4.0)(2.0)0.0 2.0 4.0 6.0 8.0

10.0

Rice

, Bre

ad a

nd O

ther

Ce

real

s (RB

) Mea

t

Fish

& S

eafo

od

Milk

, Che

ese

and

Eggs

(M

C)

Oils

& F

ats

Frui

ts

Vege

tabl

es

Suga

r,Ja

m,H

oney

, Ch

oc &

Co

nfec

tione

ry (S

J)

Apr-2012

May-2012

Jun-2012

Source: Dept. of Statistics, Maybank-KE Source: Dept. of Statistics, Maybank-KE

Global Commodity Prices (% YoY)

Type of Commodity Feb-12 Mar-12 Apr-12 May-12 Jun-12 2011 2010

All index 3.1 1.1 (5.9) (7.0) (13.2) 26.8 27.7

Non-Fuel index (14.8) (12.4) (14.6) (14.6) (14.7) 18.9 26.7

Food and beverage index (11.7) (7.9) (10.2) (11.0) (8.8) 20.5 11.8

Food index (10.6) (5.9) (8.5) (9.3) (7.0) 20.9 11.6

Beverages index (20.2) (23.0) (23.4) (24.7) (23.2) 17.2 14.5

Industrial Materials index (17.5) (16.5) (18.6) (17.9) (20.1) 17.6 45.5

Agricultural Raw Material Index (13.9) (18.8) (18.4) (15.2) (17.9) 24.0 33.7

Metal index (19.2) (15.3) (18.6) (19.3) (21.2) 14.9 52.0

Energy index 14.9 9.1 (1.0) (2.6) (12.2) 32.0 28.8

Source: IMF

Global Commodity Prices (% MoM)

Type of Commodity Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12

All index (1.3) 2.4 3.9 3.0 (2.0) (6.2) (8.3)

Non-Fuel index (1.8) 2.6 2.9 1.0 (0.2) (3.4) (2.1)

Food and beverage index (2.0) 1.2 2.9 1.9 0.3 (2.8) (0.5)

Food index (1.6) 1.3 3.4 2.5 0.7 (2.8) (0.5)

Beverages index (4.8) 0.4 (1.1) (3.0) (2.9) (2.5) (0.9)

Industrial Materials index (1.6) 4.0 3.0 0.1 (0.7)) (4.0) (3.8)

Agricultural Raw Material Index (3.7) 1.8 3.9 0.6 1.4 (2.1) (3.3)

Metal index (0.6) 5.2 2.5 (0.1) (1.7) (5.0) (4.0)

Energy index (1.0) 2.3 4.4 4.0 (2.9) (7.5) (11.4)

Source: IMF

19 July 2012 Page 4 of 8

Malaysia CPI, June ‘12

Global: Inflation (% YoY) Global: Commodity Price Indices

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Feb

-00

Sep

-00

Ap

r-01

No

v-01

Jun

-02

Jan

-03

Aug

-03

Mar

-04

Oct

-04

May

-05

Dec

-05

Jul-

06

Feb

-07

Sep

-07

Ap

r-08

No

v-08

Jun

-09

Jan

-10

Aug

-10

Mar

-11

Oct

-11

May

-12

70

90

110

130

150

170

190

210

230

250

Jan

-07

Ap

r-07

Jul-

07O

ct-0

7Ja

n-0

8A

pr-

08Ju

l-08

Oct

-08

Jan

-09

Ap

r-09

Jul-

09O

ct-0

9Ja

n-1

0A

pr-

10Ju

l-10

Oct

-10

Jan

-11

Ap

r-11

Jul-

11O

ct-1

1Ja

n-1

2A

pr-

12

Food & Beverages Energy & Fuel Industrial Input

Source: Bloomberg, CEIC, Maybank-KE Source: IMF

Global: Headline Consumer Price Index (YoY, %) Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 2012 YTD 2011

Global 4.0 3.7 3.5 3.3 3.2 3.0 2.7 - 3.1 4.0 US 3.4 3.0 2.9 2.9 2.7 2.3 1.7 1.7 2.4 3.2 Eurozone 3.0 2.7 2.7 2.7 2.7 2.6 2.4 2.4 2.6 2.7 Japan (0.5) (0.2) 0.1 0.3 0.5 0.4 0.2 - 0.3 (0.3) Germany 2.8 2.3 2.3 2.5 2.3 2.2 2.2 2.0 2.3 2.5 UK 4.8 4.2 3.6 3.4 3.5 3.0 2.8 2.4 3.1 4.5 OECD 3.1 2.9 2.8 2.8 2.6 2.4 2.1 - 2.6 2.9 China 4.2 4.1 4.5 3.2 3.6 3.4 3.0 2.2 3.3 5.4 India 9.3 6.5 5.3 7.6 8.6 10.2 10.2 - 8.4 8.9 Russia 6.8 6.1 4.2 3.7 3.7 3.6 3.6 4.3 3.9 8.5 Brazil 6.6 6.5 6.2 5.9 5.2 5.1 5.0 4.9 5.4 6.6 S. Korea 4.2 4.2 3.4 3.1 2.6 2.5 2.5 2.2 2.7 4.0 Taiwan 1.0 2.0 2.4 0.2 1.3 1.4 1.7 1.8 1.5 1.4 Hong Kong 5.7 5.7 6.1 4.7 4.9 4.7 4.3 - 4.9 5.3 Singapore 5.7 5.5 4.8 4.6 5.2 5.4 5.0 - 5.0 5.2 Indonesia 4.2 3.8 3.7 3.6 4.0 4.5 4.5 4.5 4.1 5.4 Thailand 4.2 3.5 3.4 3.4 3.5 2.5 2.5 2.6 3.0 3.8 Malaysia 3.3 3.0 2.7 2.2 2.1 1.9 1.7 1.6 2.0 3.2 Philippines 4.7 4.2 4.0 2.7 2.6 3.0 2.9 2.8 3.0 4.7 Vietnam 19.8 18.1 17.3 16.4 14.2 10.5 8.3 6.9 12.3 18.6 Source: Bloomberg, CEIC, Maybank KE

Global: Core Consumer Price Index (YoY, %)

Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 2012 YTD 2011 US 2.2 2.2 2.3 2.2 2.3 2.3 2.3 2.2 2.3 1.7 Eurozone 1.6 1.6 1.5 1.5 1.6 1.6 1.6 1.6 1.6 1.4 Japan (1.1) (1.1) (0.8) (0.5) (0.4) (0.3) (0.6) - (0.5) (1.0) UK 3.2 3.0 2.6 2.4 2.5 2.1 2.2 2.1 2.3 3.2 OECD 2.0 2.0 1.9 1.9 1.8 2.0 1.9 - 1.9 1.6 China 2.2 1.9 1.8 1.7 1.8 1.7 1.4 1.4 1.6 2.7 S. Korea 3.5 3.6 3.2 2.5 1.9 1.8 1.6 1.5 2.1 3.2 Taiwan 1.2 1.2 1.8 (0.0) 0.7 0.9 0.9 0.8 0.9 1.1 Indonesia 2.8 2.8 3.0 2.9 2.9 3.1 3.0 2.9 3.0 4.3 Thailand 2.9 2.7 2.8 2.7 2.8 2.1 2.0 1.9 2.4 2.4 Malaysia 2.2 2.2 1.8 1.8 1.7 1.4 1.3 1.2 1.5 2.0 Source: Bloomberg, CEIC, Maybank KE

19 July 2012

Regional Daily

RESEARCH OFFICES REGIONAL

P K BASU Regional Head, Research & Economics (65) 6432 1821 pk.basu@maybank-ke.com.sg

WONG Chew Hann, CA Acting Regional Head of Institutional Research (603) 2297 8686 wchewh@maybank-ib.com

THAM Mun Hon Regional Strategist (852) 2268 0630 thammunhon@kimeng.com.hk

ONG Seng Yeow Regional Products & Planning (852) 2268 0644 ongsengyeow@maybank-ke.com.sg

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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 connie@maybank-ke.com.sg Tel: (65) 6333 5775 US Toll Free: 1 866 406 7447

North Asia Sales Trading Eddie LAU eddielau@kimeng.com.hk Tel: (852) 2268 0800 US Toll Free: 1 866 598 2267

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